SkyWest Airlines 2009 Annual Report Download - page 49

significant changes in our costs not proportionate to the relative changes in our fleet size (dollar
amounts in thousands).
Year Ended December 31,
2009 2008
2009 2008 $ Change % Change Cents Per Cents Per
Amount Amount Amount Percent ASM ASM
Aircraft fuel ................ $ 390,739 $1,220,618 $(829,879) (68.0)% 1.8 5.5
Salaries, wages and benefits .... 698,326 724,094 (25,768) (3.6)% 3.2 3.3
Aircraft maintenance, materials
and repairs ............... 436,039 381,653 54,386 14.3% 2.0 1.7
Aircraft rentals .............. 300,773 295,784 4,989 1.7% 1.3 1.4
Depreciation and amortization . . 221,548 220,195 1,353 0.6% 1.0 1.0
Station rentals and landing fees . . 116,312 132,017 (15,705) (11.9)% 0.5 0.6
Ground handling services ...... 95,805 106,135 (10,330) (9.7)% 0.4 0.5
Other airline expense ......... 141,877 160,522 (18,645) (11.6)% 0.6 0.7
Total operating expenses ....... 2,401,419 3,241,018 (839,599) (25.9)% 10.8 14.7
Interest ................... 86,330 106,064 (19,734) (18.6)% 0.4 0.5
Total airline expenses ......... $2,487,749 $3,347,082 (859,333) (25.7)% 11.2 15.2
Fuel. Fuel costs decreased $829.9 million, or 68.0%, during the year ended December 31, 2009,
compared to the year ended December 31, 2008. The average cost of fuel decreased to $1.87 per gallon
during the year ended December 31, 2009, from $3.33 during the year ended December 31, 2008. In
addition to the decrease in the average cost per gallon of fuel during the year ended December 31,
2009, United purchased fuel directly from a fuel vendor for our United Express aircraft under contract
operated out of Chicago, San Francisco, Los Angeles and Denver; Midwest purchased all of the fuel
for our Midwest aircraft directly from Midwest’s fuel vendors and Delta purchased the majority of the
fuel for our Delta aircraft under contract directly from its fuel vendors. These modifications reduced
our total fuel costs, as well as our passenger revenues for the year ended December 31, 2009. During
the year ended December 31, 2008, we purchased the fuel for all of our Delta Connection flights. The
following table summarizes the gallons of fuel we purchased directly, and the percentage change in fuel
price per gallon on our fuel expense, for the periods indicated:
Year Ended December 31,
(in thousands, except per gallon amounts) 2009 2008 % Change
Fuel gallons purchased .................... 209,254 366,540 (42.9)%
Average price per gallon ................... $ 1.87 $ 3.33 (43.8)%
Fuel expense ........................... $390,739 $1,220,618 (68.0)%
Salaries wages and employee benefits. Salaries, wages and employee benefits decreased
$25.8 million, or 3.6%, during the year ended December 31, 2009, compared to the year ended
December 31, 2008. The average number of full-time equivalent employees decreased 11.7% to 12,642
for the year ended December 31, 2009, from 14,315 for the year ended December 31, 2008. The
decrease in number of employees was significantly due to a reduction in our customer service
employees resulting from United transitioning 16 stations from SkyWest Airlines to other ground
handlers during the second quarter of 2008 and Delta transitioning 23 stations from SkyWest Airlines
and ASA to other ground handlers during the second quarter of 2009.
Aircraft maintenance, materials and repairs. Maintenance costs increased $54.4 million, or 14.3%,
during the year ended December 31, 2009, compared to the year ended December 31, 2008. The
45