How do they stay in the air?

No frills, no meals and no free drinks; budget airlines have changed the way we think about flying.

Gone is the glamour and expense of yesteryear, instead this is the age of cheap and cheerful short-haul travel.

It means that we can enjoy a weekend flight to Paris or Rome for as little as £20 - less than the cost of a train fare from Blackpool to London. Perhaps the most successful low-cost airline is Irish-based Ryanair which reported net profits of £172 million in the year to March 31.

However, because of differences in the tax regime in Ireland, it is difficult to work out how it makes its money. So JANE MULKERRINS used an average £48.70 fare flight from Luton to Nice with its rival, easyJet, to do the maths...

Ticket sales: £6,136. Outgoings: £5,591. Profit: £545

Airport charges: £817

These are paid per passenger and vary depending on who owns the airports. For example, BAA, which runs Stansted, charges £4.89 per person. Meanwhile, at Luton, the operator TBI charges £5.50. Heathrow, also a BAA airport, is more expensive, at £6.48 per person.

Planes: £676

The aircraft of choice is the Boeing 737, which holds 150 passengers. However, easyJet has recently ordered 120 new Airbus 319s. It has a fleet of 67 planes, all 737s - which means that each can operate on any given route, maximising the capacity of the stock - as well as easing maintenance.

With no business-class or first-class passengers needing extra legroom, easyJet can pack in far more seats. Most aircraft are held on long leasehold arrangements with financing companies, rather than being owned outright.

Crew costs: £643

Even budget airlines can't scrimp on qualified pilots, so their salaries compare well with the bigger airlines. A captain with easyJet will earn around £80,000 a year, a first officer (the second-in-command) £50,000. But, unlike large airlines, low-cost operators expect their staff to arrive fully-qualified.

Cabin crew earn significantly less, from £14,000 to £17,000. EasyJet does not need the same number of staff to serve business and first-class passengers and on-board meals that other airlines do.

Fuel: £614

The price of aviation fuel can vary drastically, particularly during world crises. For example, the price of oil rose significantly in the buildup to the Iraq war, but has remained steady since the end of the conflict. Currency crashes also pose problems since fuel is paid for in dollars, while passengers buy their flights in sterling or euros.

Maintenance: £584

The workhorse planes have to be checked between each flight and the airline must have a stock of spare engines and parts should any of the fleet need repairs. All planes have to undergo a yearly MoT which requires them to spend a day or more in a hangar, being given the once-over.

Ground-handling: £542

This covers the cost of check-in staff, baggage handlers and the workers who refuel the plane. These staff are usually employed by an outside agency, such as Servis-Air or Aviance, who have a deal with the airline. At Luton and Geneva, where the company has large bases, easyJet employs its own check-in staff.

Navigation: £420

There is no way of cutting costs with regard to safety. Part of this money pays for the services of airports' air traffic control towers while the rest goes to the air traffic control organisations of the nations over which easyJet planes fly.

Tax: £251

Like every other company that makes profits, airlines pay a certain percentage to the Treasury. The notional £545 profit on each flight may seem small, but works out at 8.9 per cent after tax. When the airline carries 20 million passengers on 156,000 flights each year, the figures look very healthy indeed.

Advertising: £215

Low-cost airlines rely heavily on advertising in newspapers, on billboards and on public transport. This is far cheaper than television, where a 30-second slot at peak time costs around £80,000.

Credit card fees: £101

The fee charged by credit card companies for the more than 90 per cent of passengers who book their easyJet and Ryanair seats online. There is an option to book by phone, but this incurs a 95p per-booking payment to the call centre.

And how money is saved

Administration

Ticketless booking (with passengers just given a booking reference number to quote when they check in) is a major moneysaver, combined with online booking which reduces the need for call operators and sales staff.

Administration costs easyJet only £728 in our sample flight - which is included in our total outgoings figure on the opposite page. Of course, there are also no travel agents, no paperwork and no commission for middle-men.

The only major administrative expenses are IT costs, the lease on the head office and the salaries of management staff. There is a very small slush-fund to cover passenger refunds, but few customers expect or receive compensation from budget airlines when things go wrong or flights are seriously delayed.

Turnaround time

Low-cost airlines mainly use secondary airports such as Stansted, Luton and East Midlands instead of Heathrow and Manchester, which means there is less congestion. Inbound planes can be on the runway for just 20 minutes before taking off again.

In mainland Europe, turnaround time is often longer as the companies use larger and busier airports such as Barcelona and Nice, but the low-cost operators still manage to squeeze in three hours of extra flying time per day.

On some routes, a single plane might make eight flights a day. With only a few minutes to clean the cabin, budget airlines have also outlawed bags of peanuts from the in-flight food trolley because they take too long to clear up if dropped.

Food and drink

Plastic trays of reheated food are not the low-cost way, and feedback indicates that most customers would prefer to pay less for a short-haul flight than be given a big meal, saving the airline hundreds of pounds.

Operators have even managed to turn in-flight catering into a money-earner. From the trolley on easyJet flights, passengers will pay £2.50 for a 330ml can of lager, £1 for a small pot of Pringles and £1.60 for a cup of coffee.

On Ryanair, a Cadbury's Dairy Milk chocolate bar is £1 and a sandwich is an even costlier £4.