Revenue Seat Miles

AAA

DEFINITION of 'Revenue Seat Miles'

The number of miles a plane flies multiplied by the number of passenger seats available per flight. Revenue seat miles, more commonly called available seat miles, are one of the air transport traffic and capacity statistics that airlines must report to the government under section 298.61 of the U.S. Code of Federal Regulations.

BREAKING DOWN 'Revenue Seat Miles'

It is difficult to remain profitable in the airline industry, as evidenced by the chapter 11 bankruptcy filings of numerous major air carriers, including Delta, American and Northwest. Layoffs and wage cuts have plagued airline employees as airlines have struggled to deal with high operating expenses for fuel, aircraft, gate fees, pension funds and union labor contracts. Air travel also has high demand elasticity, so when customers experience a small decline in income, they will cut back significantly on air travel.

RELATED TERMS
  1. Revenue Passenger Mile - RPM

    A transportation industry metric that shows the number of miles ...
  2. Revenue Ton Mile

    A single ton of goods that is transported for one mile. Revenue ...
  3. Demand Elasticity

    In economics, the demand elasticity refers to how sensitive the ...
  4. Chapter 11

    Named after the U.S. bankruptcy code 11, Chapter 11 is a form ...
  5. Transportation Sector

    A category of stocks relating to the transportation of goods ...
  6. Cyclical Industry

    A type of an industry that is sensitive to the business cycle, ...
Related Articles
  1. Investing Basics

    Industry Handbook

    In this feature, we take an in-depth look at the various techniques that determine the value and investment quality of companies from an industry perspective.
  2. Insurance

    Travel Tips For Keeping You And Your Money Safe

    Take precautions to avoid being taken advantage of on your vacation.
  3. Budgeting

    Vacation Savings Tips

    You can enjoy your holiday without spending exorbitant amounts of money. Read on for summer budgeting tips.
  4. Personal Finance

    Save On Planes, Trains And Automobiles

    Getting to, and around, your travel destination doesn't need to break the bank.
  5. Options & Futures

    Travel Smart By Planning How You'll Pay

    With a little pre-trip planning, you can avoid being stranded without adequate funds.
  6. Economics

    Explaining Replacement Cost

    The replacement cost is the cost you’d have to pay to replace an asset with a similar asset at the present time and value.
  7. Fundamental Analysis

    Bet on this U.S. Automaker for Long-Term Gains

    Ford holds a stronger technical position than General Motors and also pays a consistent dividend. This combination could mean greater 3-to-5-year returns.
  8. Term

    What are Articles of Association?

    Articles of association are a document that specifies the regulations for a company’s operations.
  9. Investing Basics

    What Does Window Dressing Mean?

    Window dressing is the actions taken close to the end of a reporting period by managers to try and make their financial numbers look better.
  10. Stock Analysis

    What’s Uber Worth?

    Value projections for Uber have been all over the map, but the most important projection doesn't come in the form of numbers.
RELATED FAQS
  1. What does the term 'revenue passenger mile' mean for an airline?

    A revenue passenger mile (RPM) is a major metric that airlines use to assess their performance. One RPM is one paying passenger ... Read Full Answer >>
  2. How can I calculate funds from operation in Excel?

    In general, the terms "work in progress" and "work in process" are used interchangeably to refer to products midway through ... Read Full Answer >>
  3. When does Q4 start and finish?

    Most companies such as Facebook have financial years that end on December 31st. For these companies, the fourth quarter begins ... Read Full Answer >>
  4. When is it useful to look at a company's fixed asset turnover ratio?

    It is useful to look at a company's fixed asset turnover ratio when an outside observer, such as an investor, wants to know ... Read Full Answer >>
  5. What is the difference between perfect and imperfect competition?

    Perfect competition is a microeconomics concept that describes a market structure controlled entirely by market forces. In ... Read Full Answer >>
  6. How difficult is it to understand business analytics?

    In the abstract, business analytics is the study of financial, economic, consumer and production data through statistical ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Bear Market

    A market condition in which the prices of securities are falling, and widespread pessimism causes the negative sentiment ...
  2. Alligator Spread

    An unprofitable spread that occurs as a result of large commissions charged on the transaction, regardless of favorable market ...
  3. Tiger Cub Economies

    The four Southeast Asian economies of Indonesia, Malaysia, the Philippines and Thailand. Tiger cub economy indicates that ...
  4. Gorilla

    A company that dominates an industry without having a complete monopoly. A gorilla firm has large control of the pricing ...
  5. Elephants

    Slang for large institutions that have the funds to make high volumes trades. Due to the large volumes of stock that elephants ...
  6. Widow's Exemption

    In general terms, a widow's exemption refers to the amount that can be deducted from taxable income by a widow, thereby reducing ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!