Explains in detail what Revenue Passenger Kilometer & Yield is. There are 7 examples to illustrate the explanations. There are 2 exercises to test the reader's knowledge.
Describes the following terms with examples
- ASM (Available Seat Miles)
- RPM (Revenue Passenger Miles)
- PLF (Passenger Load Factor)
There is also an exercise at the end to test the reader's knowledge
Revenue management first appeared in the airline industry in the early 1980s. It arose from the need for accurate demand estimates and profit-generating resource allocations in a newly deregulated environment. We begin this program and this module with a look back at the main causes and consequences of airline deregulation in North America. We describe how the deregulated North American airline industry has encouraged a trend toward deregulation, or at least liberalization, worldwide. We then move on to introduce the basic concept involved in airline revenue management.
Describes the following terms with examples
- ASM (Available Seat Miles)
- RPM (Revenue Passenger Miles)
- PLF (Passenger Load Factor)
There is also an exercise at the end to test the reader's knowledge
Revenue management first appeared in the airline industry in the early 1980s. It arose from the need for accurate demand estimates and profit-generating resource allocations in a newly deregulated environment. We begin this program and this module with a look back at the main causes and consequences of airline deregulation in North America. We describe how the deregulated North American airline industry has encouraged a trend toward deregulation, or at least liberalization, worldwide. We then move on to introduce the basic concept involved in airline revenue management.
This presentation introduces readers to airline industry's two most common networks. It also compares the features of the two and highlights scenarios when one may be more profitable than the other.
Not all airlines are created equal. As in most businesses, there is a sort of stratification of airlines. In many countries, the government owns the airlines. An airline’s rank is determined by the amount of revenue it generates. There are three categories in Airlines: Major, National and Regional.
This Powerpoint presentation provides a brief insight of Airport management in terms of a business modeling architecture. It can be used for educational as well as management purposes.
The concepts of yield management in the airline industry have an impact on customer feelings of price fairness, also affecting customer loyalty.
Website: tts.com
Blog: blog.tts.com
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This presentation introduces readers to airline industry's two most common networks. It also compares the features of the two and highlights scenarios when one may be more profitable than the other.
Not all airlines are created equal. As in most businesses, there is a sort of stratification of airlines. In many countries, the government owns the airlines. An airline’s rank is determined by the amount of revenue it generates. There are three categories in Airlines: Major, National and Regional.
This Powerpoint presentation provides a brief insight of Airport management in terms of a business modeling architecture. It can be used for educational as well as management purposes.
The concepts of yield management in the airline industry have an impact on customer feelings of price fairness, also affecting customer loyalty.
Website: tts.com
Blog: blog.tts.com
Facebook: facebook.tts.com
Linkedin: linkedin.tts.com
Google Plus: googleplus.tts.com
Youtube: youtube.tts.com
Complied list of cost savings recommendations made to the Indianapolis Airport Authority. Completed Summer 2010 as Intern for the Indianapolis Airport Authority.
This content highlight you with how airport generate it's revenue and cost of airport.
It will help the reader to understand the overall activities in generation of income in airports
Analysis of the profit function of Ryanair, Europe's biggest airline and a worldwide innovator on cost leadership.
For this analysis I first built a revenue and a cost function. Then, I used some real life examples to back up how the airline's pricing system works.
Is Low Cost Carrier Profitable, this time we hold differents senarios by varing load factors and fares, the network is huge and large 128 sectors. hope to enjoy
Business Research ProjectChristopher Abgande, Lee DeVa.docxRAHUL126667
Business Research Project
Christopher Abgande, Lee DeVaughan, Sheri LeBeau, Qiana Reynolds, Andrew Rice
QNT/561
12/19/16
Dr. Heidi Carty
Running head: BUSINESS RESEARCH PROJECT
1
BUSINESS RESEARCH PROJECT
2
Business Research Project
Dyeus Airlines, an international airline, was founded in 2013. Dyeus Airlines is facing challenging competition from other, larger airlines around the world. In the hopes of competing with the various airline companies, Dyeus has decided to pilot a system where the airline waives all excess luggage fees. Most airlines charge a fee for excess baggage, as well as overweight luggage, and it will be the strategy of Dyeus Airlines to waive the first two pieces of luggage from all additional fees. Due to weight restrictions of the Federal Aviation Administration, any bag over the weight of 50 pounds will be subject to a $50 fee for special handling guidelines.
Hypothesis- By not charging for two bags per ticket, it is Dyeus Airlines’ belief that the boarding and unloading of the plane will be quicker, which will mean more precise timing in connecting flights. By pushing the luggage to the baggage handlers and away from checked overhead storage, they can decrease delays in flight times, and get the passengers in and out of the plane faster. The dependent variables would be the flight’s cost in comparison to all other airlines, overall cost to passenger with less baggage fees, and having the potential of fewer flight delays. Another dependent variable will be the volume of flyers, based on lower luggage costs. Dyeus Airlines independent variable is quite simple. This variable will stand alone and is not affected by any other variable. Dyeus Airlines will not charge extra baggage fees moving forward. Of course, this independent variable will affect dependent variables.
Business Problem- Many airlines charge for extra luggage for two reasons one fuel cost and the other is a 7.5% excise tax on tickets. According to, The real reason airlines charge checked fees, and it’s not what you think “the 7.5% federal excise tax on domestic tickets applies to airfare and not to ancillary services. So as long as airlines are able to unbundle, they get a portion of the transportation cost out from under that tax.” (Leff, 2015)The airline maybe losing because they are not charging for the extra bag fee, because they will not be receiving a portion of the transportation fee. In order for Dyeus Airlines to be successful in not charging for the extra baggage and the overnight luggage the company will have to be successful in making sure that all customers understand that luggage cannot weigh over 50 pounds to avoid charging the $50 fee for the special handling guidelines. Dyeus Airline may be able to recoup some of the portion from the transportation fee because they will be saving on fuel with the luggage not weighing as much, the loads will be lighter.
When there are charges for the amount of bags that a customer can brin ...
A Bare Knuckle Truth About The Aviation Industry!taxguru5
"A bare knuckle truth about the aviation industry is that globally, the airports and airlines struggle between balancing the impact of aviation on environment an"
TaxGuru is a platform that provides Updates On Amendments in Income Tax, Wealth Tax, Company Law, Service Tax, RBI, Custom Duty, Corporate Law , Goods and Service Tax etc.
To know more visit https://taxguru.in/corporate-law/bare-knuckle-truth-aviation-industry.html
A Bare Knuckle Truth About The Aviation Industry!taxguru5
"A bare knuckle truth about the aviation industry is that globally, the airports and airlines struggle between balancing the impact of aviation on environment an"
TaxGuru is a platform that provides Updates On Amendments in Income Tax, Wealth Tax, Company Law, Service Tax, RBI, Custom Duty, Corporate Law , Goods and Service Tax etc.
To know more visit https://taxguru.in/corporate-law/bare-knuckle-truth-aviation-industry.html
Operation “Blue Star” is the only event in the history of Independent India where the state went into war with its own people. Even after about 40 years it is not clear if it was culmination of states anger over people of the region, a political game of power or start of dictatorial chapter in the democratic setup.
The people of Punjab felt alienated from main stream due to denial of their just demands during a long democratic struggle since independence. As it happen all over the word, it led to militant struggle with great loss of lives of military, police and civilian personnel. Killing of Indira Gandhi and massacre of innocent Sikhs in Delhi and other India cities was also associated with this movement.
The Roman Empire A Historical Colossus.pdfkaushalkr1407
The Roman Empire, a vast and enduring power, stands as one of history's most remarkable civilizations, leaving an indelible imprint on the world. It emerged from the Roman Republic, transitioning into an imperial powerhouse under the leadership of Augustus Caesar in 27 BCE. This transformation marked the beginning of an era defined by unprecedented territorial expansion, architectural marvels, and profound cultural influence.
The empire's roots lie in the city of Rome, founded, according to legend, by Romulus in 753 BCE. Over centuries, Rome evolved from a small settlement to a formidable republic, characterized by a complex political system with elected officials and checks on power. However, internal strife, class conflicts, and military ambitions paved the way for the end of the Republic. Julius Caesar’s dictatorship and subsequent assassination in 44 BCE created a power vacuum, leading to a civil war. Octavian, later Augustus, emerged victorious, heralding the Roman Empire’s birth.
Under Augustus, the empire experienced the Pax Romana, a 200-year period of relative peace and stability. Augustus reformed the military, established efficient administrative systems, and initiated grand construction projects. The empire's borders expanded, encompassing territories from Britain to Egypt and from Spain to the Euphrates. Roman legions, renowned for their discipline and engineering prowess, secured and maintained these vast territories, building roads, fortifications, and cities that facilitated control and integration.
The Roman Empire’s society was hierarchical, with a rigid class system. At the top were the patricians, wealthy elites who held significant political power. Below them were the plebeians, free citizens with limited political influence, and the vast numbers of slaves who formed the backbone of the economy. The family unit was central, governed by the paterfamilias, the male head who held absolute authority.
Culturally, the Romans were eclectic, absorbing and adapting elements from the civilizations they encountered, particularly the Greeks. Roman art, literature, and philosophy reflected this synthesis, creating a rich cultural tapestry. Latin, the Roman language, became the lingua franca of the Western world, influencing numerous modern languages.
Roman architecture and engineering achievements were monumental. They perfected the arch, vault, and dome, constructing enduring structures like the Colosseum, Pantheon, and aqueducts. These engineering marvels not only showcased Roman ingenuity but also served practical purposes, from public entertainment to water supply.
Acetabularia Information For Class 9 .docxvaibhavrinwa19
Acetabularia acetabulum is a single-celled green alga that in its vegetative state is morphologically differentiated into a basal rhizoid and an axially elongated stalk, which bears whorls of branching hairs. The single diploid nucleus resides in the rhizoid.
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It is possible to hide or invisible some fields in odoo. Commonly using “invisible” attribute in the field definition to invisible the fields. This slide will show how to make a field invisible in odoo 17.
Macroeconomics- Movie Location
This will be used as part of your Personal Professional Portfolio once graded.
Objective:
Prepare a presentation or a paper using research, basic comparative analysis, data organization and application of economic information. You will make an informed assessment of an economic climate outside of the United States to accomplish an entertainment industry objective.
Instructions for Submissions thorugh G- Classroom.pptxJheel Barad
This presentation provides a briefing on how to upload submissions and documents in Google Classroom. It was prepared as part of an orientation for new Sainik School in-service teacher trainees. As a training officer, my goal is to ensure that you are comfortable and proficient with this essential tool for managing assignments and fostering student engagement.
The French Revolution, which began in 1789, was a period of radical social and political upheaval in France. It marked the decline of absolute monarchies, the rise of secular and democratic republics, and the eventual rise of Napoleon Bonaparte. This revolutionary period is crucial in understanding the transition from feudalism to modernity in Europe.
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2. What is RPK/RPM?
RPM stands for Revenue Passenger Miles
Countries using kilometers as a measure of
distance use RPK
A revenue passenger is one for whose
transportation an air carrier receives
commercial remuneration
RPM is used to measure the number of
revenue passengers flown for each mile
In conjunction with revenue, this
measurement is also used to calculate yield
1/20/2012 2
3. RPK/RPM Calculation
Revenue Passenger Mile = Revenue
passengers flown * Miles traveled
Let us define some variables to calculate
RPK/RPM
P = total number of revenue generating
passengers
D = total distance travelled
RPK or RPM = P * D
1/20/2012 3
4. Example 1
An airplane flies a distance of 2,962 miles.
There are 130 passengers in the flight. What is
the RPM?
P = 130
D = 2,962
RPM = 130 * 2,962 = 385,060
In this example, the airline has 385,060
revenue passenger miles
1/20/2012 4
5. What is FTK/FTM?
FTM stands for Freight Tonne Miles
Countries using kilometers as a measure of
distance use FTK
It is the equivalent of RPM for freight
One Freight Tonne is one metric tonne of
revenue load carried one mile
In conjunction with revenue, this
measurement is also used to calculate yield
1/20/2012 5
6. FTK/FTM Calculation
Freight Tonne Mile = Revenue load flown *
Miles traveled
Let us define some variables to calculate
FTK/FTM
T = total load of revenue generating freight
D = total distance travelled
FTK or FTM = T * D
1/20/2012 6
7. Example 2
A freight carrier flies a distance of 2,962
miles. There are 130 tonnes of cargo in the
flight. What is the FTM?
T = 130
D = 2,962
FTM = 130 * 2,962 = 385,060
In this example, the airline has 385,060
freight tonne miles
1/20/2012 7
8. What is Yield?
Yield measures average earnings made by an
airline by transporting revenue passengers or
cargo per mile/kilometer flown
In case of passengers, Passenger Yield =
Passenger Revenue / Revenue Passenger Mile
In case of cargo, Cargo Yield = Cargo Revenue
/ Freight Tonne Mile
If your currency is USD, then Yield is
calculated in cents per mile
1/20/2012 8
9. What is Yield?
It is useful in assessing changes in fare over time
Yield is not useful for comparison across markets
and/or airlines
It varies dramatically by length of the route flown (also
known as stage length)
It also does not take into account the percentage of
capacity used (also known as load factor)
It can be calculated using gross or net revenue
figures but here we will use gross figures only
1/20/2012 9
10. Passenger Yield Calculation
Let us define some variables to help calculate
Passenger Yield
RP = total passenger revenue generated
P = total number of revenue generating
passengers
DP = total distance travelled by the
passengers
Passenger Yield = RP / RPM = RP / (P * DP)
1/20/2012 10
11. Cargo Yield Calculation
Let us define some variables to help calculate
Cargo Yield
RT = total freight revenue generated
T = total amount of revenue generating load
DT = total distance travelled in transporting
freight
Cargo Yield = RT / FTM = RT / (T * DT)
1/20/2012 11
12. Example 3
A flight generates revenue of US$ 36,400. It flies
a distance of 2,962 miles. There are 130
passengers in the flight. What is the yield?
RP = 36,400
P = 130
DP = 2,962
Yield = 36,400 / (130 * 2,962) = 36,400 / 385,060 =
0.095
In this example, the airline earned 9.5 cents or
about 9 cents per passenger per mile
1/20/2012 12
13. Example 4
An aircraft has a first class and an economy
section. There are 12 seats in the first class
section and 108 in the economy. Average fare
per passenger in first class was US$ 690.
Average fare per passenger in economy class
was US$ 345. The aircraft flew a distance of
3,854 miles. What is the yield?
R = (12 * 690) + (108 * 345) = 8,280 + 37,260 =
45,540
P = 12 + 108 = 120
1/20/2012 13
14. Example 4
D = 3,854
Yield = 45,540 / (120 * 3,854) = 45,540 /
462,480 = 0.098
In this example, the airline earned 9.8 cents
or about 10 cents per passenger per mile
1/20/2012 14
15. Example 5
An aircraft has a first class and an economy
section. There are 12 seats in the first class
section and 108 in the economy. Average fare per
passenger in first class was US$ 690. Average
fare per passenger in economy class was US$
345. Head sets were given out for free in the first
class. In economy class, head set sale generated
US$ 500. Overall food& beverage sale generated
US$ 1,000. On an average, all passengers paid
US$ 100 extra as fuel surcharge. The aircraft flew
a distance of 3,854 miles. What is the yield?
1/20/2012 15
16. Example 5
R = (12 * 690) + (108 * 345) + 500 + 1,000 +
12,000 = 8,280 + 37,260 + 500 + 1,000 +
12,000 = 59,040
P = 12 + 108 = 120
D = 3,854
Yield = 59,040 / (120 * 3,854) = 59,040 /
462,480 = 0.1277
In this example, the airline earned 12.77 cents
or about 13 cents per passenger per mile
1/20/2012 16
17. What is Revenue?
Revenue is generated by transporting either
passengers or cargo or both
Following are considered examples of
revenue for the airline from transporting
passengers
Ticket fares, including fuel surcharge
In-flight sales
Other ancillary revenue like priority boarding,
partnership with shuttle buses, rental cars, hotels,
etc.
1/20/2012 17
18. What is Revenue?
Following are considered examples of
revenue for the airline from transporting
cargo
Extra or oversized baggage
Freight not linked to a passenger
1/20/2012 18
19. What is not Revenue?
Following are not considered examples of
revenue for the airline
Taxes, Fees & other charges – While this is extra
money collected from passengers, this is not
counted as revenue as the airline is collecting
them on behalf of the airport and the
Government. So while this adds to the gross
collections by the airlines, it should not be used in
gross revenue collection.
1/20/2012 19
20. Example 6
An aircraft has 16 seats in first class, 58 seats in
business class and 227 seats in economy section.
Average fare per passenger in first class was US$
7,000, in business class was US$ 4,500 and in
economy class was US$ 1,200.
Passengers in first and business class on an
average checked in 2 bags weighing 23 kilos each
for free. Passengers in economy were allowed
the first bag for free and the second for US$ 60.
1/20/2012 20
21. Example 6
About 125 passengers in economy paid for
the second bag. The aircraft flew a distance of
15,380 miles.
Assuming no other freight was flown, what is
the passenger and cargo yield?
1/20/2012 21
23. Example 6
Passenger Yield = RP / (P *DP) = 645,400 / (301
* 15,380) = 645,400 / 4,629,380 = .139
Passenger Yield for the airline is 13.9 cents or
almost 14 cents per passenger per mile
Cargo Yield = RT / (T * DT) = 7,500 / (11.5 *
15,380) = 7,500 / 176,870 = .042
Cargo Yield for the airline is 4.2 cents per
passenger per mile
1/20/2012 23
24. Revenue Passengers
Following are considered revenue passengers
Passengers traveling on published fares
Passengers using publicly available promotional
offers like “Two for one”
Passengers with tickets from frequent flyer miles
Passengers using compensation for denied
boarding
Passengers travelling on corporate discounts
Passengers using preferential fares like
government, seamen, military, youth, student,
etc.
1/20/2012 24
25. Non Revenue Passengers
Following are considered non revenue
passengers
Passengers travelling free
Passengers using fares or discounts only available
to airline employees or their agents
Passengers travelling on business for the airline
Infants who do not occupy a seat
1/20/2012 25
26. Example 7
An aircraft has a first class and an economy
section. There are 12 seats in the first class
section and 108 in the economy. In the first class
section of the aircraft, there were 2 airline
executives travelling on company business. In
the economy section, there was 1 person who
was denied boarding in the previous flight.
Average fare per passenger in first class was US$
690. Average fare per passenger in economy
class was US$ 345. The aircraft flew a distance of
3,854 miles. What is the yield?
1/20/2012 26
27. Example 7
The 2 executives are travelling on airline business so
we have to discount them. The passenger who was
bumped in the previous flight will be considered as a
revenue passenger for this flight.
R = ((12 – 2) * 690) + (108 * 345) = (10 * 690) + (108 *
345) = 6,900 + 37,260 = 44,160
P = 10 + 108 = 118
D = 3,854
Yield = 44,160 / (118 * 3,854) = 44,160 / 454,772 =
0.097
In this example, the airline earned 9.7 cents or 10
cents per passenger per mile
1/20/2012 27
28. How is Distance calculated?
Airline distance between two points is
calculated by first finding all the points visited
en-route to the destination and then
calculating great circle distances for all the
route pairs
For example, a flight from London to New
York follows a set of points which may include
Navaids, Waypoints, Airways, Departure
routes, Arrival routes, and lat/long fixes
1/20/2012 28
29. Exercise 1
A flight has two segments. The distance of
the first segment is 10,385 miles. The distance
of the second segment is 4,367 miles. In the
first segment there were 30 passengers in
first class, 60 passengers in the business class
and 326 in the economy class. In the second
segment there were 200 in the economy
class.
1/20/2012 29
30. Exercise 1
In the first segment, the average fare for first
class was US$ 4,752. The average fare for
business class was US$ 2,567 and for
economy class was US$ 1,135.
In the second segment, the average fare for
the economy class was US$ 702.
Average fuel surcharge for the first segment
was US$ 150 per person. For the second
segment, it was US $80 per person.
What is the overall yield?
1/20/2012 30
31. Exercise 2
An aircraft has 12 first class seats, 42 business
class seats and 316 economy class seats. In the
economy class there were 4 passengers traveling
on company business.
Average fare in first class was US$ 12,000,
business class was US$ 6,400 while in economy
class it was US$ 850. All ticket prices included
average taxes of US$ 250.
All first and business class passengers checked in
their allowed 3 bags each weighing 23 kilos.
1/20/2012 31
32. Exercise 2
All Economy class passengers checked in
their allowed 2 bags each weighing 23 kilos.
50 economy passengers checked in an extra
bag each weighing 23 kilos at US$ 70 per bag.
Food & beverage sale generated extra US$
2,000.
The aircraft had flown a distance of 7,880
miles.
What is the passenger and cargo yield?
1/20/2012 32