Will passengers soon be paid to fly by airlines?

Icelandic low-cost carrier WOW air may revolutionise airfares. Photo / 123RF

This airline boss thinks it won't be long until airlines pay passengers to fly with them.

Skúli Mogensen, the founder and chief executive of Icelandic low-cost airline WOW air, said there could soon come a time when passengers stopped paying for their seats on flights and started to actually be rewarded for them.

It seems like a crazy idea, but Mr Mogensen said it could work if airlines were able to shift their focus from airfare revenue to ancillary revenue, which includes things such as baggage fees and costs for early boarding and in-flight meals.

"I can see a day when we pay you to fly," Mr Mogensen told Business Insider.

"Our goal, and we're working hard towards it, is for our ancillary revenue to actually surpass our passenger revenue.

"Whatever airline becomes the first to achieve this will be a game changer."

WOW air is among a number of European ultra-low-cost carriers that have slashed airfares to unprecedented lows.

Right now, it's offering flights from the UK city of Bristol to San Francisco - via Reykjavic - for just $268.10. During a January sale, one-way tickets from the US to Europe were going for as little as $123.30. (WOW air does not service New Zealand cities.)

Many passengers, however, will pay more for luggage costs, food and seat selection, while others will take advantage of additional services, such as car hire and hotel booking, which are being increasingly sold by airlines.

Skuli Mogensen isn't the only budget carrier boss foreseeing even lower costs for airfares. Last year, Michael O'Leary, the chief executive of Irish low-cost carrier Ryanair, said airfares could drop to as little as $8 - or even become free - as long as passengers continued to fork out for extras such as car hire, travel insurance, hotels and checked bags.

"As long as we can persuade people to buy additional, optional services, then I see no reason why we can't keep driving down the underlying airfare," Mr O'Leary said.