United Airline
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What's So Special About RPKs?

Fri Apr 19, 2013 10:22 am

A lot of aviation experts believe that RPK is the most accurate way of measuring airline size. Why is that? Why is it more accurate than fleet size, number of passengers carried etc?
 
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Polot
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RE: What's So Special About RPKs?

Fri Apr 19, 2013 11:18 am

I'm going to repeat what I said in a thread a few weeks ago.

You have 2 airlines. One flies a single 737/A320 between New York and Boston all day, and the other flies a single A330/777 between New York and London all day. Which is larger?

They both have the same fleet size. They would likely have similar number employees (the 2nd one might have more) Because the first airline is flying a relatively short flight it will likely end up carrying more passengers- but that is because it can fly more segments a day than the second airline.
 
vv701
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RE: What's So Special About RPKs?

Fri Apr 19, 2013 11:20 am

Because it is a measure of comparative business activity that does not vary with exchange rates or ticket prices.

Fleet size tells you very little. For example is an airline that operates 20 31 seat DO328s "larger" than an airline that operates 15 469 seat A380s?

Number of passengers is also not truly indicative of operational size. Is an airline that carries 1 million passengers a year between LHR and BRU really "bigger" than an airline that carries 750,000 passengers a year between LHR and SYD?

If you are trying to compare economic activity theoretically the best measure is revenue. But airlines can slide up and down a revenue ranking list for no other reason than changes in relative exchange rates. So, for example a non-American airline could show 10 per cent growth in RPKs while maintaining ticket prices but because its home market currency lost 15 per cent of its value against the US $, comparative revenue figures would show a decline.

RPK does not have the intrinsic problems of comparison that many other possible measures have.
 
United Airline
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RE: What's So Special About RPKs?

Fri Apr 19, 2013 6:18 pm

Shouldn't revenue or total assets be the standard way of measuring airline size?

Can anyone give me the list of top ten airlines in terms of RPKs?
 
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coronado
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RE: What's So Special About RPKs?

Fri Apr 19, 2013 6:33 pm

http://www.airlines-inform.com/rankings/traffic_2011.html

You can probably add United and Continental together but in 2011 they technically were still on separate certificates at least until the very end of November.
.
These are for 2011, we should be seeing the Airline Business 2012 rankings in another 2 or 3 months.
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Azure
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RE: What's So Special About RPKs?

Fri Apr 19, 2013 6:47 pm

Quoting Coronado (Reply 4):

I have another source, the official European website, with agregated data : http://europa.eu/rapid/press-release_MEMO-12-714_en.htm



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[Edited 2013-04-19 11:52:21]
 
Pihero
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RE: What's So Special About RPKs?

Fri Apr 19, 2013 6:54 pm

Here are the figures for 2012. They include all the parameters Polot and VV701 are talking about.
http://en.wikipedia.org/wiki/World%27s_largest_airlines
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Pe@rson
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RE: What's So Special About RPKs?

Fri Apr 19, 2013 7:04 pm

Quoting VV701 (Reply 2):
If you are trying to compare economic activity theoretically the best measure is revenue

Yep, and that it is distance-based enables much fairer and better comparison.
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Viscount724
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RE: What's So Special About RPKs?

Fri Apr 19, 2013 7:15 pm

Quoting United Airline (Reply 3):
Shouldn't revenue or total assets be the standard way of measuring airline size?

No, because that would make a small carrier based in a country with a strong currency seem much larger than a larger carrier based in a country with a weak currency, when you converted both of their total revenue numbers to a common currency.
 
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OzarkD9S
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RE: What's So Special About RPKs?

Sat Apr 20, 2013 12:13 am

To me, it should be revenue + pax carried combined.

If airline A carries 1 pax and had $2 in revenue it is larger then the one that carried 1 pax and $1.99 in revenue. But that's just me.
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waly777
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RE: What's So Special About RPKs?

Sat Apr 20, 2013 12:26 am

Quoting OzarkD9S (Reply 9):
To me, it should be revenue + pax carried combined.

That is essentially RPK but with the distance flown factored in.
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FlyHossD
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RE: What's So Special About RPKs?

Sat Apr 20, 2013 12:35 am

Quoting United Airline (Thread starter):
A lot of aviation experts believe that RPK is the most accurate way of measuring airline size. Why is that? Why is it more accurate than fleet size, number of passengers carried etc?

RPK is just one measurement. Like many others, it's useful especially for comparison with competitors or previous periods.

The industry seems to have a over fascination with statistics, in my opinion, but RPK or RPMs are a key measurement.
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United Airline
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RE: What's So Special About RPKs?

Sat Apr 20, 2013 3:53 am

OK I know CX has a higher RPK than let's say CA but CA has a larger fleet and it carries more passengers. So which is a bigger airline with more assets? CX?
 
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coronado
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RE: What's So Special About RPKs?

Tue May 14, 2013 2:59 pm

Quoting United Airline (Reply 12):
with more assets

Assets could be tricky. It is possible for a an airline to be very large and not own a single aircraft if there entire fleet is on an operating lease from leasing companies. A few years ago AirTran started transcontinental operations but using wet leased aircraft from Ryan (Ryan provided the aircraft and crew). While most observers credit those operations as adding to Airtran's revenues and RPK(RPM) they certainly did not add to their assets until AirTran a year or two later took delivery of their own aircraft they had ordered. I don't see much difference in this arrangement and the arrangement major carriers have with their regional lift providers, particularly when the entire revenue stream for carrying pax on regional jets flows through the major carrier's P&L.
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