2 Charts Explain Why Flying Is Cheaper But Airlines Are More Profitable Than Ever

In constant 2013 dollars, the average third quarter fare in 1995 was $439. By 2009, it had dropped to $333. It has since climbed back to $390.

So if airlines are charging less to fly, why does the International Air Transport Association (IATA) predict the global airline industry will bring home an all-time high net profit of $19.7 billion in 2014?

Factors include more efficient jets, a small drop in jet fuel prices, and airline consolidation (like the mega-merger of American Airlines and US Airways).

But the bigger answer is in a DOT table that shows how much money airlines actually make off passengers fares, as a percentage of total revenue.

In 1990, it was nearly 90%. After two decades of dropping it's now barely above 70%. Simply put, airlines aren't as dependent on fares as they once were:

Airlines are less dependent on fares because they're making up the money on ancillary fees - the things you pay extra for, like checking a bag, extra leg room, or changing a reservation. "Without ancillaries," an IATA forecast says, "the industry would be making a loss from its core seat and cargo products."

An IATA table shows how ancillary fees - once nearly worthless - are making up for lost fare revenue:

So fares can keep dropping, and airlines will continue to make up the difference by charging for everything they can think of.