How do airlines measure success?

To measure the performance and efficiency of an airline, managers need to use key performance indicators (KPIs) that reflect the goals and objectives of the organization. KPIs are quantifiable metrics that track and compare the progress and results of specific activities, processes, or outcomes.



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Available Seat Mile (ASM) One seat transported one mile; the most common measure of airline seating capacity or supply. For example, an aircraft with 100 passenger seats, flown a distance of 100 miles, produces 10,000 ASMs. Sometimes measured as an available seat kilometer (ASK).

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Key Takeaways The higher the load factor, the more an airline can spread its fixed costs amongst passengers. The load factor helps investors and management determine how well an airline generates sales, covers its expenses, and remains profitable.

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Global Airline Ranking
  • Qatar Airways. 8.11 / 10.
  • United Airlines. 8.07 / 10.
  • Qantas. 8.02 / 10.


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Profitability moves these stocks too, as do factors such as fuel costs, foreign exchange rates, capital expenditures, and seat prices, which result in either margin expansion or contraction. Airline stocks are primarily valued based on these factors and valuation multiples.

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The 5-Star Airline Rating is the original and unique mark of Quality Achievement and a global benchmark of Airline Excellence, awarded following detailed audit analysis and assessment of airline product and front-line service standards.

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EBITDAR is a metric used primarily to analyze the financial health and performance of companies that have gone through restructuring within the past year. It is also used for businesses such as airlines that have unique rent costs of their aircraft fleet, warehouse, or other major assets used in the airline operations.

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