US Airways 2006 Annual Report Download - page 53

Table of Contents
CASM increased 5.6% to 11.39 cents in 2006 from 10.79 cents in 2005. The 2006 results include special items of $21 million, which
comprised 0.04 cents of mainline CASM, as compared to $15 million of net special charges in 2005, which comprised of 0.03 cents of
mainline CASM. The increase in CASM was mainly due to a 16.8% increase in the average fuel price per gallon.
The table below sets forth the major components of mainline CASM for US Airways for the years ended December 31, 2006 and
2005:
Year Ended December 31, Percent
2006 2005 Change
(In cents)
Mainline:
Aircraft fuel and related taxes 3.39 2.88 17.4
Salaries and related costs 2.86 2.72 4.9
Aircraft rent 0.83 0.76 9.1
Aircraft maintenance 0.72 0.66 9.0
Other rent and landing fees 0.83 0.82 1.6
Selling expenses 0.60 0.63 (5.4)
Depreciation and amortization 0.29 0.37 (20.7)
Special items, net 0.04 0.03 49.3
Other 1.83 1.92 (3.9)
11.39 10.79 5.6
Significant changes in the components of mainline CASM are explained as follows:
• Aircraft fuel and related tax expense per ASM increased 17.4% primarily due to a 16.8% increase in the average price per gallon
of fuel from $1.77 in 2005 to $2.07 in 2006.
• Salaries and related costs per ASM increased 4.9% primarily due to costs associated with employee incentive plans in 2006,
including $36 million recorded for the US Airways Group profit sharing plan and that the 2005 period included a reduction of
expenses of $71 million for amortization of prior service benefit associated with the curtailment of postretirement benefits.
• Aircraft rent expense per ASM increased 9.1% reflecting an increase in the mix of leased to owned aircraft in 2006 as a result of
sale-leaseback transactions completed in 2005.
• Aircraft maintenance per ASM increased 9.0% reflecting an increase in rates on the renewal of certain power by the hour
maintenance agreements and the timing of certain engine maintenance cycles.
• Selling expenses per ASM decreased 5.4% primarily due to reduction in travel agent commissions and booking fees as a result of
lower rates renegotiated subsequent to the merger.
• Depreciation and amortization decreased 20.7% per ASM as a result of fewer owned aircraft in the operating fleet as a result of
sale lease back transactions completed in 2005.
Express expenses increased 10.6% to $2.06 billion in 2006 as compared to $1.86 billion in 2005, as a result of higher fuel prices
that were paid by US Airways for US Airways Express operations.
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