Passenger load factor

The proportion of available seats actually sold.

Indian carriers commonly operate in the mid-eighties, and the break-even load factor for a low-cost operator sits only a few points below that.

The narrowness of that gap is the sector's defining fact. A few points of load factor is the difference between a profitable quarter and a loss, and load factor is set by capacity decisions made a year earlier.

Capacity is the variable. Everything else follows it.