Professional Documents
Culture Documents
Of
Airline Industry
Marketing Analytics
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6
Implication & Usage
Utilization is a statistic that varies from carrier to carrier and is normally considered a
closely guarded corporate trade secret and is not tracked by government.
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Factors affecting utilization rates
Airplane availability: the total number of days in a given period minus downtime
required for airplane maintenance
Average elapsed time per trip: the average block time per trip distance plus the
average turn-time
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Implication & Usage
It is an airline industry metric that shows the number of kilometers traveled by paying
passengers.
Since it measures the actual demand for air transport, it is often referred to as airline
traffic.
P.S. RPM is also known as Revenue Passenger Kilometers (RPK). In the aviation industry, kilometers are
used more often than miles in formulation and analysis of metrics and key performance indicators.
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Implication & Usage
RPMs are the backbone of most transportation metrics. Airlines have to try to match their
supply (ASMs) with the market demand (RPMs). While shortage of seats will often result in
higher airfare, excess capacity can lead to reduced margins due to higher fixed costs. So an
increase in capacity is positive only if it is supported by an adequate rise in demand for air
travel.
RPMs give airline senior management a clear indication of the demand in a given market.
To support RPM improvement, airlines should add more seats or increase capacity. Another
way to do this without adding capacity is to improve efficiency by utilizing existing
capacity.
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Passenger Revenue per
Available Seat Miles
(PRASM)
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Passenger Revenue per Available Seat Mile
Passenger Revenue
(RASM) =
Available Seat Miles (ASM)
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Cost per
Available Seat Miles
(CASM) 17
Cost per Available Seat Mile
Operating Cost
(CASM) =
Available Seat Miles (ASM)