Order 2011-6-21 

Served: June 17,2011 

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UNITED STATES OF AMERICA 

DEPARTMENT OF TRANSPORTATION 

OFFICE OF THE SECRETARY 

WASHINGTON, D.C. 

Issued by the Department of Transportation 

on the 17'*'of June, 2011 

INTRA-ALASKA MAINLINE 

SERVICE MAIL RATES 

Docket OST-2003-14695 

Mainline Quarterly Fuel Adjustment 

Summary 

By this order, the Department is making its regular quarterly adjustments to Intra-Alaska 

Mainline mail rates to reflect the most recent quarterly fuel costs. The new rates are to be 

effective on July 2,2011, and reflect fuel expenses for the quarter ended March 31,2011. 

Background 

Order 2010-8-7 tentatively established final annual Intra-Alaska mainline mail rates. After 

receiving no objections. Order 2010-9-7 finalized those annual rates, and also updated the 

annual rates in the show-cause order to reflect fuel expenses for the quarter ended June 30, 

2010, the most recent fuel expenses available at that time. We have indicated that we will 

continue to make regular quarterly fuel updates, and Order 2011-3-35 made the most recent 

adjustment. 

This order updates the rates in Order 2011-3-35 to reflect fuel costs for the quarter ended 

March 31,2011, the most recent data available. The next quarterly fuel update, based on 

data for the quarter ended June 30, 2011, will be effective on or about October 1, 2011. 

Weighted average fuel costs per ATM have increased from $0.413742 for the QE 12-31-10 

to $0.471587 for the QE 3-31-11, as shown in Appendix C, which produces the 4.47 per 

cent increase in linehaul. There is no change to the terminal rates, but we have included it 

for convenience. 

Payment Parameter 

Linehaul, $/RTM 

Linehaul, $/RTM 

Terminal, $/Lb. Enplaned 

Terminal, $/Lb. enplaned 

Service 

Class 

Priority 

Nonpriority 

Priority 

Nonpriority 

Current Rates 

Order 2011-3-35 

$3.3191 

$2.0094 

$0.3617 

$0.3108 

Update for 

OE 3-31-11 

$3.4674 

$2.0992 

$0.3617 

$0.3108 

Percentage 

Chanee 

4.47% 

4.47% 

0.00% 

0.00% 

Other Matters 

Northern Air Cargo has informally advised us that it will be increasing the amount of flying 

it does outside Alaska. Our goal is to reflect as accurately as possible the changes in fuel 

costs for Intra-Alaska operations, and the carriers' data submitted to the Department's 

Bureau of Transportation Statistics on Schedule P12 of the Form 41 will better allow us to 
-2-

do that. We therefore announce our intention to rely, where practicable, on Schedule PI2, 

Intra-Alaska expenses and corresponding Intra-Alaska gallons, for determining fuel 

expenses in the next update. We have historically used Northern Air Cargo's Schedule P5, 

fuel expenses for their entire domestic operations, because of their limited amoimt of 

operations outside Alaska. Also, Schedule P12 does not break out fuel expenses by aircraft 

type, and mail rates are calculated on the basis of aircraft type by carrier. 

ACCORDINGLY, 

1. We make final the rates set forth in Appendix A, effective July 2, 2011, until further 

Department action; 

2. This docket shall remain open until further order of the Department; and 

3. We will serve this order upon all parties on the Service List for this Docket. 

Persons entitled to petition the Department for review of this order under the Department's 

Regulations, 14 CFR 385.30, must file such petitions within ten (ten) days after the date of 

service of this order. The filing of a petition for review shall not stay its effectiveness. 

By: 

TODD M. HOMAN 

Director 

Office of Aviation Analysis 

(SEAL) 

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

http: / / www.regulations.gov 
Appendix A 

INTRA-ALASKA MAINLINE CLASS SERVICE MAIL RATES 

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

Priority 

Non-priority 

Base Year 

Rates 1/ 

$1.1969 

$0.7246 

Adjustment 

Factors 2/ Final Rates 3/ Current Rate 4/ 

Linehaul Charge per Billing Ton-Mile 

189.70% $3.4674 $3.3191 

189.70% $2.0992 $2.0094 

Change from 

Current Rate 5/ 

4.47% 

4.47% 

Terminal Charge per Pound Originated 

Priority 

Non-priority 

$0.1697 

$0.1458 

113.16% 

113.16% 

$.3617 

$.3108 

$.3617 

$.3108 

0.00% 

0.00% 

1/Per Order 82-11-23. 

2/ See Appendix B of this order. Unlike the linehaul charge, the terminal charge will not change from quarter to 

quarter with the quarterly fuel updates. 

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

4/Per Order 2011-3-35. 

5/ Any differences between priority and nonpriority elements are due to rounding. 
Appendix B 

INTRA-ALASKA MAINLINE CLASS SERVICE MAIL RATES COST ADJUSTMENT FACTORS 

Base Year 

Ended 

9/30/80 

Unit Cost per Available Ton-Mile 

Fuel 

Nonfuel 

Total $0.399469 1/ 

Current 

Cost? 

$0.46476 2/ 

$0.64299 3/ 

$1.10775 

New 

Costs 

$0.51429 7/ 

$0.64299 8/ 

$1.15728 

Percentage Change from Base Year 177.31% 4/ 189.70% 9/ 

Unit Cost per Ton Enplaned $191.54 1/ 

Percentage Change from Base Year 

$408.29 5/ 

113.16% 6/ 

$408.29 10/ 

113.16% 11/ 

1/ Order 82-11-23, updated most recently in Order 97-12-24. 

2/ Appendix C of Order 2011-3-35. 

3/ Appendix B of Order 2011-3-35. 

4/ Appendix A of Order 2011-3-35. 

5/ Appendix B of Order 2011-3-35. 

6/($408.29/$ 191.54)-1. 

II Appendix C 

8/Appendix B of Order 2011-3-35. 

9/($1.15728/$0.399469)-l. 

10/ Appendix B of Order 2011-3-35. 

ll/($408.29/$191.54)-l. 
Appendix C 

Intra-Alaska Mainline Mail Costs - Quarter Ended December 31, 2010, per Order 2010-12-11 

Fuel 1/ 

Intra-AK Skd. BIk. Hrs. 

Total Block Hours 

Grand 

Total 

$51,187,623 

9,550 

26,066 

Alaska 

Airlines 

AS 

#617 

737-400 

$42,767,691 

6,321 

21,887 

Lynden 

Air 

LAC 

#556 

Hercules 

$1,211,568 

402 

504 

Northern 

Air Cargo 

NAC 

#620 

B-737-200 

$3,932,478 

1,056 

1,583 

Everts Air 

-—EAC 

#218 

DC-6 

$3,152,749 

1,545 

1.852 

Cargo 

#461 

Brasilia 

$123,137 

226 

240 

Intra-AK Fuel Expense 

Intra-AK Skd. ATMs 

Unit Cost/ATM, Fuel 

$18,687,136 $12,351,376 $966,370 $2,623,308 $2,630,128 $115,954 

45,166,165 32,512,478 

$0.413742 $0.379896 

2.593.249 5.297,042 4,566,832 196,564 

$0.372648 $0.495240 $0.575920 $0.589905 

Intra-AK Mail RTMs 

RTM Percent of Total 

Wtd. Cost/ATM, Fuel 

5,567,719 

100.00% 

$0.46476 

1.727,288 

31.023% 

$0.11786 

936.677 

16.823% 

$0.06269 

Fuel 1/ 

1.128,772 1,690,954 84,028 

20.274% 30.371% 1.509% 

$0.10040 $0.17491 $0.00890 

Intra-Alaska Mainline Mail Costs ~ Quarter Ended March 31, 2011 

Alaska 

Airlines 

AS 

Lynden Northern 

Air Air Cargo Everts Air Cargo 

LAC NAC EAC— 

Grand #617 #556 #620 #218 #461 

Total 737-400 Hercules B-737-200 DC-6 Brasilia 

$53,247,916 $45,603,000 $1,127,181 $3,560,956 $2,813,039 $143,740 

Intra-AK Skd. Blk. Hrs. 

Total Block Hours 

9,235 

23,514 

6,077 

19,991 

375 

454 

1,189 

1,275 

1,354 

1,539 

240 

255 

Intra-AK Fuel Expense 

Intra-AK Skd. ATMs 

Unit Cost/ATM, Fuel 

$20,724,692 $13,862,710 $931,042 $3,320,766 $2,474,889 $135,285 

43,946,665 31,328,069 

$0.471587 $0.442501 

2,435.564 5,933.481 4.046.042 203,509 

$0.382270 $0.559666 $0.611681 $0.664762 

Intra-AK Mail RTMs 

RTM Percent of Total 

Wtd. Cost/ATM. Fuel 

5.435.594 

100.00% 

$0.51429 

1.521.225 

27.986% 

$0.12384 

887,272 

16.323% 

$0.06240 

1,402,282 1,540,356 84,459 

25.798% 28.338% 1.554% 

$0.14438 $0.17334 $0.01033 

Note: 

Data for Alaska, NAC, and EAC are from the T-100 Segment and Form 41 reports. Data for Lynden 

are from special reports filed by the carrier. Alaska's fuel expense is for its domestic region only, 

i.e., it excludes its Latin American division.