SkyWest Airlines 2015 Annual Report Download - page 47

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that began in 2014, improvements in the provisions in certain of our flying contracts and additional revenue sharing
operations, partially offset by reductions in the ExpressJet fleet size, severe weather experienced in the first half of 2014
and reduced contract performance incentives.
Ground handling and other. Total ground handling and other revenues increased $11.3 million, or 19.3%,
during the year ended December 31, 2014, compared to the year ended December 31, 2013. Ground handling and other
revenue primarily consists of ground handling services we provide to third-party airlines and government subsidies we
receive for operating certain routes. Revenues associated with ground handling services we provide for our aircraft are
recorded as passenger revenues. The increase in ground handling and other revenue was primarily due to an increased
volume of departures during the 2014 year on routes subject to government subsidies.
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,
2014 2013
2014 2013 $ Change % Change Cents Per Cents Per
Amount Amount Amount Percent ASM ASM
Salaries, wages and benefits ........ $ 1,258,155 $ 1,211,307 $ 46,848 3.9 % 3.3 3.1
Aircraft maintenance, materials
and repairs ...................... 682,773 686,381 (3,608) (0.5)% 1.8 1.8
Aircraft rentals ................... 305,334 325,360 (20,026) (6.2)% 0.8 0.8
Depreciation and amortization . . . . . . 259,642 245,005 14,637 6.0 % 0.7 0.6
Aircraft fuel ..................... 193,247 193,513 (266) (0.1)% 0.5 0.5
Ground handling services .......... 123,917 129,119 (5,202) (4.0)% 0.3 0.3
Special Items .................... 74,777 — 74,777 NM 0.2 —
Station rentals and landing fees . . . . . 51,024 114,688 (63,664) (55.5)% 0.1 0.3
Other ........................... 263,730 239,241 24,489 10.2 % 0.7 0.6
Total operating expenses ........... 3,212,599 3,144,614 67,985 2.2 % 8.4 8.0
Interest expense .................. 65,995 68,658 (2,663) (3.9)% 0.2 0.2
Total airline expenses ............. $ 3,278,594 $ 3,213,272 $ 65,322 2.0 % 8.6 8.2
Salaries, Wages and Employee Benefits. Salaries, wages and employee benefits increased $46.8 million, or
3.9%, during the year ended December 31, 2014, compared to the year ended December 31, 2013. The increase in
salaries, wages and employee benefits was primarily due to additional expenses attributable to the implementation of the
Improvement Act, which had a negative effect on pilot scheduling and work hours and resulted in increased crew costs.
The increase was also due to the additional E175 operations and training costs associated with the commencement of our
E175 flight operations during 2014.
Aircraft maintenance, materials and repairs. Aircraft maintenance expense decreased $3.6 million, or 0.5%,
during the year ended December 31, 2014, compared to the year ended December 31 2013. The following table
summarizes the effect of directly reimbursed engine maintenance costs under our fixed-fee flying arrangements included
in our aircraft maintenance expense for the periods indicated (dollar amounts in thousands).
For the Year ended December 31,
2014 2013 $ Change % Change
Aircraft maintenance, materials and repairs . . . . . $ 682,773 $ 686,381 $ (3,608) (0.5)%
Less: directly-reimbursed engine maintenance
from airline partners ........................ 130,505 123,024 7,481 6.1%
Other aircraft maintenance, materials and repairs . $ 552,268 $ 563,357 $ (11,089) (2.0)%
Other aircraft maintenance, materials and repairs, decreased $11.1 million, or 2.0%, during the year ended
December 31, 2014, compared to the year ended December 31, 2013. The decrease was primarily driven by a reduction