Definition of Load Factor
What does the term "load factor" refer to when talking about the airline industry? What is the definition of the term "load factor"?
The term "load factor" refers to the total percentage of seats that are filled for an airline compared to the total number of seats that are available.
For instance - let's say that an airline has 500 airplanes that all seat 500 passengers.
If the airline has a "load factor" of 80%, this would mean that they average a total of 400 passengers per flight.
Airlines obviously want as high of a "load factor" as possible, as each paying customer represents a certain amount of revenue in the form of ticket fees, meal costs, baggage costs, pay per view movie sales, etc.
All airlines have a break-even "load factor" percentage - if their load factor falls below this number, they will lose money.
An airline's "load factor" will usually be higher around the holidays (Christmas, Thanksgiving, etc) due to more people travelling.
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