United Airlines 2015 Annual Report Download - page 38

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Operating Expense
The table below includes data related to the Company’s operating expense for the year ended December 31 (in millions, except percentage changes):

 
Aircraft fuel $11,675 $12,345 $ (670) (5.4)
Salaries and related costs 8,935 8,625 310 3.6
Regional capacity purchase 2,344 2,419 (75) (3.1)
Landing fees and other rent 2,274 2,090 184 8.8
Depreciation and amortization 1,679 1,689 (10) (0.6)
Aircraft maintenance materials and outside repairs 1,779 1,821 (42) (2.3)
Distribution expenses 1,373 1,390 (17) (1.2)
Aircraft rent 883 936 (53) (5.7)
Special charges 443 520 (77) NM
Other operating expenses 5,143 5,195 (52) (1.0)
$36,528 $37,030 $ (502) (1.4)
The decrease in aircraft fuel expense was primarily attributable to decreased fuel prices partially offset by losses from fuel hedge activity and a 0.3% increase
in capacity. The table below presents the significant changes in aircraft fuel cost per gallon for the year ended December 31 (in millions, except percentage
changes):



 

Total aircraft fuel purchase cost excluding fuel hedge impacts $ 11,586 $ 12,363 (6.3) $ 2.97 $ 3.13 (5.1)
Hedge gains (losses) reported in fuel expense (89) 18 NM (0.02) — NM
Fuel expense as reported 11,675 12,345 (5.4) 2.99 3.13 (4.5)
Cash received (paid) on settled hedges that did not qualify for hedge accounting (138) 39 NM (0.04) 0.01 NM
Fuel expense including all gains (losses) from settled hedges $ 11,813 $ 12,306 (4.0) $ 3.03 $ 3.12 (2.9)
Total fuel consumption (gallons) 3,905 3,947 (1.1)
Salaries and related costs increased $310 million, or 3.6%, in 2014 as compared to 2013 primarily due to higher pay rates driven by collective bargaining
agreements, increased medical and dental costs and costs associated with crew shortages and new crew rest rules, partially offset by lower post-employment
benefit costs.
Landing fees and other rent increased $184 million, or 8.8%, in 2014 as compared to 2013 primarily due to a transition from paying regional carriers for
landing fees to paying airports directly. Landing fees also increased due to airport security services and modernization projects at certain airport locations.
Aircraft rent decreased $53 million, or 5.7%, in 2014 as compared to 2013 primarily due to aircraft lease expirations and terminations of several Boeing 757-
200 aircraft leases resulting from the Company’s purchase of the leased aircraft.
37
Source: United Continental Holdings, Inc., 10-K, February 18, 2016 Powered by Morningstar® Document Research℠
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