How can capacity and utilization be measured at an airline such as Southwest Airlines?

Expert Solution

Capacity is the maximum rate of output of a process or a system.And utilization is measured as the ratio of average output rate to maximum capacity. In Southwest, capacity can be measured in available seat-miles (AMS) pre month. Therefore, utilization can be measured as the ratio of average seat-mile rate to maximum seat miles.

Capacity is the maximum rate of output of a process or system.

In an airline industry capacity is being measured by the so called ASM or available seat miles. This means that carrier capacity to carry passenger in the beanchmark is the benchmark measurement of unit of production. A unit is the available seat flown in 1 mile.

By understanding the capacity utilization can be determined as the ratio of average ASM over the maximum ASM.

It means that average ASM and the maximum capacity is ASM is both 10 then we may say that 100 % utilization have been made in certain flights.

keosha answered 9 months ago

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How can capacity and utilization be measured at an airline such as Southwest Airlines?

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