SkyWest Airlines 2015 Annual Report Download - page 52

48
• SkyWest Airlines’ ground handling service expense decreased $22.0 million, or 25.6%, during the 2015
year, compared to the 2014 year. The decrease in ground handling service expense was primarily due to a
reduction in the locations at which SkyWest Airlines provided ground handling services subsequent to
December 31, 2014.
• SkyWest Airlines’ fuel expense decreased $60.2 million, or 34.4%, during the 2015 year, compared to the
2014 year. The decrease in fuel cost was primarily due to a decrease in the average fuel cost per gallon in
2015 compared to 2014. The average fuel cost per gallon was $2.09 and $3.33 for the year 2015 and 2014,
respectively.
• SkyWest Airlines’ aircraft maintenance, materials and repairs expense decreased by $9.0 million, or 3.0%,
during the 2015 year, compared to the 2014 year. The decrease was primarily attributable to a decrease in
scheduled maintenance events and the replacement and repair of aircraft parts and components.
• SkyWest Airlines airline expense in 2014 included special items of $57.1 million for impairment charges to
write-down owned EMB120 aircraft, including capitalized engine overhaul costs, and related long-lived
assets to their estimated fair value and accrued obligations on leased aircraft and related costs.
• The remaining decrease in the SkyWest Airlines airline expense was primarily attributable to a reduction in
the EMB120 aircraft related depreciation, partially offset by crew-related training costs including
simulators, hotels and crew per diem.
ExpressJet Segment Loss. ExpressJet segment loss decreased $83.7 million, or 71.0%, during the year ended
December 31, 2015, compared to the year ended December 31, 2014. The ExpressJet 2014 segment included $17.7
million of special item expenses associated with the ERJ145 aircraft and write down of certain assets. The remaining
improvement in the ExpressJet segment loss was primarily due to the removal of aircraft operating under unprofitable
fixed-fee contracts, higher flight completion rates, higher contract incentives earned under its fixed-fee contracts and rate
improvements in certain fixed-fee contracts rates compared to 2014.
ExpressJet’s block hour production decreased to 999,995, or 17.7% for the year ended December 31, 2015 from
1,215,413 for the year ended December 31, 2014 primarily due to the removal of ERJ145 aircraft previously operated
under its United fixed-fee agreement, which was partially offset by additional block hour production from its ERJ145
agreement with American subsequent to December 31, 2014. Significant items contributing to the ExpressJet segment
loss are set forth below:
ExpressJet’s operating revenue decreased by $176.9 million, or 13.1%, for the 2015 year compared to the
2014 year. The decrease was primarily due to a reduction in scheduled departures in ExpressJet’s ERJ145 fleet operating
under its United fixed-fee arrangement, which was partially offset by an increase in contract performance incentives
earned and higher completion rates.
ExpressJet’s Airline Expense decreased $260.6 million, or 17.8%, during the year ended December 31, 2015,
compared to the year ended December 31, 2014. The decrease in the ExpressJet Airlines Expense was primarily due to
the following factors:
• ExpressJet’s salaries, wages and benefits decreased $83.7 million, or 12.9%, during the 2015 year,
compared to the 2014 year.. The decrease was primarily due to a decrease in scheduled production
subsequent to 2014 that resulted, from the decreased number of ERJ145 and CRJ200 aircraft in operation
under ExpressJet’s United fixed-fee arrangements.
• ExpressJet’s aircraft maintenance, materials and repairs expense, decreased $70.5 million, or 18.1%, during
the 2015 year, compared to the 2014 year. The decrease was primarily due to the reduced fleet size and
related production subsequent to 2014.