Alaska Airlines and Horizon Air 2012 Annual Report Download - page 126
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primarily driven by higher personnel non-wage
costs such as hotels, meals and per diems of $8
million and higher professional service costs of
$7 million as well as higher costs for
communications, property taxes, passenger
remunerations, and deicing.
Fleet Transition and Restructuring Related
Expenses
Fleet transition costs increased $26 million, as
we finalized our transition to an all-Q400 fleet.
The increase was directly due to net charges of
$28 million related to the removal of the CRJ-
700 aircraft and related inventory and a loss on
the final disposition of Q200 aircraft of
$11 million in 2011.
Operating Costs per Available Seat Mile
(CASM)
Our operating costs per ASM are summarized
below:
Year Ended
December 31,
2011 2010
%
Change
Consolidated:
Total operating expenses per
ASM (CASM) ............ 13.06¢ 12.12¢ 7.8
Less the following
components:
Aircraft fuel, including
hedging gains and
losses ............. 4.38 3.25 34.8
Fleet transition costs .... 0.13 0.05 NM
CASM, excluding fuel and
fleet transition costs ..... 8.55¢ 8.82¢ (3.1)
Mainline:
Total mainline operating
expenses per ASM
(CASM) ................ 11.87¢ 10.96¢ 8.3
Less the following
components:
Aircraft fuel, including
hedging gains and
losses ............. 4.27 3.11 37.3
CASM, excluding fuel ...... 7.60¢ 7.85¢ (3.2)
NM–Not Meaningful
CONSOLIDATED NONOPERATING INCOME
(EXPENSE)
Net nonoperating expense was $55 million in
2011 compared to $65 million in 2010. The $10
million decrease is due to lower interest expense
due to payments on maturing debt and
prepayments of debt in 2011, higher capitalized
interest due to higher levels of capital
expenditures, offset by lower investment returns
in our marketable securities portfolio, and an
impairment charge of $6 million on an owned
aircraft that was leased to another carrier that
filed for bankruptcy protection, and other-than-
temporary-impairments on mortgage-backed
securities.
CONSOLIDATED INCOME TAX EXPENSE
Our effective income tax rate for 2011 was
37.9%, compared to 38.1% for 2010. The
difference between the effective tax rates for
both periods and our statutory tax rate of
approximately 37.8% is due primarily to
miscellaneous non-deductible expenses, such as
per diems.
38