How does reducing costs help airlines in today's modern airline industry?

How does reducing costs help airlines in today's modern airline industry?

It enable large airlines to compete with low cost airlines, and offer improved services. It also helps to enable them to pay dividends to their shareholders and invest in modern more fuel efficient aircraft.

Reducing costs allow for 2 things; more profitability or the ability to lower ticket prices and compete against discount airlines. 2 of the largest costs for an airline are fuel and personnel. Reducing costs also allows the airline to re-invest in the company such as buying more modern aircraft or expand their route network and add new destinations. Finally reducing costs allow the airline to not have to offer pay-cuts or lay-offs to employees but may allow them to receive bonuses or profit-sharing which hopefully boosts morale.

Really, you can't work out how lower costs while maintaining prices improves a profit margin?

Your Econ 101 Mark: F

Many years back, American Airlines removed one black olive from each first class salad and saved like 40,000 dollars a year. Weight on a plane is everything. Removing the skymall magazines saves 20 to 30 pounds per plane but over dozens of planes and thousands of flights, the savings add up fast. Reducing unnecessary weight is crucial in reducing costs. Carrying less toilet paper, beverages and other supplies saves money. Using metrics to narrow down averages can prevent planes from flying around with surplus supplies which is dead weight.
You also have to be creative. Say you have lemons and limes for drinks. If you were cutting them into 10 wedges, you could change it to 16 wedges and carry less lines per flight.