Order 2012-3-21 

Served: March 30, 2012 

**rBB<* 

UNITED STATES OF AMERICA 

DEPARTMENT OF TRANSPORTATION 

OFFICE OF THE SECRETARY 

WASHINGTON, D.C. 

Issued by the Department of Transportation 

on the 30* of March, 2012 

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 the second Saturday after the issue date of this order, and reflect fuel expenses 

for the quarter ended December 31, 2011. 

Background 

Order 2011-9-6 tentatively established final annual Intra-Alaska mainline mail rates. After 

receiving objections. Order 2011-11-18 finalized those annual rates, and also updated them 

to reflect fuel expenses for the quarter ended June 30, 2011, the most recent fuel expenses 

available at that time. We have indicated that we will continue to make regular quarterly 

fuel updates. Most recently, we issued Order 2011-12-26, December 30, 2011, updating the 

rates set in Order 2011-11-18 for fuel expenses for the quarter ended September 30, 2011. 

This order updates the rates in Order 2011-12-26 to reflect fuel costs for the quarter ended 

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

for the quarter ended March 31, 2012, will be effective on or about July 1, 2012. Weighted 

average fuel costs per ATM have decreased by 1.76 percent, from $0.52898 for the Q E 9-30-11, 

as shown in Appendix C of Order 2011 -12-26, to $0.51968 for the QE 12-31 -11, as shown in 

Appendix C of this order. That decrease in fuel costs produces the 0.79 per cent decrease in the 

line haul rates. 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 2011-12-26 

$3.5327 

$2.1387 

$0.3456 

$0.2970 

Update for 

OE 12-31-11 

$3.5048 

$2.1218 

$0.3456 

$0.2970 

Percentage 

Change 

-0.79% 

-0.79% 

0.00% 

0.00% 
ACCORDINGLY, 

1. We make final the rates set forth in Appendix A, effective the second Saturday after the 

issue date of this order, 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 docmnent 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 

192.82% $3.5048 $3.5327 

192.82% $2.1218 $2.1387 

Change from 

Current Rate 5/ 

-0.79% 

-0.79% 

Terminal Charge per Pound Originated 

Priority 

Non-priority 

$0.1697 

$0.1458 

103.68% 

103.68% 

$.3456 

$.2970 

$.3456 

$.2970 

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 2011-12-26. 

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 

Costs. 

$0.52898 2/ 

$0.65004 2/ 

$1.17902 

New 

Costs 

$0.51968 3/ 

$0.65004 2/ 

$1.16972 

Percentage Change from Base Year 195.15% 2/ 192.82% 4/ 

Unit Cost per Ton Enplaned $191.54 1/ 

Percentage Change from Base Year 

$390.13 2/ 

103.68% 2/ 

$390.13 2/ 

103.68% II 

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

2/ Appendix B of Order 2011-12-26. 

3/ Appendix C of this order. 

4/($1.17902/$0.399469)-l. 
Operating Expenses, Alaska Airlines, Northern Air Cargo, Lynden Air Cargo, Peninsula Airways, and Tatonduk Outfitters, Ltd. 

Intra-Alaska Class Service Mail Rates-Quarter Ended December 31, 2011 

Appendix C 

Not by Aircraft Type 

1 Skd. P-12, Skd. Intra-AK Cost 

2 Skd. P-12. Skd. Intra-AK Gallons 

3 Cost per Gallon 1/ 

By Aircraft Type 

4 Bum per Hour 2/ 

Total 

Alaska 

AS 

$14,796,128 

4,777,364 

$3.10 

AS 

#617 

B-737-400 

789 

Lynden 

Air Cargo 

m 

$935,534 

282.160 

$3.32 

L2 

#556 

Hercules 

640 

Northern 

Air Cargo 

NC 

$3,254,556 

1.031.219 

$3.16 

NC 

#620 

737-200 

877 

Tatonduk 

Outfitters, Ltd. 

3Z 

$2,704,673 

708.377 

$3.82 

3Z 

#218 

DC-6 

399 

3Z 

#461 

Brasilia 

152 

Peninsula Airways 4/ 

(KS) 

456 

Saab 340 

125 

(KS) 

459 

Sa3b340 

127 

5 Fuel $2,358,852 $134,577 $2,620,663 $409,418 

6 Intra-AK Skd. Blk. Hrs. 

7 Domestic Block Hours 

8 Intra-AK Fuel Exp. 3/ 

9 Intra-AK Skd. ATMs 

10 Unit Cost/ATM, Fuel 

11 Intra-AK Mail RTMs 

12 RTM Percent of Total 

13 Wtd. Cost/ATM, Fuel 

10,090 

29,198 

$21,748,844 

43,820,579 

$0.496316 

4,988,138 

100.00% 

$0.51968 

6,106 

19,722 

$14,934,665 

31,254,118 

$0.477846 

1,198,966 

24.04% 

$0.11487 

391 

1,677 

$830,797 

2,500,447 

$0.332259 

915,027 

18.34% 

$0.06094 

1,202 

1,543 

$3,331,127 

5,985,216 

$0.556559 

1,608,638 

32.25% 

$0.17949 

987 

1,241 

$1,876,057 

2,911,162 

$0.644436 

1,103,033 

22.11% 

$0.14248 

229 

233 

$132,267 

193,302 

$0.684251 

80,910 

1.62% 

$0.01108 

1,175 

4,782 

$643,931 

976,334 

$0.659540 

81,564 

1.64% 

$0.01082 

0 

0 

$0 

0 

$0.000000 

0 

0.00% 

$0.00000 

1/ Fuel expenses for AS, L2, and NC are calculated by first determining the intra-Alaska cost per gallon for those carriers 

from Schedule P-12, Row 3 = Row 1 •;• Row 2. 

2/ Next, for AS, L2, and NC, we determine the the fuel bum per block hour by aircraft type. Row 4 -^ Row 8. 

We haye used the bum per hour from order 2011-12-26, QE 9/30/1!, because that was available. 

3/ Fuel expense for all but Tatonduk is the result of Row 3 x Row 4 x Row 7. 

For Tatonduk, we continue to determine Tatonduk's costs the old way because its DC-6 aircraft bums expensive 

Avgas while its turboprop Brasilia bums less expensive Jet A, and Schedule P-12 does not break out intra-Alaska expenses into 

those two cargeories. 

4/ PenAir does not report schedule P-12, and so we have relied on Schedule F-2 for expenses and a special report 

filed by the carrier that separates its traffic among Part 121, Part 135, and mainline service. 

Note, PenAir's data in Row 6 reflects its mainline operations only.