Posted in Finance, Accounting and Economics Terms, Total Reads: 190
Definition: Revenue Seat Miles
Revenue Seat Miles is a metric mainly used in airline industry specifically to determine the carry capacity of a passenger plane. Revenue seat miles is number of seat for passengers available on each flight multiplied by the distance that the plane has to fly from source to destination (in miles).
It gives a measure of the efficiency of every flight which is flown by calculating the flight's passenger carrying capacity. Revenue seat miles is used to determine passenger load factor, unit revenues and unit costs.
For example, an airplane having a passenger capacity of 100 people flies 200 miles. So revenue seat miles for this airplane will be 100*200= 20000.
Revenue Seat Miles are also referred as Available Seat Miles (ASM). Cost per ASM also helps to determine the airline industry unit cost.