ITEM 2. MANAGEMENT\'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

Question

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

March 2018 Quarter Financial Highlights

Our pre-tax income for the March 2018 quarter was $718 million, representing a $131 million decrease compared to the corresponding prior year quarter primarily resulting from higher salaries and related costs, and fuel expense, partially offset by increased passenger revenue. Pre-tax income, adjusted for special items (a non-GAAP financial measure) was $676 million, a decrease of $104 million compared to the corresponding prior year period.

Revenue. Compared to the March 2017 quarter, our operating revenue increased $867 million, or 9.5%, on 2.7% higher capacity combined with robust demand and strong revenue momentum, continuing the growth trend from the last three quarters of 2017. Total revenue per available seat mile ("TRASM") increased 6.6% and TRASM, adjusted (a non-GAAP financial measure) increased 5.0% compared to the March 2017 quarter, led by (1) unit revenue growth in all geographic regions for the second consecutive quarter, (2) broad-based strength in both leisure and business demand, (3) foreign currency improvements, particularly in the Atlantic region, and (4) expansion of Branded Fares. Other revenue increased 31.7% primarily from growth in our co-brand credit card partnership with American Express and sales of non-jet fuel products to third parties by our refinery, resulting from higher sales volume.

Operating Expense. Total operating expense increased $1.0 billion, or 12.7%, and our consolidated operating cost per available seat mile ("CASM") increased 9.6% to 15.35 cents compared to the March 2017 quarter, primarily due to higher salaries and related costs, fuel expense and ancillary businesses and refinery. Salaries and related costs were higher due to pay rate increases for eligible merit, ground and flight attendant employees implemented in the June 2017 quarter. The increase in fuel expense primarily resulted from an approximately 23% increase in the market price per gallon of fuel and an increase in consumption consistent with our capacity growth in the quarter. The increase in ancillary businesses and refinery primarily resulted from $152 million of additional refinery sales to third parties. Non-fuel unit costs ("CASM-Ex" a non-GAAP financial measure) increased 3.9% to 11.10 cents compared to the March 2017 quarter primarily due to the pay rate increases discussed above.

Based on the above: Summarize management’s discussion of the past year and their forecast for the future. Pretend you are thinking about buying the whole company and that you'll depend on that company's profits to support you and your family for the rest of your life. What would you be interested in knowing about the recent past and its opportunities going forward? Do about 1/3 to 1/2 of the summary on key things (good and bad) from the past year that would affect an investor's decision making and focus the rest of your summary on the management's views for what will happen in the future.

Explanation / Answer

The year 2017 proved to be good performing year for the company. The year was characterized by good income. Various steps were taken for employee and consumer welfare. The highlights of the past year are:

The forecast of company about the business of financial year 2018 is given below:

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