Airtran 2003 Annual Report Download - page 27
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AVIATION FUEL
Our results of operations are impacted by changes in the price of aircraft fuel. Excluding special items, aircraft fuel accounted for 21.5
percent and 22.0 percent of our operating expenses in 2003 and 2002, respectively. Based on our 2004 projected fuel consumption,
a 10 percent increase in the average price per gallon of aircraft fuel for the year ending December 31, 2003, would increase fuel
expense for the next 12 months by approximately $20.0 million, including the effects of our fuel hedges. Comparatively, based on 2003
fuel usage, a 10 percent increase in fuel prices would have resulted in an increase in fuel expense of approximately $17.9 million, including
the effects of our fuel hedges. In 2002, we terminated our fuel-hedging contracts consisting of swap agreements and entered into
fixed-price fuel contracts and fuel cap contracts to partially protect against significant increases in aircraft fuel prices. At December 31,
2003, we had hedged approximately 29 percent of our projected fuel requirements for 2004, as compared to approximately 41 percent of
our projected fuel requirements for 2003 at December 31, 2002. During the first quarter of 2004, we entered into additional fixed-price
fuel contracts and fuel cap contracts that increased our fuel commitments to approximately 35 percent of our estimated fuel needs
for 2004.
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