US Airways 2007 Annual Report Download - page 44

Table of Contents
The table below sets forth the major components of our mainline CASM for the years ended December 31, 2007 and 2006:
Year Ended
December 31, Percent
2007 2006 Change
(In cents)
Mainline:
Aircraft fuel and related taxes 3.47 3.27 6.0
Loss (gain) on fuel hedging instruments, net (0.32) 0.10 nm
Salaries and related costs 3.03 2.71 11.8
Aircraft rent 0.96 0.95 0.9
Aircraft maintenance 0.84 0.75 10.8
Other rent and landing fees 0.70 0.74 (4.3)
Selling expenses 0.60 0.58 3.1
Special items, net 0.13 0.04 nm
Depreciation and amortization 0.25 0.23 9.9
Other 1.64 1.59 3.5
11.30 10.96 3.1
Significant changes in the components of mainline operating expense per ASM are as follows:
• Aircraft fuel and related taxes per ASM increased 6% due primarily to a 5.8% increase in the average price per gallon of fuel to
$2.20 in 2007 from $2.08 in 2006.
• Loss (gain) on fuel hedging instruments, net per ASM fluctuated from a loss of 0.10 cents in 2006 to a gain of 0.32 cents in 2007
as a result of a period over period increase in the volume of barrels hedged during a period in which the fair market value of the
costless collar transactions increased.
• Salaries and related costs per ASM increased 11.8% due to a $99 million charge for an increase to long-term disability
obligations for US Airways' pilots as a result of a change in the FAA mandated retirement age for pilots from 60 to 65 as well as
a period over period increase in headcount, principally in fleet and passenger service employees as part of our initiative to
improve operational performance, and increases in employee benefits as a result of higher medical claims due to general
inflationary cost increases.
• Aircraft maintenance expense per ASM increased 10.8% due principally to an increase in the number of overhauls performed on
engines not subject to power by the hour maintenance agreements as well as an increase in the volume of seat overhauls and
thrust reverser repairs in the 2007 period compared to the 2006 period.
• Depreciation and amortization per ASM increased 9.9% due to an increase in capital expenditures in 2007, specifically the
acquisition of Embraer 190 aircraft and equipment to support flight operations.
Total Express expenses increased 1.4% in the 2007 period to $2.59 billion from $2.56 billion in the 2006 period, as other Express
operating expenses increased $34 million. Fuel costs remained consistent period over period as the average fuel price per gallon increased
4.2% from $2.14 in the 2006 period to $2.23 in the 2007 period, which was offset by a 4% decrease in gallons consumed as block hours
were down 6.2% in the 2007 period due to planned reductions in Express flying. The increase in other Express operating expenses is a
result of higher rates paid under certain capacity purchase agreements due to contractually scheduled rate changes.
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