what is revenue per available seat mile rasm 
revenue per available seat mile rasm is a unit of measurement commonly used to compare the efficiency of various airlines it is obtained by dividing operating income by available seat miles asm generally the higher the rasm the more profitable the airline under question revenue is represented in cents and is not solely limited to ticket sales as other factors of efficiency and profitability are taken into account understanding revenue per available seat mile rasm revenue per available seat mile rasm is a term airlines use to describe and evaluate their financial performance revenue per available seat mile rasm is more encompassing than total revenue because it factors in all operating revenue in terms of capacity rather than just passenger revenue revenue per available seat mile rasm has been adopted as a favorite standard unit of measurement by most airlines and investment analysts that follow the airlines critics contend however that airlines like most businesses have traditionally favored the use of metrics that can cast them in the best possible light by explicitly including all sources of revenue rasm includes the myriad of revenue sources air carriers have experimented with including fees or charges for baggage seat selection food and drink and wi fi airlines list their rasm also referred to as operating unit revenue in their quarterly and annual financial statements calculating revenue per available seat mile rasm the rasm represents the total operating revenue per seat empty or full flown per mile in order to calculate their rasm for a given period an airline divides its total operating revenues by the available seat miles rasm total operating revenues available seat miles total operating revenue is the income the airline generates from its primary business activities this includes the money airlines make from selling tickets and money from seat upgrades baggage fees food and beverages and reservation change fees available seat miles asm measures the carrying capacity of an airplane that s available to generate revenue to calculate seat miles the airline multiplies the available seats on a plane by the number of miles that plane will fly per flight airlines include income derived from their normal everyday business operations in their rasm calculation and exclude one time operating adjustments or events such as the sale of company assets revenue per available seat mile rasm vs cost per available seat mile casm cost per available seat mile casm also known as unit cost or operating expenses per asm is another common metric airlines use to measure efficiency and performance casm is a measure of cost efficiency and represents the average cost to fly an aircraft seat either empty or ticketed one mile casm differs from rasm in a significant way while rasm focuses on revenues earned casm focuses on expenses impacting an airline s bottom line airlines include various operating costs in their casm calculation such as operating expenses maintenance expenses administration and overhead one criticism of casm is that some airlines exclude fuel costs in their calculation which then calls into question the accuracy of the metric to calculate casm the airlines divide their operating costs by the available seat miles the casm is measured in cents airlines generally report this metric on their quarterly and annual financial statements a low casm indicates the airline is efficient at managing its costs which could lead to higher profit margins this contrasts with rasm which measures the revenue or income the airline generates airlines aim for a high and growing rasm as a measurement of financial strength special considerationsrevenue per available seat mile rasm is an especially important metric for low cost airlines many of these airlines discount the cost of their basic fares significantly in order to attract customers very similar to the loss leader strategy common in retail sales the airlines know the revenue they generate from these basic fares will probably not be enough to maintain profitability instead the airline will need to become adept at upselling or enticing the customer to purchase additional items such as inflight entertainment meals and beverages because rasm includes these forms of revenue it s an important metric in tracking an airline s financial performance 