Revenue Per Available Seat Mile - RASM

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.

BREAKING DOWN '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. Available Seat Miles - ASM

    A measure of an airplane's carrying capacity available to generate ...
  2. Cost Per Available Seat Mile - ...

    A common unit of measurement used to compare the efficiency of ...
  3. Revenue Seat Miles

    The number of miles a plane flies multiplied by the number of ...
  4. Airline Industry ETF

    A sector exchange-traded fund (ETF) that invests in stocks of ...
  5. Transferable Points Programs (UAL)

    With transferable points programs, customers earn points by using ...
  6. Revenue Passenger Mile - RPM

    A transportation industry metric that shows the number of miles ...
Related Articles
  1. Trading

    Is That Airline Ready For Lift-Off?

    Break through the clouds to see if these stocks will rocket higher, or crash and burn.
  2. Markets

    Who Are American Airlines’ Main Competitors? (DE, JBLU)

    Understand what makes American Airlines a good company and what sets it apart in the industry. Learn about the top four competitors to American Airlines.
  3. Investing

    The Industry Handbook: The Airline Industry

    Few inventions have changed how people live and experience the world as much as the invention of the airplane. During both World Wars, government subsidies and demands for new airplanes vastly ...
  4. Investing

    Know Key Financial Data Before Betting On Airlines

    The airline industry is highly cyclical. Investors need to understand where the industry is in the cycle in order to assign appropriate valuations.
  5. Markets

    Watch Airline Stocks For Takeoff Potential (AAL, DAL)

    Airline stocks have taken a hit but they show potential for takeoff as a result of low fuel prices, reduced competition and an improving economy.
  6. Markets

    Delta Vs. American Airlines: Why Delta is Flying Higher (DAL, AAL)

    Find out why Delta shares have outperformed American Airlines. How has load factor impacted revenue per available seat mile and financial results?
  7. Markets

    The Incredible Shrinking U.S. Airline Industry

    The U.S. hasn’t had a new scheduled passenger airline since 2007. Some blame a lack of financing while others say government approval has gotten too tough.
  8. Markets

    Who Are Delta Airlines’ Main Competitors? (DAL)

    Compare the top competitors of Delta Air Lines, Inc. Take a deeper look into the key drivers of competition in the airline industry.
  9. Retirement

    Is American Airlines Stock Suitable for Your IRA or Roth IRA? (AAL)

    Learn about the long-term investment thesis for American Airlines. Find out if American Airlines' stock is right for your traditional IRA or Roth IRA.
  10. Markets

    Will American Airlines Fall Back To Earth In 2015?

    The airline industry enjoys blockbuster profits, and American Airlines Group has been a key beneficiary of the favorable trends that have lifted stocks.
RELATED FAQS
  1. What is an available seat mile in the airline industry?

    Learn how to calculate and leverage available seat miles as a component metric of a commercial airline's operational health ... Read Answer >>
  2. How can I use the load factor as an indicator for the profitability of the airline ...

    Learn more about how investors and airlines use load factor. Find out about some of the major expenses of airlines and how ... Read Answer >>
  3. What does the term 'revenue passenger mile' mean for an airline?

    Learn more about what revenue passenger miles are, why they matter to airlines and why they should matter to potential investors. Read Answer >>
  4. Which countries make up the majority of the global airline sector?

    Learn more about the global airline industry and major markets around the world for air travel. Find out more about competitive ... Read Answer >>
  5. How much revenue in the airline industry comes from business travelers compared to ...

    Learn more about what business and leisure travelers contribute to airline revenue and profits. Find out how airlines remain ... Read Answer >>
  6. What dividend yield is typical for the airline sector?

    Learn what dividend yield is typical for the airline sector. The airline business tends to be victim to economic growth and ... Read Answer >>
Hot Definitions
  1. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  2. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  3. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
  4. Omnibus Account

    An account between two futures merchants (brokers). It involves the transaction of individual accounts which are combined ...
  5. Weighted Average Life - WAL

    The average number of years for which each dollar of unpaid principal on a loan or mortgage remains outstanding. Once calculated, ...
  6. Real Rate Of Return

    The annual percentage return realized on an investment, which is adjusted for changes in prices due to inflation or other ...
Trading Center