Revenue Passenger Mile - RPM

Commercial airlines fly on regular schedules. The flight from Boise to Tallahassee leaves at 9 am every morning. The trip from Kuala Lumpur to Guadalajara leaves each Tuesday at 3 pm. And so on.

This system is so routine that you probably don't even think about it. They could do it another way, though. Airlines could wait until they had enough interest to fill a plane, and then schedule a time when it would leave...like how stage coaches would leave frontier towns. That might actually be more profitable for the airline. Because, as it is, the regular scheduling system leads to the fact that the airlines don't always have full planes. Which means less revenue for each flight.

Revenue Passenger Miles helps measure that sort of thing. It represents a way to measure traffic...the amount of people the airline is carrying.

You calculate the figure by multiplying the number of paying passengers (that's the "revenue passenger" part...flight crew and frequent flyer freebies don't count) by the number of miles flown. The RPM figure can then be compared with a stat known as available seat miles, or ASM (or sometimes known as revenue seat miles, or RSM). ASM measures the total capacity of the airline. Comparing the two numbers (ASM and RPM) gives you the load factor, a measure of how full the airline keeps its planes. Generally speaking, the higher the load factor, the better the airline is using its resources (i.e. its planes).

RPM doesn't just apply to airlines. It can be used by any transportation company...bus, train, covered wagon, spaceship, etc.