US Airways 2011 Annual Report Download - page 62
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Table of Contents
Operating Expenses:
Percent
Increase
2010 2009 (Decrease)
(In millions)
Operating expenses:
Aircraft fuel and related taxes $ 2,403 $ 1,863 29.0
Loss (gain) on fuel hedging instruments, net:
Realized — 382 nm
Unrealized — (375) nm
Salaries and related costs 2,244 2,165 3.6
Aircraft rent 670 695 (3.7)
Aircraft maintenance 661 700 (5.5)
Other rent and landing fees 549 560 (1.9)
Selling expenses 421 382 10.3
Special items, net 5 55 (91.6)
Depreciation and amortization 258 251 2.6
Other 1,223 1,181 3.6
Total mainline operating expenses 8,434 7,859 7.3
Express expenses:
Fuel 770 609 26.5
Other 2,070 2,019 2.5
Total Express expenses 2,840 2,628 8.1
Total operating expenses $ 11,274 $ 10,487 7.5
Total operating expenses were $11.27 billion in 2010, an increase of $787 million, or 7.5%, compared to 2009. The 2010 increase in operating expenses
was driven by a $701 million, or 28.4%, increase in mainline and Express fuel costs on a 0.9% increase in total system capacity. The average price per gallon
of fuel increased 28.2% to $2.25 in 2010 from $1.76 in 2009.
Mainline Operating Expenses:
Significant changes in the components of mainline operating expense are as follows:
• Aircraft fuel and related taxes increased 29.0% primarily due to a 28.5% increase in the average price per gallon of fuel to $2.24 in 2010 from
$1.74 in 2009.
• Aircraft maintenance expense decreased 5.5% in 2010 as compared to 2009 due to a shift in the mix of aircraft engines undergoing maintenance,
which carried lower overhaul costs as well as a decrease in the number of engine overhauls performed.
• Selling expenses increased 10.3% due to higher credit card fees and commissions paid as a result of the increase in passenger revenues in 2010.
Express Operating Expenses:
Total Express expenses increased $212 million, or 8.1%, in 2010 to $2.84 billion from $2.63 billion in 2009. The year-over-year increase was primarily
driven by a $161 million, or 26.5%, increase in fuel costs. The average price per gallon of fuel increased 27.3% to $2.29 in 2010 from $1.80 in 2009. Other
Express expenses increased $51 million, or 2.5%, while Express capacity decreased 1.0%. This increase in other Express expenses was driven by higher
selling expenses as a result of the increase in passenger revenues and higher amounts paid under capacity purchase agreements resulting from an increase in
maintenance costs due principally to increases in the number of engine overhauls performed in 2010.
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