Thu Feb 10, 2000 10:41 am
Just one important correction. Polaris stated that to calculate the passenger kilometers of the airline, you would multiply the total number of passengers flown by the total kilometers flown by that airline in one year. This is not correct. You'll see why.
Revenue passenger kilometers mean the number of fare-paying passengers on any flight multiplied by the kilometers flown, on that flight only! Then you simply add up this stat for every flight that leaves and departs in that year to get your total.
Example:
One 747 flying to Europe from Toronto say, might produce this type of stat:
400 pax x 5,000 km = 2 million RPK
However, if you multiply the total number of passengers flown by the total number of kilometers flown, as Polaris suggested, the product of these two numbers would be outrageous because you would be multiplying every passenger's flight by every other passenger's mileage.
To make things simple, use this hypothetical example:
One 747 makes a very short flight. It flies 400 passengers from A to B 1 kilometer.
400 pax x 1 km = 400 passenger kilometers
This very short flight would produce a total of only 400 passengers kilometers.
Now, you have a second flight. This flight has only 1 passenger on it. This plane, however, flies 5000 km to Europe.
1 pax x 5000 km = 5,000 passenger kilometers.
Now if you add up the passenger kilometers from both flights you would get a total of 5,400 passenger kilometers.
400 + 5000 = 5,400
A grand total of 5,400 passenger kilometers. Correct.
However, if you then use Polaris' equation for totalling up the passenger kilometers, you would have to multiply the total number of passengers (401) by the total number of kilometers flown (5,001).
401 pax x 5,001 kilometers = 2,005,401!
That method produces a total of 2,005,401 passenger kilometers! Obviously, this is not the case.
The actual number is 5,400 passenger kilometers. Assuming that they all paid their fare, make that 5,400 revenue passenger kilometers, RPK.
So that is one way to compare airlines. The other is simply to compare how many passengers fly it every year. One airline may have fewer passengers than another, but it may also fly much longer routes, more than making up the difference.
You may also compare how many flights two airlines have. Again, however, the airline with fewer flights may also be flying 747s mostly, while the other airline is flying MD-80s mostly.
You may also compare the fleet size. But again, as above, an MD-80 doesn't produce the same numbers as a 747.
The other way to compare is passenger seat kilometers. That is the number of seats on a plane, whether they be empty or occupied, mulitpled by the number of kilometers flown for each flight. Obviously, if one airline flies long routs with big 747s, but all the seats are empty all the time, is that the measure of big airline? Hardly. But this stat is used to measure efficiency!
The other way to compare is simply revenue. How much money did an airline take in? Gate reciepts, so to speak. One airline may generate higher gross numbers, but if it isn't making any money, and another airline is making a billion dollars a year in profit, which airline would you consider to be bigger?
So the best way to compare is to count all the passengers on a particular plane and multiple them by how far each of them travelled on that flight. Then add up these numbers at the end of the year to get the revenue passenger kilometers.
Hmmmm...
An optimist robs himself of the joy of being pleasantly surprised