Airline Economic Glossary

Available Seat Miles (ASM)
DEFINITION of 'Available Seat Miles (ASM)'

Available seat miles (ASM) is a measure of an airplane's carrying capacity
available to generate revenues. Available seat miles refers to how many seat
miles are actually available for purchase on an airline. Seat miles are calculated
by multiplying the available seats for a given plane by the number of miles that
plane will be flying for a given flight.
BREAKING DOWN 'Available Seat Miles (ASM)'

ASM is simply a measure of a flight's revenue-generating abilities based upon traffic.
For investors analyzing airlines, ASM is a very important metric in deciding which
airlines are best at generating revenues from the availability of seats to customers. If all
of the seats on the plane are not sold, then the ASM of the airline is operating at below
capacity. Long instances of unavailable seats on an airline can cost an airline millions of
dollars.
How Available Seat Miles Statistics Are Used

Also known as available seat kilometers in some markets, this metric is used by airlines
and statistics keepers because of the variances in aircraft and their seating
configurations. The metric can not only measure the performance of individual airlines,
but the commercial airline industry as a whole. The Bureau of Transportation Statistics,
for instance, keeps a running monthly and annual record of domestic, international, and
total available seat miles for all carriers and airports.
ASM on its own might not provide the full picture of an air carrier’s financial
performance. While the metric does represent the capacity and occupancy of
aircraft, revenue passenger miles and revenue per available seat miles are other ways
to calculate the money generated by flights. This may be compared against the cost per
available seat mile to determine the profitability of each flight.
Not every seat on a plane that is occupied generates revenue for the carrier. Seats
used by an airline’s personnel, for example to connect with a flight crew they will work
with, are non-revenue passengers. Certain types of standby passengers might also
occupy seats, but not generate revenue for the airline. Airlines may need to transport
non-revenue passengers out necessity to move flight crews around or to fulfill
obligations to passengers who have been guaranteed passage on the carrier. How
airlines balance such non-revenue passengers against its seats occupied by paying
customers can directly affect the profitability of each flight.
Pricing of seats and capacity of the aircraft all factor into understanding the health of a
carrier; however, such elements as the costs of fuel, maintenance, and other resources
are needed to further illustrate the airline’s performance.
Cost Per Available Seat Mile -

CASM
DEFINITION of 'Cost Per Available Seat Mile - CASM'
Cost per available seat mile (CASM) is a common unit of measurement used to
compare the efficiency of various airlines. It is obtained by dividing the operating
costs of an airline by available seat miles (ASM). Generally, the lower the CASM,
the more profitable and efficient the airline.
BREAKING DOWN 'Cost Per Available Seat Mile - CASM'

Cost per available seat mile (CASM)is usually a more comprehensive measurement of
airline costs, but it's still important that investors are aware of what items comprise this
measurement. Many carriers exclude fuel costs from operating expenses, making the
CASM an unreliable metric. Cost per available seat mile, as the name suggests, reflects
the costs incurred by an airline to fly a single seat one mile.
A natural extension of CASM is RASM or revenue per available seat mile. Which helps
facilitate a revenue to expense comparison, particularly helpful when comparing rival
airlines or results to a benchmark.
More general, the available seat mile, or ASM, tends to be the preferred measure of
capacity within the airline industry. This metric is found by multiplying the number of
seats on each plane by the number of miles that plane flies during a particular period of
time (such as a month, quarter, or year) and summing up the results. Hence, an airline
with a single plane of 170 seats that travels 4,500 miles per day is generating 765,000
ASMs each day.
There are numerous capacity measures available, such as the number of flights or the
total number of seats on each flight, but neither is as effective for comparative purposes
as ASMs. For example, tallying the total number of flights does not differentiate between
a 50-seat plane and a 500-seat plane, and counting the number of seats on each flight
treats a 700-mile flight the same as a 5,000-mile flight.
Aircraft Utilization
Measure of aircraft productivity, calculated by dividing aircraft block hours by the number of aircraft
days assigned to service on air carrier routes. Typically presented in block hours per day.
Available Seat Miles (ASMs)

A common industry measurement of airline output that refers to one aircraft seat flown one mile,
whether occupied or not. An aircraft with 100 passenger seats, flown a distance of 100 miles,
generates 10,000 available seat miles.
Average Aircraft Capacity

Average seating configuration of an airline’s operating fleet. The measure is derived by dividing total
available seat miles flown by the number of aircraft miles flown. It is important to understand the
average aircraft size as it is an important determinant of employees needed to service the operation
of a particular airline.
Block Hour
Time from the moment the aircraft door closes at departure of a revenue flight until the moment the
aircraft door opens at the arrival gate following its landing. Block hours are the industry standard
measure of aircraft utilization (see above).
Cost per Available Seat Mile (CASM)

Measure of unit cost in the airline industry. CASM is calculated by taking all of an airline’s operating
expenses and dividing it by the total number of available seat miles produced. Sometimes, fuel or
transport-related expenses are withheld from CASM calculations to better isolate and directly
compare operating expenses.
Unit Cost per Unit of Output

A measurement that gauges total operating costs in relation to output.
Form 41 Data
Information derived from airline filings with the Bureau of Transportation Statistics. Airline financial
data is filed with the BTS quarterly; traffic and employment numbers are filed monthly.
Load Factor
The number of Revenue Passenger Miles (RPMs) expressed as a percentage of ASMs, either on a
particular flight or for the entire system. Load factor represents the proportion of airline output that is
actually consumed. To calculate this figure, divide RPMs by ASMs. Load factor for a single flight can
also be calculated by dividing the number of passengers by the number of seats.
Operating Revenue
Revenues received from total airline operations including scheduled and non-scheduled service.
Sources of revenue include passenger, cargo, excess baggage and certain other transport-related
revenue.
Passenger Revenue
Revenue received by the airline from the carriage of passengers in scheduled operations.
Passenger Revenue per Available Seat Mile (PRASM)

Often referred to as a measure of passenger “unit revenue.” It is calculated by dividing passenger
revenue by available seat miles. Typically the measure is presented in terms of cents per mile. This
measure is equivalent to the product of load factor and passenger yield (see below).
Passenger Yield
Measure of average fare paid per mile, per passenger, calculated by dividing passenger revenue by
revenue passenger miles (RPMs). Typically the measure is presented in cents per mile and is useful
measure in assessing changes in fares over time. Yield is not useful for comparisons across markets
and/or airlines, as it varies dramatically by stage length and does not incorporate load factor (unlike
PRASM).
Revenue per Available Seat Mile (RASM)

Also called "unit revenue," this figure is calculated by dividing the airline’s total revenue by its total
the available seat miles.
Revenue Passenger Miles (RPMs)

This is the basic measure of airline passenger traffic. It reflects how many of an airline's available
seats were actually sold. For example, if 200 passengers fly 500 miles on a flight, this generates
100,000 RPMs.
Revenue per Employee

One measure to determine an airline’s labor productivity. It is calculated by dividing an airline’s total
revenue by the number of airline employee full-time equivalents as reported to the US Department of
Transportation.
Stage Length
The average distance flown, measure in statute miles, per aircraft departure. The measure is
calculated by dividing total aircraft miles flown by the number of total aircraft departures performed.
Stage Length Adjusted Total Revenue per Equivalent Seat Mile (SLA TRESM)
A common practice utilized to normalize comparisons of TRASM between carriers. Operating costs
and revenues are significantly impacted by the distance flown and this analytical approach is
designed to compare results as if all carriers fly the same missions.
Stage Length Adjusted Passenger Revenue per Equivalent Seat Mile (SLA PRESM)
A common practice utilized to normalize comparisons of PRASM between carriers. Operating costs
and revenues are significantly impacted by the distance flown and this analytical approach is
designed to compare results as if all carriers fly the same missions.
Stage Length Adjusted Passenger Yield (Passenger Revenue Per Revenue Passenger Mile)
A common practice utilized to normalize comparisons of Passenger Yield between carriers.
Operating costs and revenues are significantly impacted by the distance flown and this analytical
approach is designed to compare results as if all carriers fly the same missions.
Total Revenue per Available Seat Mile (TRASM)

Often referred to as a measure of unit revenue. It is calculated by dividing total operating revenue by
available seat miles. Typically the measure is presented in terms of cents per mile.
Transport-Related Revenues (Costs)

Transport-related revenues (or costs) are revenues (or costs) that result from service operated by a
regional affiliate of a network carrier. Such revenues (or costs) are often excluded from RASM or
CASM calculations to allow network carriers to be compared directly with carriers that do not offer
service using regional affiliates.

Airline Economic Glossary

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Airline Economic Glossary

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Available Seat Miles (ASM)

DEFINITION of 'Available Seat Miles (ASM)'

BREAKING DOWN 'Available Seat Miles (ASM)'

How Available Seat Miles Statistics Are Used

Cost Per Available Seat Mile -

BREAKING DOWN 'Cost Per Available Seat Mile - CASM'

Available Seat Miles (ASMs)

Average Aircraft Capacity

Cost per Available Seat Mile (CASM)

Unit Cost per Unit of Output

Passenger Revenue per Available Seat Mile (PRASM)

Revenue per Available Seat Mile (RASM)

Revenue Passenger Miles (RPMs)

Revenue per Employee

Total Revenue per Available Seat Mile (TRASM)

Transport-Related Revenues (Costs)

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