Available Tonne Kilometres (ATK) [CapiPedia]

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======Available Tonne Kilometres (ATK)======
Available Tonne Kilometres (ATK) is a key performance metric used primarily by airlines and air freight companies to measure their total cargo carrying capacity. Think of it as the total amount of freight space a company has for sale over a specific period. It is calculated by multiplying the available cargo capacity (measured in tonnes) by the distance flown (measured in kilometres). For instance, if a cargo jet with a 100-tonne capacity flies a 2,000-kilometre route, it generates 200,000 ATK for that flight. This metric is the freight equivalent of the more commonly known passenger metric, [[Available Seat Kilometres (ASK)]]. For a value investor digging into the transportation sector, understanding ATK is crucial because it represents the "supply" side of a cargo business. It tells you not what a company //has// sold, but what it //could// sell. Tracking the trend in ATK helps an investor gauge a company's growth ambitions and strategic direction.
===== Why ATK Matters to Investors =====
On its own, ATK simply tells you the size and scale of a company's cargo operation. A bigger number isn't automatically better. Its true power for an investor is unlocked when used as a comparative tool to assess growth, strategy, and, most importantly, efficiency.
==== A Measure of Capacity and Growth ====
A company's ATK figure reveals its potential to generate cargo revenue. A steadily increasing ATK suggests that management is expanding the business, either by:
  * Adding more aircraft to the fleet.
  * Using larger aircraft with more cargo space.
  * Flying longer routes or increasing the frequency of existing ones.
For an investor, this is the first clue about a company's strategic posture. Is it in growth mode, aggressively adding capacity to capture market share? Or is it consolidating, perhaps even reducing ATK to focus on more profitable routes? This top-level view is the starting point of your analysis.
==== Gauging Operational Efficiency ====
Capacity is meaningless if you can't sell it. This is where the real analysis begins. ATK represents the supply of cargo space. To judge how well a company is managing that supply, you must compare it against the demand. Demand is measured by a similar metric called [[Revenue Tonne Kilometres (RTK)]], which tracks the amount of paid cargo actually transported.
By comparing these two figures, we can calculate the single most important metric for cargo efficiency: the [[Cargo Load Factor (CLF)]].
  * **The Formula:** CLF (%) = (RTK / ATK) x 100
A high or rising CLF is a fantastic sign. It means the company is skilled at filling its available cargo space, turning potential capacity into actual revenue. Conversely, a company might boast about its growing ATK, but if its CLF is low or falling, it's a major red flag. It could signal weak demand, poor route planning, or intense competition, leading to empty space and wasted [[fixed costs]].
===== The Bigger Picture: ATK in Context =====
ATK is a powerful number, but it never tells the whole story in isolation. A savvy investor always places it within a broader analytical framework to get a complete picture of the company's health and profitability.
=== Putting It All Together for a Value Analysis ===
When you see an ATK figure in a company's quarterly report, don't just glance at it. Use it as a springboard for deeper questions:
  - **Check the Load Factor:** As discussed, what is the [[Cargo Load Factor (CLF)]]? Is the company efficiently filling the capacity it's adding? A rising ATK with a falling CLF is a recipe for trouble.
  - **Analyze the Yield:** How much is the company earning for each tonne it flies one kilometre? This is known as [[yield]]. A company could have a high CLF but be forced to offer deep discounts to achieve it, crushing profitability. Strong yield indicates pricing power.
  - **Investigate the Costs:** What is the cost per available tonne-kilometre (CASK)? Is the company managing its [[operating efficiency]]? If costs are rising faster than yield, even a full plane can be unprofitable.
  - **Understand the Strategy:** //Why// is ATK changing? Is the expansion into new markets supported by long-term contracts, or is it a speculative gamble? Understanding the "why" behind the numbers separates a superficial analysis from a true value investing approach.
By using ATK as a starting point to investigate load factors, yields, and costs, you can move beyond simple growth metrics and develop a sophisticated understanding of an airline's or logistics company's operational and financial performance.