Of course providing food and drink costs a great deal. Imagine £1 per passenger x 50,000 passengers per day = £50,000! In just 20 days, that would be £1 million. Times that by 364 or something days, and that'd be quite a few million indeed - just for food and drink! £10+ million per year might not be a great deal for an airline, but if you can cut it out - without many problems - and also generate income through the sale of food and drink, it's surely a very good thing. On longer-haul flights (say 4 hours and above), however, more 'frills' would be necessary, so people will be more willing to spend to a higher level than on a short, 2-hour trip.
"What if an airline does an massive advertisement campaign in major newspapers and TV
which is extremely expensive does this effect to ticket prices?"
Hardly a fair comparison, as advertising generates passengers. Costs have to be met and hopefully exceeded, primarily through ticket sales.
[Edited 2004-03-22 11:43:01]
"Everyone writing for the Telegraph knows that the way to grab eyeballs is with Ryanair and/or sex."