Load factor is the percentage of seats sold out of those offered on a flight or across a network. It is to an airline what occupancy is to a hotel, but on its own it misleads because flying full on giveaway fares is no business. It is always read alongside revenue per seat to know if the plane makes money.
Example A flight at 95 percent load factor can still lose money if half the cabin paid bargain fares.
What is load factor in the travel and hospitality industry?
Load factor is the percentage of seats sold out of the total seats offered on a flight or network. For example, if a plane with 200 seats sells 160, the load factor is 80%.
How is load factor calculated for an airline?
It is calculated by dividing the number of passengers carried by the available seats and multiplying by 100. A flight with 150 passengers on 200 seats has a load factor of 150/200 * 100 = 75%.
Why is load factor not enough to measure an airline's profitability?
A high load factor does not guarantee profit if tickets are sold at very low prices. It must be analyzed together with revenue per available seat mile (RASK) to determine if the flight is making money.
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