Do you know what ASK, CASK and RASK stand for?
Those interested in analyzing airline financial accounts should become acquainted with key acronyms that are frequently used to assess a carrier’s performance. Let’s take a deeper look at three key acronyms that you’re likely to see while reviewing an airline’s financial report: the indexes ASK, CASK, and RASK.
Available Seat Kilometres (ASK)
The ASK index assesses an airline’s offer. The index is equal to every single seat that the airline might potentially sell multiplied by each kilometre flown. In other words, the ASK index provides information on an airline’s capacity, and its value is typically stated in millions. To calculate the ASK value, take all available aeroplane seats and multiply them by the number of kilometres flown.
For example: let’s take a Boeing 777-200ER with 280 seats which flies for 2,000 kilometres. The ASK(Available Seat Kilometres) value for this flight would be 280 x 2,000= 560,000.
This index is also useful for determining the capacity of specific routes. To boost the airline’s offer and, thus, income, the most demanded ones should be flown with high-capacity planes (wide-body aircraft) and at a high frequency. Furthermore, the ASK index is used to evaluate the cost centres of airlines. More specifically, the ASK index is used to identify most unit costs such as fuel, people, aircraft leasing, airport fees, and so on. For example, if an airline wants to measure the impact of its people on the balance sheet, it would take its total personnel cost and divide it by its ASK. In most cases, such decisions are taken towards the conclusion of a fiscal year, which indicates the overall cost of staff for a particular fiscal year.
Finally, the ASK is crucial since it is the source of another index RPK, or Revenue Passenger Kilometres. This indicator indicates how many available seats have been sold to paying passengers. This index is calculated by multiplying the number of flying passengers by the distance flown. The load factor of the plane can also be determined at this stage. The load factor is commonly associated with a specific flight, but it can also be associated with a certain route or even the airline as a whole.
Cost for Available Seat Kilometres (CASK)
The CASK index refers to the airline’s cost per available seat kilometre offered. In other words, the CASK provides information on the cost of a single passenger journey per kilometre. The index is calculated by dividing an airline’s operating costs by the number of available seat kilometres flown. The outcome is typically represented in dollars.
This index is useful for airline management since it allows you to analyse the unit expenses generated by flying each aircraft in a fleet. This makes it easier to determine which aircraft is the most efficient. However, keep in mind that the CASK index only measures direct operative costs of an aircraft, such as depreciation, leasing, fuel, and so on.
The larger the plane, the higher the CASK index: an inverse proportionality relationship between an aeroplane’s dimension and this index. The costs per available seat kilometre of an A380-800 are significantly lower than those of an A220-100. The rationale is simple: a larger plane can accommodate many more passengers than a smaller one. Furthermore, larger planes typically traverse longer distances. As a result, those expenditures that are not directly tied to a plane’s size are offset by a greater number of seats and a longer distance travelled, resulting in a drop in CASK values.
Long-haul jets, on the other hand, typically have CASK values that are 33% higher than smaller aircraft. The first argument is the increased expense of a larger plane, such as the A380. Furthermore, the most recent long-haul planes, such as the A350, are more fuel-efficient, resulting in lower airline expenses. Finally, the larger the plane, the higher the navigation costs (landing, parking, and flight) and fuel quantity necessary.
Revenue per Available Seat Kilometres (RASK)
This index displays the amount of revenue made by each seat kilometre for the airline. To calculate an airline’s RASK, divide the income made during the fiscal year by the ASK for the same period. In comparison to the first index, the ASK indicates how many tickets an airline might potentially sell. The RASK, on the other hand, refers to the effective number of tickets sold over a certain time period (typically, the FY). This index’s principal function is connected to network analysis. An airline’s routes are categorised based on their RASK values. This index makes it simple to detect less lucrative routes and, as a result, remove them from the network.