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Available seat miles (ASM) is a measure of an airline flight's passenger carrying capacity. It is equal to the number of seats available multiplied by the number of miles flown. This measures an airline's capacity for transporting passengers. For example, a transport configured to fly 100 seats flying 100 miles would give the carrier 10,000 ASMs for that particular flight. The ASM is used to calculate:
- The Cost Per Available Seat Mile (CASM), a commonly used unit cost used to compare airlines. CASM is expressed in cents to operate each seat mile offered, and is determined by dividing operating costs by Available Seat Miles. This number is frequently used to allow a cost comparison between different airlines. In theory, the lower the CASM the more profitable the airline should be.
- The Revenue per Available Seat Mile (RASM) a commonly used unit cost used to compare airlines. The revenue, expressed in cents received for each seat mile offered which is determined by dividing operating income by Available Seat Miles. This number is frequently used to allow a cost comparison between different airlines. In theory, the higher the RASM the more profitable the airline should be. Revenue is not limited to ticket sales revenue
- RASM is more comprehensive than yield as it takes into account all revenue not just passenger, but that is not the reason airlines have adopted it. Their reason relates to the fact that when the load factor is rising, RASM grows faster than yield because it is a function of both load factor and yield. Thus, during these times, RASM presents a more favorable picture of company operations than would a yield to unit cost comparison. (A declining load factor produces the opposite effect and when that happens we may see less use of this term.) As this suggests, RASM is not an independent variable in airline economics, so using it without looking at trends in the two underlying components can lead to erroneous conclusions, particularly about the trend of passenger air fares.
