Alaska Airlines and Horizon Air 2014 Annual Report Download - page 135
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Contracted Services
Contracted services increased $21 million, or 11%, primarily due to more capacity purchase flying with
SkyWest and higher rates with PenAir. Additionally, we experienced higher passenger and ramp handling
costs, and other services as a result of an increase in the number of flights to airports where outside
vendors are used.
Selling Expenses
Selling expenses increased by $11 million, or 6%, compared to 2012 as a result of higher commissions
with credit cards and interline commissions related to international routes.
Other Operating Expenses
Other operating expenses increased $30 million, or 13%, compared to 2012. The increase is driven by
a variety of factors such as higher professional fees, IT costs, losses on the disposal of assets,
property taxes, and new uniforms.
Consolidated Nonoperating Income (Expense)
Net nonoperating expense increased $4 million from 2012. This is due to the overhaul and repair of
three aircraft that were previously subleased to another carrier. Partially offsetting the sublease loss
was a gain on the sale of equity securities.
Operating Costs per Available Seat Mile
Twelve Months Ended December 31,
2013 2012 2013 2012 % Change
(in millions, except CASM) Amount Amount CASM CASM CASM
Wages and benefits $ 1,086 $ 1,038 3.23¢ 3.30¢ (2.1)%
Variable incentive pay 105 88 0.31 0.28 10.7%
Aircraft maintenance 247 222 0.73 0.71 2.8%
Aircraft rent 119 116 0.35 0.37 (5.4)%
Landing fees and other rentals 262 243 0.78 0.77 1.3%
Contracted services 221 200 0.66 0.64 3.1%
Selling expenses 179 168 0.53 0.53 –%
Depreciation and amortization 270 264 0.80 0.84 (4.8)%
Food and beverage service 84 79 0.25 0.25 –%
Other 278 248 0.83 0.79 5.1%
Non-fuel Expenses $ 2,851 $ 2,666 8.47¢ 8.48¢ (0.1)%
Additional Segment Information
Refer to the Notes of the Consolidated Financial Statements for a detailed description of each segment.
Below is a summary of each segments’ profitability.
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ŠForm 10-K