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AvailableseatmilesWikipedia,thefreeencyclopedia

Availableseatmiles
FromWikipedia,thefreeencyclopedia

Availableseatmiles(ASM)orAvailableseatkilometres(ASK)[1]isameasureofanairlineflight'spassenger
carryingcapacity.Itisequaltothenumberofseatsavailablemultipliedbythenumberofmilesorkilometres
flown.Anavailableseatmileisthefundamentalunitofproductionforapassengercarryingairline.[2]Aunitin
thiscaseisoneseat,availableforsale,flownonemile.Forexample,anaircraftwith300seatsavailableforsale
flying1,000statutemileswouldgenerate300,000ASMsforthatparticularflight.Thattheseatsareavailablefor
saleiscritical.Anaircraftthathad300seatsbutwhichwaslimited(forregulatoryortechnicalreasons)toselling
only250ofthemonaparticularflightof1,000mileswouldgenerate250,000ASMsonthatflight,not300,000.
Similarly,ifpassengerseatsonaparticularflightarededicatedtocrewrestpurposes,suchseatswouldnotbe
includedinthecalculationofASMsforthatflight.

Contents
1 Relatedquantities
1.1 CostperASM/ASK(CASM/CASK)
1.2 ExfuelCASMorCASMexfuel
1.3 RevenueperASM(RASM)
2 References

Relatedquantities
CostperASM/ASK(CASM/CASK)
CASM(orCASK)isacommonlyusedmeasureofunitcostintheairlineindustry.CASMisexpressedincentsto
operateeachseatmileoffered,andisdeterminedbydividingoperatingcostsbyASMs.Thisnumberisfrequently
usedtoallowacostcomparisonbetweendifferentairlinesorforthesameairlineacrossdifferenttimeperiods(say
foroneyearvstheprecedingyear).AlowerCASMmeansthatitiseasierfortheairlinetomakeaprofit,asthey
havetochargelesstobreakeven.AlowCASM,however,isbynomeansaguaranteeofprofitability.Further,
CASMshouldonlybecomparedacrossairlineswithcare.Forinstance,allotherthingsbeingequal,anairlinewith
alongeraveragestagelengthwillhavealowerCASM,becausefixedcostswillaccountforalowerportionofits
totalcosts.Forthisreason,tobemeaningful,CASMcomparisonsacrossdifferentairlinesgenerallyrequire,ata
minimum,thatCASMsforallairlinesbeadjustedtoacommonstagelength,orthattheCASMsbegraphedversus
thestagelengthofalltheairlinesbeingcompared.
CASMisgenerallycalculatedforaparticularairline(orportionofanairlineforinstance,anairline'sPacific
operationsasopposedtotheentireairline)foraparticularperiodoftimeayear,aquarter,amonthandsoforth.
Itcanalsobecalculatedforaparticularrouteofanairline.However,whenitiscalculatedforanythingotherthan
theentireoperationofanairline,therelevantcostswillinevitablyinvolvecostallocationsthatrequirejudgments.
Forinstance,thesalaryoftheairline'sseniormanagementneedstobespreadacrossthedifferentpartsofthe
airlineandcanbedivviedupacrossitsroutesaccordingtomanydifferentmethodologiesbythenumberof
flightsonthatrouteduringthattimeperiod,bythenumberofflighthoursonthatroute,etc.Thereisnot
necessarilyanyrightmethodformakingsuchcostallocations,butitisimportantwhenmakingcomparisonsacross
airlinesthatifanallocationmethodologyisrelevant(i.e.lessthantheentireofeachairlineisbeingcompared)
thenthesameallocationmethodologyisusedwitheachairlinebeingcompared.
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ForasimpleexampleofthecalculationofCASM,inthesecondquarterof2011,SouthwestAirlines(includingits
AirTranAirwayssubsidiary)hadoperatingcostsof$3.929bnand31.457bnASMs,asreflectedinSouthwest's
SECForm10Qforthatperiod.[3]Southwest'ssystemCASMforthesecondquarterof2011wasthen:
CASM=DirectOperatingCost/AvailableSeatMile=$3.929billion/31.457billion=12.49cents

ExfuelCASMorCASMexfuel
CASMexcludingfuelisacommonlyusedmeasuretocomparethecostperformanceofairlinesexceptingthecost
offuel.Duetothevolatilityofoilprices,airlinefuelcostisgenerallynotviewedascontrollable(otherthaninthe
shorttermviafuelhedging).Therefore,management'ssuccessatcontrollingcostsisoftenjudgedbylookingat
howtheairline'sexfuelCASMchangesfromoneperiodtoanother.Forinstance,inthesecondquarterof2011
SouthwestAirlineshadfuelcostsof$1.527bn(again,includingitsAirTransubsidiary).[3]Southwest'ssystem
CASMexfuelforthesecondquarterof2011wasthen:
CASMexfuel=(DirectOperatingCostFuelCost)/AvailableSeatMile=($3.929billion$1.527billion)/
31.457billion=7.63cents
Again,caremustbetakenincomparingCASMexfuelacrossperiods.Inparticular,ifaveragestagelengthforthe
airlinehaschangedsignificantly,thiscouldhaveasignificantimpactonCASMexfuel.www.safarme.com

RevenueperASM(RASM)
RASMisacommonlyusedmeasureofunitrevenueforairlines,expressedincentsreceivedforeachavailableseat
mileanddeterminedbydividingvariousmeasuresofoperatingrevenuebyAvailableSeatMiles.Thisnumberis
frequentlyusedtoallowacomparisonbetweendifferentairlinesoracomparisonofthesameairlineacross
periods.Intheory,thehighertheRASMthemoreprofitabletheairlineshouldbe,assumingthattheCASM
remainsconstant.Variousmeasuresofrevenuemaybeused.PassengerRASM(orPRASM)ispassenger(or
scheduledticket)revenueperASM.OperatingRASMorTotalRASMistheairline'stotaloperatingrevenueper
ASM.
So,forinstance,inthesecondquarterof2011,Southwesthadscheduledrevenueof$3.876bnandtotaloperating
revenueof$4.136bn.[3]Southwest'ssystemPassengerRASMandOperatingRASMforthesecondquarterof
2011weretherefore:
PassengerRASM=$3.876billion/31.457billion=12.32cents
OperatingRASM=$4.136billion/31.457billion=13.15cents
Again,RASMcomparisonsacrossperiodsoracrossairlinesalsoneedtobemadewithcare.Allelsebeingequal,
revenuegenerallyincreaseswithaveragestagelength.However,revenuegenerallydoesnotincreaseasquicklyas
stagelength,meaningthatRASMtypicallydecreasesasaveragestagelengthincreases.
Atconstantprices,worldairlinesRASKfellby51%fromUS17.5in1960to8.6centsin2015,whileCASK
went54%downfrom17.5to8.1[4]onlineiranianairplaneticket[5]

References
1.8056WhatisASKYouTubeVideo(http://www.youtube.com/watch?v=D3mzbY1TgOs)
2.ATAhandbook"ATAAirlineHandbook".Archivedfromtheoriginalon22February2009.Retrieved20090302.
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3.U.S.SecuritiesandExchangeCommission:Form10QforSouthwestAirlines(http://edgar.sec.gov/Archives/edgar/data/
92380/000009238011000070/form10q.htm)
4."CASK:Europe'sFullServiceAirlineshavetheworld'shighestcosts,USairlinesthelowest".CAPACentrefor
Aviation.1June2016.
5.Template:Onlineticket

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