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 Transportation Services, Inc.

To

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@ryanalaska.com

January 25, 2011
Summary

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 most 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 

has operated under both Part 121 and Part 135 classes.

Discussion

The United States Code 39 USCS, 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 2010-12-28 (Intra Alaska 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 sole 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 

flexibility 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 establishes 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 Aviation Regulations.

Penair removed all passenger seats on the Metro III, reclassifying their aircraft from a Part 

121 bush passenger carrier to 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 generated 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 Penair’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.

Additionally, Penair has elected to operate their 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 priority, is flown on the Part 135 operations parallel to Part 121 bush passenger 

or Part 121 mainline 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 show cause Order 2010-12-28 

depicts an average 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 Part 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 length distance as well as the 

basic fact that these aircraft operate out of Anchorage, where both terminal and operational 

expenses are substantially less than those 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 

passenger 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 accurately 

reflect the true and real costs for Part 135 operators because higher 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 lengths of only 72 

miles, almost 5 times less than the average stage length 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 mail rate making 

process. There is already a precedent for this, in that data for Part 135 all cargo operations 

of other carriers is excluded from the rate making process. 

Respectfully submitted,

Wilfred P. Ryan

President