## Order 2013

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- 8 Served: December 17, 2013 UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C. Issued by the Department of Transportation on the 17 th 

## of December, 2013
INTRA

- ALASKA MAINLINE SERVICE MAIL RATES
Under 49 U.S. C. 419 0 1 et seq. Docket OST
- 2003
- 14695 (Docket OST
- 95
- 429, Prior Docket)

F inalizing Annual Update and Making Quarterly Fuel Adjustment Summary By Order 201 3

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- 3, December 6, 2013, the Department directed the parties to show cause within ten (10) days of the service date of that Order why we should not make final the annual rates tentatively set forth by th at Order . The deadline for objections has expired, and we have received no objections. We will therefore make those rates final , adjusted for the most recent quarterly fuel expenses. 1 

## The rates contained in Order 2012

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- 3 include fuel costs for the year ended March 31, 2013. Consistent with longstanding program practice, we will here update the rates in that Order to reflect fuel costs for the quarter ended September 30, 2013, as sh own in the Appendices. ACCORDINGLY, 1. We finalize the tentative findings in Order 2012

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- 3 ; 2. We make final the rates set forth in Appendix A of this Order, effective on the second Saturday after the service date of this Order, i.e., December 28, 201 3 ; 3. This docket shall remain open until further Order of the Department; and 4. We will serve this Order upon all parties on the Service List for this Docket. Persons entitled to petition the Department for review of this Order under the Department’s Regulations, 14 CFR 385.50, must file such petitions with ten (10) days after the date of service of this Order. This Order will be effective immediately, and the filing of a petition for review shall not preclude its effectiveness. By:

TODD M. HOMAN Director Office of Aviation Analysis (SEAL) An electronic version of this document is available at http://www.regulations.gov

1 Order 2012

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- 3 indicated that the final Order would update the rates tentatively set by that Order for more current fuel expenses when those data became available.Appendix A

INTRA-ALASKA MAINLINE CLASS SERVICE MAIL RATES

(1) (2) (3) (4) (5)

Effective Base Year Adjustment December 28, 2013 Change from

Rates 1/ Factors 2/ Final Rates 3/ Current Rate 4/ Current Rate 5/

Linehaul Charge per Billing Ton-Mile

Priority $1.1969 195.05% $3.5315 $3.7090 -4.79% Non-priority $0.7246 195.05% $2.1379 $2.2454 -4.79%

Terminal Charge per Pound Originated

Priority $0.1697 127.11% $.3854 $.3599 7.09% Non-priority $0.1458 127.11% $.3311 $.3092 7.08%

1/ Per Order 82-11-23. 2/ See Appendix B of this order. Unlike the linehaul charge, the terminal charge will not change from quarter to quarter with the quarterly fuel updates. 3/ Column (1) increased by Column (2). 4/ Per Order 2013-6-15, Appendix A. 5/ Column 3 ÷ Column 4 minus 1. Any differences between priority and nonpriority elements are due to rounding.

### Appendix B

INTRA-ALASKA MAINLINE CLASS SERVICE MAIL RATES COST ADJUSTMENT FACTORS

Base Year Ended Current New 9/30/80 Costs 2/ Costs

Unit Cost per Available Ton-Mile Fuel $0.57605 $0.51951 3/ Nonfuel $0.66184 $0.65914 4/ Total $0.399469 1/ $1.23789 $1.17865

Percentage Change from Base Year 209.88% 195.05% 5/

Unit Cost per Ton Enplaned $191.54 1/ $406.19 $435.01 4/ Percentage Change from Base Year 112.07% 127.11% 6/

1/ Order 82-11-23, updated most recently in Order 97-12-24. 2/ Appendix B of Order 2013-6-15. 3/ Appendix C of this Order. 4/ Appendix B of Order 2013-12-3. 5/ ( $1.17865 /$0.399469)-1. 6/ ( $435.01 /$191.54)-1.Appendix C
Operating Expenses, Alaska Airlines, Northern Air Cargo, Lynden Air Cargo, Peninsula Airways, Era Aviation, and Tatonduk Outfitters, Ltd. Intra-Alaska Class Service Mail Rates--Quarter Ended September 30, 2013
Lynden Northern Northern Alaska ERA Air Cargo Air Cargo Air Cargo Tatonduk Outfitters, Ltd. Not by Aircraft Type AS 7H L2 NC NC 5V 1 Skd. P-12, Skd. Intra-Alaska Costs $15,723,839 NA $866,930 $3,814,832 $3,657,931 2 Skd. P-12, Skd. Intra-Alaska Gallons 5,252,769 NA 249,449 1,201,312 920,292 3 Cost per Gallon 1/ $2.99 NA $3.48 $3.18 $3.18 $3.97

AS 7H L2 NC NC 3Z 3Z #617 #483 #556 #619 #620 #218 640 By Aircraft Type Total B-737-400 DHC-8-100 Hercules 737-200 737-200 DC-6 DC-9-30 4 Domestic Gallons 2/ 17,632,000 875,245 618,850 442,214 999,310 445,137 658,502 5 Burn per Hour 3/ 800 177 725 741 805 408 950

6 Fuel 4/ $2,933,857 $2,277,475 $2,422,740

7 Intra-AK Skd. Blk. Hrs. 5/ 14,218 6,777 4,347 344 254 1,106 703 687 8 Domestic Block Hours 6/ 31,481 22,043 4,946 870 597 1,241 1,091 693

9 Intra-AK Fuel Exp. 7/ $26,956,095 $16,210,584 $2,578,544 $867,912 $598,521 $2,831,249 $1,467,521 $2,401,764

10 Intra-AK Skd. ATMs 5/ 54,826,871 36,031,883 3,434,095 2,202,773 1,467,011 5,696,301 2,006,264 3,988,544 11 Unit Cost/ATM, Fuel 8/ $0.491658 $0.449896 $0.750866 $0.394009 $0.407987 $0.497033 $0.731470 $0.602166

12 Intra-AK Mail RTMs 5/ 5,606,809 1,253,967 83,780 872,596 228,685 1,328,495 624,721 1,214,565 13 RTM Percent of Total 9/ 100.00% 22.365% 1.494% 15.563% 4.079% 23.694% 11.142% 21.662% 14 Wtd. Cost/ATM, Fuel 10/ $0.51951 $0.10062 $0.01122 $0.06132 $0.01664 $0.11777 $0.08150 $0.13044

1/ Row 1 ÷ Row 2. Era does not report Schedule P12. Tatonduk files that report but we do not use it here. It is included for comparison purposes only. 2/ Per Form 41, except for Era, where we rely on Schedule F2. 3/ Row 4 ÷ Row 8. However, we divide Lynden's intra-Alaska Scheduled Gallons by its Intra-Alaska Scheduled Block Hours, since it has only one aircraft type. 4/ Per Form 41 for Tatonduk, Schedule F2 for Era. AS, L2, and NC are excluded, as we rely on their Schedule P12 above. 5/ T-100 Segment Report. 6/ T-100 Segment Report. Lynden operates one aircraft, the Hercules, #556, so we divide its intra-Alaska Scheduled Service Gallons by intra-Alaska Scheduled Block Hours. 7/ For AS, LC, and NC: Row 3 x Row 5 x Row 7; For 5V and 7H: Row 6 ÷ Row 8 x Row 7. 8/ Row 9 ÷ Row 10. 9/ Row 12 for each individual carrier ÷ Total Mail RTMs for all carriers on Row 12. 10/ Row 13 x Row 11 for individual carriers, and then summed across.