SkyWest Airlines 2010 Annual Report Download - page 60

following table summarizes the amount of engine overhauls and engine overhaul reimbursements
included in our aircraft maintenance expense for the periods indicated (dollar amounts in thousands).
Year Ended December 31,
2009 2008 $ Change % Change
Aircraft maintenance, materials and repairs ............ $436,039 $381,653 $54,386 14.3%
Less: Engine overhaul reimbursed from major partners .... 112,556 120,101 (7,545) (6.3)%
Less: CRJ 200 engine overhauls reimbursed at fixed hourly
rate ....................................... 34,176 4,462 29,714 665.9%
Aircraft maintenance excluding reimbursed engine
overhauls and CRJ 200 engine overhauls reimbursed at
fixed hourly rate .............................. $289,307 $257,090 $32,217 12.5%
Aircraft maintenance expense excluding reimbursed engine overhauls and CRJ 200 engine
overhauls reimbursed at fixed hourly rate, increased $32.2 million, or 12.5%, during the year ended
December 31, 2009, compared to the year ended December 31, 2008. The increase in maintenance
excluding engine overhaul costs was principally due to scheduled maintenance events on our aging
CRJ200 and CRJ700 fleets.
Under the SkyWest Airlines United Express Agreement (and pursuant to a Services Agreement
with Midwest prior to its termination on January 1, 2010), we recognize revenue in our consolidated
statement of income at a fixed hourly rate for mature engine maintenance on regional jet engines and
we recognize engine maintenance expense on our CRJ200 regional jet engines in our consolidated
statement of income on an as-incurred basis as maintenance expense. During the year ended
December 31, 2009, our CRJ200 engine expense under our SkyWest Airlines United Express
Agreement and the Midwest Services Agreement increased $29.7 million. Under our Delta Connection
Agreements we were reimbursed for engine overhaul costs by Delta. Such reimbursements are reflected
as passenger revenue in our consolidated statements of income.
Aircraft rentals. Aircraft rentals increased $5.0 million, or 1.7%, during the year ended
December 31, 2009, compared to the year ended December 31, 2008. The increase in aircraft rents was
primarily due to Atlantic Southeast taking delivery of ten CRJ900s during 2009. These aircraft were
financed through long-term leases. This increase was partially offset by Atlantic Southeast returning 12
ATR-72 turboprops to the lessor and terminating the associated leases.
Station rentals and landing fees. Station rentals and landing fees expense decreased $15.7 million,
or 11.9%, during the year ended December 31, 2009, compared to the year ended December 31, 2008.
The decrease in station rentals and landing fees expense was primarily due to our major partners
paying for certain station rents and landing fees directly to the airport.
Ground handling service. Ground handling service expense decreased $10.3 million, or 9.7%,
during the year ended December 31, 2009, compared to the year ended December 31, 2008. The
decrease in ground handling was primarily due to 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 Atlantic Southeast to other ground handlers during the second quarter of
2009.
Other airline expenses. Other airline expenses, primarily consisting of property taxes, hull and
liability insurance, crew simulator training and crew hotel costs, decreased $18.6 million, or 11.6%,
during the year ended December 31, 2009, compared to the year ended December 31, 2008. The
decrease in other airline expenses was primarily due to the decrease in crew simulator training and
crew hotel costs.
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