DEFINITION of Available Seat Miles (ASM)
Available seat miles (ASM) is a measure of an airplane's carrying capacity available to generate revenues. Available seat miles refers to how many seat miles are actually available for purchase on an airline. Seat miles are calculated by multiplying the available seats for a given plane by the number of miles that plane will be flying for a given flight.
BREAKING DOWN Available Seat Miles (ASM)
ASM is simply a measure of a flight's revenue-generating abilities based upon traffic. For investors analyzing airlines, ASM is a very important metric in deciding which airlines are best at generating revenues from the availability of seats to customers. If all of the seats on the plane are not sold, then the ASM of the airline is operating at below capacity. Long instances of unavailable seats on an airline can cost an airline millions of dollars.
How Available Seat Miles Statistics Are Used
Also known as available seat kilometers in some markets, this metric is used by airlines and statistics keepers because of the variances in aircraft and their seating configurations. The metric can not only measure the performance of individual airlines, but the commercial airline industry as a whole. The Bureau of Transportation Statistics, for instance, keeps a running monthly and annual record of domestic, international, and total available seat miles for all carriers and airports.
ASM on its own might not provide the full picture of an air carrier’s financial performance. While the metric does represent the capacity and occupancy of aircraft, revenue passenger miles and revenue per available seat miles are other ways to calculate the money generated by flights. This may be compared against the cost per available seat mile to determine the profitability of each flight.
Not every seat on a plane that is occupied generates revenue for the carrier. Seats used by an airline’s personnel, for example to connect with a flight crew they will work with, are non-revenue passengers. Certain types of standby passengers might also occupy seats, but not generate revenue for the airline. Airlines may need to transport non-revenue passengers out necessity to move flight crews around or to fulfill obligations to passengers who have been guaranteed passage on the carrier. How airlines balance such non-revenue passengers against its seats occupied by paying customers can directly affect the profitability of each flight.
Pricing of seats and capacity of the aircraft all factor into understanding the health of a carrier; however, such elements as the costs of fuel, maintenance, and other resources are needed to further illustrate the airline’s performance.