Adam Abed
1. Virgin America
2. Virgin America is a low cost carrier( LCC). It is a low cost carrier, as it is significantly cheaper
than other airlines for the same routes.
3. RPM- Revenue Passenger Miles- Number of miles flown X number of Passengers
ASM- Available Seat Mile- Number of miles flown X number of seats
RASM- Revenue per ASM- Number of cents received for each available seat mile
CASM- Cost per ASM- Cents needed to operate each ASM
Yield- Revenue/RPM
PRASM-Passenger Revenue per Available Seat Mile
Fuel Consumed- How much fuel is used by aircraft
Fuel Costs per ASM-How much of each ASM goes towards fuel costs. Expressed in cents
Non-Fuel Costs per ASM- How much of each ASM goes towards non-fuel costs. In cents.
3.5E+09
3E+09
Miles
2.5E+09
2E+09
ASM
1.5E+09
RPM
1E+09
500000000
0
1
4.
2
3
4
5
Year (1=2007, 2=2008, etc.)
6
LF
1
Percent
0.8
0.6
0.4
LF
0.2
0
1
2
3
4
5
6
Year (1=2007, 2=2008, etc.)
1200000
1000000
USD (000)
800000
600000
Net Income
400000
Op. Expenses
200000
Op. Revenue
0
-200000
1
2
3
4
5
6
-400000
Year (1=2007, 2=2008, etc.)
5.
A. Fuel prices increase airline expenses.
B. Fuel prices cause noticeable changes in the operating expenses and revenues of airlines,
however, they do not drastically change the net income of airlines.
C. Fuel prices have slowed the growth of airline network growth, however, they have not
caused a shrinkage of airline growth at any time.