About the Performance Measures

• How were these performance measures selected?
• What changes have been made to the performance measures?
• What are the data sources for the performance measures?
• What are the definitions of network and low-cost carriers?
• Why don’t the performance measures cover regional airlines?
• Are numbers available for other airlines?
• When does BTS release the airline operating performance measures?

Q. How were these performance measures selected?

A. All the aviation data presented in the performance/productivity tables and graphs reflect SYSTEM airline operations and represent standard airline industry units of production, various output measurements and output valuations.

Q.  What changes have been made to the performance measures?

A. Measures that are now numbered 1, 2, 4, 8, 9 and 10 are now calculated using originating passengers instead of enplanements as was done before the third quarter of 2006.  This change was made to more accurately measure output performance. Each originating passenger represents one unique sale by a carrier compared to the enplanement figure which counts an originating passenger as an enplanement for each flight segment flown.   The measure now numbered 4 is now a calculation based on passenger revenue, rather than a comparison of revenue to costs.  Also, two new measures, numbers 3 and 6, were added beginning with the third quarter of 2006.

Financial Measures:

1. System Operating Profit/(Loss) per Originating Passenger.  Prior to the third quarter of 2006, this measure was System Operating Profit/Loss per Enplanement.
2. System Operating Expenses (excluding Regional Jet Contract) per Originating Passenger measures how much each airline spends in relation to the originating passengers it carries.  All expenses necessary to operate an airline excluding contracted expenses relating to regional jet activity are included in this measurement.  Prior to the third quarter of 2006, this measure was Operating Expense (Excluding Fuel/Labor Expenses) per Enplanement.
3. System Operating Expenses (excluding Regional Jet Contract) per Aircraft.  This measure spreads the total expenses to operate an airline over each of the carrier’s individual operating aircraft excluding non-mainline Regional Jet contract expenses. This is a new measure beginning with the third quarter of 2006.                                                          
4. Passenger Revenue per Originating Passenger (excluding Regional Jet Contract Revenue) measures the average amount of revenue received by the airline for each originating passenger. Prior to the third quarter of 2006, this measure compared an airline’s revenue per enplanement to its costs per enplanement.

Employment and Traffic Measures:

5. Full-Time Equivalent Employees per Aircraft. Employees per aircraft provide one measure of an airline’s efficiency with respect to the average number of all its employees per unit of production.  The smaller the number of employees per aircraft indicates greater efficiency. Note: Full-time Equivalent Employee (FTE) calculations count part-time workers as one-half of a full-time employee.
6. Average monthly Available Seat-Miles (ASMs) per Full-Time Equivalent Employee. ASMs (one aircraft seat flown one mile) are the basic unit of production in the airline industry.  This measure is the simplest gauge of FTE productivity. Note: Full-time Equivalent Employee (FTE) calculations count part-time workers as one-half of a full-time employee. This is a new measure beginning with the third quarter of 2006.
7. Average Monthly Revenue Aircraft Minutes per Full-Time Equivalent Employee. The most neutral common denominator in evaluating production performance is revenue aircraft minutes per employee.  Irrespective of an airline’s business model (long haul or short haul routes) or type of aircraft it utilizes, flight time is what the aircraft were designed to do. Note: Full-time Equivalent Employee (FTE) calculations count part-time workers as one-half of a full-time employee.
8. Average Monthly Originating Passengers per Full-Time Equivalent Employee is a basic measure reviewing how many unique passengers are transported compared to the size of the airline’s workforce.  Note: Full-time Equivalent Employee (FTE) calculations count part-time workers as one-half of a full-time employee. Prior to the third quarter of 2006, this measure was Average Monthly Enplanements per Full-Time Equivalent Employee.
9. Fuel Cost per Originating Passenger. A measure of how much airlines pay for fuel compared to the number of unique passengers they transport. Prior to the third quarter of 2006, this measure was Average Monthly Fuel Cost per Enplanement.
10. Average Full-Time Equivalent Employee Compensation per Originating Passenger.  A basic measure of how many passengers are carried compared to the compensation of the workforce. Note: Full-time Equivalent Employee (FTE) calculations count part-time workers as one-half of a full-time employee. Prior to the third quarter of 2006, this measure was Average Monthly Full-Time Equivalent Employee Compensation per Enplanement. .
11. Average Annual Full-Time Equivalent Employee Compensation is a basic measure of employee compensation. Compensation includes salary + benefits + payroll taxes. Note: Full-time Equivalent Employee (FTE) calculations count part-time workers as one-half of a full-time employee.

Q. What are the data sources for the performance measures?

A. Data are taken from airline filings with the Bureau of Transportation Statistics:

• Form 41 Financial Data, Schedule P-1.2, Schedule P-5.2, filed quarterly
• Form 41 Traffic Data, T-100 Market, and T-100 Segment data, filed monthly
• Airline employment numbers filed monthly

Q. What are the definitions of network and low-cost carriers?

A.  Network carriers operate a significant portion of their flights using at least one hub where connections are made for flights on a spoke system. Low-cost carriers are those that the industry generally recognizes as operating under a low-cost business model.

Q. Why don’t the performance measures cover regional airlines?

A.  Regional Jet airlines performance measures are not reported here because these carriers’ operational performance results are closely tied to their contractual agreements with the larger mainline airlines that specify the number of flight operations, markets served, and air fares offered.

Q.  Are numbers available for other airlines?

A.  BTS makes the traffic and financial numbers available on the TranStats database, http://www.transtats.bts.gov/.  Employment numbers for passenger airlines are available in monthly press releases, which can be found at http://www.bts.gov/press_releases/passenger_airline_employment.html

Q. When does BTS release the airline operating performance measures?

A. The airline operating efficiency numbers are issued quarterly after the release of quarterly financial data.  The schedule for release of the quarterly financial data can be found at http://www.bts.gov/upcoming_data_releases/.