Frontier Airlines 2008 Annual Report Download - page 50
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Insurance and taxes increased 35.5%, or $6.8 million, to $25.8 million in 2008 compared to $19.0 million in 2007. Property
taxes increased $5.6 million and insurance increased due to the increase in regional jet operations. Our fixed-fee agreements generally
provide for a direct reimbursement of insurance and property taxes. The unit cost increased to 0.20¢ in 2008 compared to 0.16¢ in
2007.
Depreciation and amortization increased 25.0%, or $26.6 million, to $133.2 million in 2008 compared to $106.6 million in
2007 due mainly to $24.6 million of additional depreciation on E175 aircraft purchased during 2007 and 2008. The unit cost increased
to 1.01¢ in 2008 compared to 0.93¢ in 2007.
Other expenses increased 16.4%, or $17.2 million, to $122.0 million in 2008 from $104.8 million in 2007, due primarily to
$13.8 million of expenses related to costs associated with the return of aircraft on lease and the preparation of aircraft removed from
fixed-fee service for future sale. Additionally, there was a $1.5 million increase in passenger catering costs and other operational
expenses to support the increased regional jet operations. The unit cost increased to 0.92¢ in 2008 compared to 0.91¢ in 2007.
Interest expense increased 22.9% or $24.5 million, to $131.9 million in 2008 from $107.3 million in 2007 primarily due to
interest on debt related to the financing aircraft purchased during 2007 and 2008. The weighted average interest rate decreased from
6.2% in 2007 to 6.1% in 2008. The unit cost increased to 1.00¢ in 2008 compared to 0.93¢ in 2007.
We incurred income tax expense of $52.8 million during 2008, compared to $51.2 million in 2007. The effective tax rates for
2008 and 2007 were 38.4% and 38.2%, respectively, which were higher than the statutory rate due to state income taxes and
non-deductible meals and entertainment expense, primarily for our flight crews.
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Source: REPUBLIC AIRWAYS HOLDINGS INC, 10-K, March 16, 2009 Powered by Morningstar® Document Research℠