No route optimisation report is complete without a few RPK, ASK and RASK metrics, but don't let them inform your strategy without considering other factors.

How much demand is there for your existing air route to Athens, and does your airline have enough weekly flights? If demand exceeds availability, then your airline could be missing out on a revenue opportunity.

How much demand will there be for your airline's new routes to the two recently expanded Greenlandic airports, which have enabled the island to accommodate bigger aircraft for the first time in its history?

These are two examples of when airlines might use metrics like Revenue Passenger Kilometres (RPK – number of revenue passengers multiplied by the distance they travel) and Available Seat Kilometres (ASK – number of available seats multiplied by the distance of the routes) to help them set key performance indicators (KPIs) such as the Passenger Load Factor (PLF – RPK divided by ASK) to optimise their routes.

After all, an airline with a tight RPK/ASK percentage margin on a route – so ideally the ASK is only marginally longer than the RPK – should have a recipe for success.
But is route planning really that simple?

RPK rates are soaring ... but not profits

If route planning was simple and all airlines needed to do was balance their RPK and ASK, then profitability would be assured. But it isn't. While some airlines are enjoying healthy profits again, after suffering horrific losses during the pandemic and post-pandemic restrictions, many are still struggling.

According to IATA figures for 2024, global RPK rates grew by 10.4 percent, global ASK rates by 8.4 percent, and the PLF to a new record level of 84.0 percent. But total airline profits did not shoot up. In 2024, the net profit margin of 2.7 percent was only marginally better than the 2.6 percent margin set in 2023. After all, margins remain incredibly tight in the industry following the hardship of the pandemic.

According to IATA, the average airline retains just $5.45 for every passenger carried – which according to Willie Walsh, IATA’s Director General, is “just enough to buy a basic ‘grande latte’ at a London Starbucks”.

Walsh is happy to see airlines back in the black, but remains cautious it is simply a matter of trusting their metrics:
“Airlines are far too burdened by onerous regulation, fragmentation, high infrastructure costs and a supply chain populated with oligopolies.

Are KPIs dynamic enough?

KPIs and metrics are useful data. For example, a steady rise or fall in RPK over a sustained period is a good indicator of increasing or decreasing demand. And both RPKs and ASKs are useful for benchmarking, tracking performance (of airlines and regions) and overall revenue generation. But while these metrics will inform an airline’s decision to adjust capacity by deploying larger or smaller aircraft, or even introducing/suspending/discontinuing services, they won't help that much with dynamic pricing – the real-time adjustment of prices in response to market conditions as they happen.

Aviation will always be a dynamic industry, so it is vital airlines can dynamically adjust their fares and seat availability.

IATA cautions airlines against using the metrics to inform their decision-making regarding route planning, capacity adjustments and competitive pricing – a stance shared by most industry experts. Instead, airlines must take a more holistic approach encompassing broader market analyses, external considerations, competitive actions and regulatory changes.

One KPI to rule them all?

What if the metrics could do more than help airlines with routine planning? Increasingly, Average Coupon Value (ACV) – which is often referred to as the Average Fare – and Revenue per Available Seat KM (RASK) are helping airlines with their pricing. Calculated by dividing the total revenue earned from ticket sales by the total number of km flown, the ACV should theoretically help airlines to understand their pricing strategy and whether it is generating enough revenue to cover its costs.

For example, if an airline generates €20 million in revenue from flights travelling a total of 4 million km, the ACV would be €5 per km. The RASK, meanwhile, is calculated by dividing the total revenue by the total number of available seat kms (ASK). So, if an airline generates €20 million in revenue and has a total of 5 million available seat kms, the RASM would be €4 per km.

However, while the RPK, ASK, ACV and RASK are useful for informing airlines’ decision-making on a route-by-route basis, they should not be applied universally because they don’t factor in the distance of flights adequately.

Granted, long flights will always cost more than short flights, but there is no simple correlation. Rather the price will be determined by a long list of factors.

For a more universal approach to route planning and price setting, airlines need a KPI that takes into account the yields of each and every flight. Cost per Available Seat km (CASK) factors in both fixed and varied operating costs, and then the Profit per Available Seat km (PASK) is calculated by subtracting the CASK from the RASK, providing us with a figure that should resemble the actual profit/loss of an airline – or on a smaller scale the profit/loss of a route.

So is the PASK the piece of the puzzle that airline route planners have been searching for?

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KPIs in aviation: useful for informing data, but not for informing decisions