SkyWest Airlines 2013 Annual Report Download - page 60

increase in passenger revenues, excluding fuel and engine overhaul reimbursements, was primarily due
to an increase in block hours of 2.1% during the year ended December 31, 2012 compared to the year
ended December 31, 2011. The increase in block hours was due primarily to the increase in total
number of aircraft in operation, Block hour production is a significant revenue driver in our flying
contracts with our major partners.
Individual expense components attributable to our operations are expressed in the following table
on the basis of cents per ASM. (dollar amounts in thousands).
For the year ended December 31,
2012 2011
2012 2011 $ Change % Change Cents Per Cents Per
Amount Amount Amount Percent ASM ASM
Aircraft fuel ................ $ 426,387 $ 592,871 $(166,484) (28.1)% 1.1 1.6
Salaries, wages and benefits .... 1,171,689 1,155,051 16,638 1.4% 3.1 3.1
Aircraft maintenance, materials
and repairs ............... 659,869 712,926 (53,057) (7.4)% 1.8 1.9
Aircraft rentals .............. 333,637 346,526 (12,889) (3.7)% 0.9 0.9
Depreciation and amortization . . 251,958 254,182 (2,224) (0.9)% 0.7 0.7
Station rentals and landing fees . . 169,855 174,838 (4,983) (2.9)% 0.5 0.5
Ground handling services ...... 125,148 131,462 (6,314) (4.8)% 0.3 0.4
Acquisition-related costs ....... —5,770 (5,770) NM — 0.1
Other .................... 229,842 240,192 (10,350) (4.3)% 0.6 0.7
Total operating expenses ....... 3,368,385 3,613,818 (245,433) (6.8)% 9.0 9.9
Interest expense ............. 77,380 80,383 (3,003) (3.7)% 0.2 0.2
Total airline expenses ......... $3,445,765 $3,694,201 (248,436) (6.7)% 9.2 10.1
Fuel. Fuel costs decreased $166.5 million, or 28.1%, during the year ended December 31, 2012,
compared to the year ended December 31, 2011. The average cost per gallon of fuel increased to $3.59
during the year ended December 31, 2012, from $3.48 during the year ended December 31, 2011.
Effective July 1, 2012, United began purchasing the majority of the fuel for flights we operated under
our United Express contracts. Thus, the decrease in our fuel expense was primarily due to an increase
in the volume of gallons of fuel our major partners purchased on flights we operated under our flying
contracts. The following table summarizes the gallons of fuel we purchased directly, and the change in
fuel price per gallon on our fuel expense, for the periods indicated:
For the year ended December,
(in thousands, except per gallon amounts) 2012 2011 % Change
Fuel gallons purchased ..................... 118,765 170,332 (30.3)%
Average price per gallon .................... $ 3.59 $ 3.48 3.2%
Fuel expense ............................. $426,387 $592,871 (28.1)%
Salaries Wages and Employee Benefits. Salaries, wages and employee benefits increased
$16.6 million, or 1.4%, during the year ended December 31, 2012, compared to the year ended
December 31, 2011. The average number of full-time equivalent employees increased 0.9% to 18,590
for the year ended December 31, 2012, from 18,418 for the year ended December 31, 2011. The
increase in the average number of full-time equivalent employees and resulting increase in labor costs
for the year ended December 31, 2012, compared to the year ended December 31, 2011, was primarily
due to an increase in block hours of 2.1% during the year ended December 31, 2012, compared to the
year ended December 31, 2011.
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