SkyWest Airlines 2013 Annual Report Download - page 61

Aircraft maintenance, materials and repairs. Aircraft maintenance expense decreased $53.1 million,
or 7.4%, during the year ended December 31, 2012, compared to the year ended December 31, 2011.
The 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).
For the year ended December 31,
2012 2011 $ Change % Change
Aircraft maintenance, materials and repairs ............... $659,869 $712,926 $(53,057) (7.4)%
Less: Engine overhaul reimbursement from major partners .... 159,220 173,072 (13,852) (8.0)%
Less: CRJ200 engine overhauls reimbursed at fixed hourly rate . 55,183 77,582 (22,399) (28.9)%
Other aircraft maintenance, materials and repairs .......... $445,466 $462,272 $(16,806) (3.6)%
Other aircraft maintenance, materials and repairs, decreased $16.8 million, or 3.6%, during the
year ended December 31, 2012, compared to the year ended December 31, 2011. The decrease in
aircraft maintenance expense excluding engine overhaul costs for the year ended December 31, 2012,
compared to the year ended December 31, 2011, was primarily due to fewer scheduled maintenance
events and our implementation of cost-reduction initiatives.
We recognize engine maintenance expense on our CRJ200 engines on an as-incurred basis as
maintenance expense. Under our Fixed-Rate Engine Contracts, we recognize revenue at fixed hourly
rates for mature engine maintenance on regional jet engines. Accordingly, the timing of engine
maintenance events associated with aircraft under the Fixed-Rate Engine Contracts can have a
significant impact on our financial results. During the year ended December 31, 2012, our CRJ200
engine expense under our Fixed-Rate Engine Contracts decreased $22.4 million compared to the year
ended December 31, 2011. The decrease in CRJ200 engine overhauls reimbursed under our Fixed-Rate
Engine Contracts was principally due to fewer scheduled engine maintenance events. Under our
Directly-Reimbursed Engine Contracts, we are reimbursed for engine overhaul costs by our major
partner at the time the maintenance event occurs. Such reimbursements are reflected as passenger
revenue in our consolidated statements of comprehensive income (loss).
Aircraft rentals. Aircraft rentals decreased $12.9 million, or 3.7%, during the year ended
December 31, 2012, compared to the year ended December 31, 2011. The decrease was primarily due
to aircraft lease renewals at lower rates.
Depreciation and amortization. Depreciation and amortization expense decreased $2.2 million, or
0.9%, during the year ended December 31, 2012, compared to the year ended December 31, 2011. The
decrease in depreciation expense was primarily due to certain rotable assets being fully depreciated
during 2012 and a lower volume of capital expenditures.
Station rentals and landing fees. Station rentals and landing fees expense decreased $5.0 million,
or 2.9%, during the year ended December 31, 2012, compared to the year ended December 31, 2011.
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 applicable airports.
Ground handling service. Ground handling service expense decreased $6.3 million, or 4.8%, during
the year ended December 31, 2012, compared to the year ended December 31, 2011. The decrease in
ground handling service expense was primarily due to a reduction in outsourced ground handling
services resulting from the termination of SkyWest Airlines’ AirTran code share agreement during the
year ended December 31, 2011.
Acquisition-related costs. During the year ended December 31, 2011, we incurred $5.8 million of
direct severance, legal and advisor fees associated with Atlantic Southeast’s acquisition of ExpressJet
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