Why is Revenue Passenger Mile (RPM) important for an airline company? What is the point about RPM?

Question

I understand 1 RPM is one paying passenger for every mile flown. But I don't understand the meaning of it. Is it better to have high or low RPM? For example Southwest has a higher number of passengers than American Airlines but AA has higher RPM than Southwest. Thanks for any clarification.

Answer 1

High RPMs are generally better as they directly correpond to revenue. 1RPM=1 seat sold for each mile that airplane travels. However, it does not take into account the cost of operating that seat or the price the customer paid for that seat so it is kind of a misleading statistic.

AMR has more RPMs because their flights are generally longer in terms of distance than Southwests. RPMs are a decent yardstick by which to measure the health of an airline as it shows how many of their potentail revenue miles are being sold. A much better measure though is RPMs divided by ASMs (Available seat miles...1 seat flown 1 mile). This is known as "load factor" and shows as a percentage of all the seat miles flown how many of them are being sold. Airline financial health is typically seen at something like 70-72% load factor. Recently, most airlines have been reporting between 75 and 80%, meaning that they are well on their way back to being profitable.

Answer 2

I am no where near as computer literate as the other folks that answered your question. I have a 5400 rpm 250GB drive in my laptop. A WD Black Caviar 1TB 7200 rpm drive in a desktop I just built. Here is what I think I see. My laptop does not appear to be that much slower than my desktop when it comes to accessing my files. Copying data from my external hard drives and flash drives, on the desktop, seems take about 2/3 the time it takes with the laptop. My Windows Experience Score, not that I really believe these numbers (I have my reasons for that), for the Primary Hard Disk in my laptop is 5.1. In my desktop it is 5.9. Given a choice I would always say go for the faster drive. Sometimes there are other things, not even related to the hard drive, that need to be considered. I notice that when people here ask which laptop should I buy sometimes one has a bigger drive with slower speed than the other. Some of the features on the laptop with the slower drive speed are better. Most times they cost about the same. Now if they should sacrifice some hard drive speed for more storage and other features is a decision they have to make themselves. Same for a desktop. Hope this helps. Good Luck with your future purchase.

Answer 3

this is their operating cost per customer mile ,the lower the number the higher their profits and this how they can compare to other airlines and even different routes

Answer 4

hahahahahahahahah yes