Newsstand - How Are Costs Measured at Airlines?

Over the weekend and today, the papers ran three or four articles comparing costs at the airlines, all using the same metric of "cost per available seat mile". How EXACTLY is this definition used? Can anyone help with this? Specifically, are all available seats included or only ones that are occupied?

It is just as it said, the total cost divided by the total number of available seats multiplied by the number of miles flown.

The available seat mile, or ASM, is the basic product that airlines produce. The ASMs produced by seats which aren't sold are handled in the same fashion as a produce which spoils in the grocery store.

Similarly, revenue is measured in revenue seat miles which is also referred to as yield.

Do the costs include only operating costs at flight levels, or do they include overhead associated with sales, marketing, maintenance, corporate structure, debt, and so on? Do the empty seats count or not? If they do then airlines flying at low seat yields look better by this measure than they really should.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by runningshoes:
Do the costs include only operating costs at flight levels, or do they include overhead associated with sales, marketing, maintenance, corporate structure, debt, and so on? Do the empty seats count or not? If they do then airlines flying at low seat yields look better by this measure than they really should.</font>

I believe that CASM and CPRM (cost per revenue mile - occupied seats) take into account ALL costs. Leaving out overhead wouldn't make for a very meaningful number.

What really matters, however, is whether the cash in is greater than the cash out - something lacking at almost every major US airline these days.

Revenue is measured against all seats and against purchased seats. So are costs. Thus, two numbers are generated, one representing yield for all seats and one representing yield for occupied (purchased) seats.

The units used are the ASM and the RSM, available seat mile and revenue seat mile respectively. Any cost can be expressed by this measure.

Total cost per ASM/RSM
Labor cost per ASM/RSM
Fuel cost per ASM/RSM
Whatever you want.

The ASM is the product of an airline regardless of whether the product is sold (converted into a RSM) or spoils (stays empty). It's no different from any other company which produces a product for sale, they just use slightly different terms.