Revenue Per Available Seat Mile - RASM

AAA

DEFINITION of 'Revenue Per Available Seat Mile - RASM'

A unit of measurement that is 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 in question. Revenue is represented in cents and is not solely limited to ticket sales.

INVESTOPEDIA EXPLAINS 'Revenue Per Available Seat Mile - RASM'

Because it is more encompassing than total revenue - factoring in all operating revenue, in terms of capacity, rather than just passenger revenue - RASM has been adopted as a standard unit of measurement by most airlines. However, be aware that airlines, like many businesses, have traditionally favored metrics that cast them in the best possible light.

RELATED TERMS
  1. Return On Equity - ROE

    The amount of net income returned as a percentage of shareholders ...
  2. Robert Crandall

    A former president, CEO and chairman of AMR Corporation, the ...
  3. Commercial Visa

    A government-issued document that allows noncitizens to enter ...
  4. Revenue Passenger Mile - RPM

    A transportation industry metric that shows the number of miles ...
  5. Cost Per Available Seat Mile - ...

    A common unit of measurement used to compare the efficiency of ...
  6. Dow Jones Transportation Average ...

    A price-weighted average of 20 transportation stocks traded in ...
Related Articles
  1. Is That Airline Ready For Lift-Off?
    Active Trading

    Is That Airline Ready For Lift-Off?

  2. What is the average salary for an accountant?
    Personal Finance

    What is the average salary for an accountant?

  3. How do I calculate earnings per share ...
    Fundamental Analysis

    How do I calculate earnings per share ...

  4. Credit Cards With Travel Insurance
    Insurance

    Credit Cards With Travel Insurance

Hot Definitions
  1. Halloween Strategy

    An investment technique in which an investor sells stocks before May 1 and refrains from reinvesting in the stock market ...
  2. Halloween Massacre

    Canada's decision to tax all income trusts domiciled in Canada. In October 2006, Canada's minister of finance, Jim Flaherty, ...
  3. Zombies

    Companies that continue to operate even though they are insolvent or near bankruptcy. Zombies often become casualties to ...
  4. Witching Hour

    The last hour of stock trading between 3pm (when the bond market closes) and 4pm EST. Witching hour is typically controlled ...
  5. October Effect

    The theory that stocks tend to decline during the month of October. The October effect is considered mainly to be a psychological ...
  6. Repurchase Agreement - Repo

    A form of short-term borrowing for dealers in government securities.
Trading Center