What exactly is the 'yield' ???
Available Seat Mile (ASM): The Basic Measure of Capacity
One seat (empty or filled) flying one mile is an ASM
A 140-seat MD-80 flying a 500-mile segment creates 70,000 ASMs.
System ASMs are simply the sum of each of these individual segment calculations.
In a typical day in 2007; American made available about 465 million ASM
Revenue Passenger Mile (RPM): The Basic Measure of Production
A paying passenger flying one mile creates an RPM
100 passengers flying 500 miles generates 50,000 RPMs
System RPMs are the sum of this calculation for each of the revenue segments we fly.
In a typical day in 2007, American produced 380 million RPMs.
Load Factor: Production Compared to Capacity
To calculate system-wide load factor, divide RPMs by ASMs; in 2007 it's 138.5 billion RPMs divided by 169.9 billion ASMs, or 81.5 percent.
For an individual flight, divide the revenue passengers on board by the aircraft capacity; in the MD-80 example above, it is 100 divided by 140, or 71.4 percent.
High load factors are not necessarily desirable - How much each passenger pays is also important, as we see in the next measure.
Yield: Revenue per Passenger Mile
To calculate system yield, divide passenger revenue by total RPMs; For American in 2007, this is $18.2 billion divided by 138.5 billion RPMs, or 13.1 cents per mile.
To calculate a customer's individual yield, divide ticket price by mileage; if a customer pays $98.00 for the 500-mile segment above, the yield would be 19.6 cents per mile.
Revenue per Available Seat Mile (R/ASM): The Best Basic Measure
Multiply load factor times yield to get the measure of how much revenue we generate per increment of capacity; using the 2007 example above, it's 81.5 percent times 13.1 cents or 10.7 cents.
Cost per Available Seat Mile (C/ASM): The Basic Measure Of Cost
Unit costs represent how much it costs to fly one seat (empty or filled) one-mile.
To calculate unit costs, divide total operating expenses by Total ASM capacity; For American in 2007, this is $19.24 billion divided by 169.9 billion, or 11.3 cents per mile.
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