Passenger yield of airlines worldwide 2005-2021

Although the global commercial air travel industry is booming, passenger yields have been consistently declining over past years, with a decline of 8.7 percent in 2020. This, however, is much lower than the 11.9 percent decline that occurred in 2015.

Passenger yield

Airline passenger yield is generally expressed as the number of cents (or equivalent) earned for each passenger mile or kilometer flown. It is calculated by dividing the revenue generated from passengers by the number of revenue passenger miles, which in turn are calculated by multiplying the number of passengers on a flight by the number of miles flown by the aircraft. At least in the U.S. market, full-service and low-cost carriers report similar passenger yields, while ultra-low cost airlines reported far lower yields.

Passenger revenue

Despite declining passenger yields, overall revenue generated from passengers increased in recent years. Several factors explain this divergence. First, the overall number of passengers has been increasing every year since 2010, counterbalancing the lower yields. Likewise, the passenger load factor has been increasing, essentially meaning there are increasingly fewer empty seats on flights. However, despite this increase in passenger traffic, increased competition has created downward pressure on ticket prices, contributing to lower passenger yields and a recent decline in overall net profits.