What is the average amount of revenue earned per passenger mile?

What is the average amount of revenue earned per passenger mile?

• A. Net profit
• B. Gross margin
• C. Yield
• D. Break-even

Answer: (C)

Yield is the revenue earned for each passenger mile flown. It is calculated by dividing passenger revenue by revenue passenger miles, so it directly answers “how much money per mile does a paying passenger generate?” This makes it the precise measure described in the question. For example, if passenger revenue is $1,200 and the flight generates 1,000 revenue passenger miles, yield is $1.20 per revenue passenger mile. This concept is distinct from net profit (the bottom-line after all costs), gross margin (revenue minus cost of goods sold, not per mile), and break-even (the point where revenue covers costs).

Yield is the revenue earned for each passenger mile flown. It is calculated by dividing passenger revenue by revenue passenger miles, so it directly answers “how much money per mile does a paying passenger generate?” This makes it the precise measure described in the question.

For example, if passenger revenue is $1,200 and the flight generates 1,000 revenue passenger miles, yield is $1.20 per revenue passenger mile. This concept is distinct from net profit (the bottom-line after all costs), gross margin (revenue minus cost of goods sold, not per mile), and break-even (the point where revenue covers costs).