### Orde r 2010-8- 7 Served : Augus t

12 , 201 0 UNITE D STATE S O FAMERIC A DEPARTMEN T O FTRANSPORTATIO N OFFIC E O FTH E SECRETAR Y WASHINGTON , D.C
. Issue db y th e Departmen t o f Transportatio n o n th e 12'% f

August , 201 0
INTRA-ALASK A MAINLIN E SERVIC E MAI LRATE S Docke t OST.2003-1469 5 (Docke t OST-95-429 )

ORDE RT O SHO WCAUS E ESTABLISHIN G NE W MAINLIN E SERVIC E MAI LRATE S Summar y B y thi s order , th e Departmen t propose s t o establis hne w intra-Alask amainlin e mai l rate s for th e nex t annua l period , beginnin g o n o r abou t Octobe r 1 , 2010
. Th e rate s that

ar e currentl y i n effec t

wer e establishe db y Orde r 2009-9-14 , mos t

recentl y adjuste db y Orde r 2010-6-2 4 for

firs t quarte r 201 0 fuel costs
. Th e cos t poo l comprise s th e bul k

o f mainlin e carrie r

operation s i n Alaska , an dconsist s o f Alask aAirline s (AS) , Lynde n Ai r Carg o (LAC) , Norther n Ai r Carg o (NAC) , an dTatondu k Outfitters , Ltd. , d/b/ aEverts Ai r Carg o (TOL). l Backgroun d Becaus e mai l rate s ar e mad e effectiv e o n afinal , prospectiv e basis , but ar e basedo n historica l costs , w e projec t th e cost s fo r

th e upcomin g rat e year . Unti l w e issue d Orde r 2004-8-26 , w e ha destimate dth e long-ter mtren dof cost s base do n aten-year movin g average that

onl y include dNA C an dAS , th e onl y tw o carrier s for whic hwe , a

t tha t time , ha dte n year s o f

data

. Orde r

2004-8-2 6 change dtha t

b y calculatin g th e long-ter mtren d basedo n th e mos t

recen t perio dfor

whic hw e ha ddat afor

al l o f th e mainlin e carriers , whic hwa s afive-yea

r perio da t th e time

. Sinc e then , fiv e additiona l year s o f dat ahav e becom e available , so , a s contemplate db y Orde r 2004-8-26 , w e propos e t o us e aten-year tren dfor al l four carriers

. Th e propose drates , containe di n Appendi x A , reflec t th e applicatio n of

cos t adjustmen t factors , develope di n Appendi x B , t o th e basi c mai l rat e structur e establishe db y th e Civi l Aeronautic s Boar di n Orde r 82-11-23
. W e hav e use dth e carriers ' reporte doperatin g expense s an dtraffi c for

th e year ende dMarc h31 , 2010 , an dfuel cost s fo r th e quarte r

ende d Marc h31 , 2010 , an dhav e increase dthei r non-fue l uni t

cost s t o th e mid-poin t

o f th e ne w

' EraAviation , Ltd. , als o provide s servic e wit hmainline equipment , bu

t i s excludedfro

mthe cos t pool becaus e i t transportedademinimi s amoun t o f mai l - les s tha n 1 percen

t o f the total

.

### rat e perio dbasedo n th e long-ter m(ten-year ) averag e annua l change s i n uni t cost s ~ nonfue l lin e hau l an dtermina l —fo r al l four carriers. 2 Result s o f

th e Update dDat a Th e propose drates , includin g fuel , differ fro mth e rate s currentl y i n effec t b y th e amount s show n i n th e followin g table :

Lin e haul , $/RT M ^
Terminal , $/Poun dEnplane d Priorit y Nonpriorit y Priorit y Nonpriorit y Orde r

2010-6-2 4 $3.204 1 $1.939 8 $.362 0 $.311 0 Propose d

$3.334 1 $2.018 4 $.361 7 $.310 8 Percentag e Increas e 3 4.0 6 4.0 5 -0.0 8 -0.0 6 

### Thes e rate s reflec t

acombinatio n o f

change s i n mos t

recen t uni t costs , an dapplicatio n o f th e long-ter mtren dt o thos e uni t costs
. A s show n i n th e table , ther e wa s asignifican t increas e i n th e lin e haul , whic hinclude s fuel , an dasligh t decreas e i n th e termina l rate
. Th e combinatio n o f

thos e change s i n th e rate s produce s propose drate s tha t ar e 2.6 1 percen t highe r tha n thos e i n effec t

for th e curren t

perio dfor

a421-mil e ^ averag e lengtho f haul

. Genera l Matter s A s indicated , whe n Orde r 2004-8-2 6 issue dw e onl y ha dfiv e year s o f dat afor al l four carriers , but

w e anticipate daddin g additiona l year s t o th e tren dlin e unti l w e ha dte n year s o f data

. Th e prio r

annua l updat e was th e firs t withte n year s o f

data , an dgoin g forwar dw e mus t begi n droppin g of

f th e dat afor

th e oldes t

yea r a s w e ad dth e newes t

yea r for determinin g th e long-ter mtrend

. Fiv e carrier s operate dmainlin e aircraf t i n Alask a~ AS , TOL , LAC , an dNA C tha t w e hav e include di n th e cos t poo l ~ an dEr aAviation , Inc
. Appendi x E show s al l of

th e mai l transporte db y th e fiv e carrier s currentl y operatin g mainlin e equipmen t

i n Alaska

. W e hav e tentativel y exclude dfro mth e lin e hau l calculatio n th e dat ao f

thos e aircraf

t type s transportin g les s tha n on e percen t o f revenu e to n mile s o f mail , an dfro mth e termina l calculatio n th e dat ao f thos e carrier s enplanin g les s tha n on e pe r cen t of mai l ton s enplaned

. Becaus e Er aAviatio n di dnot mee t th e on e percen t

threshol di n eithe r case , it i s no t part of th e cos t poo l for eithe r th e lin e hau l o r

terminal

. T o determin e th e long-ter mtren di n non-fue l lin e hau l an dtermina l expenses , w e propos e t o continu e ou r

practic e o f

separatel y regressin g thos e expense s agains t tim e —i n thi s instance , th e ten-year

perio dfro mth e year

ende dMarc h31 , 2001 , throug hMarc h31 , 2010
. Th e result s o f

bothregression s ar e show n i n Appendi x C
.

2 W e hav e continue dou r practic e o f

updatin g fuel expense s o n aquarterl y basis , an dhav e relie do n fue l expense s fo

r th e quarte r

ende dMarc h31 , 2010 , th e mos t recen t quarterl y dat aavailable

. W e wil l update th e rat e final rat e fo

r Q E 6/30/1 0 dat awhe n thos e becom e available

. ^ Any differenc e betwee n Priorit y an dNonpriorit y i s du e t o rounding

. ^ Th e propose dlin e hau l rate s abov e ar e th e su mo f non-fue l lin e hau l expense , wit h a10-yea

r averag e inflatio n facto r

applied , plus th e mos t

recen t fue l expens e unadjuste dfor

inflation

. ^ 22,853,33 4 RTM s o f

mai l divide db y 54,34 8 ton s enplane do f mai l fromAppendi x D
.

### Nonfue l Lin e Hau l Result s

A s show n i n Appendi x C (Lin e Haul) , th e regressio n calculate dan averag e annua l increas e o f 2.5 3 percen t

i n uni t cost s ove r

th e ten-year

period , withastron g T-Valu e o f 4.27 , indicatin g that

ther e i s aconsisten t

upwar dtren di n th e non-fue l lin e hau l costs
. Thos e cost s increase dfro m$0.5754 2 pe r availabl e to n mil e for

th e year ende dMarc h31 , 2009 , t o $0.6192 7 for

th e yea r ende dMarc h31 , 2010 , o r 7.6 2 percent
. Tha t

increas e wa s drive n b y Alask aAirlines ' costs , whic hincrease dfro m$0.46087 0 i n th e prio r year t o $0.620837 , o r 34.7 1 percent , a s show n i n Appendi x D- 1 o f boththi s orde r

an dOrde r

2009-9-10
. Alask a Airline s indicate s th e principa l source s o f that increas e wer e th e severa l ne w collectiv e bargainin g agreement s i t reache di n 2009
. Th e carrier' s quarterl y dat afile dwithth e Departmen t

ar e consisten t

withtha t explanation

. Th e chart i n Appendi x C (Lin e Haul) , depictin g eac hyear' s dat apoint s an dthei r deviatio n fro mth e tren dline , show s tha t th e consistenc y of

th e tren di s strong , an dtha t thi s year' s uni t cost s wer e slightl y abov e th e mos t recen t 10-yea r trend

. Th e averag e annua l increas e i n th e long-ter mtren dha s decrease dfro m2.84 percen t pe r Orde r 2009-9-1 , t o 2.5 3 percen t thi s year , notwithstandin g tha t thi s year' s result s wer e abov e trend

. Th e fac t tha t th e long-ter m tren dha s decrease dreflect s th e droppin g fro mth e ten-year tren dof th e result s for

th e yea r ende dMarc h31 , 2000 , whic hwer e s o significantl y belo w th e tren di n Orde r 2009-9- 1 (16.6 8 percen t belo w year

Marc h31 , 2001 ) tha t

the y mor e tha n offse t

th e effec t

o n th e tren dof

th e mos t recen t 7.6 2 percen t

year-over-year

increase

. Termina l Result s A s show n i n Appendi x C-Terminal , th e regressio n calculate dan averag e annua l increas e of 4.1 4 percen t

i n uni t cost s ove r

th e ten-year

period , withastron g T-Valu e o f 9.91 , indicatin g tha t ther e i s aconsisten t

upwar dtren di n termina l costs
. Thos e cost s wer e basicall y stable , withadecreas e fro m$386.2 9 fo r th e year ende dMarc h31 , 2009 , t o $384.0 9 fo r th e year ende dMarc h31 , 2010 , o r 0.5 7 percent
. Th e overal l fla t resul t disguise dtha t

th e uni t termina l cost s for

LA C increase db y 8.2 0 percent , onl y t o b e offse t b y adecreas e i n uni t cost s for TO Lof 6.8 5 percent
. Th e chart i n Appendi x C (Terminal) , depictin g eac hyear' s dat apoint s an dthei r deviatio n fro mth e tren dline , show s tha t th e consistenc y of

th e tren di s strong , an dtha t thi s year' s uni t cost s wer e slightl y belo w th e trend

. Th e mos t recen t ycci r resul t ha s drive n dow n th e averag e annua l increas e i n th e long-ter mtren dfro m3.8 0 percen t pe r Orde r 2009-9-1 , t o 2.5 3 percen t thi s year . Th e fac t

that th e long-ter mtren dha s decrease dreflect s th e droppin g fro mth e ten
year tren dof th e result s for

th e year ende dMarc h31 , 2000 , whic hwer e s o significantl y belo w th e tren di n Orde r

2009-9- 1 (16.6 8 percen t belo w year

Marc h31 , 2001 ) tha t

the y mor e tha n offset

th e effec t

o n th e tren dof

th e mos t recen t 0.5 7 percen t

year-over-year

decrease

. ACCORDINGLY , 1
. W e direc t

al l intereste dperson s t o sho w cause , n o late r tha n twent y (20 ) day s afte r th e dat e o f servic e o f

thi s order , wh y th e Departmen t shoul dno t

adop t th e foregoin g tentativ e finding s an dconclusion s an dfix , determin e an dpublis hth e propose dfina l annua l rate s specifie di n Appendi x A , t o b e effectiv e o n o r abou t Octobe r 1 , 2010 , subjec t

t o th e

### -4
-



### quarterl y fue l adjustment , a s discussed

. Vagu e o r unsupporte dAnswer s tha t d o no t includ e al l propose dadjustment s an dbacku p dat awil l not b e accepted ; 2
. I f n o objectio n i s file dwithi n th e designate dtime , o r if n o timely-file dobjectio n raise s materia l issue s o f

fact , w e hereb y delegat e authorit y t o th e Director , Offic e o f Aviatio n Analysis , t o mak e th e above rate s final ; 3
. Thi s docke t

shal l remai n ope n unti l further orde r o f th e Department ; an d 4
. W e wil l serv e thi s orde r upo n al l partie s o n th e Servic e Lis t for thi s Docket

. By :

Susa n L
. Kurlan d Assistan t Secretar y for Aviatio n an dInternationa l Affair s (SEAL ) A n electroni c versio n o f

thi s documen t

i s availabl e o n th e Worl dWid e We b at http : //w w w .regu l ations

. go vIntra-Alask aClas s Servic e Mai l Rate s Appendi x A

Effective : O n o r abou t Octobe r 1 , 201 0

Colum n (1 ) (2 ) (3 ) (4 ) (5 )

Bas e Year Rate s 1 / Adjustmen t

Factor s 2 / Propose d

Fina l Rate s 3 / Curren t Rate , Orde r 2010-6-2 4 Chang e from

Prio r Rat e 4 /

Linehau l Charg e pe r

Billing Ton-Mil e

Priority Non-priority $1.196 9 $0.724 6 178.56 %

178.56 % $3.334 1

$2.018 4 $3.204 1

$1.939 8 4.06 %

4.05 %

Termina l Charg e pe r

Poun dOriginate d

Priority Non-priority $0.169 7 $0.145 8 113.16 %

113.16 % $.361 7 $.310 8 $.362 0

$.311 0 -0.08 %

-0.06 %

l/Pe r Orde r 82-11-23
. 2 / Se e Appendi x B
. 3 / Column (1 ) increase db y Colum n (2)
. 4 / Any difference s du e to rounding

.Intra-Alask aClas s Servic e Mai l Rate s Cos t Adjustmen t

Factor s Appendi x B

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

Bas e Yea r Ende d 9/30/8 0 1 / Year

Ende d 3/31/1 0 2 / Averag e Annual

Chang e Y E 3/31/0 1 t o Y E 3/31/1 0 3 / Midpoin t t o Midpoin t Chang e 4 / Estimate d

Uni t Cos t at 4/1/1 1 5 / Percen t

Chang e 198 0 Bas e Yea r t o 4/1/1 1 6 /

Uni t Cos t pe r Availabl e Ton-Mil e Fue l Nonfue l Tota l $0.39946 9 $0.4697 8 $0.6192 7 $1.0890 5 n a

2.53 % n a

3.83 % $0.46978 0

$0.64298 8 $1.11276 8 178.56 %

Uni t Cos t pe r To n Enplane d $191.5 4 $384.0 9 4.14 % 6.30 % $408.2 9 113.16 %

I/Pe r Orde r 82-11-23 , update dmos t

recentl y in Orde r

97-12-24
. 2 / Se e Appendi x D
. Fo r

nonfuel , w e use dY E Marc h31 , 2010 ; fo r fue l expense , w e use dQ E Marc h 31 , 2010 , th e mos t recentl y available

. 3 / Se e th e regressio n result s in Appendi x C
. 4 / Reflect s th e fac t

that fromth e mi dpoin t

o f th e reportin g perio dt o th e midpoin t o f th e prospectiv e rat e i s 1 an d1/ 2 years . 1.025 3 X 1.0126 5 wher e 1.0126 5 i s th e averag e annua l uni t cos t increas e projecte dfo

r a6-mont h period

. 1.041 4 X 1.020

7 where 1.0207 i s th e averag e annual uni t cos t increas e projecte dfor

a6-mont h period

. 5 / Column (2 ) multiplie db y column (4) , excep t for fuel

. A s indicate di

n Orde r 97-9-37 , w e wil l rel y o n th e mos t recen t fue l costs , wit

hn o inflatio n factor

. Fue l for th e Q E 3/31/1 0 i s th e mos t recen t availabl e at

thi s time , bu t w e anticipat e in th e final orde r addin g fuel for

th e Q E 6/30/10
. 6/ $1.1276 8 in precedin g column divide db y $.39946 9 i n th e bas e period , an d$408.2 9 i n th e preceedin g column divide db y $191.5 4 i n th e bas e period

.Orde r

Numbe r 2004-8-2 6 2004-8-2 6 2004-8-2 6 2004-8-2 6 2005-9-1 6 2006-9-2 3 2007-8-2 6 2008-9- 3 2009-9- 1 Ne w ANOV A Regressio n Residua l Tota l Intercep t X Variabl e 1
Regres s io r Multipl e R RSquar e Y E 3/31 /

200 1 200 2 200 3 200 4 200 5 200 6 200 7 200 8 200 9 201 0

d f

1 8 9 Coefficient s -50.6837 3 0.024944 9

1 Statistic s 0.833396 5 0.694549 7 Adj

. RSquar e 0.656368 4 Std

. Erro r Observation s 0.05312 3

1 0 Appendi x C Linehau l Pag e 1 o f

2

Calculatio n o f

th e Linehau l Portio n o f

th e 10-Yea

r Trend : TOL
. LAC
. NAC , an dAlask a

$/AT M Non-Fue l Linehau l 0.460 9 0.486 9 0.469 7 0.522 5 0.531 2 0.531 2 0.492 4 0.5156 2 0.5754 2 0.6192 7

S S 0.051335 5 0.022576 4 0.07391 2 Std

. Erro r 11.7294 8 0.005848 7 Actua l Y

Natura l Lo g $/AT M Non-Fue l Linehau l Predicte dY -0.77457 4 -0.71969 7 -0.75566 1 -0.64913 0 -0.63261 7 -0.63261 7 -0.70846 4 -0.66238 5 -0.55265 5 -0.47921 4

M S 0.051335 5 0.002822 1

tSta t -4.32105 5 4.265072 2 -0.76895 4

-0.74400 9 -0.71906 4 -0.69411 9 -0.66917 4 -0.64422 9 -0.61928 4 -0.59433 9 -0.56939 4 -0.54444 9

F 18.19084 1

P-valu e 0.002542 4 0.002742 4 Residual s

-0.00562045 6 0.02431162 7 -0.03659728 9 0.04498879 5 0.03655687 8 0.01161196 2 -0.08917995 4 -0.06804608 9 0.01673914 3 0.06523538 3 Significance F 0.00274244 7

Lower 95 % -77.7319613 6 0.01145790 4 EXP(Y )

0.463497 8 0.475205 2 0.487208 2 0.499514 4 0.512131 5 0.525067 2 0.538329 7 0.551927 2 0.565868 1 0.580161 2

Uppe r 95 % -23.635 5 0.038431 9 Predicte d

Annual Increas e 2.53 %Appendi x C Linehau l Pag e 2 o f 2

n A H 2 0 -0.4 5 -
B O -0.5 0 - 

## 2 S 2 5 -0.5 5 - (0 

### z 1 -0.6 0 - 1 -0.6 5

. .

' E

= -0.7 0 -
-0.7 5 - 

## 1 0 1



# r -0.8 0 J 

### Nonfue l Linehaul , Uni t Cos t pe rRTM , Actua l vs . Predicte d

1 1 1 1 1 1 f ) ( 200 2 200 3 200 4 200 5 200 6 200 7 200 8 200 9 201 0



## •

y= 0.0249 X - 50.68 4 R ^ = 0.694 5 •^' ^ 

### Jiii k ^^"""' ^ • Y -j.^^ ^ • Predicte d Y
^ JIIK ^

Linea r(Predicte d Y )



# ^ •

Year s Ende d Marc h 31 , 2001 , throug h 201 0Orde r

Numbe r 2004-8-2 6 2004-8-2 6 2004-8-2 6 2004-8-2 6 2005-9-1 6 2006-9-2 3 2007-8-2 6 2008-9- 3 2009-9- 1 Ne w ANOV A Regressio n Residual Tota l
Intercep t X Variabl e 1 Calculatio n

Y E 3/3 1 200 1 200 2 200 3 200 4 200 5 200 6 200 7 200 8 200 9 201 0

df I 8 9 Coefficient s -75.5723 5 0.040568 6 Appendi x C Termina l Pag e 1 o f

2

o f th e Termina l Portio n o f

th e 10-Yea

r Trend : TOL
. LAC
. NAC , an dAlask a

] $/To n Enp
. Termina l $281.1 7 $278.3 4 $299.9 2 $302.6 4 $304.9 1 $318.3 0 $368.5 3 $363.2 9 $386.2 9 $384.0 9

S S 0.135779 2 0.011053 5 0.146832 7 StdErro r 8.207320 4 0.004092 4 Actua l Y

Matura l Lo g $/To n Enp
. Termina l Predicte dY 5.63895 9 5.62884 3 5.70351 6 5.71254 4 5.72001 7 5.76299 4 5.90952 2 5.89520 1 5.95658 8 5.95087 7

M S 0.135779 2 0.001381 7

tSta t -9.2079 2 9.913142 6 5.605347 6

5.645916 1 5.686484 7 5.727053 3 5.767621 8 5.808190 4 5.848758 9 5.889327 5 5.929896 1 5.970464 6

F 98.27039 7

P-valu e 1.566E-0 5 9.059E-0 6 Residual s

0.03361143 6 -0.01707312 7 0.01703130 9 -0.01450925 5 -0.04760481 8 -0.04519638 2 0.06076305 5 0.00587349 1 0.02669192 7 -0.01958763 6 Significanc e F 9.05908E-0 6

Lowe r 95 % -94.4984630 3 0.03113146 8 EXP(Y )

271.876 4 283.132 8 294.855 3 307.063 1 319.776 3 333.015 9 346.803 7 361.162 3 376.115 4 391.687 6

Uope r 95 % -56.6462 3 0.050005 7 Annua l

Increas e 4.14 %

Regressio n Statistic s Multipl e R0.961623 8 RSquar e 0.924720 3 Adj

. RSquar e 0.915310 4 StdErro r 0.037171 1 Observation s 1 0Appendi x C Termina l Pag e 2 o f

2

6.0 0 -
5.9 5 -
M 5.9 0 - Q
" 5 3 5.8 5 - 

### z

• o c5.8 0 § 5.7 5 -
tt 5.7 0 - 

## 5

= 5.6 5 -
5.6 0 -

c ^. C 2 0 

## Terminal , Uni t Cos t pe rTo n Enplaned , Actua l vs . Predicte d 

# •/ T

y= 0.0406 X - 75.57 2 W ^ R ^ = 0.924 7 y ^ 

# X J ^ J " • 

# y* *y^

" ^

1 1 • • • 1 1 t "" 1 • • • i 1 1 1 0 0 200 1 200 2 200 3 200 4 200 5 200 6 200 7 200 8 200 9 201 0

Year s Ende d Marc h 31 , 2001 , thr u Marc h 31 , 200 9 • Y

• Predicte d YAppendi x D- 1
Operatin g Expenses , Alask aAirlines , Northern Ai r Cargo , Lynde n Ai r

Cargo , an dTatondu k

Outfitters , Ltd

. Intra-Alask aClas s Servic e Mai l Rates-Yea r Ende dMarc h31 , 201 0

Domesti c Fue l Dom
. N-Fue l Total Intra-A K Skd

. B.Hrs
. Intra-A K Adj

. Fue l B.Hrs
. Domesti c Tota l Intra-A K Fue l Intra-A K N-Fue l Intra-A K Skd

. ATM s $/ATM , Fue l $/ATM , N-Fue l Intra-A K Mai l RTM s RT M % o f Tota l $/ATM , Fue l $/ATM , N-Fue l

Accoun t '#690 0 Syste mTon s Enpl

. Intra-A K Skd

. Svc
. Intra-A K Skd

. Svc
. Ton s $/To n Enplane d A K Mai l Ton s Enplane d Mai l Ton s % o f

Tota l Wtd

. $/To n Enplane d Tota l

39,07 3 114,60 6 $60,578,44 7 $114,544,80 0 187,492,05 3 $0.32309 9 $0.61093 1 22,853,33 4 99.99 % $0.38229 0 $0.61927 0

Tota l

54,34 8 100.01 % 3 / $384.0 9 Alask aAi dine s (AS ) #61 7 B-737-40 0 $137,427,66 4 $297,041,58 6 $434,469,25 0 25,46 0

— 91,81 3 $38,109,07 3 $82,370,45 7 132,676,40 0 $0.28723 3 $0.62083 7 6,501,98 4 28.45 % $0.0817 2 $0.1766 3

A S

$52,295,03 8 148,60 7 $351.9 0 14,02 6 25.81 % $90.8 3 Lynde n

Ai r Carg o (LAC ) #55 6 Hercule s $6,610,27 2 $35,449,89 7 $42,060,16 9 1,69 6 3,26 6 9,37 1 $3,432,64 6 $6,415,86 0 10,899,37 2 $0.31494 0 $0.58864 5 3,985,60 8 17.44 % $0.0549 3 $0.1026 6

LACl /

$5,511,03 9 12,93 7 $425.9 9 9,63 5 17.73 % $75.5 3 Norther n

Air Carg o NA C #62 0 737-20 0 $10,809,08 2 $13,843,63 0 $24,652,71 2 5,29 8

— 5,82 2 $9,836,22 7 $12,597,65 6 26,305,66 3 $0.37392 1 $0.47889 5 5,677,22 3 24.84 % $0.0928 8 $0.1189 6

NA C $15,578,85 0 32,29 2 $14,470,21 0 29,99 4 $482.4 4 14,32 5 26.36 % $127.1 7 Tatondu k

Outfitters , Ltd , (TOL ) #21 8 DC- 6 $10,276,34 7 $13,199,85 9 $23,476,20 6 5,54 9

— 6,49 2 $8,783,64 9 $11,282,50 4 16,711,79 3 $0.52559 6 $0.67512 2 6,308,29 4 27.60 % $0.1450 6 $0.1863 3

TO L $9,880,96 5 32,85 4 $7,344,70 8 24,42 1 $300.7 5 16,36 2 2 1 30.11 % $90.5 6 (TOL )

#46 1 Brasili a $431,65 6 $1,945,03 0 $2,376,68 6 1,07 0

— 1,10 8 $416,85 2 $1,878,32 3 898,82 5 $0.46377 4 $2.08975 4 380,22 5 1.66 % $0.0077 0 $0.0346 9

1 / Lynde n develope dit s intra-Alask acost s b y direcd y assignin g al l termina l costs , an dthe n allocatin g th e remainde r o n intra-Alask aan dsyste mdepartures

. 2 / Mainlin e aircraf

t only : 16,61 0 enplane dtons , allocate dbetwee n mainlin e an dbus h o n schedule dpayload : 16,61 0 * 49,11 7 mainlin e payloa dton s - ^ 49,86 1 syte mpayloa dtons
. 3 / Tota l ma y no t su mt o 100 % du e t o rounding

.Appendi x D- 2

Intra-Alask aMainlin e Mai l Cost s - Quarte r Ende dMarc h31 , 2010 , Orde r 2010-6-2 4 Alask aLynde n Norther n Airline s Ai r

Ai r Carg o A S LA C NA C Tatondu k Outfitters Ltd

. TOL

Gran d#61 7 #55 6 #62 0 #15 0 #21 8 #46 1 Tota l 737-40 0 Hercule s B-737-20 0 C-4 6 DC- 6 Brasili a
Fue l 1 / $40,946,58 8 $33,531,58 8 $1,890,71 7 $2,942,74 2 $98,31 5 $2,383,49 9 $99,72 7 Intra-A K Skd

. Elk

. Hrs
. 2 / Tota l Bloc k

Hour s 2 /

Intra-A K Fue l Expens e

Intra-A K Skd

. ATM s 2 / Uni t Cost/ATM , Fue l

Intra-A K Mai l RTM s 2 / RTM Percen t

o f Tota l Wtd

. Cost/ATM , Fuel 9,42 3 23,79 2
$16,709,93 1
44,161,39 8 $0.37838 3
5,397,04 0 100.00 % $0.4697 8 6,18 5

20,13 3
$10,301,14 1
31,602,08 0 $0.32596 4
1,542,93 8 28.59 % $0.0931 9 38 3

47 6
$1,521,31 2
2,481,85 9 $0.61297 3
922,54 7 17.09 % $0,1047 6 1,14 1

1,37 9
$2,434,85 8
5,675,26 8 $0.42903 0
1,294,65 8 23.99 % $0.1029 2 14 3

15 7
$89,54 8
151,06 3 $0.59278 6
45,08 2 0.84 % $0.0049 8 1,33 3

1,402
$2,266,19 4
4,045,68 6 $0.56015 1
1,511,45 0 28.01 % $0.1569 0 23 8

24 5
$96,87 8
205,44 2 $0.47155 9
80,36 5 1.49 % $0.0070 3

1 / Per For m4 1 reports , excep t

for Lynden , whos e fuel expens e i s fromaspecia l interna l report o f Lynden

. 2 / Per th e T-10 0 Segmen t

report an dcarrie r

submissions

. Northern Air , Lynden , an dEvert s dat aar e for thei r system
. For Alask aAirlines , i t

i s for th e carrier' s domesti c operatio n only , i.e. , th e carrier' s Lati n America n Divisio n i s excluded

. Lynde n i s pe r

th e carrier' s specia l report
.Appendi x E

Exclud e Operation s Belo w th e On e Percen t Threshold

. Y E 3-31-1 0

Carrie r Alask aAirline s Inc
. Tatondu k Outfitter s Norther n Ai r

Carg o Inc
. Lynde n Ai r

Carg o Airline s Tatondu k

Outfitter s Tatondu k Outfitter s Er aAviatio n Alask aAirline s Inc
. Alask aAirline s Inc
. Alask aAirline s Inc
. Gran dTota l

Uniquecarriernam e Tatondu k Outfitter s Northern Ai r

Carg o Inc
. Alask aAirline s Inc
. Lynde n Ai r

Carg o Airline s Er aAviatio n Gran dTota l Aircrafttvp e #617 , B-737-40 0 #218 , DC- 6 #620 , B-737-20 0 #556 , Hercule s #461 , Brasili a #150 , C-4 6 #483 , Das h 8 #614,B-737-80 0 #612,B-737-70 0 #634 , B-737-90 0 Intra-Alask aSkd

. RTM s o f Mai l 6,501,98 4 6,308,29 4 5,677,22 3 3,985,60 8 380,22 5 207,98 1 66,48 4 59,77 4 26,45 1 6.97 2 23,239,63 7

Intra-Alask aSkd

. Mai l Ton s Enplane d

16,61 0 14,32 5 14,31 8 9,63 5 33 4 55,22 2 Percen t

27.98 % 27.14 % 24.43 % 17.15 % L64 % 0.89 % 0.29 % 0.26 % 0.11 % 0.03 % 100.00 %

Percen t 30.08 % 25.94 % 25.93 % 17.45 % 0.60 % 100.00 % Cumulativ e

Percen t 27.98 % 55.12 % 79.55 % 96.70 % 98.34 % 99.23 % 99.52 % 99.78 % 99.89 % 99.92 %

Cumulativ e Percen t 30.08 % 56.02 % 81.95 % 99.40 % 100.00 %

Note : Total s for

Tatondu k

an dEr aMai l Ton s Enplane dinclud e som e bus h operations

. I n Appendi x D , Pag e 1 , w e hav e adjuste dTatonduk' s total t o exclud e it s bus h enplanements

. N o suc hadjustmen t

necessary fo

r Era , whos e tota l doe s no t reac h th e I percen t

threshhol din any event
.