Airline and Aviation Key Terms

By Kristan Hart, writer
Jun 18, 2011
Image Credit: Monkeybusinessimages / Getty Images

Airline and aviation key terms for airline officials and investors

Airlines and aviation key terms are important to help you learn the lingo of the industry. Calculating revenue and abiding by all regulations for the airline industry is different from other industries. That's why it's so important to understand what the terms mean—and when applicable—how to calculate revenue. Understanding revenue formulas for the airline industry is important, so consider these airline and aviation key terms to help you out.

Airline industry

The airline industry can be a broad term, but the U.S. Department of Transportation helps break it down based on the size and capacity of the airline. Commercial airlines, aviation companies and air shipping businesses are all part of the airline industry.


There are several groups charged with overseeing the airline industry. Some of the most recognized are the Federal Aviation Administration, the Air Transport Association and the International Air Transport Association.
Federal Aviation Administration, the Air Transport Association and the International Air Transport Association to read about each organization's specific responsibilities and goals.

Load factor, passenger load factor, breakeven load factor

The load factor is the percentage of available seating on a flight that passengers must fill for that airline to make enough money to meet operating expenses. An airline's load factor varies from season to season with the ebb and flow of travel numbers.
Research and Innovative Technology Administration (RITA), part of the U.S. Department of Transportation, addresses the rising breakeven load factors necessary for airlines because of increased expenses. Graeme Pietersz offers a definition and explanation of passenger load factor.

Available Seat Miles (ASM)

Available Seat Mile is a way of measuring airline seating capacity.
The Learning Center at the Air Transport Association of America website offers an example to help calculate ASM. "Creating Value Through Corporate Restructuring”  by Stuart Gilson gives even more information on the term, ASM.

Revenue Seat Miles, Revenue Passenger Miles (RPM)

The number of seats sold on a flight is how airlines calculate Revenue Seat Miles. It's also known as Revenue Passenger Miles. defines Revenue Seat Miles in its airline glossary of terms. The Airline Data Project, opearted through MIT, also includes Revenue Passenger Miles (RPMs) in its online glossary.

Air Traffic Liability (ATL)

Air Traffic Liability is an important key term for airline officials and even investors to know. It involves money the airline has collected, but service that has yet to be provided.
JetBlue defines Air Traffic Liability under "Passenger Revenues."
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