US Airways 2007 Annual Report Download - page 43

Table of Contents
Operating Expenses:
Percent
2007 2006 Change
(In millions)
Operating expenses:
Aircraft fuel and related taxes $ 2,630 $ 2,518 4.4
Loss (gain) on fuel hedging instruments, net:
Realized (58) 9 nm
Unrealized (187) 70 nm
Salaries and related costs 2,302 2,090 10.1
Aircraft rent 727 732 (0.6)
Aircraft maintenance 635 582 9.1
Other rent and landing fees 536 568 (5.7)
Selling expenses 453 446 1.6
Special items, net 99 27 nm
Depreciation and amortization 189 175 8.2
Other 1,247 1,223 2.0
Total mainline operating expenses 8,573 8,440 1.6
Express expenses:
Fuel 765 764 0.1
Other 1,829 1,795 1.9
Total operating expenses $ 11,167 $ 10,999 1.5
Total operating expenses were $11.17 billion in 2007, an increase of $168 million or 1.5% compared to the 2006 period. Mainline
operating expenses were $8.57 billion in the 2007 period, an increase of $133 million from the 2006 period, while ASMs decreased 1.5%.
The 2007 period included net charges from special items of $99 million, primarily due to merger related transition expenses. This
compares to net charges from special items of $27 million in 2006, which included $131 million of merger related transition expenses,
offset by a $90 million credit related to the restructuring of the then existing Airbus aircraft order and $14 million of credits related to the
settlement of certain bankruptcy-related claims. Mainline CASM increased 3.1% to 11.30 cents in 2007 from 10.96 cents in 2006. The
period over period increase in CASM was driven principally by higher salaries and related costs ($212 million), due primarily to
increased headcount associated with our operational improvement plan and a $99 million charge to increase our obligation for long-term
disability as a result of a change in the FAA mandated retirement age for certain pilots, and aircraft fuel costs ($112 million), due to a
5.8% increase in the average price per gallon of fuel in 2007. These increases were offset in part by gains on fuel hedging instruments
($245 million) in the 2007 period as compared to losses in the 2006 period ($79 million).
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