Revenue per Available Seat Mile (RASM)
Candlefocus EditorRASM helps airline companies gain better visibility into the success of their operations. The higher the RASM, the more revenue an airline can generate per mile flown, allowing it to make fiscally sound decisions for its operations. Airlines typically use RASM to compare their performance with similar airlines, as well as assess how seasonal events and industry trends affect their revenue.
The calculation for revenue per available seat mile (RASM) involves taking the total operating revenue of the airline, adding any additional sources of revenue, such as baggage fees, reservation change fees, and inflight meals, then dividing this total by the total available seat miles. By measuring total revenues per available seat mile, an airline can gain a better understanding of how their operations perform relative to the industry as a whole.
By looking at RASM, airlines can make important operational decisions that should increase their total operating revenue. Aside from showing how much money an airline is generating per mile flown, RASM also allows airline executives to assess product quality and the effect of long-term programs.
RASM is a critical metric for evaluating an airline's financial performance and making better operational choices that can positively impact the airline's bottom line. The metric allows airlines to measure their overall financial performance and compare it to industry averages, while also providing insight into potential changes they need to make in order to maximize future revenue.