capacity reductions due to the retirement of our dedicated freighter aircraft in 2009.  

      Other . Other revenue increased due to higher baggage fee revenue from an increased volume of checked bags.  

Operating Expense  

     On July 1, 2010, we sold Compass Airlines, Inc. (“Compass”) and Mesaba Aviation, Inc. (“Mesaba”) to Trans States Airlines, Inc. (“Trans States”) and Pinnacle Airlines Corp. (“Pinnacle”), respectively. Upon the closing of these transactions, we entered into new or amended longterm capacity purchase agreements with Compass, Mesaba and Pinnacle. Prior to these sales, expenses related to Compass and Mesaba as our wholly-owned subsidiaries were reported in the applicable expense line items. Subsequent to these sales, expenses related to Compass and Mesaba are reported as contract carrier arrangements expense.  

      Aircraft fuel and related taxes . Aircraft fuel and related taxes increased due to higher average unhedged fuel prices, which increased fuel costs $1.6 billion, partially offset by reductions of $1.3 billion in fuel hedge costs and $156 million from the change in reporting described above due to the transactions involving Compass and Mesaba. We recorded $89 million in net fuel hedge costs for 2010, compared to $1.4 billion in 2009. The fuel hedge costs for 2009 were primarily from losses on hedge contracts purchased in 2008 when fuel prices reached record highs and were expected to continue to rise but instead declined.  

      Contract carrier arrangements . Contract carrier arrangements expense increased primarily due to higher average fuel prices and the change in reporting described above due to the transactions involving Compass and Mesaba.  

      Aircraft maintenance materials and outside repairs. Aircraft maintenance materials and outside repairs expense increased primarily due to returning aircraft to service after temporary storage, as well as the timing of engine and airframe maintenance volumes.  

      Passenger commissions and other selling expenses. Passenger commissions and other selling expenses increased primarily due to higher revenue-related expenses, such as booking fees and sales commissions, from the increase in revenue.  

      Profit sharing. We recorded $313 million related to our broad-based employee profit sharing plans for 2010. We did not record any profit sharing expense in 2009. Our broad-based profit sharing plans provide that, for each year in which we have an annual pre-tax profit (as defined in the plan document), we will pay a specified portion of that profit to eligible employees.  

      Restructuring and merger-related items. Restructuring and merger-related items increased primarily due to the following:  

During 2010, we recorded a $268 million charge primarily for merger-related items and $182 million in asset impairment charges related to the initiative to substantially reduce our 50-seat aircraft and the retired dedicated freighter aircraft. 

  

During 2009, we recorded a $288 million charge primarily for merger-related items and a $119 million charge in connection with employee workforce reduction programs. 

Other (Expense) Income  

     Other