The Aviation Industry is filled with lots of industry jargon, we felt that it is quite key to explain a few basic terminologies/acronyms used by professionals in this industry which will be essential in deciphering/analyzing Airline companies.
Cargo
Anything other than passengers, carried for hire, including both mail and freight.
Freight
All air cargo excluding mail
Direct Flight
A flight with one or more intermediate stops, but no change of aircraft.
Connecting Flight
A flight requiring passengers to change aircraft and/or airlines at an intermediate stop.
Major Carrier
An airline with annual revenue of more than $1 billion.
ASK (Available Seat Kilometers)
One seat flown one kilometer. An airliner with 100 passenger seats, flown a distance of 100 kilometers, represents 10,000 available seat miles (ASKs). Simply put Passenger seat capacity measured in seats available multiplied by distance flown.
ATK (Available Ton Kilometers)
Overall capacity measured in tones available for carriage of passengers and cargo load multiplied by the distance flown.
RPK (Revenue Passenger Kilometers)
Number of revenue passengers carried multiplied by the distance flown. One paying passenger flown one kilometer. It is the principal measure of airline passenger traffic.
RTK (Revenue Ton Kilometers)
Actual traffic load (passenger and cargo) carried in terms of tons multiplied by the distance flown.
Freight-Ton Kilometer
A ton of freight moved one kilometer. It is the standard measure of air freight activity.
Load Factor
The percentage of available seats that are filled with paying passengers, or the percent of freight capacity that is utilized. Technically, revenue passenger kilometers divided by available seat kilometers or cargo ton kilometers divided by available cargo ton kilometers.
Yield
Average revenue per revenue passenger kilometer or revenue ton kilometer, expressed in cents per kilometer.
Yield Management
Also known as revenue management, the process airlines use to set prices for a flight. The goal is to find the mix of seat prices that produces the most revenue.
Passenger Seat Factor – RPK divided by ASK.
Overall Load Factor – RTK divided by ATK.
Yield (cents per RTK) – Transport Revenue earned per RTK.
Unit Cost (cents per ATK) – Transport operating costs incurred per ATK.
Breakeven Load Factor – The load factor at which revenue will be equal to operating costs.
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