Frontier Airlines 2007 Annual Report Download - page 44

Fleet Transition and Growth
The following table sets forth the number and type of aircraft in service and operated by us at the dates indicated:
December 31,
2007 2006 2005
Total Owned Leased Total Owned Leased Total Owned Leased
Aircraft:
Embraer
ERJ-135 LR (1) 17 15 2 17 15 2 17 15 2
Embraer
ERJ-140 LR 15 11 4 15 11 4 15 11 4
Embraer
ERJ-145 LR (2) 62 27 35 63 27 36 63 22 41
Embraer
ERJ-170 LR (3) 76 56 20 76 56 20 47 42 5
Embraer
ERJ-175 LR 25 22 3 — — — — — —
Bombarier
CRJ-200 24 — 24 — — — — — —
Total 219 131 88 171 109 62 142 90 52
(1) Two of these aircraft are used for charter operations and as spares at December 31, 2006, 2005.
(2) Two of these aircraft were used for charter operations and as spares at December 31, 2006. One of these aircraft were used for
charter operations and as spares at December 31, 2007 and 2005.
(3) Four of these aircraft were unassigned at December 31, 2006.
In addition to the aircraft listed above, we subleased six ERJ-145 aircraft to an airline in Mexico.
During 1999, we began operating Embraer aircraft on behalf of US Airways under a fixed-fee arrangement. There were 58,
58 and 40 Embraer aircraft operating on behalf of US Airways at December 31, 2007, 2006 and 2005, respectively. During 2000, we
began operations on behalf of TWA under a fixed-fee arrangement; TWA was subsequently acquired by American. There were 15
Embraer aircraft operating under the agreement with American at December 31, 2007, 2006 and 2005. At December 31, 2007, 2006
and 2005, respectively, we had 55, 55 and 48 aircraft in operation under our agreements with Delta. We began operations for United in
June 2004, and at December 31, 2007, 2006 and 2005 respectively, we had 35 Embraer aircraft in operation under the agreement with
United. In January 2007 we began operations for Continental, and at December 31, 2007 we had 20 Embraer and 24 Bombardier
regional jet aircraft in operation with Continental. In March 2007 we began operations for Frontier, and at December 31, 2007 we had
nine aircraft in operation with Frontier.
Revenue
Under our fixed-fee arrangements with our Partners, we receive fixed-fees, as well as reimbursement of specified costs on a
gross basis with additional possible incentives from our Partners for superior performance. For the years ended December 31, 2007,
2006 and 2005 all of our regional airline services revenue was earned under our fixed-fee arrangements. The number of aircraft we
operate and aircraft utilization are the most significant drivers of our revenue, as opposed to the number of passengers we carry or the
fare the passengers pay.
Operating Expenses
A brief description of the items included in our operating expenses line items follows.
Wages and Benefits
This expense includes not only wages and salaries, but also expenses associated with various employee benefit plans,
employee incentives and payroll taxes. These expenses will fluctuate based primarily on our level of operations changes in wage rates
for contract and non-contract employees and changes in costs of our benefit plans.
Aircraft Fuel
Fuel expense includes the cost of aircraft fuel, including fuel taxes and into-plane fees. Beginning in May 2005, we do not
record fuel expense and the related revenue for US Airways operations because US Airways pays for fuel directly. Beginning in
January 2007, for certain United locations, we do not record fuel expense and the related revenue because United pays for fuel
Source: REPUBLIC AIRWAYS HOLDINGS INC, 10-K, February 21, 2008 Powered by Morningstar® Document Research℠