American Airlines 2007 Annual Report Download - page 39

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36
Operating Expenses
2007 Compared to 2006 The Company’s total operating expenses increased 2.2 percent, or $467 million, to
$22.0 billion in 2007 compared to 2006. American’s mainline operating expenses per ASM in 2007 increased 4.4
percent compared to 2006 to 11.38 cents. This increase in operating expenses per ASM is due primarily to a 5.6
percent increase in American’s price per gallon of fuel (net of the impact of fuel hedging) in 2007 relative to 2006.
(in millions)
Operating Expenses
Year ended
December 31,
2007
Change
from 2006
Percentage
Change
Wages, salaries and benefits $ 6,770 $ (43) (0.6)%
Aircraft fuel 6,670 268 4.2 (a)
Other rentals and landing fees 1,278 (5) (0.4)
Depreciation and amortization 1,202 45 3.9
Maintenance, materials and repairs 1,057 86 8.9 (b)
Commissions, booking fees and credit
card expense
1,028
(47)
(4.5)
Aircraft rentals 591 (15) (2.5)
Food service 534 26 5.1
Other operating expenses 2,840 152 5.7 (c)
Total operating expenses $ 21,970 $ 467 2.2%
(a) Aircraft fuel expense increased primarily due to a 5.6 percent increase in American’s price per gallon
of fuel (net of the impact of fuel hedging) offset by a 1.6 percent decrease in American’s fuel
consumption.
(b) Maintenance, materials and repairs expense increased due to $57 million a heavier workscope of
scheduled airframe maintenance overhauls, repair costs and volume, and contractual engine repair
rates, which are driven be aircraft age.
(c) Other operating expenses increased due to charges taken in 2007. Included in 2007 expenses was
a $63 million charge for the retirement of 24 MD-80 aircraft and certain related equipment. In
addition, Other operating expenses increased due to technology investments and development, and
other costs associated with improving the customer experience.