What’s Unit Cost?

[Ref. The Global Airline Industry Edited By Peter Belobaba, Amedeo Odoni and Cynthia Barnhart © 2009 John Wiley & Sons, L td. ISBN: 978-0-470-74077-4]

Unit cost, which is an important measure of cost efficiency, both over time and across airlines. It’s defined as the total operating expense divided by the ASK produced by an airline, for a route, region or total network:

Unit cost = Total operating expense / ASK

For example, an airline incurs $15,000 of expense with 200,000 ASK, then its unit cost would be $15,000/200,000 = $0.075 per ASK.

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