For much of the industry's post-1978 history, airlines have yet to recoup their cost of capital. Capacity discipline and an unprecedented drop in fuel prices have fueled the industry's healthiest phase ever. With the additional cash flow generated, airlines are making large investments in incremental improvements to their products and airframes. In the near term we will see capacity continue to be added on select routes, particularly by ultra-low-cost carriers (ULCCs). However, airline leaders have noted their intent to avoid recreating the industry's history of battles for market share. The main trend in 2016 is expected to be downward pressure on airfares as a result of increased capacity and reduced fuel costs. With the proliferation of airfare transparency and the aggressive growth of ULCCs serving as a catalyst for change, the industry is evolving to attract the next generation of younger, more cost-conscious consumers by adding an unbundled (or limited) fare class. This new fare has a significantly lower return than other fare classes, so airlines are responding by adding extremely high return ancillary revenue products/services at numerous points in the air travel experience. Looking ahead, ancillary revenues will become a larger portion of the total