How do you calculate profitability of an airline?

Revenue per available seat mile (RASM) is a unit of measurement commonly used to compare the efficiency of various airlines. It is obtained by dividing operating income by available seat miles (ASM). Generally, the higher the RASM, the more profitable the airline under question.



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Next time you board a flight, just imagine you're putting a $20 bill in the airline's tip jar. Profit per passenger at the seven largest U.S. airlines averaged $19.65 over the past four years—record-setting profitable years for airlines. In 2017, it stood at $17.75, based on airline earnings reports.

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Airline passenger yield is generally expressed as the number of cents (or equivalent) earned for each passenger mile or kilometer flown.

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The best pricing model used in the airline industry is dynamic pricing which is based on current market demand and prices. However, the best pricing model for an airline will depend on its specific business goals, route network, and competitive environment.

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Key Airline Metrics
  • Available seat miles (ASM) ...
  • Revenue passenger miles (RPM) ...
  • Passenger Load Factor. ...
  • Revenue per Available Seat Mile (RASM) ...
  • Passenger Revenue per Available Seat Mile (PRASM) ...
  • Cost per Available Seat Mile (CASM) ...
  • CASM-Ex Fuel (CASM-Ex)


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