Order 2013-6-5

Served: June 6, 2013

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 6th day of June, 2013

INTRA ALASKA BUSH MAIL RATES

 

 Under 49 U.S.C § 41901 et seq

Docket OST-2003-14694

SHOW CAUSE ORDER PROPOSING UPDATED MAIL RATES

Summary

By this Order, the Department directs all interested parties to show-cause why the proposed 

Intra-Alaska bush service mail rates set forth below should not be made final. The rates 

currently in effect were tentatively set by Order 2011-6-14, made final by Order 2011-10-3, and 

updated for changes in quarterly fuel prices most recently by Order 2012-8-35. 

Linehaul Rates per Revenue Ton Mile (RTM) and Terminal per Ton Enplaned 1

Part 121,

per RTM

Part 135,

per RTM

Seaplane,

per RTM

Terminal, Per

Ton Enplaned

Proposed $5.7792 $14.8403 $33.4689 $850.03

Current, Order 2012-8-35 $6.0747 $12.0763 $37.2295 $716.16

Percentage Increase <4.86> 22.89 <10.10> 18.69

Based on average eligible stage lengths of 375 miles for the Part 121 operators, 73 for the 

Part 135 operators, and 37 miles for Seaplane operators, these linehaul and terminal 

changes would have a net effect on each class as follows: Part 121 [linehaul class rate], 

0.78 percent; Part 135 [linehaul class rate], 21.02 percent; and Seaplane [linehaul class 

rate], <0.24> percent.

 

1 The proposed rates are based on those shown in the appendices to this Order, including fuel and non-fuel 

linehaul expenses for the YE 9-30-12. When the final Order is issued, we will adjust the fuel portion of the 

rate shown in the appendices to the most recent quarterly fuel expenses available at the time, and will 

continue our practice of issuing quarterly fuel surcharges as more recent data become available.
- 2 -

Background

Order 2009-11-19 set final rates, based on data for the year ended June 30, 2009, that were 

effective January 2, 2010, until on or about December 31, 2010, when it was anticipated 

the next annual update would be finalized. As anticipated, Order 2010-10-28 directed 

parties to show cause why we should not finalize the Part 121, Part 135, Seaplane, and 

Terminal Rates it proposed, effective on or about January 1, 2011. 

Although Order 2010-12-28 continued the historical approach of preceding orders to updating 

the various class rates, the carriers’ underlying Part 135 operations changed significantly from 

prior periods because Peninsula Airways, Inc., (PenAir) began operating a number of its Metro 

aircraft under Part 135. Previously all of those operations had been conducted under Part 121. 

Accordingly, Order 2010-12-28 tentatively assigned three-quarters of those Metro operations to 

the Part 135 cost pool rather than the Part 121 cost pool where they had previously been 

assigned, thereby increasing PenAir’s share of the overall Part 135 mail volumes from 7 to 27 

percent. The increased volume of PenAir’s new Part 135 operations with Metro aircraft, 

coupled with the much lower unit costs of those operations, produced a significant drop in the 

rates tentatively set by Order 2010-12-28. However, after Order 2010-12-28 issued, the 

carriers recognized the impact of PenAir’s operational changes and our proposed decision, and 

we received a request for extension to file comments and subsequently a number of comments 

and objections. 

In response to those objections, we chose not to finalize the tentative rates. The rates set by 

Order 2009-11-19, due to expire on December 31, 2010, remained in effect. Six months later, 

on June 10, 2011, we issued Order 2011-6-14. That Order proposed making significant 

changes to the structure of the Part 135 rate, namely adding a mileage taper to the Part 135 rate 

tentatively proposed by Order 2010-12-28. Because the taper represented a significant 

methodological change, we issued Order 2011-6-14 on a show-cause basis.2 3

We received several objections and late-filed responses to Order 2011-6-14. Nevertheless, 

Order 2011-10-3 finalized the mail rates tentatively proposed in Order 2011-6-14, and 

stated that:

“We are concerned with the delay in finalizing these rates. As a result of the 

delays, the current Part 135 rate (about ten percent higher than the rates we are 

setting here) will have been in place for about a year and nine months rather than 

the typical one-year period. The delay in setting a final rate in this case due to the 

 

2 See Order 2011-6-14 for a full discussion. The Order introduced a mileage-taper to the Part 135 rate, 

recognizing that part of the reason that PenAir’s Metro’s enjoyed such a cost advantage over the other 

Part 135 operations was the fact that PenAir’s Metros had a 515-mile average length of haul compared to the 

average for the other carriers of less than 70 miles. Introducing a mileage taper recognized PenAir’s 

advantage and adjusted the Part 135 rate accordingly.

3 Order 2011-6-14 finalized the Seaplane and terminal rates, effective June 18, 2011, because there had been 

no objections to those rates. Because the Part 121 and Part 135 rates received objections, we did not finalize 

those two rates.
- 3 -

numerous pleadings has cost the Postal Service a significant amount of money. 

The Department’s policy is to make all rates final and not provide for retroactive 

adjustment to rates, and we find that that continues to be the appropriate policy. 

However, we cannot ignore the losses incurred by the Postal Service due to the 

delay in setting a final rate. ...Consistent with our earlier approach when we 

eliminated retroactively adjustable rates, we will extend these lower rates [set by 

Order 2011-10-3 and implemented by Order 2011-10-4] for an annual period 

[thru December 31, 2012, rather than the two months thru December 31, 2011] 

while we discuss with all of the parties the best way to address the outstanding 

issues [that were not fully put to bed by Orders 2011-6-14 and 2011-10-3].”

Staff met with the carriers and the Postal Service in Alaska on December 1-2, 2011, and 

again on February 12-13, 2013. At the later meeting, PenAir indicated that it no longer 

objected to the mileage taper, notwithstanding its earlier strong opposition. PenAir 

indicated that since that time its operations had changed again and it no longer received 

compensation under the Part 135 rate, even though it continued to operate Saab 340A 

aircraft in an all-cargo configuration under Part 135.4 At the same February 2013 meeting,

representatives of Era Aviation argued orally that all of PenAir’s historical Part 135 

operations should be excluded from the next update because PenAir was no longer a 

Part 135 bush passenger carrier. On March 2, 2013, Era Aviation filed a document to that 

effect. In its filing Era notes that the Rural Service Improvement Act of 2002 (RSIA), 

39 U.S.C. 5402(h)(6)(C) requires that:

“The Secretary shall establish a bush rate based on data collected under 

subsection (k) from [Part] 135 bush passenger carriers [emphasis added]. Such 

rates shall be paid to all bush passenger carriers operating on bush city pair routes 

in the State of Alaska where no 121 bush passenger carrier is tendered nonpriority 

bypass mail.”

Tentative Decision

Excluding PenAir’s Data

We agree with Era that, as a statutory matter, the Part 135 rate must be based on the costs 

of bush carriers operating under Part 135 and that those carriers must transport at least 

some passengers. Since 2003, when RSIA was established, we have excluded all of the 

operations of two large bush carriers that would otherwise be included in the calculation of 

the mail rate -- Alaska Central Express, Inc., and Arctic Transportation Services, Inc. --

because they are not bush passenger carriers. 

 

4 Under mail rate equalization, for markets served by aircraft in different rate categories (Part 121, Part 135, 

Seaplane, or mainline) the Postal Service pays the lowest applicable rate to all carriers in a market. Because 

PenAir operates its Saab 340A’s in markets where it has equalized to the much lower mainline mail rate, it is 

not affected by the level of the Part 135 rate. However, the Department has never excluded a carrier’s 

operations from a specific class rate on the basis of the rate paid to the carrier, although it has been argued at 

times that that adjustment should be made. There can thus be the apparent anomaly of a rate class being 

based on operations that were not compensated under that rate class.
- 4 -

PenAir indicated at the meeting in February 2013 that it had recently discontinued all of its 

Part 135 operations except those operations provided by its Saab 340A aircraft, all of 

which operated in an all-cargo configuration. The carrier’s T-100 Segment report for the 

month of February 2013 confirms this, showing that the carrier operated a total of two 

aircraft types, Saab 340A and Saab 340B. All of PenAir’s Saab 340B aircraft are

classified as either mainline or bush Part 121; while all of its Saab 340A aircraft operate in 

an all-cargo configuration with no passenger service, so it is clear that since that time 

PenAir has not operated as a Part 135 bush passenger carrier. 

Nevertheless, this fact by itself is not dispositive as to whether we include or exclude 

PenAir’s results from the proposed rate, because PenAir did, in fact, operate as a bush 

passenger carrier for all of the time period on which the proposed rate would be based, 

namely the year ended September 30, 2012. Since PenAir only discontinued its Part 135 

bush passenger operations in January 2013, the threshold issue is whether we should 

maintain the results of the historical period intact for the Part 135 class, or we should 

adjust those results to reflect changed conditions that we know will prevail during the 

effective period of the rate by excluding PenAir. There is no hard and fast precedent

regarding how we should handle such circumstances. As Order 2007-6-17 indicated:

“Thus, there are instances, both recent and distant, where we have either included 

or excluded the data of non-operating carriers based on the particular facts at the 

time. We have never enunciated a policy of either including or excluding the data 

of carriers that no longer operate, but have decided this issue on a case-by-case 

basis.” 

We believe there are good reasons to maintain our policy of resolving this type of issue on 

a case-by-case basis.5 In this instance, we find it appropriate to exclude PenAir’s data 

from the calculation of the Part 135 rate. First, we must recognize that our fundamental 

aim is to set a mail rate that reflects the costs of transporting the mail in the prospective 

period. Second, as we recognized in Order 2011-6-14, adding PenAir’s Metro costs to the 

Part 135 class rate produced a very significant change in the level of that rate.6 Indeed, 

that was the underlying issue that caused nine months of objections and comments, and 

ultimately led the Department to construct a mileage taper as a means to ameliorate the 

anomalous and highly significant impact of adding PenAir’s long-haul, low-cost operations 

to the short-haul, high-cost operations of the typical Part 135 operator. 7 On that basis, we 

propose to exclude PenAir’s expenses from the prospective rate. 

 

5 The issue is whether we include the expenses of a carrier that operated during some or all of the base period 

but whose operations will be absent during the period when the rate will be in place.

6 For many years we included the costs of those Metro aircraft in the Part 121 cost pool because PenAir 

operated them under Part 121. When PenAir began to operate those aircraft under Part 135, we assigned 

them to the Part 135.

7 See also Order 2008-12-28, which stated we would make adjustments to the historical results “if there have 

been anomalous, demonstrable, and highly significant changes in the industry structure.”
- 5 -

Adjusting the Time Periods

For many years, the annual updates have been based on data for the annual periods ending 

on June 30. Because of the delay in setting this rate, which we had planned to finalize on 

or about January 1, 2013, we propose to base this and subsequent prospective updates on 

data for the year ended September 30. The cause of the delay was data issues. 

“As most of the carriers are aware, we have recently worked intensively with the 

Department’s Bureau of Transportation Statistics and the bush carriers to improve 

the accuracy, reliability, and timeliness of the carrier’s data, especially their 

reported expenses on Schedule F-2. As a result, the carriers have implemented 

web-based reporting of Schedule F-2 that they intend to continue to employ. 

Web-based reporting automatically corrects several encoding problems which 

some of the carriers had been making. Those mistakes delayed the mail rate 

review by OST staff. (Response on December 31, 2012, of Kevin Adams, OST 

staff, to inquiry by Mr. Steve Deaton.)

Thus we anticipate having the annual rates based on data for the year ended September 30, 

2013, in place on or about April 1, 2014. Likewise, our goal is to have quarterly fuel 

updates based on data for the quarter ended March 31, 2013, in place on or about July 1, 

2013. Obviously this goal is subject to the Department’s Bureau of Transportation 

Statistics having the requisite data available. 

Discarding the Mileage Taper 

Excluding PenAir’s Part 135 operations removes the underlying reason we introduced the 

Mileage Taper in the last annual update. At that time, support among the parties for the 

Mileage Taper was only seen as a way to ameliorate the impact of adding the data for PenAir’s 

long-haul, low-cost Metro’s to the other short-haul, high-cost Part 135 operators. We will 

therefore tentatively discard the application of the Mileage Taper. We have only included 

PenAir’s data in the Part 121 linehaul class rate, where it continues to transport the bulk of the 

mail, and a pro rata portion of its operations in the terminal class rate. 

Reasonableness and Data Reliability

We have carefully reviewed the bush carriers’ data, as shown in the attachments. We continue 

our longstanding policy of only including the operations of carriers that transported more than 

one percent of the mail.8 We note that there is a substantial increase in the Part 135 and 

Terminal rates from those currently in effect, as shown in the right-hand column below.

 

8 Frontier Flying Service, like PenAir, is no longer a Part 135 bush passenger carrier. We exclude its results 

because it does not meet our one-percent standard. Likewise, Arctic Circle and Wings of Alaska have 

dropped out of the annual update from the prior period.
- 6 -

Intra-Alaska Inflation Trends in Select Mail Rate Classes9 10

We have closely scrutinized those results for reasonableness and for data integrity. For 

both the Part 135 and the Terminal, the percentage increases shown in the right-hand 

column11 above are for more than two years, not for the typical annual period. The large 

11.07 percent is compared to the “trend” level in that chart, and we believe that 

comparison is a better measure of the inflation over the two-year period, because it 

excludes PenAir’s anomalous low-cost, long-haul operations from both periods.

Adjustments to the Calculation of the Terminal Rate

Analysis of the Terminal Cost Trends for Three Commonly-Owned Carriers

 

9 These results are different from those shown on page 1 of this Order, because they compare the unit costs 

underlying the proposed rates before a long-term trend is added.

10 Order 2011-6-14 recognized the impact of including PenAir's long-haul, low-cost aircraft. We 

ameliorated the impact on the short-haul Part 135 operators by introducing the taper. For purposes of 

determining the trend, that Order excluded PenAir's long-haul, low-cost aircraft. 

11 For example, the 11.07% result is $10.1679 ÷ $9.1547 less one for the linehaul as are the 1.15% and 

negative 9.84%, and $12.53 ÷ $10.62 less one for the terminal.

Increase Over 

Classification Total Fuel Nonfuel Row 1 (One)

Part 135 Class Rate, $/RTM Before Long Term Trend 8

Total Fuel Total -Fuel

1 . Order 2011-6-14, "Trend" $12.3313 $3.1766 $9.1547 ------

2 . Order 2011-6-14, "Actual" $11.0571 $2.8032 $8.2539 -9.84%

3 . If PenAir Were Included $13.2897 $4.0300 $9.2597 1.15%

4 . Proposed, Sans PenAir $14.5932 $4.4253 $10.1679 11.07%

Terminal Class Rate, $/Wtd. Departure Before Long Term Trend 8

1 . Order 2010-12-28 $10.62 ------

2 . Proposed $12.53 17.98%

Year-- 2010 2010 2011 2011 2011 2012 2012 2012

Carrier Quarter-- 3 4 2 3 4 1 2 3

Era Aviation Expense $2,137,874 $2,965,841 $2,775,475 $3,514,870 $1,947,299 $1,501,161 $1,615,891 $1,688,087

$/Wtd. Dep $11.99 $18.82 $15.39 $17.19 $11.13 $9.16 $8.85 $8.42

Frontier Expense $448,176 $454,575 $110,035 $33,999 $14,812 $1,952 $1,172 $2,171

$/Wtd. Dep $15.80 $26.30 $24.33 $8.03 $4.94 $0.80 $0.81 $0.48

Hageland Expense $1,772,654 $1,574,029 $2,826,408 $2,276,960 $2,942,336 $2,884,723 $2,842,413 $3,242,847

$/Wtd. Dep $9.29 $8.33 $15.10 $11.04 $14.60 $14.18 $14.20 $15.38

Grand Total Expense $4,358,704 $4,994,445 $5,711,918 $5,825,829 $4,904,447 $4,387,836 $4,459,476 $4,933,105

$/Wtd. Dep $10.80 $13.66 $15.27 $13.97 $12.86 $11.80 $11.55 $11.80

Note: We do not show QE 3-31-11 because those data are not available.
- 7 -

On the terminal side, we have adjusted the results for Hageland Aviation Services, Inc., 

Era Aviation, Inc., and Frontier Flying Service, Inc.12 As shown above, Frontier’s unit 

costs per weighted departure decreased from $15.80 to $0.48 between the first and last 

quarter, a thirty-fold decrease; Hageland’s increased from $9.29 to $15.38; and the unit 

costs for Era steadily decreased from $11.99 to $8.42. Based on that information, we infer 

that some of the departure-related expenses of those three carriers have been commingled. 

This has a significant effect because most of Era’s weighted departures are provided with 

mainline equipment and thus excluded from calculating the rate, while all of Hageland’s 

operations are with bush equipment. Without any such adjustment, we would allocate 

away a significant portion of Era Aviation’s low-cost operations while retaining all of 

Hageland’s high-cost operations. To correct for this, we combined all of the costs and all 

of the weighted departures of the three entities, and allocated away a prorated portion of 

the combined entity based on the combined weighted departures of Era’s ineligible 

mainline equipment and Frontier’s ineligible all-cargo service, as shown in Attachment D, 

Appendix D-1. As shown in Attachment D, Appendices D-1 and D-2, with that

adjustment, the unit cost per weighted departure is $12.53 rather than $13.06, and the 

increase in the unit terminal costs of $10.62 in 2010 decreases from 22.98 to the 17.98

percent.

Long-term Inflation Factor

As a general rate matter, we use the most recent base period of financial and traffic data 

(year ended September 30, 2012, in this case) to establish rates for a future annual period. 

Because prospective rates are final but based on past-period data a methodology for 

projecting costs is required. That methodology projects costs from the midpoint of the 

base period to the midpoint of the future rate period. We have separately applied a longterm trend in unit costs for each of the three rate classes and for the terminal element based 

on eight years of data using the years ended June 30, 2004, through June 30, 2010, and for 

September 30, 2012.13 We will use a ten-year moving average for calculating the trend 

once we have accumulated ten years of data.14

 

12 HoTH, Inc., a/k/a Era Alaska, is a regional airline holding company whose wholly-owned subsidiaries 

include Era Aviation, Inc., Hageland Aviation Service, Inc., and Frontier Flying Service, Inc. Those three 

subsidiaries operate as independent carriers throughout the state of Alaska. Era Aviation, Inc., operates 

entirely under Part 121, while Hageland and Frontier operate entirely under Part 135. Frontier bought Cape 

Smythe Assets (not the company) in August of 2005, Hageland combined with Frontier to form HoTH in 

March 2008, HoTH bought Era in March of 2009, HoTH bought Arctic Circle in October of 2009. Arctic 

Circle now operates as Frontier. Integration of the carriers’ operations would have taken some time.

13 After objections by the parties, Order 2008-12-28 excised the first year of data, YE June 30, 2003, 

because it was not reflective of continuing operations, similar to our exclusion of PenAir’s Part 135 data in 

this case. 

14 RSIA required the carriers to supply additional data.
- 8 -

ACCORDINGLY,

1. We direct all interested persons to show cause, no later than twenty (20) days after the 

date of service of this order, why the Department should not adopt the foregoing tentative 

findings and conclusions and set mail rates as follows: Part 121 linehaul class rate, $5.7792

per mail revenue ton mile (RTM); Part 135 linehaul class rate, $14.8043 per RTM; 

Seaplane linehaul class rate, $33.4689 per RTM; and Terminal class rate, $850.03 per mail 

ton enplaned. These rates would be final (subject to quarterly fuel updates), until the next 

annual update, which we anticipate would occur approximately nine months from when 

these rates are finalized. Vague or unsupported objections that do not include all proposed 

adjustments and backup data will not be accepted;

2. If no objection is filed within the designated time, or if no timely-filed objection raises 

material issues of fact, we hereby delegate authority to the Director, Office of Aviation 

Analysis, to make the above rates final;

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 these Dockets.

By: 

Susan Kurland

Assistant Secretary for

Aviation and International Affairs

(SEAL)

An electronic version of this document is available on the World Wide Web at

http://www.regulations.gov
Attachment A

Linehaul, Part 121

Appendix A

Calculation of the Linehaul, Part 121, YE 9-30-12

(1) (2) (3) (4) (5) (6)

Avg. Annual

Change, Midpoint to Estimated

Year Ended YE 6/30/04 Midpoint Unit Cost at Current Rate Change from

9/30/2012 1/ to YE 9/30/12 2/ Change 3/ 10/1/2013 4/ Order 2012-8-35 Current 5/

Unit Cost per

Revenue Ton-Mile

Fuel $1.5192 0 0 $1.5192 $1.3608 11.64%

Nonfuel $4.0649 3.17% 4.81% $4.26 $4.7139 -9.63%

$5.5841 $5.7792 $6.0747 -4.86%

1/ Fuel, Appendix C2; Nonfuel, Appendix C-1.

2/ We assume fuel increases will b ezero. For nonfuel, see "predicted annual increased" in Appendix B, Page 1.

3/ Reflects the fact that from the midpoint of the reporting period to the midpoint of ther prospective

rate is 1 and 1/2 years. 1.0317 x 1.01585 = 1.0481, where 1.585 is the average annual unit cost increase projected for

a 6-month period.

4/ Fuel reflects YE 9-30-12, Appendix C-2. Nonfuel is column (1) mulitplied by Column (3). 

The total is the sum of the two. The final order will reflect the most recent quarterly fuel costs available at the time.

5/ Column 4 ÷ Column 5 less 1.
Attachment A

Linehaul, Part 121

Appendix B

Page 1 of 2

Actual Y

Natural Log

$/RTM $/RTM Predicted

Non-Fuel Non-Fuel Annual 

Linehaul Linehaul 1/ Predicted Y Residuals EXP (Y) Increase

6/30/2004 $3.4924 1.250589 1.234255397 0.016334 3.435819 3.17%

6/30/2005 $3.4511 1.238693 1.26545821 -0.026765 3.544717

6/30/2006 $3.4450 1.236924 1.296661022 -0.059737 3.657065

6/30/2007 $3.6835 1.303863 1.327863835 -0.024001 3.772975

6/30/2008 $4.1265 1.417430 1.359152135 0.058278 3.892891

6/30/2009 $4.1315 1.418641 1.390354948 0.028286 4.016275

6/30/2010 $4.5669 1.518835 1.421557761 0.097277 4.143570

9/30/2012 $4.0649 1.402389 1.491913692 -0.089672 4.445595

ANOVA

df SS MS F Significance F

Regression 1 0.05083105 0.050831051 11.36821 0.015011299

Residual 6 0.026828 0.004471333

Total 7 0.07765905

Coefficients Std. Error T Stat P-value Lower 95% Upper 95%

Intercept -2.02862 1.00186367 -2.024844818 0.089299 -4.480090558 0.422854

X Variable 1 8.55E-05 2.5354E-05 3.37167751 0.015011 2.3447E-05 0.000148

Regression Statistics

Multiple R 0.809037

R Square 0.654541

Adj. R Square 0.596965

Standard Error 0.066868

Observations 8

1/ For 2004 through 2010, see Order 2011-6-14, made final by Order 2011-10-3.

For YE 9-30-12, see Appendix C of this order: $5.5841 total linehaul expense

per RTM, Appendix C-1, less $1.5192 per RTM, Appendix C-2.
Attachment A

Linehaul, Part 121

Appendix B

Page 2 of 2

y = 9E-05x - 2.03

R2 = 0.655

1.20

1.25

1.30

1.35

1.40

1.45

1.50

1.55

1/14/04 5/28/05 10/10/06 2/22/08 7/6/09 11/18/10 4/1/12 8/14/13

Unit Cost per RTM, Natural Log

Years Ended June 30, 2004, through September 30, 2012

Nonfuel Linehaul, Unit Cost per RTM, 

Actual vs. Predicted
Attachment A

Linehaul, Part 121

Appendix C-1

Page 1 of 1

Year Ended September 30, 2012

System Parameters for Each Carrier Total Era Aviation PenAir PenAir

1 . Capacity Related Expense (CR) $8,974,385 $6,637,362

2 . Direct Expense, Includes Fuel $45,390,073 $50,585,461

3 . Indirect Expense $24,449,572 $22,349,749

4 . CR Markup 14.74% 10.01%

5 . Return and Tax Markup 9.46% 9.46%

6 . T-100 Seg. Mail RTMs 443,234 1,849,288

7 . T-100 Mkt. Mail RTMs 450,188 1,745,914

8 . Circuity Markup -1.54% 5.92%

By Aircraft Type B-1900 Saab 340B Saab 340A

Aircraft Code Total 405 456 459

9 . Direct Expense, Includes Fuel $60,267,763 $16,148,863 $38,102,880 $6,016,020

10 . Less Psgr. Liability Insurance $1,022,200 $188,757 $833,441 $2

11 . Linehaul Expense Allocable to Mail $59,245,563 $15,960,106 $37,269,439 $6,016,018

12 . Cost per Block Hour (R11÷ R18) $1,618.78 $1,308.31 $1,779.06 $1,743.27

13 . Marked Up Costs (R11*R4*R5*R8) $59,245,563 $19,736,307 $47,535,540 $6,016,018

14 . Eligible Expense (R13*R32÷R18) $11,106,418 $3,368,390 $10,844,066 $0

15 . Eligible Cost per RTM (R14÷R36) $4.2726 $7.0665 $5.1084 $0.0000

16 . Percentage of Eligible Mail RTMs 100.00% 24.29% 75.71% 0.00%

17 . Cost Wtd. By Mail RTMs (R15*R16) $5.5841 $1.7165 $3.8676 $0.0000

Scheduled + Nonscheduled Traffic

18 . Block Hours, T-100 36,599 12,199 20,949 3,451

19 . Pax RTMs 10,982,805 2,323,367 8,659,438 0

20 . Frt RTMs Wtd. @ 0.75 412,286 42,840 139,236 230,210

21 . Mail RTMs 1,800,781 81,047 643,965 1,075,769

22 . Total RTMs 13,195,872 2,447,254 9,442,639 1,305,979

23 . Aircraft Miles 8,110,616 2,245,239 5,061,168 804,209

24 . Available Ton Miles (ATMs) 24,028,388 3,816,203 17,196,803 3,015,382

25 . Departures Performed 27,185 13,463 11,911 1,811

26 . Wtd. Deps. (GTOW) 624,116 226,178 345,419 52,519

27 . Ton Load Factor 54.92% 64.13% 54.91% 43.31%

28 . Stage Length 298 167 425 444

29 . ATMs per Mile 2.96 1.70 3.40 3.75

30 . RTMs per Mile 1.63 1.09 1.87 1.62

31 . RTMs per Hour 361 201 451 378

Eligible Traffic

32 . Block Hours, T-100 6,861 2,082 4,779 0

33 . Pax RTMs 2,405,353 430,285 1,975,068 0

34 . Frt RTMs Wtd. @ 0.75 33,647 7,405 26,242 0

35 . Mail RTMs 160,473 38,981 121,492 0

36 . Total RTMs 2,599,473 476,671 2,122,802 0

37 . Aircraft Miles 1,607,899 439,988 1,167,911 0

38 . Available Ton Miles (ATMs) 4,460,427 743,199 3,717,228 0

39 . Departures Performed 4,288 1,760 2,528 0

40 . Wtd. Deps. (GTOW) 102,880 29,568 73,312 0

41 . Ton Load Factor 58.28% 64.14% 57.11% 0

42 . Stage Length 375 250 462 0

43 . ATMs per Mile 2.77 1.69 3.18 0

44 . RTMs per Mile 1.62 1.08 1.82 0

45 . RTMs per Hour 379 229 444 0
Attachment A

Linehaul, Part 121

Appendix C-2

Page 1 of 1

Year Ended September 30, 2012, Fuel Expense

Carrier Era Aviation PenAir PenAir

By Aircraft Type B-1900 Saab 340B Saab 340A

Aircraft Code Total 405 456 459

1 . Total Fuel Expense $5,918,064 $12,346,477 $1,912,058

2 . Total Gallons Issued 1,617,372 2,893,458 450,444

3 Total Block Hours, Schedule F-2 12,751 21,592 3,499

4 . Total Block Hours, T-100 Segment 12,199 20,949 3,451

5 . Eligible Block Hours, , T-100 Segment 2,082 4,779 0

6 . Eligible Mail RTMs, T-100 Segment 160,473 38,981 121,492 0

7 . Subtotal, Total Eligible RTMs, T-100 Segment 476,671 2,122,802 0

8 . Price per Gallon $3.66 $4.27 $4.24

9 . Burn per Revenue Block Hour 133 138 131

10 . Costs per Hour $485.13 $589.36 $554.06

11 . Eligible Fuel Expense $1,010,034 $2,816,546 $0

12 . Cost per Eligible RTM $2.1189 $1.3268 $0.0000

13 . Mail RTMs, Percentage 100.00% 24.29% 75.71% 0.00%

14 . Cost/RTM, Wtd. By Mail RTMs $1.5192 $0.5147 $1.0045 $0.0000
Attachment A

Linehaul, Part 121

Appendix D

Determination of Which Carriers are Included in the Part 121 Class Rate

One Percent Rule

Eligible Cumulative

Carrier 2-Ltr. A/C Type Mail RTMs Percent Percent

PenAir KS 456 121,492 75.71% 75.71%

Era 7H 405 38,981 24.29% 100.00%

160,473 100.00%

Note: We have relied on a special report prepared by PenAir which shows

whether a particular segment operated as Mainline, Part 121, or Part 135.

The above reflects Part 121 operations only.

Intra-Alaska Carriers Excluded from the Bush Calculations

Reason for

Carriers Exclusion

Alaska Airlines Mainline Only

Northwest Airlines Mainline Only

Alaska Central Express All-Cargo Operator

Federal Express All-Cargo Operator

Lynden All-Cargo Operator

Northern Air Cargo All-Cargo Operator

United Parcel Service All-Cargo Operator

Arctic Transporation Services All-Cargo Operator

Empire All-Cargo Operator

40-Mile Schedule F-2 for QE 3/31/12 and

QE 9/30/12 Missing.

Homer No Schedule F-2s reported for the 

YE 9-30-12
Attachment A

Linehaul, Part 121

Appendix E

Circuity Calculation, Intra-AK Mail Revenue Ton Miles (RTMs), YE 9-30-12

T-100 Segment T-100 Market Circuity

Air Excursions X4 16,669 16,631 100.23%

Alaska Seaplane J5 6,222 5,534 112.43%

Bering 8E 386,286 370,399 104.29%

Era 7H 443,234 450,188 98.46%

Frontier Flying 2F 41,452 41,909 98.91%

Grant GV 326,632 304,992 107.10%

Hageland H6 1,716,988 1,525,854 112.53%

Iliamna V8 5,378 4,977 108.06%

Island Air 2O 5,733 4,763 120.37%

Pacific Airways 3F 7,828 7,508 104.26%

Peninsula KS 1,849,288 1,745,914 105.92%

PM Air Z3 7,165 6,737 106.35%

SeaPort Airlines K5 19,975 19,807 100.85%

Servant Air 8D 2,576 2,381 108.19%

Smokey Bay 2E 1,642 1,616 101.61%

Spernak Airways SNK 1,309 1,245 105.14%

Tanana 4E 2,765 2,707 102.14%

Venture K3 28,221 26,203 107.70%

Warbelow 4W 101,970 96,550 105.61%

Wright 8V 199,757 185,055 107.94%

Yute 4Y 119,712 113,777 105.22%
Attachment A

Appendix F

Determination of Segments Ineligible for Calculating Bush Rates,

Scheduled Intra-Alaska Departures Perfomred with Mainline Equipment

T-100 Segment Report, QE 9-30-12, Seven or More Departures Performed 1/

Origin Dest Total Origin Dest Total

ADK ANC 26 DLG AKN 44

ADQ ANC 532 DLG ANC 220

AKN ADQ 10 DLG TOG 8

AKN ANC 349 DUT ANC 21

AKN DLG 36 EMK ANC 45

ANC ADK 26 EMK KSM 8

ANC ADQ 524 ENA ANC 615

ANC AKN 359 FAI ANC 861

ANC ANC 31 FAI BRW 101

ANC ANI 139 FAI SCC 152

ANC BET 568 GAL ANC 28

ANC BRW 55 GST JNU 54

ANC CDB 7 HOM ANC 204

ANC CDV 102 ILI ANC 37

ANC DLG 239 JNU ANC 361

ANC DUT 9 JNU GST 55

ANC EMK 57 JNU KTN 96

ANC ENA 616 JNU PSG 92

ANC FAI 938 JNU SIT 299

ANC GAL 20 JNU YAK 95

ANC HOM 203 KSM ANC 108

ANC ILI 31 KTN JNU 100

ANC JNU 368 KTN SIT 210

ANC KSM 101 KTN WRG 91

ANC MCG 42 MCG ANC 55

ANC OME 287 OME ANC 319

ANC OTZ 369 OME OTZ 119

ANC SCC 87 OTZ ANC 295

ANC UNK 159 OTZ OME 168

ANC VDZ 150 PSG JNU 92

ANC YAK 10 PSG WRG 92

ANI ANC 135 SCC ANC 66

ANI MCG 12 SCC BRW 183

ANI UNK 13 SCC FAI 72

BET ANC 521 SIT JNU 299

BET ANI 8 SIT KTN 152

BET EDF 7 TOG ANC 13

BET TOG 23 UNK ANC 140

BRW ANC 167 UNK ANI 22

BRW FAI 96 UNK GAL 10

BRW SCC 75 VDZ ANC 149

CDB DUT 7 WRG KTN 91

CDV ANC 105 WRG PSG 91

CDV YAK 90 YAK CDV 92

YAK JNU 99

1/ Includes PenAir's Mainline Departures from its special report.
Attachment B

Linehaul, Part 135

Appendix A

Calculation of the Linehaul, Part 135, YE 9-30-12

(1) (2) (3) (4) (5) (6)

Avg. Annual

Change, Midpoint to Estimated

Year Ended YE 6/30/04 Midpoint Unit Cost at Current Rate, Change from

9/30/2012 1/ to YE 9/30/12 2/ Change 3/ 10/1/2013 4/ Order 2012-8-35 Current 5/

Unit Cost per

Revenue Ton-Mile

Fuel $4.4253 0 0 $4.4253 $3.7580 17.76%

Nonfuel $10.1679 1.43% 2.43% $10.4150 $8.3183 25.21%

Total $14.5932 $14.8403 $12.0763 22.89%

1/ Fuel, Appendix C2, Nonfuel, Appendix C-1 of this Order.

2/ We assume fuel increases will be zero. For nonfuel, see "predicted annual increased" in Appendix B, Page 1.

3/ Reflects the fact that from the midpoint of the reporting period to the midpoint of the prospective

rate is 1 and 1/2 years. 1.0143 x 1.00715 = 2.16, where 0.00715 is the average annual unit cost increase projected for

a 6-month period.

4/ Fuel reflects YE 9-30-12, Appendix C-2. Nonfuel is Column (1) mulitplied by Column (3). 

The total is the sum of the two. The final order will reflect the most recent quarterly fuel costs available at the time.

5/ Column 4 ÷ Column 5 less 1.
Attachment B

Linehaul, Part 135

Appendix B

Page 1 of 2

Actual Y

1/ Natural Log

$/RTM $/RTM Predicted 

Time Nonfuel Nonfuel Annual 

Period Linehaul Linehaul Predicted Y Residuals EXP(Y) Increase

6/30/2004 $9.5218 2.253584 2.154278944 0.099305056 8.621671227 1.43%

6/30/2005 $8.5699 2.148256 2.168453479 -0.020197479 8.744749637

6/30/2006 $8.4039 2.128696 2.182628014 -0.053932014 8.86958505

6/30/2007 $8.6708 2.159961 2.196802549 -0.036841549 8.996202547

6/30/2008 $8.6853 2.161632 2.211015919 -0.049383919 9.124981925

6/30/2009 $9.6160 2.263428 2.225190454 0.038237546 9.255245332

6/30/2010 $9.1547 2.214267 2.239364989 -0.025097989 9.387368311

9/30/2012 $10.1679 2.319236 2.271325653 0.047910347 9.69224085

ANOVA

df SS MS F Significance F

Regression 1 0.01048961 0.010489608 2.946300251 0.136888687

Residual 6 0.02136159 0.003560264

Total 7 0.03185119

Coefficients Std Error t Stat P-value Lower 95% Upper 95%

Intercept 0.67205 0.89398707 0.751744371 0.480642717 -1.5154578 2.859557

X Variable 1 3.88E-05 2.2624E-05 1.716479027 0.136888687 -1.6526E-05 9.42E-05

Regression Statistics

Multiple R 0.573874

R Square 0.329332

Adj. R Square 0.217554

Std Error 0.059668

Observations 8
Attachment B

Linehaul, Part 135

Appendix B

Page 2 of 2

y = 4E-05x + 0.672

R2 = 0.3293

2.10

2.15

2.20

2.25

2.30

2.35

1/14/04 5/28/05 10/10/06 2/22/08 7/6/09 11/18/10 4/1/12 8/14/13

Unit Cost per RTM, Natural Log

Years Ended June 30, 2004, through September 30, 2012

Nonfuel Linehaul, unit Cost per RTM, 

Actual vs. Predicted
Attachment B

Linehaul, Part 135

Appendix C-1

Page 1 of 5

System Parameters for Each Carrier Total Bering Bering Bering

1 . Capacity Related Expense (CR) $1,598,796 $1,598,796 $1,598,796

2 . Direct Expense, Includes Fuel $18,260,851 $18,260,851 $18,260,851

3 . Indirect Expense $5,861,653 $5,861,653 $5,861,653

4 . CR Markup 7.10% 7.10% 7.10%

5 . Return and Tax Markup 9.46% 9.46% 9.46%

6 . T-100 Seg. Mail RTMs 386,286 386,286 386,286

7 . T-100 Mkt. Mail RTMs 370,399 370,399 370,399

8 . Circuity Markup 4.29% 4.29% 4.29%

By Aircraft Type Navajo B-1900 Casa 212

Aircraft Code 194 405 412

9 . Direct Expense, Includes Fuel $2,922,904 $3,600,400 $1,066,112

10 . Less Psgr. Liability Insurance $43,363 $59,226 $14,901

11 . Linehaul Expense Allocable to Mail $2,879,541 $3,541,174 $1,051,211

12 . Cost per Block Hour (R11÷ R18) $665.33 $2,299.46 $1,318.96

13 . Marked Up Costs (R11*R4*R5*R8) $3,520,553 $4,329,471 $1,285,220

14 . Eligible Expense (R13*R32÷R18) $2,432,988 $2,895,685 $886,915

15 . Eligible Cost per RTM (R14÷R36) $13.2144 $15.7437 $12.3809

16 . Percentage of Eligible Mail RTMs 100.00% 1.764% 3.564% 2.348%

17 . Cost Wtd. By Mail RTMs (R15*R16) $14.5932 $0.2331 $0.5611 $0.2907

Scheduled + Nonscheduled Traffic

18 . Block Hours, T-100 145,011 4,328 1,540 797

19 . Pax RTMs 5,562,854 198,724 186,413 99

20 . Frt RTMs Wtd. @ 0.75 608,484 10,604 9,587 44,122

21 . Mail RTMs 40,320 81,335 53,583

22 . Total RTMs 8,984,232 249,649 277,336 97,804

23 . Aircraft Miles 18,340,944 664,662 357,285 124,389

24 . Available Ton Miles (ATMs) 24,486,310 581,579 893,213 326,521

25 . Departures Performed 242,941 8,496 2,245 1,181

26 . Wtd. Deps. (GTOW) 1,688,018 62,870 37,716 20,077

27 . Ton Load Factor 36.69% 42.93% 31.05% 29.95%

28 . Stage Length 75 78 159 105

29 . ATMs per Mile 1.34 0.87 2.50 2.62

30 . RTMs per Mile 0.49 0.38 0.78 0.79

31 . RTMs per Hour 62 58 180 123

Eligible Traffic

32 . Block Hours, T-100 117,160 2,991 1,030 550

33 . Pax RTMs 4,323,398 135,198 95,345 0

34 . Frt RTMs Wtd. @ 0.75 430,831 8,655 7,248 18,053

35 . Mail RTMs 2,282,024 40,264 81,335 53,583

36 . Total RTMs 7,036,253 184,117 183,927 71,636

37 . Aircraft Miles 14,455,868 452,953 231,751 85,726

38 . Available Ton Miles (ATMs) 18,697,125 396,334 579,378 225,031

39 . Departures Performed 199,315 6,368 1,719 884

40 . Wtd. Deps. (GTOW) 1,371,478 47,123 28,879 15,028

41 . Ton Load Factor 37.63% 46.46% 31.75% 31.83%

42 . Stage Length 73 71 135 97

43 . ATMs per Mile 1.29 0.88 2.50 2.63

44 . RTMs per Mile 0.49 0.41 0.79 0.84

45 . RTMs per Hour 60 62 179 130
System Parameters for Each Carrier

1 . Capacity Related Expense (CR)

2 . Direct Expense, Includes Fuel

3 . Indirect Expense

4 . CR Markup

5 . Return and Tax Markup

6 . T-100 Seg. Mail RTMs

7 . T-100 Mkt. Mail RTMs

8 . Circuity Markup

By Aircraft Type

Aircraft Code

9 . Direct Expense, Includes Fuel

10 . Less Psgr. Liability Insurance

11 . Linehaul Expense Allocable to Mail

12 . Cost per Block Hour (R11÷ R18)

13 . Marked Up Costs (R11*R4*R5*R8)

14 . Eligible Expense (R13*R32÷R18)

15 . Eligible Cost per RTM (R14÷R36)

16 . Percentage of Eligible Mail RTMs 

17 . Cost Wtd. By Mail RTMs (R15*R16)

Scheduled + Nonscheduled Traffic

18 . Block Hours, T-100

19 . Pax RTMs

20 . Frt RTMs Wtd. @ 0.75

21 . Mail RTMs

22 . Total RTMs

23 . Aircraft Miles

24 . Available Ton Miles (ATMs)

25 . Departures Performed

26 . Wtd. Deps. (GTOW)

27 . Ton Load Factor

28 . Stage Length

29 . ATMs per Mile

30 . RTMs per Mile

31 . RTMs per Hour

Eligible Traffic

32 . Block Hours, T-100

33 . Pax RTMs

34 . Frt RTMs Wtd. @ 0.75

35 . Mail RTMs

36 . Total RTMs

37 . Aircraft Miles

38 . Available Ton Miles (ATMs)

39 . Departures Performed

40 . Wtd. Deps. (GTOW)

41 . Ton Load Factor

42 . Stage Length

43 . ATMs per Mile

44 . RTMs per Mile

45 . RTMs per Hour

Attachment B

 Linehaul, Part 135

Appendix C-1

Page 2 of 5

Bering Grant Grant Grant

$1,598,796 $2,330,173 $2,330,173 $2,330,173

$18,260,851 $17,954,163 $17,954,163 $17,954,163

$5,861,653 $8,218,660 $8,218,660 $8,218,660

7.10% 9.77% 9.77% 9.77%

9.46% 9.46% 9.46% 9.46%

386,286 326,632 326,632 326,632

370,399 304,992 304,992 304,992

4.29% 7.10% 7.10% 7.10%

Caravan C-207 Navajo Caravan

416 35 194 416

$7,582,189 $4,460,061 $4,286,505 $5,084,650

$118,577 $81,502 $61,328 $341,272

$7,463,612 $4,378,559 $4,225,177 $4,743,378

$946.68 $453.60 $770.74 $596.80

$9,125,079 $5,634,557 $5,437,177 $6,104,025

$8,096,135 $5,282,580 $4,375,926 $2,959,085

$14.1480 $22.4199 $12.5905 $9.7474

8.767% 3.165% 3.483% 6.325%

$1.2404 $0.7096 $0.4385 $0.6165

7,884 9,653 5,482 7,948

376,207 166,476 340,590 456,708

40,277 6,104 6,838 12,245

200,136 80,430 97,581 148,611

616,620 253,011 445,009 617,564

1,121,409 1,030,642 955,872 1,080,599

1,630,384 618,461 861,412 1,513,272

16,323 23,390 8,759 14,286

145,275 86,543 64,817 127,145

37.82% 40.91% 51.66% 40.81%

69 44 109 76

1.45 0.60 0.90 1.40

0.55 0.25 0.47 0.57

78 26 81 78

6,995 9,050 4,412 3,853

337,389 158,084 262,671 152,015

34,781 5,310 5,395 7,234

200,075 72,226 79,492 144,328

572,245 235,620 347,558 303,577

985,802 961,372 766,288 539,127

1,433,155 576,892 690,774 755,206

14,999 21,909 6,905 5,110

133,491 81,063 51,097 45,479

39.93% 40.84% 50.31% 40.20%

66 44 111 106

1.45 0.60 0.90 1.40

0.58 0.25 0.45 0.56

82 26 79 79
System Parameters for Each Carrier

1 . Capacity Related Expense (CR)

2 . Direct Expense, Includes Fuel

3 . Indirect Expense

4 . CR Markup

5 . Return and Tax Markup

6 . T-100 Seg. Mail RTMs

7 . T-100 Mkt. Mail RTMs

8 . Circuity Markup

By Aircraft Type

Aircraft Code

9 . Direct Expense, Includes Fuel

10 . Less Psgr. Liability Insurance

11 . Linehaul Expense Allocable to Mail

12 . Cost per Block Hour (R11÷ R18)

13 . Marked Up Costs (R11*R4*R5*R8)

14 . Eligible Expense (R13*R32÷R18)

15 . Eligible Cost per RTM (R14÷R36)

16 . Percentage of Eligible Mail RTMs 

17 . Cost Wtd. By Mail RTMs (R15*R16)

Scheduled + Nonscheduled Traffic

18 . Block Hours, T-100

19 . Pax RTMs

20 . Frt RTMs Wtd. @ 0.75

21 . Mail RTMs

22 . Total RTMs

23 . Aircraft Miles

24 . Available Ton Miles (ATMs)

25 . Departures Performed

26 . Wtd. Deps. (GTOW)

27 . Ton Load Factor

28 . Stage Length

29 . ATMs per Mile

30 . RTMs per Mile

31 . RTMs per Hour

Eligible Traffic

32 . Block Hours, T-100

33 . Pax RTMs

34 . Frt RTMs Wtd. @ 0.75

35 . Mail RTMs

36 . Total RTMs

37 . Aircraft Miles

38 . Available Ton Miles (ATMs)

39 . Departures Performed

40 . Wtd. Deps. (GTOW)

41 . Ton Load Factor

42 . Stage Length

43 . ATMs per Mile

44 . RTMs per Mile

45 . RTMs per Hour

Attachment B

 Linehaul, Part 135

Appendix C-1

Page 3 of 5

Hageland Hageland Hageland Hageland

$6,045,146 $6,045,146 $6,045,146 $6,045,146

$52,845,640 $52,845,640 $52,845,640 $52,845,640

$19,842,508 $19,842,508 $19,842,508 $19,842,508

9.07% 9.07% 9.07% 9.07%

9.46% 9.46% 9.46% 9.46%

1,716,988 1,716,988 1,716,988 1,716,988

1,525,854 1,525,854 1,525,854 1,525,854

12.53% 12.53% 12.53% 12.53%

C-207 Navajo B-1900 Caravan 

35 194 405 416

$7,438,201 $5,099,266 $14,673,140 $21,878,794

$221,748 $96,984 $179,797 $284,136

$7,216,453 $5,002,282 $14,493,343 $21,594,658

$326.36 $678.00 $1,570.58 $800.42

$9,695,113 $6,720,433 $19,471,421 $29,011,849

$7,700,582 $5,776,767 $13,331,213 $25,651,382

$20.4960 $18.4590 $15.3274 $15.2894

4.129% 4.027% 19.820% 22.680%

$0.8463 $0.7433 $3.0379 $3.4676

22,112 7,378 9,228 26,979

339,120 252,640 418,575 1,224,035

12,615 9,210 147,991 76,729

94,618 98,795 923,491 538,735

446,354 360,645 1,490,057 1,839,500

1,797,253 975,037 1,869,219 3,168,629

1,213,189 1,167,256 4,901,586 5,386,694

40,124 10,645 9,954 42,388

148,459 78,773 167,227 377,253

36.79% 30.90% 30.40% 34.15%

45 92 188 75

0.68 1.20 2.62 1.70

0.25 0.37 0.80 0.58

20 49 161 68

17,563 6,342 6,318 23,854

271,749 212,936 333,503 1,093,376

9,748 8,108 83,965 66,776

94,215 91,907 452,295 517,567

375,712 312,951 869,763 1,677,719

1,398,252 823,647 1,210,558 2,768,525

943,863 987,210 3,019,123 4,706,517

32,399 9,103 7,938 37,767

119,876 67,362 133,358 336,126

39.81% 31.70% 28.81% 35.65%

43 90 153 73

0.68 1.20 2.49 1.70

0.27 0.38 0.72 0.61

21 49 138 70
System Parameters for Each Carrier

1 . Capacity Related Expense (CR)

2 . Direct Expense, Includes Fuel

3 . Indirect Expense

4 . CR Markup

5 . Return and Tax Markup

6 . T-100 Seg. Mail RTMs

7 . T-100 Mkt. Mail RTMs

8 . Circuity Markup

By Aircraft Type

Aircraft Code

9 . Direct Expense, Includes Fuel

10 . Less Psgr. Liability Insurance

11 . Linehaul Expense Allocable to Mail

12 . Cost per Block Hour (R11÷ R18)

13 . Marked Up Costs (R11*R4*R5*R8)

14 . Eligible Expense (R13*R32÷R18)

15 . Eligible Cost per RTM (R14÷R36)

16 . Percentage of Eligible Mail RTMs 

17 . Cost Wtd. By Mail RTMs (R15*R16)

Scheduled + Nonscheduled Traffic

18 . Block Hours, T-100

19 . Pax RTMs

20 . Frt RTMs Wtd. @ 0.75

21 . Mail RTMs

22 . Total RTMs

23 . Aircraft Miles

24 . Available Ton Miles (ATMs)

25 . Departures Performed

26 . Wtd. Deps. (GTOW)

27 . Ton Load Factor

28 . Stage Length

29 . ATMs per Mile

30 . RTMs per Mile

31 . RTMs per Hour

Eligible Traffic

32 . Block Hours, T-100

33 . Pax RTMs

34 . Frt RTMs Wtd. @ 0.75

35 . Mail RTMs

36 . Total RTMs

37 . Aircraft Miles

38 . Available Ton Miles (ATMs)

39 . Departures Performed

40 . Wtd. Deps. (GTOW)

41 . Ton Load Factor

42 . Stage Length

43 . ATMs per Mile

44 . RTMs per Mile

45 . RTMs per Hour

Attachment B

 Linehaul, Part 135

Appendix C-1

Page 4 of 5

 

Hageland Warbelow Wright Yute

$6,045,146 $444,358 $1,098,573 $503,712

$52,845,640 $7,251,601 $8,738,071 $4,627,661

$19,842,508 $1,511,701 $3,116,887 $2,183,384

9.07% 5.34% 10.21% 7.99%

9.46% 9.46% 9.46% 9.46%

1,716,988 101,970 199,757 119,712

1,525,854 96,550 185,055 113,777

12.53% 5.61% 7.94% 5.22%

C-406 Navajo Caravan C-207

417 194 416 35

$3,488,385 $5,996,509 $6,695,062 $4,627,661

$39,504 $63,240 $93,480 $116,410

$3,448,881 $5,933,269 $6,601,582 $4,511,251

$1,219.55 $546.85 $541.42 $285.32

$4,633,480 $7,225,166 $8,596,207 $5,610,923

$3,966,639 $5,394,569 $7,296,166 $4,730,834

$18.7090 $11.5491 $7.8969 $15.8549

2.681% 3.484% 8.516% 5.246%

$0.5016 $0.4024 $0.6725 $0.8317

2,828 10,850 12,193 15,811

178,747 565,075 662,234 197,211

4,419 23,972 191,453 12,318

61,190 79,527 194,826 119,712

244,356 668,573 1,048,513 329,241

448,614 1,536,527 1,807,456 1,403,351

672,945 1,365,103 2,541,194 813,501

4,441 11,214 11,881 37,614

43,966 82,984 105,741 139,172

36.31% 48.98% 41.26% 40.47%

101 137 152 37

1.50 0.89 1.41 0.58

0.54 0.44 0.58 0.23

86 62 86 21

2,421 8,101 10,349 13,331

146,575 364,852 591,625 168,080

4,271 22,730 137,966 10,591

61,172 79,516 194,337 119,712

212,018 467,098 923,929 298,383

372,902 1,140,316 1,512,167 1,206,482

559,377 976,099 2,139,387 708,779

3,840 8,986 10,567 30,821

38,016 66,496 94,046 114,038

37.90% 47.85% 43.19% 42.10%

97 127 143 39

1.50 0.86 1.41 0.59

0.57 0.41 0.61 0.25

88 58 89 22
System Parameters for Each Carrier

1 . Capacity Related Expense (CR)

2 . Direct Expense, Includes Fuel

3 . Indirect Expense

4 . CR Markup

5 . Return and Tax Markup

6 . T-100 Seg. Mail RTMs

7 . T-100 Mkt. Mail RTMs

8 . Circuity Markup

By Aircraft Type

Aircraft Code

9 . Direct Expense, Includes Fuel

10 . Less Psgr. Liability Insurance

11 . Linehaul Expense Allocable to Mail

12 . Cost per Block Hour (R11÷ R18)

13 . Marked Up Costs (R11*R4*R5*R8)

14 . Eligible Expense (R13*R32÷R18)

15 . Eligible Cost per RTM (R14÷R36)

16 . Percentage of Eligible Mail RTMs 

17 . Cost Wtd. By Mail RTMs (R15*R16)

Scheduled + Nonscheduled Traffic

18 . Block Hours, T-100

19 . Pax RTMs

20 . Frt RTMs Wtd. @ 0.75

21 . Mail RTMs

22 . Total RTMs

23 . Aircraft Miles

24 . Available Ton Miles (ATMs)

25 . Departures Performed

26 . Wtd. Deps. (GTOW)

27 . Ton Load Factor

28 . Stage Length

29 . ATMs per Mile

30 . RTMs per Mile

31 . RTMs per Hour

Eligible Traffic

32 . Block Hours, T-100

33 . Pax RTMs

34 . Frt RTMs Wtd. @ 0.75

35 . Mail RTMs

36 . Total RTMs

37 . Aircraft Miles

38 . Available Ton Miles (ATMs)

39 . Departures Performed

40 . Wtd. Deps. (GTOW)

41 . Ton Load Factor

42 . Stage Length

43 . ATMs per Mile

44 . RTMs per Mile

45 . RTMs per Hour

Attachment B

 Linehaul, Part 135

Appendix C-1

Page 5 of 5

Exclude from Totals, Only Shown for Reference

PenAir PenAir Frontier

$6,637,362 $6,637,362 $55,099

$50,585,461 $50,585,461 $1,379,204

$22,349,749 $22,349,749 $76,796

10.01% 10.01% 3.93%

9.46% 9.46% 9.46%

1,849,288 1,849,288 41,452

1,745,914 1,745,914 41,909

5.92% 5.92% -1.09%

Caravan Saab 340A SD-330

416 459 487

$3,446,309 $6,016,020 $1,379,204

$106,676 $2 $0

$3,339,633 $6,016,018 $1,379,204

$990.40 $1,743.27 $2,377.94

$4,259,556 $7,673,168 $1,551,905

$3,557,209 $1,938,859 $920,440

$14.3343 $7.4617 $15.8743

1.26%

$0.2000

3,372 3,451 580

170,159 0 0

21,529 230,210 49,147

101,537 1,075,769 41,452

293,226 1,305,979 90,599

442,605 804,209 95,728

791,923 3,015,382 311,116

5,810 1,811 498

51,709 52,519 11,404

37.03% 43.31% 29.12%

76 444 192

1.79 3.75 3.25

0.66 1.62 0.95

87 378 156

2,816 872 344

146,562 0 0

17,955 35,998 28,964

83,643 223,843 29,019

248,160 259,841 57,983

370,475 208,208 56,768

661,268 780,676 184,496

5,006 439 306

44,553 12,731 7,007

37.53% 33.28% 31.43%

74 474 186

1.78 3.75 3.25

0.67 1.25 1.02

88 298 169
Attachment B

Linehaul, Part 135

Appendix C-2

Page 1 of 5

Year Ended September 30, 2012 

Carrier Bering Bering Bering Bering

By Aircraft Type Navajo B-1900 Casa 212 Caravan

Aircraft Code Total 194 405 412 416

1 . Total Fuel Expense $1,322,144 $1,578,381 $440,448 $2,939,791

2 . Total Gallons Issued 184,635 257,213 71,684 482,318

3 Total Block Hours, Schedule F-2 4,337 1,548 798 7,897

4 . Total Block Hours, T-100 Segment 4,328 1,540 797 7,884

5 . Eligible Block Hours, , T-100 Segment 2,991 1,030 550 6,995

6 . Eligible Mail RTMs, T-100 Segment 2,282,024 40,264 81,335 53,583 200,075

7 . Subtotal, Total Eligible RTMs, T-100 Segment 184,117 183,927 71,636 572,245

8 . Price per Gallon $7.16 $6.14 $6.14 $6.10

9 . Burn per Revenue Block Hour 43 167 90 61

10 . Costs per Hour $305.49 $1,024.92 $552.63 $372.88

11 . Eligible Fuel Expense $913,709 $1,055,670 $303,948 $2,608,300

12 . Cost per Eligible RTM $4.9627 $5.7396 $4.2430 $4.5580

13 . Mail RTMs, Percentage 100.00% 1.764% 3.564% 2.348% 8.767%

14 . Cost/RTM, Wtd. By Mail RTMs $4.4253 $0.0875 $0.2046 $0.0996 $0.3996

Note: Total excludes PenAir and Frontier.
Carrier

By Aircraft Type

Aircraft Code

1 . Total Fuel Expense

2 . Total Gallons Issued

3 Total Block Hours, Schedule F-2

4 . Total Block Hours, T-100 Segment

5 . Eligible Block Hours, , T-100 Segment

6 . Eligible Mail RTMs, T-100 Segment

7 . Subtotal, Total Eligible RTMs, T-100 Segment

8 . Price per Gallon

9 . Burn per Revenue Block Hour

10 . Costs per Hour

11 . Eligible Fuel Expense

12 . Cost per Eligible RTM

13 . Mail RTMs, Percentage

14 . Cost/RTM, Wtd. By Mail RTMs

Attachment B

 Linehaul, Part 135

Appendix C-2

Page 2 of 5

Year Ended September 30, 2012 

Grant Grant Grant Hageland Hageland

C-207 Navajo Caravan C-207 Navajo

35 194 416 35 194

$1,067,601 $1,802,599 $1,483,472 $2,409,307 $1,983,622

177,811 305,495 366,891 339,769 280,507

10,458 6,499 7,584 22,336 7,455

9,653 5,482 7,948 22,112 7,378

9,050 4,412 3,853 17,563 6,342

72,226 79,492 144,328 94,215 91,907

235,620 347,558 303,577 375,712 312,951

$6.00 $5.90 $4.04 $7.09 $7.07

18 56 46 15 38

$110.60 $328.82 $186.65 $108.96 $268.86

$1,000,910 $1,450,760 $719,152 $1,913,651 $1,705,087

$4.2480 $4.1742 $2.3689 $5.0934 $5.4484

3.165% 3.483% 6.325% 4.129% 4.027%

$0.1344 $0.1454 $0.1498 $0.2103 $0.2194
Carrier

By Aircraft Type

Aircraft Code

1 . Total Fuel Expense

2 . Total Gallons Issued

3 Total Block Hours, Schedule F-2

4 . Total Block Hours, T-100 Segment

5 . Eligible Block Hours, , T-100 Segment

6 . Eligible Mail RTMs, T-100 Segment

7 . Subtotal, Total Eligible RTMs, T-100 Segment

8 . Price per Gallon

9 . Burn per Revenue Block Hour

10 . Costs per Hour

11 . Eligible Fuel Expense

12 . Cost per Eligible RTM

13 . Mail RTMs, Percentage

14 . Cost/RTM, Wtd. By Mail RTMs

Attachment B

 Linehaul, Part 135

Appendix C-2

Page 3 of 5

Year Ended September 30, 2012 

Hageland Hageland Hageland Warbelow

B-1900 Caravan C-406 Navajo

405 416 417 194

$7,157,973 $8,333,838 $1,623,195 $2,176,016

1,235,658 1,423,469 277,164 417,426

9,932 27,249 2,856 10,843

9,228 26,979 2,828 10,850

6,318 23,854 2,421 8,101

452,295 517,567 61,172 79,516

869,763 1,677,719 212,018 467,098

$5.79 $5.85 $5.86 $5.21

134 53 98 38

$775.68 $308.90 $573.97 $200.55

$4,900,745 $7,368,523 $1,389,588 $1,624,692

$5.6346 $4.3920 $6.5541 $3.4783

19.820% 22.680% 2.681% 3.484%

$1.1168 $0.9961 $0.1757 $0.1212
Carrier

By Aircraft Type

Aircraft Code

1 . Total Fuel Expense

2 . Total Gallons Issued

3 Total Block Hours, Schedule F-2

4 . Total Block Hours, T-100 Segment

5 . Eligible Block Hours, , T-100 Segment

6 . Eligible Mail RTMs, T-100 Segment

7 . Subtotal, Total Eligible RTMs, T-100 Segment

8 . Price per Gallon

9 . Burn per Revenue Block Hour

10 . Costs per Hour

11 . Eligible Fuel Expense

12 . Cost per Eligible RTM

13 . Mail RTMs, Percentage

14 . Cost/RTM, Wtd. By Mail RTMs

Attachment B

 Linehaul, Part 135

Appendix C-2

Page 4 of 5

Year Ended September 30, 2012 

Wright Yute

Caravan C-207

416 35

$2,115,949 $1,345,162

654,582 201,262

12,221 20,082

12,193 15,811

10,349 13,331

194,337 119,712

923,929 298,383

$3.23 $6.68

54 13

$173.54 $85.08

$1,795,945 $1,134,170

$1.9438 $3.8011

8.516% 5.246%

$0.1655 $0.1994
Carrier

By Aircraft Type

Aircraft Code

1 . Total Fuel Expense

2 . Total Gallons Issued

3 Total Block Hours, Schedule F-2

4 . Total Block Hours, T-100 Segment

5 . Eligible Block Hours, , T-100 Segment

6 . Eligible Mail RTMs, T-100 Segment

7 . Subtotal, Total Eligible RTMs, T-100 Segment

8 . Price per Gallon

9 . Burn per Revenue Block Hour

10 . Costs per Hour

11 . Eligible Fuel Expense

12 . Cost per Eligible RTM

13 . Mail RTMs, Percentage

14 . Cost/RTM, Wtd. By Mail RTMs

Attachment B

 Linehaul, Part 135

Appendix C-2

Page 5 of 5

Year Ended September 30, 2012

Exclude, Only Shown for Reference

PenAir PenAir Frontier

Caravan Saab 340A SD-330

416 459 487

$771,602 $1,912,058 $414,287

189,830 450,444 111,446

3,438 3,499 722

3,372 3,451 580

2,816 872 344

83,643 223,843 29,019

248,160 259,841 57,983

$4.06 $4.24 $3.72

56 131 192

$228.83 $554.06 $714.29

$644,375 $483,140 $245,715

$2.5966 $1.8594 $4.2377

3.67% 9.81% 1.27%

$0.0953 $0.1824 $0.0538
Arttachment B

Appendix D

One Percent Rule, Determination of Which Carriers are Included 

in the Part 135 Class Rate

Carrier 2-Ltr. A/C Type Mail RTMs Percent Cumulative Percent

Hageland H6 416 517,567 21.58% 21.58%

Hageland H6 405 452,295 18.86% 40.44%

Bering 8E 416 200,075 8.34% 48.78%

Wright 8V 416 194,337 8.10% 56.88%

Grant GV 416 144,328 6.02% 62.90%

Yute 4Y 35 119,712 4.99% 67.89%

Hageland H6 35 94,215 3.93% 71.82%

Hageland H6 194 91,907 3.83% 75.65%

Bering 8E 405 81,335 3.39% 79.04%

Warbelow 4W 194 79,516 3.32% 82.36%

Grant GV 194 79,492 3.32% 85.68%

Grant GV 35 72,226 3.01% 88.69%

Hageland H6 417 61,172 2.55% 91.24%

Bering 8E 412 53,583 2.23% 93.47%

Bering 8E 194 40,264 1.68% 95.15%

Tatonduk 3Z 416 16,246 0.68% 95.83%

Wings/Seaport K5 416 13,374 0.56% 96.39%

Warbelow 4W 405 12,175 0.51% 96.90%

Air Exc. X4 79 11,528 0.48% 97.38%

Bering 8E 406 9,678 0.40% 97.78%

Warbelow 4W 416 8,530 0.36% 98.14%

Tatonduk 3Z 79 7,389 0.31% 98.45%

Tatonduk 3Z 479 5,346 0.22% 98.67%

Iliamna V8 35 4,898 0.20% 98.87%

Wright 8V 194 4,317 0.18% 99.05%

Air Exc. X4 194 3,254 0.14% 99.19%

Island 2O 131 2,682 0.11% 99.30%

Wings/Seaport K5 35 2,144 0.09% 99.39%

Servant 8D 35 2,084 0.09% 99.48%

Island 2O 79 2,072 0.09% 99.57%

Tanana 4E 35 1,762 0.07% 99.64%

Warbelow 4W 35 1,739 0.07% 99.71%

Smokey 2E 35 1,642 0.07% 99.78%

Bering 8E 35 1,234 0.05% 99.83%

40-Mile Q5 35 888 0.04% 99.87%

Tanana 4E 79 841 0.04% 99.91%

Air Exc. X4 35 471 0.02% 99.93%

Wright 8V 35 423 0.02% 99.95%

Iliamna V8 479 406 0.02% 99.97%

Servant 8D 79 192 0.01% 99.98%

Wright 8V 10 169 0.01% 99.99%

Hageland H6 30 158 0.01% 100.00%

Tanana 4E 33 123 0.01% 100.01%

Tanana 4E 195 37 0.00% 100.01%

Iliamna V8 10 21 0.00% 100.01%

Iliamna V8 117 11 0.00% 100.01%

Tanana 4E 30 1 0.00% 100.01%

Grant GV 406 0 0.00% 100.01%

Wright 8V 34 0 0.00% 100.01%

2,397,859 100.00%

Exclude PenAir and Frotnier, Which no Longer Operate as Part 135 Bush Passenger Carriers

PenAir KS 459 223,843

PenAir KS 416 83,643

PenAir KS 79 22,369

Frontier 2F 487 29,019
Attachment B

Appendix E

Circuity Calculation, Intra-AK Mail Revenue Ton Miles (RTMs), YE 9-30-12

T-100 Segment T-100 Market Circuity

Air Excursions X4 16,669 16,631 100.23%

Alaska Seaplane J5 6,222 5,534 112.43%

Bering 8E 386,286 370,399 104.29%

Era 7H 443,234 450,188 98.46%

Frontier Flying 2F 41,452 41,909 98.91%

Grant GV 326,632 304,992 107.10%

Hageland H6 1,716,988 1,525,854 112.53%

Iliamna V8 5,378 4,977 108.06%

Island Air 2O 5,733 4,763 120.37%

Pacific Airways 3F 7,828 7,508 104.26%

Peninsula KS 1,849,288 1,745,914 105.92%

PM Air Z3 7,165 6,737 106.35%

SeaPort Airlines K5 19,975 19,807 100.85%

Servant Air 8D 2,576 2,381 108.19%

Smokey Bay 2E 1,642 1,616 101.61%

Spernak Airways SNK 1,309 1,245 105.14%

Tanana 4E 2,765 2,707 102.14%

Venture K3 28,221 26,203 107.70%

Warbelow 4W 101,970 96,550 105.61%

Wright 8V 199,757 185,055 107.94%

Yute 4Y 119,712 113,777 105.22%
Attachment B 

Appendix F

Determination of Segments Ineligible for Calculating Bush Rates,

Scheduled Intra-Alaska Departures Perfomred with Mainline Equipment

T-100 Segment Report, QE 9-30-12, Seven or More Departures Performed 1/

Origin Dest Total Origin Dest Total

ADK ANC 26 DLG AKN 44

ADQ ANC 532 DLG ANC 220

AKN ADQ 10 DLG TOG 8

AKN ANC 349 DUT ANC 21

AKN DLG 36 EMK ANC 45

ANC ADK 26 EMK KSM 8

ANC ADQ 524 ENA ANC 615

ANC AKN 359 FAI ANC 861

ANC ANC 31 FAI BRW 101

ANC ANI 139 FAI SCC 152

ANC BET 568 GAL ANC 28

ANC BRW 55 GST JNU 54

ANC CDB 7 HOM ANC 204

ANC CDV 102 ILI ANC 37

ANC DLG 239 JNU ANC 361

ANC DUT 9 JNU GST 55

ANC EMK 57 JNU KTN 96

ANC ENA 616 JNU PSG 92

ANC FAI 938 JNU SIT 299

ANC GAL 20 JNU YAK 95

ANC HOM 203 KSM ANC 108

ANC ILI 31 KTN JNU 100

ANC JNU 368 KTN SIT 210

ANC KSM 101 KTN WRG 91

ANC MCG 42 MCG ANC 55

ANC OME 287 OME ANC 319

ANC OTZ 369 OME OTZ 119

ANC SCC 87 OTZ ANC 295

ANC UNK 159 OTZ OME 168

ANC VDZ 150 PSG JNU 92

ANC YAK 10 PSG WRG 92

ANI ANC 135 SCC ANC 66

ANI MCG 12 SCC BRW 183

ANI UNK 13 SCC FAI 72

BET ANC 521 SIT JNU 299

BET ANI 8 SIT KTN 152

BET EDF 7 TOG ANC 13

BET TOG 23 UNK ANC 140

BRW ANC 167 UNK ANI 22

BRW FAI 96 UNK GAL 10

BRW SCC 75 VDZ ANC 149

CDB DUT 7 WRG KTN 91

CDV ANC 105 WRG PSG 91

CDV YAK 90 YAK CDV 92

YAK JNU 99

1/ Includes PenAir's Mainline Departures from its special report.
Attachment C

Linehaul, Seaplane

Appendix A

Calculation of the Linehaul, Seaplane, YE 9-30-12

(1) (2) (3) (4) (5) (6)

Avg. Annual

Change, Midpoint to Estimated

Year Ended YE 6/30/04 Midpoint Unit Cost at Current Rate Change from

9/30/2012 1/ to YE 9/30/12 2/ Change 3/ 10/1/2013 4/ Order 2012-8-35 Current 5/

Unit Cost per

Revenue Ton-Mile

Fuel $7.2211 0 0 $7.2211 $10.1097 -28.57%

Nonfuel $24.7248 4.05% 6.16% $26.2478 $27.1198 -3.22%

$31.9459 $33.4689 $37.2295 -10.10%

1/ Fuel, Appendix C2, Nonfuel, Appendix C-1 of this Order.

2/ We assume fuel increases will be zero. For nonfuel, see "predicted annual increased" in Appendix B, Page 1.

3/ Reflects the fact that from the midpoint of the reporting period to the midpoint of the prospective

rate is 1 and 1/2 years. 1.0405 x 1.02025 = 6.16, where 0.02025 is the average annual unit cost increase projected for

a 6-month period.

4/ Fuel reflects YE 9-30-12, Appendix C-2. Nonfuel is column (1) mulitplied by Column (3). 

The total is the sum of the two. The final order will reflect the most recent quarterly fuel costs available at the time.

5/ Column 4 ÷ Column 5 less 1.
Attachment C

Linehaul, Seaplane

Appendix B

Page 1 of 2

Actual Y

Natural Log

$/RTM $/RTM Predicted 

Time Nonfuel Nonfuel Annual

Period Linehaul 1/ Linehaul Predicted Y Residuals EXP (Y) Increase

6/30/2004 $18.8646 2.93728715 2.982294759 -0.045007609 19.73304732 4.05%

6/30/2005 $18.9961 2.944233695 3.022012177 -0.077778482 20.5325653

6/30/2006 $21.7432 3.079301065 3.061729594 0.017571471 21.3644771

6/30/2007 $22.7223 3.123346821 3.101447012 0.021899809 22.23009523

6/30/2008 $25.7084 3.246817787 3.141273244 0.105544543 23.13330246

6/30/2009 $26.1034 3.262065574 3.180990662 0.081074912 24.07058755

6/30/2010 $25.0246 3.219859341 3.220708079 -0.000848738 25.04584835

9/30/2012 $24.7248 3.207806788 3.310262695 -0.102455906 27.39232034

ANOVA

df SS MS F Significance F

Regression 1 0.082357584 0.082357584 13.32853314 0.010695777

Residual 6 0.03707426 0.006179043

Total 7 0.119431845

Coefficients Std Error T Stat P-value Lower 95% Upper 95%

Intercept -1.17095 1.177743556 -0.994231846 0.35849935 -4.052784816 1.710884516

X Variable 1 0.000109 2.98055E-05 3.650826363 0.010695777 3.58833E-05 0.000181746

Regression Statistics

Multiple R 0.830408

R Square 0.689578

Adj. R Square 0.637841

Std Error 0.078607

Observations 8

1/ Per Order 2010-12-28, and Appendix D of this attachment for the YE 9-30-12.
Attachment C

Linehaul, Seaplane

Appendix B

Page 2 of 2

y = 0.0001x - 1.171

R2 = 0.6896

2.9

2.95

3

3.05

3.1

3.15

3.2

3.25

3.3

3.35

1/14/2004 5/28/2005 10/10/2006 2/22/2008 7/6/2009 11/18/2010 4/1/2012 8/14/2013

Unit Cost per RTM, Natural Log

Years Ended June 30, 2004, thru September 30, 2012

Nonfuel Linehaul, Unit Cost per RTM, Actual 

vs. Predicted
Attachment C

Linehaul, Seaplane

Appendix C-1

Page 1 of 1

Year Ended September 30, 2012

Al. Seaplane Island Pacific PM Air PM Air Venture PenAir

System Parameters for Each Carrier Total J5 2O 3F Z3 Z3 K3 KS

1 . Capacity Related Expense (CR) $409,076 $392,091 $333,423 $330,165 $330,165 $589,673 $6,637,362

2 . Direct Expense, Includes Fuel $1,378,818 $1,804,083 $1,580,344 $3,421,068 $3,421,068 $2,856,521 $50,585,461

3 . Indirect Expense $900,068 $949,275 $913,630 $2,497,147 $2,497,147 $1,444,925 $22,349,749

4 . CR Markup 21.88% 16.61% 15.43% 5.91% 5.91% 15.89% 10.01%

5 . Return and Tax Markup 9.46% 9.46% 9.46% 9.46% 9.46% 9.46% 9.46%

6 . T-100 Seg. Mail RTMs 6,222 5,733 7,828 7,165 7,165 28,221 1,849,288

7 . T-100 Mkt. Mail RTMs 5,534 4,763 7,508 6,737 6,737 26,203 1,745,914

8 . Circuity Markup 12.43% 20.37% 4.26% 6.35% 6.35% 7.70% 5.92%

By Aircraft Type Beaver Beaver Beaver Beaver Otter Beaver Goose

Aircraft Code 40 40 40 40 42 40 170

9 . Direct Expense, Includes Fuel $1,236,525 $469,615 $1,580,344 $1,796,324 $1,624,744 $2,856,521 $1,158,492

10 . Less Psgr. Liability Insurance $19,677 $15,350 $56,257 $41,681 $79,658 $37,679 $38,266

11 . Linehaul Expense Allocable to Mail $1,216,848 $454,265 $1,524,087 $1,754,643 $1,545,086 $2,818,842 $1,120,226

12 . Cost per Block Hour (R11÷ R18) $476.08 $551.29 $402.13 $419.07 $714.66 $448.08 $3,011.36

13 . Marked Up Costs (R11*R4*R5*R8) $1,825,183 $697,941 $2,007,713 $2,163,310 $1,904,946 $3,851,127 $1,428,799

14 . Eligible Expense (R13*R32÷R18) $1,679,511 $581,900 $1,661,263 $1,104,130 $166,529 $1,475,929 $1,394,231

15 . Eligible Cost per RTM (R14÷R36) $33.1147 $54.7053 $28.1165 $27.4379 $18.7575 $33.3197 $115.2257

16 . Percentage of Eligible Mail RTMs 100.00% 11.903% 1.882% 15.592% 13.149% 1.150% 56.325%

17 . Cost Wtd. By Mail RTMs (R15*R16) $31.9459 $3.9416 $1.0296 $4.3839 $3.6078 $0.2157 $18.7673

Scheduled + Nonscheduled Traffic

18 . Block Hours, T-100 19,810 2,556 824 3,790 4,187 2,162 6,291 372

19 . Pax RTMs 287,563 42,565 12,350 64,235 55,988 74,216 38,209 8,632

20 . Frt RTMs Wtd. @ 0.75 21,755 5,384 1,413 1,922 4,865 3,791 4,380 639

21 . Mail RTMs 50,120 5,964 943 7,828 6,588 576 28,221 3,087

22 . Total RTMs 359,437 53,912 14,706 73,985 67,441 78,584 70,809 12,358

23 . Aircraft Miles 1,247,307 202,923 65,883 292,093 249,334 113,086 323,988 33,361

24 . Available Ton Miles (ATMs) 1,001,655 187,704 63,814 185,012 149,600 115,836 299,689 30,025

25 . Departures Performed 36,064 3,877 1,594 8,070 9,601 3,836 9,086 741

26 . Wtd. Deps. (GTOW) 195,051 19,773 8,129 41,157 48,965 30,688 46,339 6,595

27 . Ton Load Factor 35.88% 28.72% 23.05% 39.99% 45.08% 67.84% 23.63% 41.16%

28 . Stage Length 35 52 41 36 26 29 36 45

29 . ATMs per Mile 0.80 0.93 0.97 0.63 0.60 1.02 0.93 0.90

30 . RTMs per Mile 0.29 0.27 0.22 0.25 0.27 0.69 0.22 0.37

31 . RTMs per Hour 18 21 18 20 16 36 11 33

Eligible Traffic

32 . Block Hours, T-100 10,912 2,352 687 3,136 2,137 189 2,411 363

33 . Pax RTMs 147,457 39,373 8,329 49,401 30,960 7,682 11,712 8,393

34 . Frt RTMs Wtd. @ 0.75 16,293 5,381 1,365 1,871 2,694 619 4,363 620

35 . Mail RTMs 50,104 5,964 943 7,812 6,588 576 28,221 3,087

36 . Total RTMs 213,855 50,718 10,637 59,085 40,241 8,878 44,296 12,100

37 . Aircraft Miles 872,820 188,013 52,443 236,962 169,475 16,668 209,259 32,585

38 . Available Ton Miles (ATMs) 688,980 173,912 50,935 151,851 101,685 17,032 193,565 29,327

39 . Departures Performed 23,713 3,604 1,358 6,795 6,836 639 4,481 726

40 . Wtd. Deps. (GTOW) 122,790 18,380 6,926 34,655 34,864 5,112 22,853 6,461

41 . Ton Load Factor 31.04% 29.16% 20.88% 38.91% 39.57% 52.13% 22.88% 41.26%

42 . Stage Length 37 52 39 35 25 26 47 45

43 . ATMs per Mile 0.79 0.92 0.97 0.64 0.60 1.02 0.93 0.90

44 . RTMs per Mile 0.25 0.27 0.20 0.25 0.24 0.53 0.21 0.37

45 . RTMs per Hour 20 22 15 19 19 47 18 33

PenAir's results not included in the totals, they are shown for reference purposes only.
Attachment C

Linehaul, Seaplane

Appendix C-2

Page 1 of 1

Year Ended September 30, 2012

Carrier Al. Seaplane Island Pacific PM Air PM Air Venture PenAir

By Aircraft Type J5 2O 3F Z3 Z3 K3 KS

Aircraft Code Total 40 40 40 40 42 40 170

1 . Total Fuel Expense $295,631 $132,531 $475,323 $586,567 $442,509 $886,678 $124,095

2 . Total Gallons Issued 61,994 20,795 83,477 103,897 105,142 165,526 19,239

3 Total Block Hours, Schedule F-2 2,564 944 3,814 4,201 2,150 6,157 396

4 . Total Block Hours, T-100 Segment 2,556 824 3,790 4,187 2,162 6,291 372

5 . Eligible Block Hours, , T-100 Segment 2,352 687 3,136 2,137 189 2,411 363

6 . Eligible Mail RTMs, T-100 Segment 50,104 5,964 943 7,812 6,588 576 28,221 3,087

7 . Total Eligible RTMs, T-100 Segment 50,718 10,637 59,085 40,241 8,878 44,296 12,100

8 . Price per Gallon $4.77 $6.37 $5.69 $5.65 $4.21 $5.36 $6.45

9 . Burn per Hour 24 25 22 25 49 26 52

10 . Costs per Hour $115.66 $160.84 $125.42 $140.09 $204.68 $140.94 $333.59

11 . Eligible Fuel Expense $272,036 $110,496 $393,302 $299,378 $38,684 $339,816 $121,093

12 . Cost per Eligible RTM $5.3637 $10.3879 $6.6565 $7.4396 $4.3573 $7.6715 $10.0077

13 . Mail RTMs, Percentage 100.00% 11.903% 1.882% 15.592% 13.149% 1.150% 56.325% 6.161%

14 . Cost/RTM, Wtd. By Mail RTMs $7.2211 $0.6384 $0.1955 $1.0379 $0.9782 $0.0501 $4.3210 $0.6166

PenAir's results not included in the totals. They are shown for reference purposes only.
Attachment C

Linehual, Seaplane

Appendix D

Determination of Which Carriers are Included in the Class Rates, One Percent Rule

Eligible Cumulative

Carrier 2-Ltr. A/C Type Mail RTMs Percent Percent

Taquan K3 40 28,221 55.98% 55.98%

Pacific 3F 40 7,812 15.50% 71.48%

PM Air Z3 40 6,588 13.07% 84.55%

Al. Seaplane J5 40 5,964 11.83% 96.38%

Island 2O 40 943 1.87% 98.25%

PM Air Z3 42 576 1.14% 99.39%

Al. Seaplane J5 30 259 0.51% 99.90%

Island 2O 35 36 0.07% 99.97%

Servant 8D 40 13 0.03% 100.00%

50,412 100.00%

PenAir KS 170 3,087

Note: Exclude PenAir's Grumman Goose, which is no longer operating.

PenAir's results shown for reference purposes only.
Attachment C

Linehaul, Seaplane

Appendix E

Circuity Calculation, Intra-AK Mail Revenue Ton Miles (RTMs), YE 9-30-12

T-100 Market T-100 Segment Circuity

Air Excursions X4 16,631 16,669 100.23%

Alaska Seaplane J5 5,534 6,222 112.43%

Bering 8E 370,399 386,286 104.29%

Era 7H 450,188 443,234 98.46%

Frontier Flying 2F 41,909 41,452 98.91%

Grant GV 304,992 326,632 107.10%

Hageland H6 1,525,854 1,716,988 112.53%

Iliamna V8 4,977 5,378 108.06%

Island Air 2O 4,763 5,733 120.37%

Pacific Airways 3F 7,508 7,828 104.26%

Peninsula KS 1,745,914 1,849,288 105.92%

PM Air Z3 6,737 7,165 106.35%

SeaPort Airlines K5 19,807 19,975 100.85%

Servant Air 8D 2,381 2,576 108.19%

Smokey Bay 2E 1,616 1,642 101.61%

Spernak Airways SNK 1,245 1,309 105.14%

Tanana 4E 2,707 2,765 102.14%

Venture K3 26,203 28,221 107.70%

Warbelow 4W 96,550 101,970 105.61%

Wright 8V 185,055 199,757 107.94%

Yute 4Y 113,777 119,712 105.22%
Attachment C

Linehaul, Seaplane

Appendix F

Determination of Segments Ineligible for Calculating Bush Rates,

Scheduled Intra-Alaska Departures Perfomred with Mainline Equipment

T-100 Segment Report, QE 9-30-12, Seven or More Departures Performed 1/

Origin Dest Total Origin Dest Total

ADK ANC 26 DLG AKN 44

ADQ ANC 532 DLG ANC 220

AKN ADQ 10 DLG TOG 8

AKN ANC 349 DUT ANC 21

AKN DLG 36 EMK ANC 45

ANC ADK 26 EMK KSM 8

ANC ADQ 524 ENA ANC 615

ANC AKN 359 FAI ANC 861

ANC ANC 31 FAI BRW 101

ANC ANI 139 FAI SCC 152

ANC BET 568 GAL ANC 28

ANC BRW 55 GST JNU 54

ANC CDB 7 HOM ANC 204

ANC CDV 102 ILI ANC 37

ANC DLG 239 JNU ANC 361

ANC DUT 9 JNU GST 55

ANC EMK 57 JNU KTN 96

ANC ENA 616 JNU PSG 92

ANC FAI 938 JNU SIT 299

ANC GAL 20 JNU YAK 95

ANC HOM 203 KSM ANC 108

ANC ILI 31 KTN JNU 100

ANC JNU 368 KTN SIT 210

ANC KSM 101 KTN WRG 91

ANC MCG 42 MCG ANC 55

ANC OME 287 OME ANC 319

ANC OTZ 369 OME OTZ 119

ANC SCC 87 OTZ ANC 295

ANC UNK 159 OTZ OME 168

ANC VDZ 150 PSG JNU 92

ANC YAK 10 PSG WRG 92

ANI ANC 135 SCC ANC 66

ANI MCG 12 SCC BRW 183

ANI UNK 13 SCC FAI 72

BET ANC 521 SIT JNU 299

BET ANI 8 SIT KTN 152

BET EDF 7 TOG ANC 13

BET TOG 23 UNK ANC 140

BRW ANC 167 UNK ANI 22

BRW FAI 96 UNK GAL 10

BRW SCC 75 VDZ ANC 149

CDB DUT 7 WRG KTN 91

CDV ANC 105 WRG PSG 91

CDV YAK 90 YAK CDV 92

YAK JNU 99

1/ Includes PenAir's Mainline Departures from its special report.
Attachment D

Terminal

Appendix A

Determination of Terminal Rate, Rate per Revenue Ton Enplaned

-1- -2- -3- -4- -5-

Base Year Adjustment Proposed Current Rate, Change from 

Rates 1/ Factors 2/ Final Rates 3/ Order 2010-12-28 Prior Rate 4/

$625.85 35.82% $850.03 $716.16 18.69%

1/ Per Order 2005-1-18

2/ See Appendix B, Column 6

3/ Column (1) increased by Column (2).

4/ $850.03 ÷ $716.16. 
Attachment D

Terminal

Appendix B

-1- -2- -3- -4- -5- -6-

INTRA-ALASKA MAIL CLASS RATES COST ADJUSTMENT FACTORS

(Expenses in Thousand of Dollars)

Average Annual Percent 

Base Year Change Midpoint to Estimated Change 2003

Ended YE YE 6/30/04 Midpoint Unit Cost at Base Year to

6/30/2003 1/ 9/30/2012 2/ to YE 9/30/12 3/ Change 4/ 10/1/2013 5/ 10/1/2013 6/

Unit Cost $9.77 $12.53 3.88% 5.90% $13.27 35.82%

Per Wtd. Dep.

1/ Attachment D, Appendix D, Order 2007-12-19.

2/ Appendix D to this Order, Page 1 of 2.

3/ See "predicted annual increase" in Appendix D, Page 1 of 2. 

4/ Reflects the fact that from the mid-point of the reporting period to the mid-point of the prospective rate is 

one and one-half years. 1.0388 x 1.0194, where 0.0194 is the average annual unit cost increase projected 

for a six-month period.

5/ $12.53 in Column 2 increased by 5.90 percent in Column 4.

6/ $13.27 in Column 5 ÷ $9.77 in Column 1, the base period.
Attachment D

Terminal

Appendix C

Page 1 of 2

Actual Y Predicted

Natural Log Annual 

Annual Period $/Wtd. Dep. $/Wtd. Dep. Predicted Y Residuals EXP (Y) Increase

6/30/2004 $8.96 2.192770227 2.19378598 -0.00102 8.969105732 3.88%

6/30/2005 $8.90 2.186051277 2.23184151 -0.04579 9.317007669

6/30/2006 $10.14 2.316487998 2.26989705 0.046591 9.678404346

6/30/2007 $10.25 2.327277706 2.30795258 0.019325 10.05381921

6/30/2008 $10.61 2.361796953 2.34611238 0.015685 10.44488496

6/30/2009 $10.90 2.388762789 2.38416792 0.004595 10.85003078

6/30/2010 $10.62 2.362739016 2.42222345 -0.05948 11.27089177

9/30/2012 $12.53 2.528125769 2.50803087 0.020095 12.28072385

ANOVA

df SS MS F Significance F

Regression 1 0.075609659 0.07560966 51.25339 0.00037476

Residual 6 0.008851276 0.00147521

Total 7 0.084460935

Coefficients Std Error t Stat P-value Lower 95% Upper 95%

Intercept -1.78567619 0.575463046 -3.10302496 0.021035 -3.193783541 -0.377569

X Variable 1 0.000104262 1.45634E-05 7.15914756 0.000375 6.86263E-05 0.00014

Regression Statistics

Multiple R 0.946151531

R Square 0.895202719

Adj R Square 0.877736505

Std Error 0.038408498

Observations 8
Attachment D

Terminal

Appendix C

Page 2 of 2

y = 0.0001x - 1.7857

R2 = 0.8952

2.15

2.20

2.25

2.30

2.35

2.40

2.45

2.50

2.55

1/14/04 5/28/05 10/10/06 2/22/08 7/6/09 11/18/10 4/1/12 8/14/13

Unit Cost per Wtd. Departure, Natural Log

June 30, 2004, through September 30, 2012

Unit Terminal Cost per Wtd. Depaerture, 

Actual vs. Predicted
Attachment D

Terminal

Appendix D-1

Page 1 of 1

Schedule F-2 Expenses, Year Ended September 30, 2012 

-1- -2- -3- -4- -5- -6- -7- -8- -9- -10-

#1 plus #2 #3 less #4 #4 ÷ #6 #5 x #7

Oper. Less Capacity Adjusted Wtd.

Carrier Directs Indirects Operating Capacity Departure Capacity Markup Departure Wtd. Deps. $/Dep.

1 . Air Excursion $1,506,360 $999,323 $2,505,683 $244,511 $703,952 $2,261,172 10.81% $780,049 46,196 $16.89

2 . Al. Seaplane $1,378,818 $900,068 $2,278,886 $409,076 $408,128 $1,869,810 21.88% $497,426 21,786 $22.83

3 . Bering $18,260,851 $5,861,653 $24,122,504 $1,598,796 $2,498,701 $22,523,708 7.10% $2,676,109 292,705 $9.14

4 Com. Owned $99,614,917 $44,368,876 $143,983,793 $15,074,540 $18,684,864 $128,909,253 11.69% $13,988,427 1,041,997 $13.42

5 . Grant $17,954,163 $8,218,660 $26,172,823 $2,330,173 $2,833,506 $23,842,650 9.77% $3,110,340 314,811 $9.88

6 . Iliamna $2,341,154 $295,174 $2,636,328 $108,420 $89,710 $2,527,908 4.29% $93,559 45,167 $2.07

7 . Island $1,804,083 $949,275 $2,753,358 $392,091 $382,809 $2,361,267 16.61% $446,394 45,974 $9.71

8 . Pacific $1,580,344 $913,630 $2,493,974 $333,423 $455,066 $2,160,551 15.43% $525,283 41,157 $12.76

PenAir $50,585,461 $22,349,749 $72,935,210 $6,637,362 $7,878,777 $66,297,848 10.01% $8,667,443 488,034 $17.76

9 PenAir Adj. 1/ $4,407,692 248,182 $17.76

10 . PM Air 2/ $3,421,068 $2,497,147 $5,918,215 $330,165 $1,533,720 $5,588,050 5.91% $1,624,363 79,653 $20.39

Wings $13,954,710 $5,087,591 $19,042,301 $1,418,500 $2,910,530 $17,623,801 8.05% $3,144,828 245,367 $12.82

11 Wings Adj. 3/ $1,064,323 83,041 $12.82

12 . Servant $1,233,817 $555,144 $1,788,961 $246,082 $303,669 $1,542,879 15.95% $352,104 23,821 $14.78

13 . Smokey $682,942 $371,174 $1,054,116 $150,356 $176,180 $903,760 16.64% $205,496 23,317 $8.81

14 . Spernak $1,128,325 $468,382 $1,596,707 $351,046 $102,329 $1,245,661 28.18% $131,165 29,686 $4.42

15 . Tanana $510,156 $157,125 $667,281 $42,023 $87,257 $625,258 6.72% $93,121 10,465 $8.90

16 . Venture $2,856,521 $1,444,925 $4,301,446 $589,673 $573,859 $3,711,773 15.89% $665,045 46,339 $14.35

17 . Warbelows $7,251,601 $1,511,701 $8,763,302 $444,358 $533,537 $8,318,944 5.34% $562,028 98,192 $5.72

18 . Wright $8,738,071 $3,116,887 $11,854,958 $1,098,573 $1,450,982 $10,756,385 10.21% $1,599,127 126,634 $12.63

19 . Yute $4,627,661 $2,183,384 $6,811,045 $503,712 $1,620,285 $6,307,333 7.99% $1,749,746 139,172 $12.57

Total $34,571,797 2,758,295 $12.53

Com.Owned

Era $45,390,073 $24,449,572 $69,839,645 $8,974,385 $6,752,438 $60,865,260 14.74% $7,747,747 719,293 $10.77

Hageland $52,845,640 $19,842,508 $72,688,148 $6,045,146 $11,912,319 $66,643,002 9.07% $12,992,766 815,819 $15.93

Frontier $1,379,204 $76,796 $1,456,000 $55,099 $20,107 $1,400,901 3.93% $20,897 11,404 $1.83

$99,614,917 $44,368,876 $143,983,793 $15,074,630 $18,684,864 $128,909,163 $20,761,410 1,546,516 $13.42

Adjusted 1,041,997 $13,988,427 1,041,997 $13.42

1/ Grant's expenses and wtd. departures are for the YE 6-30-12.

2/ $8,667,443 system departure related expense x 248,182 ÷ 488,034 (bush Part 121 wtd. deps. ÷ Intra-Alaska wtd. deps., Appendix E.)

PenAir's Schedule F-2 expenses reflect only their Alaska operations, as do their departures in Appendix E. 

We have exlcuded PenAir's Part 135 operations, because the carrier no longer operates as a Part 135 bush passenger carrier.

3/ PMAir's Schedule F-2 expenses reflect only their Intra-Alaska operations, as do their departures in Appendix E.

4/ $3,144,828 system departure related expense x 83,041 ÷ 245,367 (intra-Alaska wtd. deps. ÷ system wtd. deps., Appendix E.

Seaport's Schedule F-2 expense reflect their operations both inside and outside of Alaska, and so we have prorated that on wtd. deps. 

Note: We excluded Alaska Central Express and Arctic Transportation Services because they are all-cargo operators, and also

Homer Air and 40-Mile Air because their reported Schedule F-2s were not available.
Attachment D

Terminal

Appendix D-2

Page 1 of 1

Schedule F-2 Expenses, Year Ended September 30, 2012 

-1- -2- -3- -4- -5- -6- -7- -8- -9- -10-

#1 plus #2 #3 less #4 #4 ÷ #6 #5 x #7

Oper. Less Capacity Adjusted Wtd.

Carrier Directs Indirects Operating Capacity Departure Capacity Markup Departure Wtd. Deps. $/Dep.

1 . Air Excursion $1,506,360 $999,323 $2,505,683 $244,511 $703,952 $2,261,172 10.81% $780,049 46,196 $16.89

2 . Al. Seaplane $1,378,818 $900,068 $2,278,886 $409,076 $408,128 $1,869,810 21.88% $497,426 21,786 $22.83

3 . Bering $18,260,851 $5,861,653 $24,122,504 $1,598,796 $2,498,701 $22,523,708 7.10% $2,676,109 292,705 $9.14

Era Aviation $45,390,073 $24,449,572 $69,839,645 $8,974,385 $6,752,438 $60,865,260 14.74% $7,747,747 719,293 $10.77

4 Era Adj. 1/ $2,436,239 226,178 $10.77

5 . Grant 2/ $17,954,163 $8,218,660 $26,172,823 $2,330,173 $2,833,506 $23,842,650 9.77% $3,110,340 314,811 $9.88

6 Hageland $52,845,640 $19,842,508 $72,688,148 $6,045,146 $11,912,319 $66,643,002 9.07% $12,992,766 815,819 $15.93

7 . Iliamna $2,341,154 $295,174 $2,636,328 $108,420 $89,710 $2,527,908 4.29% $93,559 45,167 $2.07

8 . Island $1,804,083 $949,275 $2,753,358 $392,091 $382,809 $2,361,267 16.61% $446,394 45,974 $9.71

9 . Pacific $1,580,344 $913,630 $2,493,974 $333,423 $455,066 $2,160,551 15.43% $525,283 41,157 $12.76

PenAir $50,585,461 $22,349,749 $72,935,210 $6,637,362 $7,878,777 $66,297,848 10.01% $8,667,443 488,034 $17.76

10 PenAir Adj. 2/ $4,407,692 248,182 $17.76

11 . PM Air 3/ $3,421,068 $2,497,147 $5,918,215 $330,165 $1,533,720 $5,588,050 5.91% $1,624,363 79,653 $20.39

Wings $13,954,710 $5,087,591 $19,042,301 $1,418,500 $2,910,530 $17,623,801 8.05% $3,144,828 245,367 $12.82

12 Wings Adj. 4/ $1,064,323 83,041 $12.82

13 . Servant $1,233,817 $555,144 $1,788,961 $246,082 $303,669 $1,542,879 15.95% $352,104 23,821 $14.78

14 . Smokey $682,942 $371,174 $1,054,116 $150,356 $176,180 $903,760 16.64% $205,496 23,317 $8.81

15 . Spernak $1,128,325 $468,382 $1,596,707 $351,046 $102,329 $1,245,661 28.18% $131,165 29,686 $4.42

16 . Tanana $510,156 $157,125 $667,281 $42,023 $87,257 $625,258 6.72% $93,121 10,465 $8.90

17 . Venture $2,856,521 $1,444,925 $4,301,446 $589,673 $573,859 $3,711,773 15.89% $665,045 46,339 $14.35

18 . Warbelows $7,251,601 $1,511,701 $8,763,302 $444,358 $533,537 $8,318,944 5.34% $562,028 98,192 $5.72

19 . Wright $8,738,071 $3,116,887 $11,854,958 $1,098,573 $1,450,982 $10,756,385 10.21% $1,599,127 126,634 $12.63

20 . Yute $4,627,661 $2,183,384 $6,811,045 $503,712 $1,620,285 $6,307,333 7.99% $1,749,746 139,172 $12.57

Total $36,012,375 2,758,295 $13.06

1/ $7,747,747 system departure related expense x 226,178 ÷ 719,293 (bush Part 121 wtd. deps. ÷ Intra-Alaska wtd. deps., Appendix E.)

This excludes a pro-rata portion of Era's terminal expense with mainline aircraft.

2/ $8,667,443 system departure related expense x 248,182 ÷ 488,034 (bush Part 121 wtd. deps. ÷ Intra-Alaska wtd. deps., Appendix E.)

PenAir's Schedule F-2 expenses reflect only their Alaska operations, as do their departures in Appendix E. 

We have exlcuded PenAir's Part 135 operations, because the carrier no longer operates as a Part 135 bush passenger carrier.

3/ PMAir's Schedule F-2 expenses reflect only their Intra-Alaska operations, as do their departures in Appendix E.

4/ $3,144,828 system departure related expense x 83,041 ÷ 245,367 (intra-Alaska wtd. deps. ÷ system wtd. deps., Appendix E.

Seaport's Schedule F-2 expense reflect their operations both inside and outside of Alaska, and so we have prorated that on wtd. deps. 

Note: We excluded Alaska Central Express and Arctic Transportation Services because they are all-cargo operators, and also

Homer Air and 40-Mile Air because their reported Schedule F-2s were not available.
Attachment D

Terminal

Appendix E

Page 1 of 4

Year Ended September 30, 2012, 

Carrier 2-Ltr. A/C Deps. GTOW Wtd. Deps

40-Mile Air Q5 35 753 3.7 2,786

(for reference purposes)

Air Excursions LLC X4 35 789 3.7 2,919

Air Excursions LLC X4 79 9,793 3.6 35,255

Air Excursions LLC X4 194 1,084 7.4 8,022

46,196

Alaska Central Express KO 405 10,067 16.8 169,126

(for reference purposes)

Alaska Seaplane Service J5 30 671 3.0 2,013

Alaska Seaplane Service J5 40 3,877 5.1 19,773

21,786

Arctic Transportation 7S 35 7,704 3.7 28,505

Arctic Transportation 7S 412 6,743 17.0 114,631

Arctic Transportation 7S 479 107 9.9 1,059

Arctic Transportation 7S 486 1,055 12.5 13,188

(for reference purposes) 157,383

Bering Air Inc. 8E 35 269 3.7 995

Bering Air Inc. 8E 194 8,496 7.4 62,870

Bering Air Inc. 8E 360 301 2.4 722

Bering Air Inc. 8E 405 2,245 16.8 37,716

Bering Air Inc. 8E 406 2,004 12.5 25,050

Bering Air Inc. 8E 412 1,181 17.0 20,077

Bering Air Inc. 8E 416 16,323 8.9 145,275

292,705

Era Aviation, Bush 7H 405 13,463 16.8 226,178

Era Aviation, Mainline 7H 483 14,089 35.0 493,115

719,293

Frontier Flying Service 2F 487 498 22.9 11,404

(for reference purposes)
Attachment D

Terminal

Appendix E

Page 2 of 4

Year Ended September 30, 2012, 

Carrier 2-Ltr. A/C Deps. GTOW Wtd. Deps

Grant Aviation GV 35 23,390 3.7 86,543

Grant Aviation GV 194 8,759 7.4 64,817

Grant Aviation GV 406 2,905 12.5 36,313

Grant Aviation GV 416 14,286 8.9 127,145

314,818

Hageland Aviation Service H6 30 47 3.0 141

Hageland Aviation Service H6 35 40,124 3.7 148,459

Hageland Aviation Service H6 194 10,645 7.4 78,773

Hageland Aviation Service H6 405 9,954 16.8 167,227

Hageland Aviation Service H6 416 42,388 8.9 377,253

Hageland Aviation Service H6 417 4,441 9.9 43,966

815,819

Homer Air HB 35 8,272 3.7 30,606

(for reference purposes)

Iliamna Air Taxi V8 10 415 3.3 1,370

Iliamna Air Taxi V8 35 2,572 3.7 9,516

Iliamna Air Taxi V8 40 528 5.1 2,693

Iliamna Air Taxi V8 117 495 5.4 2,673

Iliamna Air Taxi V8 194 5 7.4 37

Iliamna Air Taxi V8 479 2,917 9.9 28,878

45,167

Inland Aviation Services 7N 35 450 3.7 1,665

(appears carrier ceased operations)

Island Air Service 2O 35 113 3.7 418

Island Air Service 2O 40 1,594 5.1 8,129

Island Air Service 2O 79 3,387 3.6 12,193

Island Air Service 2O 131 4,070 6.2 25,234

45,974

Pacific Airways, Inc. 3F 40 8,070 5.1 41,157
Attachment D

Terminal

Appendix E

Page 3 of 4

Year Ended September 30, 2012, 

Carrier 2-Ltr. A/C Deps. GTOW Wtd. Deps

PenAir, Part 121 KS 456 8,558 29.0 248,182

PenAir, Part 135 KS 79 8,826 3.6 31,774

PenAir, Part 135 KS 170 741 8.9 6,595

PenAir, Part 135 KS 416 5,812 8.9 51,727

PenAir, Part 135 KS 459 1,811 29 52,519

PenAir, Mainline KS 456 3,353 29 97,237

488,034

PM Air, LLC Z3 40 9,601 5.1 48,965

PM Air, LLC Z3 42 3,836 8.0 30,688

79,653

PM Air, LLC (outside Alaska, Z3 42 636 8.0 5,088

for reference purposes)

SeaPort/Wings, Intra-AK K5 35 6,313 3.7 23,358

SeaPort/Wings, Intra-AK K5 416 6,706 8.9 59,683

SeaPort/Wings, Not Intra-AK K5 416 4,617 8.9 41,091

SeaPort/Wings, Not Intra-AK K5 479 12,246 9.9 121,235

Total 245,367

Intra-AK 83,041

Servant Air Inc. 8D 35 5,669 3.7 20,975

Servant Air Inc. 8D 40 397 5.1 2,025

Servant Air Inc. 8D 79 228 3.6 821

23,821

Smokey Bay Air Inc. 2E 35 6,302 3.7 23,317

Spernak Airways Inc. SNK 35 7,734 3.7 28,616

Spernak Airways Inc. SNK 36 446 2.4 1,070

29,686

Tanana Air Service 4E 30 152 3.0 456

Tanana Air Service 4E 31 9 3.0 27

Tanana Air Service 4E 33 243 3.3 802

Tanana Air Service 4E 35 1,468 3.7 5,432

Tanana Air Service 4E 79 1,011 3.6 3,640

Tanana Air Service 4E 195 23 4.7 108

10,465
Attachment D

Terminal

Appendix E

Page 4 of 4

Year Ended September 30, 2012, 

Carrier 2-Ltr. A/C Deps. GTOW Wtd. Deps

Venture K3 40 9,086 5.1 46,339

Warbelow 4W 35 518 3.7 1,917

Warbelow 4W 194 11,214 7.4 82,984

Warbelow 4W 405 504 16.8 8,467

Warbelow 4W 416 542 8.9 4,824

Warbelow 4W 476 58 9.5 551

98,743

Less #476, Medivac, no associated Dep. Rel. Exp. 98,192

Wright Air Service 8V 10 372 3.3 1,228

Wright Air Service 8V 34 1,725 3.8 6,555

Wright Air Service 8V 35 1,085 3.7 4,015

Wright Air Service 8V 194 1,229 7.4 9,095

Wright Air Service 8V 416 11,881 8.9 105,741

126,634

Yute Air Aka Flight Alaska 4Y 35 37,614 3.7 139,172
Appendix F

Historical Trends in Unit Costs at Era, Frontier, and Hageland, All Commonly-Owned Carriers

Weighted Departures -- Departures Mutliplied by GTOW, Gross Takeoff Weight, by Quarter

2009 2010 2010 2010 2010 2011 2011 2011 2012 2012 2012

Carrier A/C GTOW 4 1 2 3 4 2 3 4 1 2 3

A. Circle 125 7.2 0 0 0 0 0 0 0 0 0 0 0

487 22.9 5,336 3,046 4,580 4,030 0 0 0 0 0 0 0

Total 7,349 5,057 6,592 6,043 2,014 2,013 2,014 2,015 2,013 2,014 2,015

Era 405 16.8 53,844 54,029 62,966 58,766 58,380 54,230 57,826 59,657 56,381 57,086 53,458

483 35.0 90,720 88,795 89,530 119,560 99,190 126,105 146,650 115,325 107,450 125,475 147,070

Total 144,564 142,824 152,496 178,326 157,570 180,335 204,476 174,982 163,831 182,561 200,528

Frontier 194 7.4 4,588 488 163 629 644 81 0 0 0 0 0

405 16.8 46,133 32,844 29,870 27,115 15,355 2,906 0 0 0 0 0

487 22.9 0 0 0 618 1,282 1,534 4,237 3,000 2,427 1,443 4,534

Total 50,721 33,332 30,033 28,362 17,281 4,521 4,237 3,000 2,427 1,443 4,534

Hageland 30 3.0 30 0 153 252 45 102 501 129 0 6 6

35 3.7 35,035 32,075 38,713 40,904 38,351 40,208 40,404 38,672 34,151 39,668 36,016

194 7.4 13,490 12,980 14,519 19,255 17,975 18,493 20,061 17,427 20,098 20,528 20,720

405 16.8 5,006 4,234 7,594 20,513 23,016 33,835 42,084 45,024 42,269 37,901 42,034

416 8.9 82,672 76,451 89,792 92,569 96,182 86,027 93,566 89,854 96,832 91,003 99,662

417 9.9 17,345 20,671 19,008 17,414 13,306 8,514 9,613 10,405 10,157 11,029 12,375

Total 153,578 146,411 169,779 190,907 188,875 187,179 206,229 201,511 203,507 200,135 210,813

Grand Total 356,212 327,624 358,900 403,638 365,740 374,048 416,956 381,508 371,778 386,153 417,890

Schedule F-2 Departure Related Expenses, and Unit Cost per Weighted Departure, By Quarter

2009 2010 2010 2010 2010 2011 2011 2011 2012 2012 2012

Carrier 4 1 2 3 4 2 3 4 1 2 3

Era Expense $3,084,351 $2,906,251 $2,033,785 $2,137,874 $2,965,841 $2,775,475 $3,514,870 $1,947,299 $1,501,161 $1,615,891 $1,688,087

$/Wtd. Dep $21.34 $20.35 $13.34 $11.99 $18.82 $15.39 $17.19 $11.13 $9.16 $8.85 $8.42

Frontier Expense $1,266,621 $749,229 $446,268 $448,176 $454,575 $110,035 $33,999 $14,812 $1,952 $1,172 $2,171

$/Wtd. Dep $24.97 $22.48 $14.86 $15.80 $26.30 $24.34 $8.02 $4.94 $0.80 $0.81 $0.48

Hageland Expense $1,428,668 $1,638,904 $1,666,884 $1,772,654 $1,574,029 $2,826,408 $2,276,960 $2,942,336 $2,884,723 $2,842,413 $3,242,847

$/Wtd. Dep $9.30 $11.19 $9.82 $9.29 $8.33 $15.10 $11.04 $14.60 $14.18 $14.20 $15.38

Grand Total Expense $5,779,640 $5,294,384 $4,146,937 $4,358,704 $4,994,445 $5,711,918 $5,825,829 $4,904,447 $4,387,836 $4,459,476 $4,933,105

$/Wtd. Dep $16.23 $16.16 $11.55 $10.80 $13.66 $15.27 $13.97 $12.86 $11.80 $11.55 $11.80

Note: We do not show QE 3-31-11 because that data is missing.