American Airlines CEO Doug Parker

It wasn't long ago that airlines would question Wall Street's focus on passenger revenue per available seat mile, or PRASM, an arcane metric that defines the amount of revenue produced by one passenger flying one mile.

Understand, PRASM measures only revenue. If costs decline, that makes no difference. If the cost of oil declines by a dollar and PRASM declines by a dime, then you are a loser, by Wall Street standards, because your PRASM declined.

PRASM is also referred to as  "unit revenue." The closely related term "RASM" includes total revenue per available seat mile, not just passenger ticket revenue.

American (AAL) CEO Doug Parker used to regularly say that Wall Street had it wrong. Most notably, Parker said on American's fourth-quarter earnings call in January that in the "almost 30 years now that I've been in this business, I can't remember a bigger disconnect between what we're seeing in our airline and in our forward prospects and how the market is treating our stock."

At the time, American shares traded at $38.99. They have declined since, despite record profits. On Monday, American shares closed at $35.80, down 15% year to date, an indication that it is investors and Wall Street analysts, not airline executives, who shape the direction of airline share prices.

By the time of this month's earnings calls, the airlines had pretty much given in, constantly referring to the importance of RASM on their calls.

For instance, American President Scott Kirby noted that American reduced its capacity guidance for the remainder of 2016, "which is really just a normal and natural reaction to a decline in year-over-year PRASM and higher fuel environment.

"We still dislike negative RASM, but we feel good about the path that we are on to get back to RASM growth," Kirby declared.

The Delta (DAL - Get Report) call on July 14 was similarly focused on RASM, so much so that at one point an analyst asked whether Delta would achieve positive RASM in the fourth quarter or in December. CEO Ed Bastian responded, "We will take either."

Delta is aggressively adjusting capacity, planning a 6% fourth quarter cut in U.K. capacity and a systemwide fourth-quarter capacity increase of just 1%, down from previous guidance of 2%.

"I realize the RASM numbers have been weak, but the bottom line results have been phenomenal," Bastian said. " But we realize in order to get the RASM improvement to match the increasing fuel prices, we are going to be paying, we need to be making {capacity} adjustments."

But it was the Alaska (ALK - Get Report) earnings call that provided the most striking indication of the airline industry's willingness to follow Wall Street's lead on the importance of RASM.

In a remarkable exchange, Wolfe Research analyst Hunter Keay suggested that airlines still aren't focused enough on PRASM as a long-term metric. "I don't know why PRASM has to be so short-term-oriented and I feel like you guys might be in the position now to sort of reevaluate things," Keay said.

Keay's question was a long one, slightly rambling, and it led Alaska Chief Financial Officer Brandon Pederson to respond to what he thought he heard.

So Pederson responded, "I agree with you. I don't know why there is so much focus on PRASM. What I would do if I were an investor is I would focus on profit.

"I think the danger of focusing just on PRASM is that you don't know what happens in any particular market," Pederson said. "You don't know what happens with fuel prices and I think you are seeing a lot of that now. But at the end of the day, it's really {cost} that matters and profit on the bottom line and actual cash that goes into your checking account that you can use to de-lever the balance sheet and pay back debt and return capital to shareholders."

It seems that Pederson spoke the unacceptable truth, that PRASM is not quite so important as it has come to seem. Retribution came swiftly.

First, Keay responded to Pederson, "I am sorry to interrupt you but I think you misheard me. I am saying the exact opposite to be clear. I think PRASM matters a lot because it's a proxy for pricing power."

Then Alaska CEO Brad Tilden spoke up. Tilden addressed Keay. He said that Keay was "making a great point," that "I think Brandon does agree with you," and that the airline industry has shifted its focus over the years, from cost per available seat mile, to return on invested capital, and now to PRASM.

Tilden was right, of course. In any industry, key metrics shift. But for now, in the airline industry, the key metric is PRASM.

Woe be to anyone who proclaims that the emperor of PRASM has no clothes.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.