BEFORE THE DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON D.C.

IN THE MATTER OF INTRA

- ALASKA BUSH CLASS SERVICE MAIL RATES

DOCKET OST

- 2003

- 14694

Comments of

Ryan Air, Inc. formerly Arctic Transportati on Services, Inc.

T o

Order 2010

- 12

- 28

Communication with respect to the document should be sent to:

Wilfred P. Ryan, President Ryan Air, Inc. 5701 Silverado Way, Unit L Anchorage, AK 99518 Phone (907) 771

- 2314 Fax (907)563

- 8177 E

- mail wryan@ ryan alaska.com

January 25 , 2011Summary

Ryan Air, Inc., opposes the Intra

- Alaska bush service mail rates tentatively set by Order 2009

- 11

- 2, made final by Order 2009

- 11

- 19, and updated for changes in quarterly fuel prices m ost recently by Order 2010

- 9

- 24 and finally reflected in Order 2010

- 12

- 28.

Background

The Department requests comments on Order 2009

- 11

- 2, Order 2009

- 11

- 19, Order 2010

- 9

- 24 and finally Order 2010

- 12

- 28 setting final line haul and terminal rates for Intra Alaska Bush Service Mail Rates

. Until this year , PenAir’s Metro III aircraft were included in the Part 121 class rate . However, during the year ended 06

- 30

- 10, PenAir’s Metro III aircraft h as operated under both Part 121 and Part 135 class es

.

Discussion

The United States Code 39 US CS, Section 5402, Title 39, Postal Service, Part V, ( Transportation of Mail ) , Chapter 54, ( Transportation of Mail by Air ) , clearly defines the aircraft classes in Section 5402 (a) (18), (19), (20), (21), (22) and (23).

Although Order 2010

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- 28 (Intra Ala ska Bush Mail Rates) pertains primarily to the reclassification of Penair’s activity , both PenAir and Era Alaska have the capability to operate similar type aircraft as a Part 121 bush carrier, a Part 121 mainline carrier or a Part 135 carrier at their sol e discretion. These carriers operate Metro III

, Beechcraft 1900, Saab 340 and Dash 8

- 100 aircraft, certified with a payload capacity of either less than or greater than 7,500 pounds, authorized by the FAA certification process. Each carrier has flexibili ty to operate under Part 121 or Part 135 because of their ability to select a seating configuration of 10 seats or more; additionally, each carrier has the capability to select either less than or greater than the 7,500 pound payload threshold that establi shes rate classes

. The ability to select operations under Part 135 or Part 121 is subjective ; yet , the election remains within the requirements of all Federal A viation R egulations

. Penair removed all passenger seats on the Metro III, reclassifying their aircraft from a Part 121 bush passenger carrier t o a Part 135 cargo carrier

. A majority of Penair’s Metro III RTM’s that contributed to the Part 135 rate were generated between Anchorage and Dutch Harbor, a 788 statute mile stage length . The RTM’s genera ted on this route accounted for a substantial portion ( 19.56% ) of the Part 135 RTM’s for all of Alaska , to a destination that receives little bypass mail by air (ref. footnote 2, page 2 of Order 2010

- 12

- 28). A substantial amount of mail transported on Pena ir’s Metro III aircraft over this long haul route was flown under Part 135 cargo operations

. Also, parallel to the Part 135 cargo operation, Penair operates the Metro III in Part 121 bush passenger operations

. A dditionally, Penair has elected to operate t heir Saab 340 aircraft simultaneously as a Part 121 mainline carrier as well as a Part 121 bush carrier. The flexibility to select an aircraft classification in various authorized operations further confuses the rate making methodology

.The Mail RTM’s for PenAir’s Part 121 passenger operations shows 31,153 compared to

the Part 135 Mail RTM’ s of 549,537, an indication that a majority of the mail, either bypass or prio rity, is flown on the Part 135 operations parallel to Part 121 bush passenger or Part 121 m ainline operations. A significant amount of Part 121 bush passenger operations is conducted over the Anchorage to Dutch Harbor route as opposed to a lesser number of Part 135 cargo operations conducted in the Metro III through the year ended 06

- 30

- 2010.

The average stage lengths reflected on page one of the s how cause Order 2010

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- 28 depicts an a verage of 340 mile and 72 mile stage lengths , respectively, for Part 121 and Part 135 operators. The Anchorage to Dutch Harbor route, whether it is flown on P art 121 or Part 135 class aircraft does not reflect the real cost of Part 135 operations and negatively impacts the RTM data

. Any Part 135 operations in the Metro III ( Beechcraft 1900, Saab 340 or Dash 8

- 100) operated over the average Part 121 stage leng th distance as well as the basic fact that these aircraft operate out of Anchorage, where both terminal and operational expenses are substantially less than t hose located in the “Bush” hubs, should be deemed ineligible for consideration.

Conclusion

Ryan Air, Inc., requests reconsideration for updated mail rates expressed in Order 2010

- 12

- 28 for several sound reasons. The aircraft certification for the Metro III

, ( Beechcraft 1900, Saab 340 or Dash 8

- 100, whenever considered) allows either Part 121 bush
pa ssenger or mainline operations as well as Part 135 operations, based on the sole discretion of the operator. When operational discretion is allowed, at stage lengths of 340 miles or greater for Part 121 bush or mainline operations , the data does not accur ately reflect the true and real costs for Part 135 operators because high er costs exist in “Bush” hubs, rather than costs reflected in Anchorage or points served all year by water transport. Furthermore, the Anchorage to Dutch Harbor route has significant Part 121 bush passenger

or ( mainline service ) and should be deemed an ineligible route because this operation is an anomaly from the “true” Part 135 bush operations with average stage length s of only 72 miles, almost 5 times less than the average stage le ngth for Part 121 operations. The high level of service provided by a Part 121 bush passenger or mainline carrier over a single route with Part 121 average stage lengths should be considered significant service and must be given special consideration.

We further ask that the Metro III , Beechcraft 1900, Dash 8

- 100 and Saab 340 , when operated under Part 135 all cargo operations, be excluded from the ma il rate mak ing process. There is already a preceden t for this, in that data for Part 135 all cargo operatio ns of other carriers is excluded from the rate making process.

Respectfully submitted,

Wilfred P. Ryan President