Frontier Airlines 2007 Annual Report Download - page 46

Landing Fees
This expense consists of fees charged by airports for each aircraft landing. Under our current fixed-fee agreements, we are
reimbursed for the actual costs of landing fees.
Aircraft and Engine Rent
This expense consists of the costs of leasing aircraft and spare engines. The leased aircraft and spare engines are operated
under long-term operating leases with third parties. The lease payments associated with future aircraft deliveries are subject to market
conditions for interest rates and contractual price increases for the aircraft. Aircraft rent is reduced by the amortization of integration
funding credits received from the aircraft manufacturer for parts and training. The credits are amortized on a straight-line basis over
the term of the respective lease of the aircraft.
Maintenance and Repair
Maintenance and repair expenses include all parts, materials, tooling and spares required to maintain our aircraft. We have
entered into long-term maintenance "power-by-the-hour" service contracts with third-party maintenance providers under which we are
charged fixed rates for each flight hour accumulated by all of our engines and some of the major airframe components. The effect of
such contracts is to reduce the volatility of aircraft maintenance expense over the term of the contract.
Insurance and Taxes
This expense includes the costs of passenger liability insurance, aircraft hull insurance, war risk insurance and all other
insurance policies, other than employee welfare insurance. Additionally, this expense includes personal and real property taxes,
including aircraft property taxes. Under our current fixed-fee agreements, we are reimbursed for the actual costs of passenger liability
insurance, war risk insurance, aircraft hull insurance and property taxes, subject to certain restrictions. Under our US Airways and
United fixed-fee agreements, we are reimbursed for the actual costs of such items other than aircraft hull insurance, which is
reimbursed at agreed upon rates.
Depreciation and Amortization
This expense includes the depreciation of all fixed assets, including aircraft, and the amortization of the commuter slots that
we own. Goodwill and intangibles with an indefinite life are required to be evaluated for impairment on an annual basis. If we
determine the goodwill and intangibles are impaired, we are required to write-off the amount of goodwill and intangibles that are
impaired. As of December 31, 2007 and 2006, goodwill and intangibles was $62.0 million and $62.4 million respectively, net of
amortization.
Other
This expense includes the costs of crew training, crew travel, airport, passenger and ground handling related expenses, all
other lease expenses, professional fees and all other administrative, facilities and operational overhead expenses not included in other
line items above.
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Source: REPUBLIC AIRWAYS HOLDINGS INC, 10-K, February 21, 2008 Powered by Morningstar® Document Research℠