Question:
For each scenario calculate the break-even load factor as a percentage of available seat miles or ASMs - must show work. The break-even load factor formula is:
(RPM x RRPM) - (ASM x CASM) = 0
RPM = revenue passenger miles
RRPM = revenue per revenue passenger mile or Yield: Average revenue per revenue passenger mile or revenue ton mile, expressed in cents per mile.
ASM = available seat miles
CASM = cost per available seat mile
Scenarios:
1) A small airline flies 10,000,000 seat miles per year. Yield is 10 cents per RPM. Cost per available seat mile or CASM is 8 cents, so the annual costs are 8 cents (.08) x 10,000,000 or $800,000.
(.10) - (800,000) =
2) A given airline's available seat miles (ASMs) in 2011 were 37,332 in millions, or 37,332,000,000 miles. The yield was 13.29 cents per mile and cost per available seat mile or CASM was 11.17 cents per mile.
3) A given airline's available seat miles (ASMs) in 2011 were 98,437,092 in thousands or 98,437,092,000 miles. Operating revenue yield per ASM was 12.3 cents and operating expenses per ASM were 11.29 cents.