cost per available seat-mile

Dead Companies Walking
by Scott Fearon
Published 10 Nov 2014

Continental was still in business as Texas Air’s prime operating subsidiary, but it was only serving a fraction of the routes it had once served. Because of these troubles, shares of Texas Air were very cheap, down around $5. And yet, when I crunched the numbers and plotted out the company’s earnings models, I found something intriguing: of all the airlines in business, Texas Air had the lowest “cost per available seat-mile,” meaning it could charge less for tickets and still make a healthy profit. I checked and rechecked my calculations to make sure they were correct. When I was satisfied that I hadn’t made a stupid error, I started to go into my boss Geoff Raymond’s office to show him what I had found.