of its sale to SkyWest and (2) a net 4% decrease due to our shifting of capacity from domestic to international offset by Accounting Adjustments discussed above.

Aircraft rent . The decline in aircraft rent expense is primarily due to a 29% decrease from the renegotiation and rejection of certain leases in connection with our restructuring efforts and an 8% decrease from the change in how we classify ASA’s expense as a result of its sale to SkyWest.

Restructuring, asset writedowns, pension settlements and related items, net . For 2006, restructuring, asset writedowns, pension settlements and related items, net totaled a $13 million charge, primarily due to the following:

 

 	•	 	Workforce Reduction . A $29 million charge related to our decision in 2005 to reduce staffing by approximately 7,000 to 9,000 jobs by December 2007. This charge was partially offset by a $21 million reduction in accruals associated with prior year workforce reduction programs.

For 2005, restructuring, asset writedowns, pension settlements and related items, net totaled an $888 million charge consisting of the following:

 

 	•	 	Pension curtailment charge . A $447 million curtailment charge related to the Pilot Plan and the qualified defined benefit pension plan for eligible non-pilot employees and retirees (the “Non-Pilot Plans”). This charge relates to the freeze of service accruals under the Pilot Plan effective December 31, 2004, and the impact of the planned reduction of 6,000 to 7,000 jobs announced in November 2004 on the Non-Pilot Plan (see Note 10 of the Notes to the Consolidated Financial Statements).

 

 	•	 	Pension settlements . $388 million in settlement charges primarily related to the Pilot Plan due to a significant increase in pilot retirements and lump sum distributions from plan assets (see Note 10 of the Notes to the Consolidated Financial Statements).

 

 	•	 	Workforce reduction . A $46 million charge related to our decision in 2005 to reduce staffing by approximately 7,000 to 9,000 jobs by December 2007. This charge was partially offset by a net $3 million reduction in accruals associated with prior year workforce reduction programs.

 

 	•	 	Asset charges . A $10 million charge related to the removal from service of six B-737-200 aircraft prior to their lease expiration dates.

Other. The decrease in other operating expense primarily reflects (1) a 13% decrease due to an adjustment related to certain non-income tax reserves, (2) a 12% decrease from the Accounting Adjustments discussed above and (3) a 10% decrease related to the change in how we classify ASA’s expense as a result of its sale to SkyWest.

Operating Income (Loss) and Operating Margin

We reported operating income of $58 million for 2006, compared to an operating loss of $2.0 billion for 2005. Operating margin, which is the ratio of operating income (loss) to operating revenue, was less than 1% and (12%) for 2006 and 2005, respectively.

Other (Expense) Income

Other expense, net was $820 million for 2006, compared to $974 million for 2005. This change is substantially attributable to (1) a 16%, or $162 million, decrease in interest expense primarily due to a $206 million