SkyWest Airlines 2005 Annual Report Download - page 39

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Revenue per ASM increased 1.3% to 15.3¢, from 15.1¢ for the year ended December 31, 2003, primarily due to an increase in
fuel reimbursements from major partners.
Passenger Load Factor. Passenger load factor increased to 73.5% for the year ended December 31, 2004, from 71.9% for the
year ended December 31, 2003. The increase in load factor was due primarily to the further development of our relationships
with United and Delta whereby SkyWest supplements mainline service in previously established and developed markets.
Additionally, we are experiencing higher passenger acceptance of our regional jet aircraft.
Total Airline Expenses Excluding Fuel. Total airline expenses for the year ended December 31, 2004, excluding fuel charges
(which are substantially reimbursable by our major partners), increased approximately 21.4% from the same period of 2003. The
increase was primarily a result of a 28.4% increase in ASMs (which resulted principally from the expansion of SkyWest’s
regional jet fleet from 2003). Total operating expenses for the year ended December 31, 2004 increased at a lower rate than ASM
growth, primarily due to the increased operating efficiencies obtained from increased stage lengths flown by the regional jets.
Operating and Interest Expenses. Operating and interest expenses increased 30.4% to $1.03 billion for the year ended
December 31, 2004, compared to $789.4 million for the year ended December 31, 2003. The increase in total operating and
interest expenses was due principally to the growth in our regional jet fleet from 2003. As a percentage of consolidated operating
revenues, total operating and interest expenses increased to 89.1% for the year ended December 31, 2004, from 88.9% for the
year ended December 31, 2003. The increase in operating and interest expenses as a percentage of consolidated operating
revenues was primarily due to significant increases in fuel costs year-over-year.
Operating revenues increased 30.2% for the year ended December 31, 2004, compared to the year ended December 31, 2003,
while total operating and interest expenses increased 30.4% over the same period. The increase in total operating revenues was
primarily due to the growth in SkyWest’s regional jet fleet from 2003. Airline operating and interest expenses, excluding fuel
charges, per ASM decreased 5.5% to 10.3¢ for the year ended December 31, 2004, from 10.9¢ for the year ended December 31,
2003. The primary reason for the decrease was the increased capacity of our regional jet aircraft and the increase in stage lengths
flown by our regional jet aircraft.
The following tables set forth information regarding our operating expense components for the years ended December 31,
2004 and 2003. Operating expenses are expressed as a percentage of operating revenues. Individual expense components are also
expressed as cents per ASM.
Year ended December 31,
2004 2003
Amount
Percentage
of
Revenue
Cents
per
ASM Amount
Percentage
of
Revenue
Cents
Per
ASM
(in thousands) (in thousands)
Salaries, wages and employee benefits $ 282,676 24.5 3.8 $225,545 25.4 3.8
Aircraft costs 222,837 19.3 3.0 199,355 22.4 3.4
Maintenance 77,514 6.7 1.0 54,151 6.1 0.9
Fuel 252,556 21.8 3.3 149,429 16.8 2.5
Other airline expenses 175,686 15.2 2.3 151,066 17.0 2.6
Interest 18,239 1.6 0.2 9,891 1.1 0.2
Total airline expenses $1,029,508 13.6 $789,437 13.4
The cost per ASM of salaries, wages and employee benefits remained constant at 3.8¢ for the year ended December 31, 2004
and December 31, 2003. The average number of full-time equivalent employees increased 28.3% to 6,747 for the year ended
December 31, 2004 from 5,257 for the year ended December 31, 2003. The increase in number of employees was due, in large
part, to the addition of personnel required for the new regional jet flying and ground handling operations within our United
Express operations.