SkyWest Airlines 2015 Annual Report Download - page 54

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The following table sets forth our segment data for the years ended December 31, 2014 and 2013 (in
thousands):
2014 2013 $ Change % Change
Amount Amount Amount Percent
Operating Revenues:
SkyWest Airlines operating revenue ......... $ 1,873,675 $ 1,827,568 $ 46,107 2.5%
ExpressJet operating revenues .............. 1,346,859 1,466,341 (119,482) (8.1)%
SkyWest Leasing operating revenues . . . . . . . . 16,913 3,816 13,097 343.2 %
Total Operating Revenues .................... $ 3,237,447 $ 3,297,725 $ (60,278) (1.8)%
Airline Expenses:
SkyWest airlines expense ................. $ 1,797,596 $ 1,688,049 $ 109,547 6.5%
ExpressJet airlines expense ................ 1,464,804 1,515,336 (50,532) (3.3)%
SkyWest Leasing airline expense ........... 16,194 9,887 6,307 63.8%
Total Airline Expense(1) ..................... 3,278,594 $ 3,213,272 $ 65,322 2.0%
Segment profit (loss):
SkyWest Airlines segment profit ............ $ 76,079 $ 139,519 $ (63,440) (45.5)%
ExpressJet segment loss ................... (117,945) (48,995) (68,950) 140.7%
SkyWest Leasing profit (Loss) ............. 719 (6,071) 6,790 (111.8)%
Total Segment Profit ........................ $ (41,147) $ 84,453 $ (125,600) (148.7)%
Interest Income ............................ 4,096 3,689 407 11.0%
Other ..................................... 20,708 10,390 10,318 99.3%
Consolidated Income Before Taxes ............ $ (16,343) $ 98,532 $ (114,875) (116.6)%
Total Airline Expense includes operating expense and interest expense
SkyWest Airlines Segment Profit. SkyWest Airlines segment profit decreased $63.4 million, or 45.5%, during
the year ended December 31, 2014, compared to the year ended December 31, 2013. The decrease in the SkyWest
Airlines’ segment profit was due primarily to the following factors:
• SkyWest Airlines operating revenue increased by $46.1 million or 2.5%, for the 2014 year compared to the
2013 year. The increase was primarily due to the additional E175 operations we began in 2014, increased
government subsidies applicable to certain routes we operated and improvements in the provisions of
certain of our flying contracts since 2013. The increase in operating revenue was partially offset by
additional expenses described below.
• SkyWest Airlines airline expense 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.
• SkyWest Airlines airline expense included an increase in salaries, wages and employee benefits of
$41.1 million, or 7.2%, for the 2014 year compared to the 2013 year, primarily due to direct labor costs
associated with our increased pro-rate and E175 operations during the year, and increased labor related
costs attributable to the implementation of the Improvement Act.
• SkyWest Airlines’ airline expense included an increase in other direct operating costs of $11.3 million, or
1.0%, during the 2014 year, compared to the 2013 year, primarily due to other operating expenses
associated with the additional pro-rate and E175 operations and additional crew hotel expenses due to crew
scheduling inefficiencies resulting from the Improvement Act.
ExpressJet Segment Loss. ExpressJet segment loss increased $68.9 million, or 140.7%, during the year ended
December 31, 2014, compared to the year ended December 31, 2013. The increase in ExpressJet segment loss was due
primarily to the following factors: