### Order 2014

-4

-11 

### UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C. Issued by the Department of Transportation on the 10th 

### day ofApril, 2014 Served: April 10, 2013

INTRA ALASKA BUSH MAIL RATES Under 49 U.S.C. § 41901 et seq Docket OST-2003-14694

SHOW CAUSE ORDER PROPOSING UPDATED MAIL RATES Summary By this Order, the Department directs all interested parties to show

-cause why the proposed Intra

-Alaska bush service mail rates set forth below should not be made final. The rates currently in effect were tentatively set by Order 2013

-6

-5, made final by Order 2013

-7

-25, and updated for changes in quarterly fuel prices most recently by Order 2013

-12

-9. The table below shows the current and proposed rates. Linehaul Rates per Revenue Ton Mile (RTM) and Terminal Ratesper Ton Enplaned 1



### Based on average eligible stage lengths of270 miles for the Part 121 operators, 70 miles for the Part 135 operators, and 36 miles for Seaplane operators, these linehaul and terminal changes would have a net effect on each class as follows: Part 121, <4.99> percent; Part 135, 2.99 percent; and Seaplane, <1.42> percent.

1 Theproposed rates are based on those shown in the appendices to this Order, including fuel and non-fuel linehaul expenses for the YE 9

-30

-13. When the final Order is issued, we will adjust the fuel portion of the rate shown in the appendices to the most recent quarterly fuel expenses available at the time, and will continue our practice of issuing quarterly fuel surcharges as more recent data become available. Current, Order 2013-12-9 Proposed Percentage Change

Fuel Nonfuel Total Fuel Nonfuel Total Fuel Nonfuel Total Part 121 $1.4876 $4.2600 $5.7476 $1.3092 $3.8900 $5.1992 -11.99% -8.69% -9.54% Part 135 $4.5191 $10.4150 $14.9341 $4.4950 $10.8464 $15.3414 -0.53% 4.14% 2.73% Seaplane $6.3505 $26.2478 $32.5983 $6.8840 $24.1305 $31.0145 8.40% -8.07% -4.86% Terminal NA NA $850.03 NA NA $878.26 NA NA 3.32%

### - 2
- Background Order 2013

-6

-5 directed the parties to show cause within twenty (20) days after the service date of the Order, June 26, 2013, why we should not make final the rates tentatively set by that Order.We received an objection from only one party, the Postal Service, arguing that “to properly gauge the true cost of any particular lane [class of traffic], the Department ought to consider all mail movement and all associated data [in that class] in determining mail rates.” Order 2013

-7

-25, July 31, 2013,rejected the Postal Service’s argument and made final the annualrateupdatestentatively set by Order 2013

-6

-5. Most recently, by Order 2013

-12

-9, December 19, 2013, we updated those rates for fuel expenses for the quarter ended June 30, 2013. Regarding the Postal Service’s objection, the Orderindicated that, as a statutory matter, only carriers’ operations as bushpassengercarriers in one of each of the three linehaul classes should be included in the calculation ofeach particularrate class. In brief, the Order recognized that Peninsula Airways, Inc. (PenAir), had indeed operated as a bush passenger carrier during the year ended September 30, 2012, in the Part 135 class, the annual period we relied on.Nevertheless, we did NOT include PenAir in the calculation of the Part 135 ratebecause PenAir had since discontinued all of its Part 135passenger operations. The Order excluded PenAir’s Part 135 databecause its “data were anomalous two years ago and they are anomalous now.” Essentially, including them would most likely distort the rates that would apply prospectively, and the ultimate goal ofour rate calculations is to use historical results to make the most reasonable estimate of prospective mail rates. Decision and Discussion Delays in Setting Mail Rates The Department has stated that it would update bush nonfuel linehaul and terminal mail rates on an annual basis, and fuel expenses on a quarterly basis. Our goal continues to be having new annual updates finalized on or about six months after the end of the reporting period. That amount oftime is needed because ofthe unavoidable lagbetween the carriers generatingthe data and then reporting it; the time required by the Office of Airline Information (OAI) toreview and validatethe data andthen load that data into its data bases; and finally the time requiredby the Of fice of the Secretary toreview that data, prepare a draft Order and for the Assistant Secretary to issuethe decision. Because of the fewerissues involved in updating quarterly fuel expenses andbecause those Orders are issued on a final rather than a show cause basis, our goal is to have quarterly fuel updates in place on or about one quarter after the end of the reporting period. Because ofthe delay that occurred inthe preceding annual update, Order 2013

-6

-5 amended the annual update period fromthe year endedJune 30, 2012, to September 30, 2012, and indicatedthatthe next annual update would also be based on the year ended September 30, 2013. Because we are issuing this Order at this late date and theparties will

### - 3
- be afforded twenty days to submit comments, we will again not meet our goalhaving a six

month lag between the end of the reporting period and the effective date of a new rate. OAI informed us that Ryan Air, Inc. (Ryan)2 

### had filed reliable data for the quarter ended September 30, 2013, on February 7, 2014.3 

### Likewise, Grant Aviation, Inc. (Grant), did not submit fully acceptable data forthe quarter ended September 30, 2013,until late

-January.4 

### Such delays in carriers submitting reliable data confronts the Department with the dilemma of whether or not to exclude their data in the calculation of the rate.5 

### This issue was addressed most recently in the letter from OAI to the carriers datedFebruary 11, 2014, included as Attachment E. In brief, carriers who are late in submitting any of the data required for calculating mail rates

– Schedule F

-2 and T

-100

– would receive decreasing volumes of mail as their delay in submitting reliable data increases. OAI is in the process of implementing this, and we anticipate that, in the future, delay in receiving reliable data, and therefore delay in issuing mail rates, will decrease. Inclusion of Carrier Data Perhaps the biggest issue during the last annual update was whether to include or exclude PenAir’s data. (See Orders 2013

-6

-5 and 2013

-7

-25). Those orders excluded PenAir from the calculation of the Part 135 ratebecause it only conducted all

-cargo operations in that class and a carrier must have at least somebush passenger operations in the rate class at issue for it to be included. For that same reason we will again exclude PenAir from the calculation of the Part 135 class rate. However, we note that we propose to continue to include PenAir’s data in the calculation of the Part 121 and Terminal portions of intra

Alaska mail rates, because the carrier has eligible operations in those classes of service. For the first time we propose in this update to include the data of Ryan Air. Until the current year, Ryan did not conduct any scheduled passenger operations. Ryanbegan providing that service in May, 2013, and has continued to provide that service through the most recent time period we have available, i.e., the month ofFebruary 2014. Adjustment ofData We have adjusted the data of Wright Air Service. When we update mail rates weuse historical circuity, the ratio of T

-100 Segment to T

-100 Market Mail RTMs, to estimate prospective circuity. As shown in Attachment B, Appendix E, Wright’s circuity for the year ended September 30, 2013, was 24.22 percent. Without any adjustment,thatresult reflectsthe highest value of any of the carriers. Upon review, in the months of November and December of 2012 Wright reported circuity of more than 500 percent. By excluding

2 The carrier had operated with a d/b/a of Arctic Transportation Services until January 2011. 3 The carrier’s earlier data filings had been rejected by OAI as unreliable. 4Grant still has some problems with its data, as shown in Attachment B, Appendix C

-2, where the totalblock hours the carrier reports are shown to be less than the revenue block hours it reports. 5 In brief, such delays confront the Department with the dilemma of whether or not to exclude the data of a carrier that should otherwise be included in the calculation of the rate, or to wait perhaps a few more days for reliable data, which could ultimately turn into weeks, to be filed.

### - 4
- the data forthose two months, Wright’s circuity for the remaining ten months decreasesto 8.43 percent, which is close to the level it reported in the prior annual period. We have not adjusted the data of Grant Aviation. As shown on Attachment B, Appendix C

-2, Grant reports having more revenue block hours than totalblock hours. We havetentatively accepted Grant’s data, using the traditional revenue block hours it reported to calculate unit costs. It appears that its totalblock hours areunderstated, but its revenue block hours are accurate. ACCORDINGLY, 1. We direct all interested persons to show cause, no later than twenty (20) days after the date of service of this order, why the Department should not adopt the foregoing tentative findings and conclusions and set mail rates as follows: Part 121 linehaul class rate, $5.1992 per mail revenue ton mile (RTM); Part 135 linehaul class rate, $15.3414 per RTM; Seaplane linehaul class rate, $31.0145 per RTM; and Terminal class rate, $878.26 per mail ton enplaned. These rates would be final (subject to quarterly fuel updates), until the next annual update, which we anticipate wouldbe on or aboutMay 1, 2015; 2. If no objection is filed within the designated time, or if notimely

-filed objection raises material issues of fact, we hereby delegate authority to the Director, Office of Aviation Analysis, to make the above rates final; 3. This docket shall remain open until further order of the Department; and 4. We will servethis order upon all parties on the Service List for these Dockets. By:

SUSAN L. KURLAND Assistant Secretary for Aviation and International Affairs (SEAL) An electronic version of this document is available at http://www.regulations.govAttachment A Linehaul, Part 121 Appendix A Calculation of the Linehaul, Part 121, YE 9-30-13 (1) (2) (3) (4) (5) (6) Avg. Annual Change, Midpoint to Estimated Year Ended YE 6/30/04 Midpoint Unit Cost at Current Rate Change from 9/30/2013 1/ to YE 9/30/12 2/ Change 3/ 10/1/2014 4/ Order 2013-12-9 Current 5/ Unit Cost per Revenue Ton-Mile Fuel $1.3092 0 0 $1.3092 $1.4876 -11.99% Nonfuel $3.7773 1.94% 2.93% $3.89 $4.2600 -8.69% $5.0865 $5.1992 $5.7476 -9.54% 1/ Fuel, Appendix C2; Nonfuel, Appendix C-1. 2/ We assume fuel increases will b ezero. For nonfuel, see "predicted annual increased" in Appendix B, Page 1. 3/ Reflects the fact that from the midpoint of the reporting period to the midpoint of ther prospective rate is 1 and 1/2 years. 1.0194 x 1.0097 = 1.0293, where 1.0293is the average annual unit cost increase projected for a 6-month period. 4/ Fuel reflects YE 9-30-13, Appendix C-2. Nonfuel is column (1) mulitplied by Column (3). The total is the sum of the two. The final order will reflect the most recent quarterly fuel costs available at the time. 5/ Column 4 ÷ Column 5 less 1.Attachment A Linehaul, Part 121 Appendix B Page 1 of 2 Actual Y Natural Log $/RTM $/RTM Predicted Non-Fuel Non-Fuel Annual Linehaul Linehaul 1/ Predicted Y Residuals EXP (Y) Increase 6/30/2004 3.4924 1.2506 1.2643 -0.0137 3.5406 1.94% 6/30/2005 3.4511 1.2387 1.2835 -0.0448 3.6093 6/30/2006 3.4450 1.2369 1.3026 -0.0657 3.6788 6/30/2007 3.6835 1.3039 1.3218 -0.0179 3.7502 6/30/2008 4.1265 1.4174 1.3409 0.0765 3.8225 6/30/2009 4.1315 1.4186 1.3601 0.0585 3.8966 6/30/2010 4.5669 1.5188 1.3792 0.1396 3.9717 9/30/2012 4.0649 1.4024 1.4224 -0.0200 4.1471 9/30/2013 

### 3.7773 1.3290 1.4416 -0.1125 4.2275
ANOVA df SS MS F Significance F Regression 1.0000 0.0294 0.0294 4.2227 0.0790 Residual 7.0000 0.0487 0.0070 Total 8.0000 0.0780 Coefficients Std Error t Stat P-value Lower 95% Upper 95% Intercept -0.7377 1.0145 -0.7272 0.4907 -3.1367 1.6613 X Variable 1 0.0001 0.0000 2.0549 0.0790 0.0000 0.0001 Regression Statistics Multiple R 0.6134 R Square 0.3763 Adj. R Square 0.2872 Std. Error 0.0834 Observations 9 1/ Per Oder 2013-6-5, made final by Order 2013-7-25, and Appendix D of this attachment for the YE 9-30-13.Attachment A Linehaul, Part 121 Appendix B Page 2 of 2

y = 5E-05x
- 0.7375 R2 = 0.3763

1.20 1.25 1.30 1.35 1.40 1.45 1.50

1/14/04 5/28/05 10/10/06 2/22/08 7/6/09 11/18/10 4/1/12 8/14/13Unit Cost per RTM, Natural Log

Years Ended June 30, 2004, through September 30, 2013 

# Nonfuel Linehaul, Unit Cost per RTM, Actual vs. PredictedAttachment A Linehaul, Part 121 Appendix C-1 Page 1 of 1 Year Ended September 30, 2013 System Parameters for Each Carrier Era Aviation PenAir 1 . Capacity Related Expense (CR) $9,627,922 $6,771,335 2 . Direct Expense, Includes Fuel $47,943,132 $51,005,373 3 . Indirect Expense $24,823,971 $23,963,014 4 . CR Markup 15.25% 9.93% 5 . Return and Tax Markup 9.46% 9.46% 6 . T-100 Seg. Mail RTMs 345,005 1,449,762 7 . T-100 Mkt. Mail RTMs 343,217 1,404,935 8 . Circuity Markup 0.52% 3.19% By Aircraft Type B-1900 Saab 340B Aircraft Code Total 405 456 9 . Direct Expense, Includes Fuel $16,060,481 $45,453,050 10 . Less Psgr. Liability Insurance $158,539 $670,002 11 . Linehaul Expense Allocable to Mail $15,901,942 $44,783,048 12 . Cost per Block Hour (R11÷ R18) $1,388.82 $1,749.95 13 . Marked Up Costs (R11*R4*R5*R8) $20,165,037 $55,606,164 14 . Eligible Expense (R13*R32÷R18) $2,971,041 $24,423,168 15 . Eligible Cost per RTM (R14÷R36) $6.7825 $4.7416 16 . Percentage of Eligible Mail RTMs 100.00% 16.90% 83.10% 17 . Cost Wtd. By Mail RTMs (R15*R16) $5.0865 $1.1462 $3.9403 Scheduled + Nonscheduled Traffic 18 . Block Hours, T-100 11,450 25,591 19 . Pax RTMs 2,389,257 9,423,640 20 . Frt RTMs Wtd. @ 0.75 35,017 178,758 21 . Mail RTMs 55,635 469,332 22 . Total RTMs 2,479,908 10,071,730 23 . Aircraft Miles 2,155,886 5,857,075 24 . Available Ton Miles (ATMs) 4,090,629 20,617,133 25 . Departures Performed 14,232 15,393 26 . Wtd. Deps. (GTOW) 239,098 446,397 27 . Ton Load Factor 60.62% 48.85% 28 . Stage Length 151 381 29 . ATMs per Mile 1.90 3.52 30 . RTMs per Mile 1.15 1.72 31 . RTMs per Hour 217 394 Eligible Traffic 32 . Block Hours, T-100 1,687 11,240 33 . Pax RTMs 401,032 4,874,609 34 . Frt RTMs Wtd. @ 0.75 5,874 123,072 35 . Mail RTMs 184,260 31,136 153,124 36 . Total RTMs 438,043 5,150,804 37 . Aircraft Miles 8,012,961 360,270 2,916,022 38 . Available Ton Miles (ATMs) 670,191 9,695,372 39 . Departures Performed 29,625 1,367 4,640 40 . Wtd. Deps. (GTOW) 22,966 134,560 41 . Ton Load Factor 65.36% 53.13% 42 . Stage Length 270 264 628 43 . ATMs per Mile 1.86 3.32 44 . RTMs per Mile 1.22 1.77 45 . RTMs per Hour 260 458Attachment A Linehaul, Part 121 Appendix C-2 Page 1 of 1 Fuel Expense, Year Ended September 30, 2013

Carrier Era Aviation PenAir By Aircraft Type B-1900 Saab 340B Aircraft Code Total 405 456 1 . Total Fuel Expense $5,539,625 $14,032,129 2 . Total Gallons Issued 1,492,230 3,497,274 3 Total Block Hours, Schedule F-2 11,931 26,409 4 . Total Block Hours, T-100 Segment 11,450 25,591 5 . Eligible Block Hours, , T-100 Segment 1,687 11,240 6 . Eligible Mail RTMs, T-100 Segment 184,260 31,136 153,124 7 . Subtotal, Total Eligible RTMs, T-100 Segment 438,043 5,150,804 8 . Price per Gallon $3.71 $4.01 9 . Burn per Revenue Block Hour 130 137 10 . Costs per Hour $483.81 $548.32 11 . Eligible Fuel Expense $816,188 $6,163,148 12 . Cost per Eligible RTM $1.8633 $1.1965 13 . Mail RTMs, Percentage 100.00% 16.90% 83.10% 14 . Cost/RTM, Wtd. By Mail RTMs $1.3092 $0.3149 $0.9943 Ratio of Total to Revenue Block Hours 4.20% 3.20%Attachment A Linehaul, Part 121 Appendix D Determination of Which Carriers are Included in the Part 121 Class Rate, YE 9-30-13 One Percent Rule Eligible Cumulative Carrier 2-Ltr. A/C Type Mail RTMs Percent Percent PenAir KS 456 153,124 83.10% 83.10% Era 7H 405 31,136 16.90% 100.00% 184,260 100.00% Note: We have relied on a special report prepared by PenAir which shows whether a particular segment operated as Mainline, Part 121, or Part 135. The above reflects Part 121 operations only.

### Attachment A Appendix E Circuity Calculation, Intra-AK Mail Revenue Ton Miles (RTMs), YE 9-30-13 Segment Market Carrier Mail RTMs Mail RTMs Circuity 40-Mile 1,081 895 20.78% Air Excursions 12,724 12,681 0.34% Alaska Seaplane 14,986 13,916 7.69% Arctic Transportation 443,806 387,421 14.55% Bering Air 362,155 347,018 4.36% Ellis Air Taxi 1,687 1,687 0.00% Era Aviation 345,005 343,217 0.52% Grant 318,724 297,261 7.22% Hageland 1,664,766 1,597,951 4.18% Iliamna 5,797 5,295 9.48% Island Air 6,012 5,260 14.30% Pacific 7,999 7,700 3.88% Peninsula 1,449,762 1,404,935 3.19% PM Air 7,155 6,693 6.90% SeaPort 16,519 16,456 0.38% Servant 2,020 1,840 9.78% Smokey Bay 857 821 4.38% Spernak 1,306 1,189 9.84% Tanana 2,529 2,483 1.85% Tatonduk 7,021,192 6,714,341 4.57% Venture 26,105 24,094 8.35% Warbelow 70,382 68,154 3.27% Ward Air 21 20 5.00% Wright 1/ 164,581 151,792 8.43% Yute 91,013 85,217 6.80% 12,038,184 11,498,337 4.70% 1/ For Wright, we relied on reported figures, but excluded the months of November and December, 2012, shown as follows: Total, YE 9-30-13 194,581 156,645 24.22% less November 2012 17,999 2,960 508.07% less December 2012 12,001 1,893 533.97% Total 164,581 151,792 8.43%

### Appendix F Determination of Segments Ineligible for Calculating Bush Rates, Scheduled Intra-Alaska Departures Performed with Mainline Equipment T-100 Segment Report, QE 9-30-13, Seven or More Departures Performed 1/ Total Total Orig Dest Deps. Orig Dest Deps. ADK ANC 26 EMK ANC 53 ADQ ANC 679 ENA ANC 526 AKN ANC 193 FAI ANC 1005 AKN DLG 10 FAI SCC 169 AKN ILI 16 GAL ANC 35 ANC ADK 26 GST JNU 52 ANC ADQ 643 HOM ADQ 40 ANC AKN 196 HOM ANC 250 ANC ANC 27 ILI ANC 23 ANC ANI 122 JNU ANC 479 ANC BET 666 JNU GST 52 ANC BRW 106 JNU KTN 93 ANC CDV 110 JNU PSG 92 ANC DLG 199 JNU SIT 362 ANC EMK 55 JNU YAK 93 ANC ENA 523 KSM ANC 116 ANC FAI 1013 KSM ANI 7 ANC GAL 30 KTN ANC 8 ANC HOM 289 KTN JNU 205 ANC ILI 7 KTN SIT 152 ANC JNU 467 KTN WRG 89 ANC KSM 113 MCG ANC 49 ANC MCG 34 OME ANC 295 ANC OME 290 OME OTZ 118 ANC OTZ 348 OME UNK 13 ANC SCC 102 OTZ ANC 299 ANC TOG 31 OTZ OME 146 ANC UNK 178 PSG JNU 90 ANC VDZ 154 PSG WRG 92 ANC YAK 26 SCC ANC 58 ANI ANC 120 SCC BRW 262 ANI KSM 8 SCC FAI 85 ANI MCG 11 SIT JNU 241 BET ANC 603 SIT KTN 208 BET ANI 13 TOG ANC 39 BRW ANC 149 UNK ANC 184 BRW FAI 92 UNK MCG 8 BRW SCC 124 VDZ ANC 151 CDV ANC 108 WRG KTN 91 CDV YAK 92 WRG PSG 88 DLG AKN 23 YAK CDV 91 DLG ANC 113 YAK JNU 116 1/ Includes the mainline operations of PenAirAppendix G

Carriers Reporting Intra-Alaska Operations for YE 9-30-13 Excluded from Calculations of the Bush Rates Reason for Exclusion No Mainline No No Mail Only Pax. Skd. Pax. Al.Central

----- ----- ----- X Alaska

----- X

----- ----- Atlas Air X X

----- ----- Avjet Corp X

----- ----- ----- Condor X X

----- ----- Delta X X

----- ----- Empire X X

----- ----- Fed Ex X

----- ----- ----- Frontier

----- ----- X

----- Harris Air X

----- ----- ----- Homer Air X

----- ----- ----- Katmai X

----- ----- ----- Lynden

----- X

----- ----- Miami Air X X

----- ----- Northern

----- X

----- ----- Polar Air X X

----- ----- Prescott X

----- ----- ----- S. Pacific X X

----- ----- Sun Country X X

----- ----- Swiss Air X

----- ----- ----- United X

----- ----- ----- UPS X X

----- ----- World X X

----- -----Attachment B Linehaul, Part 135 Appendix A Calculation of the Linehaul, Part 135, YE 9-30-13 (1) (2) (3) (4) (5) (6) Avg. Annual Change, Midpoint to Estimated Year Ended YE 6/30/04 Midpoint Unit Cost at Current Rate, Change from 9/30/2013 1/ to YE 9/30/13 2/ Change 3/ 10/1/2014 4/ Order 2013-12-9 Current 5/ Unit Cost per Revenue Ton-Mile Fuel $4.4950 0 0 $4.4950 $4.5191 -0.53% Nonfuel $10.5489 1.87% 2.82% $10.8464 $10.4150 4.14% Total $15.0439 $15.3414 $14.9341 2.73% 1/ Fuel, Appendix C2, Nonfuel, Appendix C-1 of this Order. 2/ We assume fuel increases will be zero. For nonfuel, see "predicted annual increase" in Appendix B, Page 1. 3/ Reflects the fact that from the midpoint of the reporting period to the midpoint of the prospective rate is 1 and 1/2 years. 1.0187 x 1.00935 = 2.822, where 0.00935is the average annual unit cost increase projected for a 6-month period. 4/ Fuel reflects YE 9-30-13, Appendix C-2. Nonfuel is Column (1) mulitplied by Column (3). The total is the sum of the two. The final order will reflect the most recent quarterly fuel costs available at the time. 5/ Column 4 ÷ Column 5 less 1.Attachment B Linehaul, Part 135 Appendix B Page 1 of 2
Actual Y 1/ Natural Log $/RTM $/RTM Predicted Time Nonfuel Nonfuel Annual Period Linehaul Linehaul Predicted Y Residuals EXP(Y) Increase 6/30/2004 $9.5218 2.253584 2.143353 0.110231 8.527982177 1.87% 6/30/2005 $8.5699 2.148256 2.161911 -0.01365 8.68772027 6/30/2006 $8.4039 2.128696 2.180468 -0.05177 8.850450426 6/30/2007 $8.6708 2.159961 2.199026 -0.03907 9.016228689 6/30/2008 $8.6853 2.161632 2.217635 -0.056 9.185579167 6/30/2009 $9.6160 2.263428 2.236193 0.027235 9.357634745 6/30/2010 $9.1547 2.214267 2.25475 -0.04048 9.532913105 9/30/2012 $10.1679 2.319236 2.296594 0.022642 9.940271625 9/30/2013 $10.5489 2.356022 2.315152 0.04087 10.12646339
ANOVA df SS MS F Significance F Regression 1 0.027577935 0.027578 7.962676 0.025705997 Residual 7 0.024243803 0.003463 Total 8 0.051821738 Coefficients Std. Error t Stat P-value Lower 95% Upper 95% Intercept 0.202767 0.716125333 0.283145 0.785256 -1.490599893 1.896134767 X Variable 1 5.08E-05 1.80179E-05 2.821821 0.025706 8.23773E-06 9.34488E-05Attachment B Linehaul, Part 135 Appendix B Page 2 of 2

y = 5E-05x + 0.2028 R2 = 0.5322

2.10 2.15 2.20 2.25 2.30 2.35 2.40

Jan-04 May-05 Oct-06 Feb-08 Jul-09 Nov-10 Apr-12 Aug-13 Dec-14Unit Cost per RTM, Natural Log

Years Ended June 30, 2004, through September 30, 2013 

# Nonfuel Linehaul, Unit Cost per RTM, Actual vs. PredictedAttachment B Linehaul, Part 135 Appendix C-1 Page 1 of 4 Year Ended September 30, 2013 System Parameters for Each Carrier Total Bering Bering Bering Bering 1 . Capacity Related Expense (CR) $1,578,337 $1,578,337 $1,578,337 $1,578,337 2 . Direct Expense, Includes Fuel $19,282,106 $19,282,106 $19,282,106 $19,282,106 3 . Indirect Expense $5,776,372 $5,776,372 $5,776,372 $5,776,372 4 . CR Markup 6.72% 6.72% 6.72% 6.72% 5 . Return and Tax Markup 9.46% 9.46% 9.46% 9.46% 6 . T-100 Seg. Mail RTMs 362,155 362,155 362,155 362,155 7 . T-100 Mkt. Mail RTMs 347,018 347,018 347,018 347,018 8 . Circuity Markup (R6÷R7)-1 4.36% 4.36% 4.36% 4.36% By Aircraft Type Navajo B-1900 Casa Caravan Aircraft Code 194 405 412 416 9 . Direct Expense, Includes Fuel $3,222,800 $3,321,061 $1,188,819 $7,862,210 10 . Less Psgr. Liability Insurance $37,695 $45,674 $14,950 $95,873 11 . Linehaul Expense Allocable to Mail $3,185,105 $3,275,387 $1,173,869 $7,766,337 12 . Cost per Block Hour (R11÷ R18) $725.37 $2,306.61 $2,177.86 $996.45 13 . Marked Up Costs (R11*R4*R5*R8) $3,882,926 $3,992,988 $1,431,051 $9,467,854 14 . Eligible Expense (R13*R32÷R18) $2,714,776 $2,766,972 $934,564 $8,663,682 15 . Eligible Cost per RTM (R14÷R36) $15.6785 $15.8641 $19.7061 $15.6873 16 . Percentage of Eligible Mail RTMs 100.00% 1.520% 2.822% 1.486% 7.837% 17 . Cost Wtd. By Mail RTMs (R15*R16) $15.0439 $0.2383 $0.4477 $0.2928 $1.2294 Scheduled + Nonscheduled Traffic 18 . Block Hours, T-100 4,391 1,420 539 7,794 19 . Pax RTMs 188,269 165,078 219 345,727 20 . Frt RTMs Wtd. @ 0.75 11,783 8,505 27,351 39,601 21 . Mail RTMs 39,717 73,194 39,532 203,388 22 . Total RTMs 239,769 246,777 67,102 588,716 23 . Aircraft Miles 669,075 325,964 83,218 1,094,200 24 . Available Ton Miles (ATMs) 585,441 814,910 218,447 1,627,256 25 . Departures Performed 8,505 1,995 770 16,023 26 . Wtd. Deps. (GTOW) 62,937 33,516 13,090 142,605 27 . Ton Load Factor 40.96% 30.28% 30.72% 36.18% 28 . Stage Length 79 163 108 68 29 . ATMs per Mile 0.88 2.50 2.62 1.49 30 . RTMs per Mile 0.36 0.76 0.81 0.54 31 . RTMs per Hour 55 174 124 76 Eligible Traffic 32 . Block Hours, T-100 3,070 984 352 7,132 33 . Pax RTMs 124,440 93,735 0 313,574 34 . Frt RTMs Wtd. @ 0.75 9,300 7,490 8,899 35,453 35 . Mail RTMs 2,593,371 39,413 73,192 38,526 203,246 36 . Total RTMs 173,153 174,417 47,425 552,273 37 . Aircraft Miles 15,284,566 460,909 218,506 54,223 999,166 38 . Available Ton Miles (ATMs) 403,295 546,265 142,335 1,484,635 39 . Departures Performed 221,967 6,509 1,587 552 15,031 40 . Wtd. Deps. (GTOW) 48,167 26,662 9,384 133,776 41 . Ton Load Factor 42.93% 31.93% 33.32% 37.20% 42 . Stage Length 69 71 138 98 66 43 . ATMs per Mile 0.87 2.50 2.62 1.49 44 . RTMs per Mile 0.38 0.80 0.87 0.55 45 . RTMs per Hour 56 177 135 77System Parameters for Each Carrier 1 . Capacity Related Expense (CR) 2 . Direct Expense, Includes Fuel 3 . Indirect Expense 4 . CR Markup 5 . Return and Tax Markup 6 . T-100 Seg. Mail RTMs 7 . T-100 Mkt. Mail RTMs 8 . Circuity Markup (R6÷R7)-1 By Aircraft Type Aircraft Code 9 . Direct Expense, Includes Fuel 10 . Less Psgr. Liability Insurance 11 . Linehaul Expense Allocable to Mail 12 . Cost per Block Hour (R11÷ R18) 13 . Marked Up Costs (R11*R4*R5*R8) 14 . Eligible Expense (R13*R32÷R18) 15 . Eligible Cost per RTM (R14÷R36) 16 . Percentage of Eligible Mail RTMs 17 . Cost Wtd. By Mail RTMs (R15*R16) Scheduled + Nonscheduled Traffic 18 . Block Hours, T-100 19 . Pax RTMs 20 . Frt RTMs Wtd. @ 0.75 21 . Mail RTMs 22 . Total RTMs 23 . Aircraft Miles 24 . Available Ton Miles (ATMs) 25 . Departures Performed 26 . Wtd. Deps. (GTOW) 27 . Ton Load Factor 28 . Stage Length 29 . ATMs per Mile 30 . RTMs per Mile 31 . RTMs per Hour Eligible Traffic 32 . Block Hours, T-100 33 . Pax RTMs 34 . Frt RTMs Wtd. @ 0.75 35 . Mail RTMs 36 . Total RTMs 37 . Aircraft Miles 38 . Available Ton Miles (ATMs) 39 . Departures Performed 40 . Wtd. Deps. (GTOW) 41 . Ton Load Factor 42 . Stage Length 43 . ATMs per Mile 44 . RTMs per Mile 45 . RTMs per Hour Attachment B Linehaul, Part 135 Appendix C-1 Page 2 of 4 Year Ended September 30, 2013 Grant Grant Hageland Hageland Hageland $3,135,609 $3,135,609 $7,389,003 $7,389,003 $7,389,003 $17,807,304 $17,807,304 $56,370,678 $56,370,678 $56,370,678 $12,485,995 $12,485,995 $21,479,705 $21,479,705 $21,479,705 11.55% 11.55% 10.49% 10.49% 10.49% 9.46% 9.46% 9.46% 9.46% 9.46% 318,724 318,724 1,664,766 1,664,766 1,664,766 297,261 297,261 1,597,951 1,597,951 1,597,951

7.22% 7.22% 4.18% 4.18% 4.18% C-207 Caravan C-207 Navajo B-1900 35 416 35 194 405 $2,049,517 $9,903,877 $7,520,599 $5,361,277 $15,475,223 $40,004 $244,109 $184,687 $102,080 $72,779 $2,009,513 $9,659,768 $7,335,912 $5,259,197 $15,402,444 $275.77 $609.41 $365.03 $737.00 $1,722.29 $2,630,823 $12,646,418 $9,243,084 $6,626,470 $19,406,732 $2,505,546 $8,697,953 $7,780,067 $5,675,586 $10,895,807

$15.0459 $13.8422 $19.1619 $17.3140 $13.5592

1.814% 9.404% 4.019% 3.140% 13.941% $0.2729 $1.3017 $0.7701 $0.5437 $1.8903

7,287 15,851 20,097 7,136 8,943 122,831 673,774 343,908 278,864 591,534

4,123 23,605 11,670 7,338 144,274 47,193 244,452 104,737 82,814 855,976 174,147 941,831 460,315 369,016 1,591,784 712,272 1,868,390 1,810,282 969,107 1,819,435 427,364 2,615,746 1,221,951 1,066,190 4,396,297

17,405 27,076 41,351 11,615 10,293 64,398 240,976 152,999 85,951 172,922 40.75% 36.01% 37.67% 34.61% 36.21% 41 69 44 83 177 0.60 1.40 0.68 1.10 2.42 0.24 0.50 0.25 0.38 0.87

24 59 23 52 178 6,940 10,902 16,916 6,112 5,021 115,622 364,612 291,169 239,642 368,041

3,861 19,860 10,617 6,723 73,995 47,044 243,891 104,232 81,439 361,537 166,527 628,363 406,018 327,804 803,573 673,931 1,314,614 1,503,365 827,406 977,227 404,360 1,840,460 1,014,782 910,169 2,257,119

16,816 17,814 35,649 10,043 7,099 62,219 158,545 131,901 74,318 119,263 41.18% 34.14% 40.01% 36.02% 35.60% 40 74 42 82 138 0.60 1.40 0.68 1.10 2.31 0.25 0.48 0.27 0.40 0.82

24 58 24 54 160System Parameters for Each Carrier 1 . Capacity Related Expense (CR) 2 . Direct Expense, Includes Fuel 3 . Indirect Expense 4 . CR Markup 5 . Return and Tax Markup 6 . T-100 Seg. Mail RTMs 7 . T-100 Mkt. Mail RTMs 8 . Circuity Markup (R6÷R7)-1 By Aircraft Type Aircraft Code 9 . Direct Expense, Includes Fuel 10 . Less Psgr. Liability Insurance 11 . Linehaul Expense Allocable to Mail 12 . Cost per Block Hour (R11÷ R18) 13 . Marked Up Costs (R11*R4*R5*R8) 14 . Eligible Expense (R13*R32÷R18) 15 . Eligible Cost per RTM (R14÷R36) 16 . Percentage of Eligible Mail RTMs 17 . Cost Wtd. By Mail RTMs (R15*R16) Scheduled + Nonscheduled Traffic 18 . Block Hours, T-100 19 . Pax RTMs 20 . Frt RTMs Wtd. @ 0.75 21 . Mail RTMs 22 . Total RTMs 23 . Aircraft Miles 24 . Available Ton Miles (ATMs) 25 . Departures Performed 26 . Wtd. Deps. (GTOW) 27 . Ton Load Factor 28 . Stage Length 29 . ATMs per Mile 30 . RTMs per Mile 31 . RTMs per Hour Eligible Traffic 32 . Block Hours, T-100 33 . Pax RTMs 34 . Frt RTMs Wtd. @ 0.75 35 . Mail RTMs 36 . Total RTMs 37 . Aircraft Miles 38 . Available Ton Miles (ATMs) 39 . Departures Performed 40 . Wtd. Deps. (GTOW) 41 . Ton Load Factor 42 . Stage Length 43 . ATMs per Mile 44 . RTMs per Mile 45 . RTMs per Hour Attachment B Linehaul, Part 135 Appendix C-1 Page 3 of 4 Year Ended September 30, 2013 Hageland Hageland Ryan Air Ryan Air Warbelow $7,389,003 $7,389,003 $1,699,423 $1,699,423 $276,182 $56,370,678 $56,370,678 $6,799,190 $6,799,190 $6,370,118 $21,479,705 $21,479,705 $4,268,315 $4,268,315 $1,050,929 10.49% 10.49% 18.14% 18.14% 3.87% 9.46% 9.46% 9.46% 9.46% 9.46% 1,664,766 1,664,766 443,806 443,806 70,382 1,597,951 1,597,951 387,421 387,421 68,154 4.18% 4.18% 14.55% 14.55% 3.27% Caravan C-406 C-207 Casa Navajo 416 417 35 412 194 $24,233,102 $3,756,952 $1,525,339 $6,746,990 $6,369,708 $266,182 $47,654 $6,744 $0 $72,039 $23,966,920 $3,709,298 $1,518,595 $6,746,990 $6,297,669 $921.95 $1,394.47 $369.04 $1,508.04 $566.49 $30,197,779 $4,673,632 $2,249,518 $9,994,419 $7,394,343 $27,262,336 $4,294,119 $2,234,211 $9,219,260 $4,703,858 $14.8902 $17.8204 $23.0348 $15.6344 $11.5439 21.304% 2.355% 3.017% 13.755% 2.712% $3.1722 $0.4197 $0.6950 $2.1505 $0.3131

25,996 2,660 4,115 4,474 11,117 1,306,209 189,319 4,347 0 594,137 84,610 4,690 15,123 266,124 47,058 560,005 61,165 78,248 356,728 70,382 1,950,824 255,174 97,718 622,852 711,577 3,297,757 455,647 413,409 600,956 1,598,730 5,606,193 683,471 263,559 1,682,690 1,462,421 44,962 4,537 7,322 6,883 11,468 400,162 44,916 27,091 117,011 84,863 34.80% 37.34% 37.08% 37.02% 48.66% 73 100 56 87 139 1.70 1.50 0.64 2.80 0.91 0.59 0.56 0.24 1.04 0.45

75 96 24 139 64 23,469 2,444 4,087 4,127 7,072 1,202,616 175,796 4,070 0 291,492 75,774 4,108 14,675 232,951 45,640 552,499 61,062 78,248 356,727 70,344 1,830,889 240,966 96,993 589,678 407,476 2,962,096 416,324 410,751 553,398 1,019,889 5,035,569 624,486 261,865 1,549,528 874,325 40,962 4,217 7,295 6,473 8,221 364,562 41,748 26,992 110,041 60,835 36.36% 38.59% 37.04% 38.06% 46.60% 72 99 56 85 124 1.70 1.50 0.64 2.80 0.86 0.62 0.58 0.24 1.07 0.40

78 99 24 143 58System Parameters for Each Carrier 1 . Capacity Related Expense (CR) 2 . Direct Expense, Includes Fuel 3 . Indirect Expense 4 . CR Markup 5 . Return and Tax Markup 6 . T-100 Seg. Mail RTMs 7 . T-100 Mkt. Mail RTMs 8 . Circuity Markup (R6÷R7)-1 By Aircraft Type Aircraft Code 9 . Direct Expense, Includes Fuel 10 . Less Psgr. Liability Insurance 11 . Linehaul Expense Allocable to Mail 12 . Cost per Block Hour (R11÷ R18) 13 . Marked Up Costs (R11*R4*R5*R8) 14 . Eligible Expense (R13*R32÷R18) 15 . Eligible Cost per RTM (R14÷R36) 16 . Percentage of Eligible Mail RTMs 17 . Cost Wtd. By Mail RTMs (R15*R16) Scheduled + Nonscheduled Traffic 18 . Block Hours, T-100 19 . Pax RTMs 20 . Frt RTMs Wtd. @ 0.75 21 . Mail RTMs 22 . Total RTMs 23 . Aircraft Miles 24 . Available Ton Miles (ATMs) 25 . Departures Performed 26 . Wtd. Deps. (GTOW) 27 . Ton Load Factor 28 . Stage Length 29 . ATMs per Mile 30 . RTMs per Mile 31 . RTMs per Hour Eligible Traffic 32 . Block Hours, T-100 33 . Pax RTMs 34 . Frt RTMs Wtd. @ 0.75 35 . Mail RTMs 36 . Total RTMs 37 . Aircraft Miles 38 . Available Ton Miles (ATMs) 39 . Departures Performed 40 . Wtd. Deps. (GTOW) 41 . Ton Load Factor 42 . Stage Length 43 . ATMs per Mile 44 . RTMs per Mile 45 . RTMs per Hour Attachment B Linehaul, Part 135 Appendix C-1 Page 4 of 4 Year Ended September 30, 2013 Wright Yute $1,089,223 $410,823 $9,996,690 $4,923,656 $3,129,853 $1,994,818 9.05% 6.31% 9.46% 9.46% 164,581 1/ 91,013 151,792 1/ 85,217

8.43% 1/ 6.80% Caravan C-207 416 35 $7,978,850 $4,923,656

$120,328 $128,689 $7,858,522 $4,794,967 $602.65 $310.51 $10,171,182 $5,959,179

$9,018,344 $5,033,002 $8.5330 $19.3287 7.363% 3.509% $0.6283 $0.6782

13,040 15,442 772,027 185,868 188,930 12,854 190,991 91,013 1,151,948 289,735 1,941,406 1,377,357 2,301,932 800,667 12,754 38,374 113,511 141,984 50.04% 36.19% 152 36 1.19 0.58 0.59 0.21

88 19 11,562 13,042 713,717 159,572 152,200 9,805 190,958 91,013 1,056,875 260,390 1,709,803 1,182,958 2,028,371 695,733 11,595 32,104 103,196 118,785 52.10% 37.43% 147 37 1.19 0.59 0.62 0.22

91 20 1/ YE 9-30-13 less results for November and December of 2012.Attachment B Linehaul, Part 135 Appendix C-2 Page 1 of 3 Year Ended September 30, 2013

Carrier Bering Bering Bering Bering By Aircraft Type Navajo B-1900 Casa Caravan Aircraft Code Total 194 405 412 416 1 . Total Fuel Expense $1,377,883 $1,430,316 $469,461 $2,903,366 2 . Total Gallons Issued 175,051 214,132 70,112 434,092 3 Total Block Hours, Schedule F-2 4,503 1,472 581 7,981 4 . Total Block Hours, T-100 Segment 4,391 1,420 539 7,794 5 . Eligible Block Hours, , T-100 Segment 3,070 984 352 7,132 6 . Eligible Mail RTMs, T-100 Segment 2,593,371 39,413 73,192 38,526 203,246 7 . Total Eligible RTMs, T-100 Segment 173,153 174,417 47,425 552,273
8 . Price per Gallon $7.87 $6.68 $6.70 $6.69 9 . Burn per Revenue Block Hour 40 151 130 56 10 . Costs per Hour $313.80 $1,007.26 $870.99 $372.51 11 . Eligible Fuel Expense $963,357 $991,149 $306,587 $2,656,762 12 . Cost per Eligible RTM $5.5636 $5.6826 $6.4647 $4.8106 13 . Mail RTMs, Percentage 100.00% 1.520% 2.822% 1.486% 7.837% 14 . Cost/RTM, Wtd. By Mail RTMs $4.4950 $0.0846 $0.1604 $0.0961 $0.3770 Ratio of Total to Revenue Block Hours 2.55% 3.66% 7.79% 2.40%Carrier By Aircraft Type Aircraft Code 1 . Total Fuel Expense 2 . Total Gallons Issued 3 Total Block Hours, Schedule F-2 4 . Total Block Hours, T-100 Segment 5 . Eligible Block Hours, , T-100 Segmen 6 . Eligible Mail RTMs, T-100 Segment 7 . Total Eligible RTMs, T-100 Segment
8 . Price per Gallon 9 . Burn per Revenue Block Hour 10 . Costs per Hour 11 . Eligible Fuel Expense 12 . Cost per Eligible RTM 13 . Mail RTMs, Percentage 14 . Cost/RTM, Wtd. By Mail RTMs Ratio of Total to Revenue Block Hour Attachment B Linehaul, Part 135 Appendix C-2 Page 2 of 3 Year Ended September 30, 2013

Grant Grant Hageland Hageland Hageland Hageland C-207 Caravan C-207 Navajo B-1900 Caravan 35 416 35 194 405 416 $753,324 $4,211,862 $2,257,762 $1,852,208 $6,675,629 $8,941,033

118,063 713,073 322,251 262,809 1,217,623 1,416,418

6,184 14,058 21,010 7,497 9,637 26,990 7,287 15,851 20,097 7,136 8,943 25,996 6,940 10,902 16,916 6,112 5,021 23,469 47,044 243,891 104,232 81,439 361,537 552,499 166,527 628,363 406,018 327,804 803,573 1,830,889

$6.38 $5.91 $7.01 $7.05 $5.48 $6.31 16 45 16 37 136 54 $103.38 $265.72 $112.34 $259.56 $746.46 $343.94 $717,451 $2,896,834 $1,900,398 $1,586,420 $3,747,997 $8,071,900

$4.3083 $4.6101 $4.6806 $4.8395 $4.6642 $4.4087 1.814% 9.404% 4.019% 3.140% 13.941% 21.304% $0.0782 $0.4335 $0.1881 $0.1520 $0.6502 $0.9392 -15.14% -11.31% 4.54% 5.06% 7.76% 3.82%Carrier By Aircraft Type Aircraft Code 1 . Total Fuel Expense 2 . Total Gallons Issued 3 Total Block Hours, Schedule F-2 4 . Total Block Hours, T-100 Segment 5 . Eligible Block Hours, , T-100 Segmen 6 . Eligible Mail RTMs, T-100 Segment 7 . Total Eligible RTMs, T-100 Segment
8 . Price per Gallon 9 . Burn per Revenue Block Hour 10 . Costs per Hour 11 . Eligible Fuel Expense 12 . Cost per Eligible RTM 13 . Mail RTMs, Percentage 14 . Cost/RTM, Wtd. By Mail RTMs Ratio of Total to Revenue Block Hour Attachment B Linehaul, Part 135 Appendix C-2 Page 3 of 3 Year Ended September 30, 2013
Hageland Ryan Air Ryan Air Warbelow Wright Yute C-406 C-207 Casa Navajo Caravan C-207

417 35 412 194 416 35 $1,575,279 $456,233 $2,954,836 $2,266,658 $2,259,007 $1,599,420 246,925 71,925 462,110 459,378 658,078 210,388 2,860 4,429 4,625 11,604 13,162 15,694 2,660 4,115 4,474 11,117 13,040 15,442 2,444 4,087 4,127 7,072 11,562 13,042 61,062 78,248 356,727 70,344 190,958 91,013 240,966 96,993 589,678 407,476 1,056,875 260,390 $6.38 $6.34 $6.39 $4.93 $3.43 $7.60 93 17 103 41 50 14 $592.21 $110.87 $660.45 $203.89 $173.24 $103.58 $1,447,362 $453,129 $2,725,661 $1,441,918 $2,002,963 $1,350,838 $6.0065 $4.6718 $4.6223 $3.5387 $1.8952 $5.1877 2.355% 3.017% 13.755% 2.712% 7.363% 3.509% $0.1415 $0.1409 $0.6358 $0.0960 $0.1395 $0.1820

7.52% 7.63% 3.38% 4.38% 0.94% 1.63%Attachment B Linehaul, Part 135 Appendix D Determination of Which Carriers Are Included in the Class Rates Per the One-Percent Rule, YE 9-30-13 Aircraft Eligible Cumulative Name Type Mail RTMs Percent Percent Hageland 416 552,499 20.33% 20.33% Hageland 405 361,537 13.30% 33.63% Ryan Air 412 356,727 13.13% 46.76% Grant 416 243,891 8.98% 55.74% Bering 416 203,246 7.48% 63.22% Wright 416 190,958 7.03% 70.25% Hageland 35 104,232 3.84% 74.09% Yute 35 91,013 3.35% 77.44% Hageland 194 81,439 3.00% 80.44% Ryan Air 35 78,248 2.88% 83.32% Bering 405 73,192 2.69% 86.01% Warbelow 194 70,344 2.59% 88.60% Hageland 417 61,062 2.25% 90.85% Grant 35 47,044 1.73% 92.58% Bering 194 39,413 1.45% 94.03% Bering 412 38,526 1.42% 95.45% Grant 194 22,259 0.82% 96.27% Tatonduk 416 12,633 0.46% 96.73% SeaPort 416 10,823 0.40% 97.13% Tatonduk 79 9,063 0.33% 97.46% Ryan Air 486 8,546 0.31% 97.77% Bering 406 6,104 0.22% 97.99% Air Excursion 79 6,051 0.22% 98.21% Tatonduk 479 6,036 0.22% 98.43% Al.Seaplane 415 5,065 0.19% 98.62% Iliamna 35 4,971 0.18% 98.80% Air Excursion 194 4,817 0.18% 98.98% Grant 406 4,721 0.17% 99.15% Island Air 131 3,015 0.11% 99.26% Wright 194 2,927 0.11% 99.37% Al.Seaplane 79 2,754 0.10% 99.47% SeaPort 35 2,166 0.08% 99.55% Island Air 79 2,095 0.08% 99.63% Servant 35 1,549 0.06% 99.69% Tanana 35 1,480 0.05% 99.74% Smokey Bay 35 857 0.03% 99.77% 40-Mile 35 847 0.03% 99.80% Al.Seaplane 194 765 0.03% 99.83% Tanana 79 732 0.03% 99.86% Air Excursion 415 519 0.02% 99.88% Iliamna 479 491 0.02% 99.90% Wright 35 460 0.02% 99.92% Spernak 35 457 0.02% 99.94% Air Excursion 35 387 0.01% 99.95% Al.Seaplane 35 289 0.01% 99.96% Al.Seaplane 30 289 0.01% 99.97% Tanana 33 166 0.01% 99.98% Bering 35 145 0.01% 99.99% Tanana 194 128 0.00% 99.99% Servant 416 120 0.00% 99.99% Pacific 33 114 0.00% 99.99% Hageland 30 68 0.00% 99.99% Wright 10 64 0.00% 99.99% Iliamna 10 22 0.00% 99.99% Tanana 39 13 0.00% 99.99% Tanana 30 10 0.00% 99.99% 40-Mile 31 2 0.00% 99.99% 2,717,391 100.00%

### Attachment B Appendix E Circuity Calculation, Intra-AK Mail Revenue Ton Miles (RTMs), YE 9-30-13 Segment Market Carrier Mail RTMs Mail RTMs Circuity 40-Mile 1,081 895 20.78% Air Excursions 12,724 12,681 0.34% Alaska Seaplane 14,986 13,916 7.69% Arctic Transportation 443,806 387,421 14.55% Bering Air 362,155 347,018 4.36% Ellis Air Taxi 1,687 1,687 0.00% Era Aviation 345,005 343,217 0.52% Grant 318,724 297,261 7.22% Hageland 1,664,766 1,597,951 4.18% Iliamna 5,797 5,295 9.48% Island Air 6,012 5,260 14.30% Pacific 7,999 7,700 3.88% Peninsula 1,449,762 1,404,935 3.19% PM Air 7,155 6,693 6.90% SeaPort 16,519 16,456 0.38% Servant 2,020 1,840 9.78% Smokey Bay 857 821 4.38% Spernak 1,306 1,189 9.84% Tanana 2,529 2,483 1.85% Tatonduk 7,021,192 6,714,341 4.57% Venture 26,105 24,094 8.35% Warbelow 70,382 68,154 3.27% Ward Air 21 20 5.00% Wright 1/ 164,581 151,792 8.43% Yute 91,013 85,217 6.80% 12,038,184 11,498,337 4.70% 1/ For Wright, we relied on reported figures, but excluded the months of November and December, 2012, shown as follows: Total, YE 9-30-13 194,581 156,645 24.22% less November 2012 17,999 2,960 508.07% less December 2012 12,001 1,893 533.97% Total 164,581 151,792 8.43%

### Appendix F Determination of Segments Ineligible for Calculating Bush Rates, Scheduled Intra-Alaska Departures Performed with Mainline Equipment T-100 Segment Report, QE 9-30-13, Seven or More Departures Performed 1/ Total Total Orig Dest Deps. Orig Dest Deps. ADK ANC 26 EMK ANC 53 ADQ ANC 679 ENA ANC 526 AKN ANC 193 FAI ANC 1005 AKN DLG 10 FAI SCC 169 AKN ILI 16 GAL ANC 35 ANC ADK 26 GST JNU 52 ANC ADQ 643 HOM ADQ 40 ANC AKN 196 HOM ANC 250 ANC ANC 27 ILI ANC 23 ANC ANI 122 JNU ANC 479 ANC BET 666 JNU GST 52 ANC BRW 106 JNU KTN 93 ANC CDV 110 JNU PSG 92 ANC DLG 199 JNU SIT 362 ANC EMK 55 JNU YAK 93 ANC ENA 523 KSM ANC 116 ANC FAI 1013 KSM ANI 7 ANC GAL 30 KTN ANC 8 ANC HOM 289 KTN JNU 205 ANC ILI 7 KTN SIT 152 ANC JNU 467 KTN WRG 89 ANC KSM 113 MCG ANC 49 ANC MCG 34 OME ANC 295 ANC OME 290 OME OTZ 118 ANC OTZ 348 OME UNK 13 ANC SCC 102 OTZ ANC 299 ANC TOG 31 OTZ OME 146 ANC UNK 178 PSG JNU 90 ANC VDZ 154 PSG WRG 92 ANC YAK 26 SCC ANC 58

ANI ANC 120 SCC BRW 262 ANI KSM 8 SCC FAI 85 ANI MCG 11 SIT JNU 241 BET ANC 603 SIT KTN 208 BET ANI 13 TOG ANC 39 BRW ANC 149 UNK ANC 184 BRW FAI 92 UNK MCG 8 BRW SCC 124 VDZ ANC 151 CDV ANC 108 WRG KTN 91 CDV YAK 92 WRG PSG 88 DLG AKN 23 YAK CDV 91 DLG ANC 113 YAK JNU 116 1/ Includes the mainline operations of PenAirAppendix G

Carriers Reporting Intra-Alaska Operations for YE 9-30-13 Excluded from Calculations of the Bush Rates Reason for Exclusion No Mainline No No Mail Only Pax. Skd. Pax. Al.Central

----- ----- ----- X Alaska

----- X

----- ----- Atlas Air X X

----- ----- Avjet Corp X

----- ----- ----- Condor X X

----- ----- Delta X X

----- ----- Empire X X

----- ----- Fed Ex X

----- ----- ----- Frontier

----- ----- X

----- Harris Air X

----- ----- ----- Homer Air X

----- ----- ----- Katmai X

----- ----- ----- Lynden

----- X

----- ----- Miami Air X X

----- ----- Northern

----- X

----- ----- Polar Air X X

----- ----- Prescott X

----- ----- ----- S. Pacific X X

----- ----- Sun Country X X

----- ----- Swiss Air X

----- ----- ----- United X

----- ----- ----- UPS X X

----- ----- World X X

----- -----Attachment C Linehaul, Seaplane Appendix A Calculation of the Linehaul, Seaplane, YE 9-30-13 (1) (2) (3) (4) (5) (6) Avg. Annual Change, Midpoint to Estimated Year Ended YE 6/30/04 Midpoint Unit Cost at Current Rate Change from 9/30/2013 1/ to YE 9/30/13 2/ Change 3/ 10/1/2014 4/ Order 2013-12-9 Current 5/ Unit Cost per Revenue Ton-Mile Fuel $6.8840 0 0 $6.8840 $6.3505 8.40% Nonfuel $23.1757 2.72% 4.12% $24.1305 $26.2478 -8.07% $30.0597 $31.0145 $32.5983 -4.86% 1/ Fuel, Appendix C2, Nonfuel, Appendix C-1 of this Order. 2/ We assume fuel increases will be zero. For nonfuel, see "predicted annual increase" in Appendix B, Page 1. 3/ Reflects the fact that from the midpoint of the reporting period to the midpoint of the prospective rate is 1 and 1/2 years. 1.0272 x 1.0136 = 4.12, where 0.0136 is the average annual unit cost increase projected for a 6-month period. 4/ Fuel reflects YE 9-30-13, Appendix C-2. Nonfuel is column (1) mulitplied by Column (3). The total is the sum of the two. The final order will reflect the most recent quarterly fuel costs available at the time. 5/ Column 4 ÷ Column 5 less 1.Attachment C Linehaul, Seaplane Appendix B Page 1 of 2
Actual Y Natural Log $/RTM $/RTM Predicted Time Nonfuel Nonfuel Annual Period Linehaul 1/ Linehaul Predicted Y Residuals EXP (Y) Increase 6/30/2004 $18.8646 2.937287 3.014346677 -0.077059527 20.37577463 2.72% 6/30/2005 $18.9961 2.944234 3.041205819 -0.096972124 20.93046638 6/30/2006 $21.7432 3.079301 3.068064961 0.011236104 21.50025855 6/30/2007 $22.7223 3.123347 3.094924102 0.028422719 22.08556223 6/30/2008 $25.7084 3.246818 3.121856831 0.124960956 22.6884692 6/30/2009 $26.1034 3.262066 3.148715972 0.113349602 23.30611966 6/30/2010 $25.0246 3.219859 3.175575114 0.044284227 23.94058448 9/30/2012 $24.7248 3.207807 3.23613696 -0.028330171 25.43527423 9/30/2013 $23.1757 3.143104 3.262996101 -0.119891785 26.12770123 ANOVA df SS MS F Significance F Regression 1 0.057769 0.057769 6.535255904 0.037748561 Residual 7 0.061877 0.00884 Total 8 0.119646 Coefficients Std. Error t Stat P-value Lower 95% Upper 95% Intercept 0.2056899 1.144072 0.179788 0.862413052 -2.499609387 2.910989205 X Variable 1 7.359E-05 2.88E-05 2.556415 0.037748561 5.52071E-06 0.000141653 Regression Statistics Multiple R 0.6948612 R Square 0.4828321 Adjusted R Square 0.408951 Standard Error 0.094019 Observations 9 1/ Per Order 2013-6-5, made final by Order 2013-7-25, and Appendix D of this attachment for the YE 9-30-12.Attachment C Linehaul, Seaplane Appendix B Page 2 of 2

y = 7E-05x + 0.2057 R2 = 0.4828

2.90 2.95 3.00 3.05 3.10 3.15 3.20 3.25 3.30

1/14/04 5/28/05 10/10/06 2/22/08 7/6/09 11/18/10 4/1/12 8/14/13Unit Cost per RTM, Natural Log

Years Ended June 30, 2004, through September 30, 2013 

# Nonfuel Linehaul, Unit Cost per RTM, Actual vs. PredictedAttachment C Linehaul, Seaplane Appendix C-1

Page 1 of 1 Year Ended September 30, 2013 Al. Seaplane Island Pacific PM Air Venture System Parameters for Each Carrier Total J5 2O 3F Z3 K3 1 . Capacity Related Expense (CR) $757,755 $491,936 $297,181 $434,358 $602,637 2 . Direct Expense, Includes Fuel $2,208,696 $1,518,485 $1,615,875 $4,843,254 $3,060,439 3 . Indirect Expense $1,437,831 $1,058,711 $818,694 $2,967,519 $1,523,616 4 . CR Markup 26.23% 23.59% 13.90% 5.89% 15.14% 5 . Return and Tax Markup 9.46% 9.46% 9.46% 9.46% 9.46% 6 . T-100 Seg. Mail RTMs 14,986 6,012 7,999 7,155 26,105 7 . T-100 Mkt. Mail RTMs 13,916 5,260 7,700 6,693 24,094 8 . Circuity Markup 7.69% 14.30% 3.88% 6.90% 8.35% By Aircraft Type Beaver Beaver Beaver Beaver Beaver Aircraft Code 40 40 40 40 40 9 . Direct Expense, Includes Fuel $1,077,722 $408,199 $1,471,987 $1,816,996 $3,060,439 10 . Less Psgr. Liability Insurance $24,494 $13,754 $72,630 $36,932 $67,883 11 . Linehaul Expense Allocable to Mail $1,053,228 $394,445 $1,399,357 $1,780,064 $2,992,556 12 . Cost per Block Hour (R11÷ R18) $371.90 $485.17 $371.48 $430.28 $487.31 13 . Marked Up Costs (R11*R4*R5*R8) $1,567,169 $609,918 $1,812,340 $2,205,585 $4,086,513 14 . Eligible Expense (R13*R32÷R18) $1,423,844 $461,377 $1,498,657 $1,207,554 $1,412,080 15 . Eligible Cost per RTM (R14÷R36) $26.7163 $44.3674 $24.1302 $27.6524 $32.6681 16 . Percentage of Eligible Mail RTMs 100.00% 11.515% 1.913% 16.609% 14.531% 55.432% 17 . Cost Wtd. By Mail RTMs (R15*R16) $30.0597 $3.0764 $0.8487 $4.0078 $4.0182 $18.1086 Scheduled + Nonscheduled Traffic 18 . Block Hours, T-100 2,832 813 3,767 4,137 6,141 19 . Pax RTMs 46,501 12,431 66,674 53,904 35,608 20 . Frt RTMs Wtd. @ 0.75 5,558 1,616 2,523 4,621 4,629 21 . Mail RTMs 5,423 901 7,885 6,843 26,105 22 . Total RTMs 57,483 14,948 77,081 65,368 66,342 23 . Aircraft Miles 218,878 66,986 296,085 247,894 275,338 24 . Available Ton Miles (ATMs) 202,462 58,165 188,562 162,123 254,688 25 . Departures Performed 4,266 1,611 8,052 9,974 9,397 26 . Wtd. Deps. (GTOW) 21,757 8,216 41,065 50,867 47,925 27 . Ton Load Factor 28.39% 25.70% 40.88% 40.32% 26.05% 28 . Stage Length 51 42 37 25 29 29 . ATMs per Mile 0.92 0.87 0.64 0.65 0.93 30 . RTMs per Mile 0.26 0.22 0.26 0.26 0.24 31 . RTMs per Hour 20 18 20 16 11 Eligible Traffic 32 . Block Hours, T-100 2,573 615 3,115 2,265 2,122 33 . Pax RTMs 42,314 7,962 51,832 33,300 12,592 34 . Frt RTMs Wtd. @ 0.75 5,557 1,536 2,453 3,526 4,529 35 . Mail RTMs 47,094 5,423 901 7,822 6,843 26,105 36 . Total RTMs 53,295 10,399 62,107 43,669 43,225 37 . Aircraft Miles 186,986 138,308 48,678 237,952 183,619 200,236 38 . Available Ton Miles (ATMs) 183,435 41,366 153,533 118,406 185,218 39 . Departures Performed 5,193 3,877 1,316 6,854 7,444 4,166 40 . Wtd. Deps. (GTOW) 19,773 6,712 34,955 37,964 21,247 41 . Ton Load Factor 29.05% 25.14% 40.45% 36.88% 23.34% 42 . Stage Length 36 36 37 35 25 48 43 . ATMs per Mile 1.33 0.85 0.65 0.64 0.92 44 . RTMs per Mile 0.39 0.21 0.26 0.24 0.22 45 . RTMs per Hour 21 17 20 19 20Attachment C Linehaul, Seaplane Appendix C-2

Page 1 of 1 Year Ended September 30, 2013

Carrier Al. Seaplane Island Pacific PM Air Venture By Aircraft Type J5 2O 3F Z3 K3 Aircraft Code Total 40 40 40 40 40 1 . Total Fuel Expense, Schedule F-2 $271,952 $146,784 $450,676 $606,811 $912,560 2 . Total Gallons Issued, Schedule F-2 55,439 21,282 82,342 109,716 167,117 3 Total Block Hours, Schedule F-2 2,865 984 3,804 4,251 6,310 4 . Total Block Hours, T-100 Segment 2,832 813 3,767 4,137 6,141 5 . Eligible Block Hours, , T-100 Segment 2,573 615 3,115 2,265 2,122 6 . Eligible Mail RTMs, T-100 Segment 47,094 5,423 901 7,822 6,843 26,105 7 . Total Eligible RTMs, T-100 Segment 53,295 10,399 62,107 43,669 43,225 8 . Price per Gallon $4.91 $6.90 $5.47 $5.53 $5.46 9 . Burn per Hour 20 26 22 27 27 10 . Costs per Hour $96.03 $180.55 $119.64 $146.68 $148.60 11 . Eligible Fuel Expense $247,081 $111,036 $372,672 $332,228 $315,332 12 . Cost per Eligible RTM $4.6361 $10.6776 $6.0005 $7.6079 $7.2951 13 . Mail RTMs, Percentage 100.00% 11.515% 1.913% 16.609% 14.531% 55.432% 14 . Cost/RTM, Wtd. By Mail RTMs $6.8840 $0.5338 $0.2043 $0.9966 $1.1055 $4.0438 Ratio of Total to Revenue Block Hours 1.17% 21.03% 0.98% 2.76% 2.75%Attachment C Linehual, Seaplane Appendix D
Determination of Carriers Included in the Class Rates, One Percent Rule, YE 9-30-13 Eligible Cumulative Carrier 2-Ltr. A/C Type Mail RTMs Percent Percent Taquan K3 40 26,105 55.044% 55.044% Pacific 3F 40 7,822 16.493% 71.537% PM Air Z3 40 6,843 14.429% 85.966% Al. Seaplane J5 40 5,423 11.435% 97.401% Island 2O 40 901 1.900% 99.301% PM Air Z3 42 312 0.658% 99.959% Servant 8D 40 20 0.042% 100.001% 47,426 100.00%

### Attachment C Appendix E Circuity Calculation, Intra-AK Mail Revenue Ton Miles (RTMs), YE 9-30-13 Segment Market Carrier Mail RTMs Mail RTMs Circuity 40-Mile 1,081 895 20.78% Air Excursions 12,724 12,681 0.34% Alaska Seaplane 14,986 13,916 7.69% Ryan Air 443,806 387,421 14.55% Bering Air 362,155 347,018 4.36% Ellis Air Taxi 1,687 1,687 0.00% Era Aviation 345,005 343,217 0.52% Grant 318,724 297,261 7.22% Hageland 1,664,766 1,597,951 4.18% Iliamna 5,797 5,295 9.48% Island Air 6,012 5,260 14.30% Pacific 7,999 7,700 3.88% Peninsula 1,449,762 1,404,935 3.19% PM Air 7,155 6,693 6.90% SeaPort 16,519 16,456 0.38% Servant 2,020 1,840 9.78% Smokey Bay 857 821 4.38% Spernak 1,306 1,189 9.84% Tanana 2,529 2,483 1.85% Tatonduk 7,021,192 6,714,341 4.57% Venture 26,105 24,094 8.35% Warbelow 70,382 68,154 3.27% Ward Air 21 20 5.00% Wright 1/ 164,581 151,792 8.43% Yute 91,013 85,217 6.80% 12,038,184 11,498,337 4.70% 1/ For Wright, we relied on reported figures, but excluded the months of November and December, 2012, shown as follows: Total, YE 9-30-13 194,581 156,645 24.22% less November 2012 17,999 2,960 508.07% less December 2012 12,001 1,893 533.97% Total 164,581 151,792 8.43%

### Appendix F Determination of Segments Ineligible for Calculating Bush Rates, Scheduled Intra-Alaska Departures Performed with Mainline Equipment T-100 Segment Report, QE 9-30-13, Seven or More Departures Performed 1/ Total Total Orig Dest Deps. Orig Dest Deps. ADK ANC 26 EMK ANC 53 ADQ ANC 679 ENA ANC 526 AKN ANC 193 FAI ANC 1005 AKN DLG 10 FAI SCC 169 AKN ILI 16 GAL ANC 35 ANC ADK 26 GST JNU 52 ANC ADQ 643 HOM ADQ 40 ANC AKN 196 HOM ANC 250 ANC ANC 27 ILI ANC 23 ANC ANI 122 JNU ANC 479 ANC BET 666 JNU GST 52 ANC BRW 106 JNU KTN 93 ANC CDV 110 JNU PSG 92 ANC DLG 199 JNU SIT 362 ANC EMK 55 JNU YAK 93 ANC ENA 523 KSM ANC 116 ANC FAI 1013 KSM ANI 7 ANC GAL 30 KTN ANC 8 ANC HOM 289 KTN JNU 205 ANC ILI 7 KTN SIT 152 ANC JNU 467 KTN WRG 89 ANC KSM 113 MCG ANC 49 ANC MCG 34 OME ANC 295 ANC OME 290 OME OTZ 118 ANC OTZ 348 OME UNK 13 ANC SCC 102 OTZ ANC 299 ANC TOG 31 OTZ OME 146 ANC UNK 178 PSG JNU 90 ANC VDZ 154 PSG WRG 92 ANC YAK 26 SCC ANC 58 ANI ANC 120 SCC BRW 262 ANI KSM 8 SCC FAI 85 ANI MCG 11 SIT JNU 241 BET ANC 603 SIT KTN 208 BET ANI 13 TOG ANC 39 BRW ANC 149 UNK ANC 184 BRW FAI 92 UNK MCG 8 BRW SCC 124 VDZ ANC 151 CDV ANC 108 WRG KTN 91 CDV YAK 92 WRG PSG 88 DLG AKN 23 YAK CDV 91 DLG ANC 113 YAK JNU 116 1/ Includes the mainline operations of PenAirAppendix G

Carriers Reporting Intra-Alaska Operations for YE 9-30-13 Excluded from Calculations of the Bush Rates Reason for Exclusion No No No No Mail Bush Pax. Skd. Pax. Al.Central

----- ----- ----- X Alaska

----- X

----- ----- Atlas Air X X

----- ----- Avjet Corp X

----- ----- ----- Condor X X

----- ----- Delta X X

----- ----- Empire X X

----- ----- Fed Ex X

----- ----- ----- Frontier

----- ----- X

----- Harris Air X

----- ----- ----- Homer Air X

----- ----- ----- Katmai X

----- ----- ----- Lynden

----- X

----- ----- Miami Air X X

----- ----- Northern

----- X

----- ----- Polar Air X X

----- ----- Prescott X

----- ----- ----- S. Pacific X X

----- ----- Sun Country X X

----- ----- Swiss Air X

----- ----- ----- United X

----- ----- ----- UPS X X

----- ----- World X X

----- -----Attachment D Terminal Appendix A Determination of Terminal Rate, Rate per Revenue Ton Enplaned, YE 9-30-13

-1- -2- -3- -4- -5- Base Year Adjustment Proposed Current Rate, Change from Rates 1/ Factors 2/ Final Rates 3/ Order 2013-12-9 Prior Rate 4/ $625.85 40.33% $878.26 $850.03 3.32%

1/ Per Order 2005-1-18 2/ See Appendix B, Column 6 3/ Column (1) increased by Column (2). 4/ $878.26 ÷ $850.03.Attachment D Terminal Appendix B
-1- -2- -3- -4- -5- -6-
INTRA-ALASKA MAIL CLASS RATES COST ADJUSTMENT FACTORS (Expenses in Thousand of Dollars) Average Annual Percent Base Year Change Midpoint to Estimated Change 2004 Ended YE YE 6/30/04 Midpoint Unit Cost at Base Year to 6/30/2004 1/ 9/30/2013 2/ to YE 9/30/13 3/ Change 4/ 10/1/2014 5/ 10/1/2014 6/ Unit Cost $9.77 $12.93 3.97% 6.03% $13.71 40.33% Per Wtd. Dep. 1/ Attachment D, Appendix D, Order 2007-12-19. 2/ Appendix D to this Order, Page 1 of 2. 3/ See "predicted annual increase" in Appendix D, Page 1 of 2. 4/ Reflects the fact that from the mid-point of the reporting period to the mid-point of the prospective rate is one and one-half years. 1.0397 x 1.01985, where 0.01985is the average annual unit cost increase projected for a six-month period. 5/ $12.93in Column 2 increased by 5.90 percent in Column 4. 6/ $13.71in Column 5 ÷ $9.77 in Column 1, the base period.Attachment D Terminal Appendix C Page 1 of 2
Actual Y Predicted Natural Log Annual Annual Period $/Wtd. Dep. 1/ $/Wtd. Dep. Predicted Y Residuals EXP (Y) Increase 6/30/2004 $8.96 2.192770227 2.191699988 0.001070239 8.95041579 3.97% 6/30/2005 $8.90 2.186051277 2.23059236 -0.044541083 9.305376582 6/30/2006 $10.14 2.316487998 2.269484732 0.047003266 9.674414615 6/30/2007 $10.25 2.327277706 2.308377104 0.018900602 10.05808817 6/30/2008 $10.61 2.361796953 2.34737603 0.014420922 10.45809198 6/30/2009 $10.90 2.388762789 2.386268402 0.002494387 10.87284507 6/30/2010 $10.62 2.362739016 2.425160774 -0.062421759 11.30404667 9/30/2012 $12.53 2.528125769 2.512855082 0.015270687 12.34011184 9/30/2013 $12.93 2.559550193 2.551747453 0.007802739 12.82950317
ANOVA df SS MS F Significance F Regression 1 0.121126227 0.121126227 94.66863223 2.56212E-05 Residual 7 0.008956331 0.001279476 Total 8 0.130082558 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Intercept -1.875270019 0.435264981 -4.308341123 0.003530279 -2.904508149 -0.846031888 X Variable 1 0.000106554 1.09514E-05 9.729780688 2.56212E-05 8.06586E-05 0.00013245
Regression Statistics Multiple R 0.964960555 R Square 0.931148872 Adj. R Square 0.921312997 Standard Error 0.035769761 Observations 9 1/ Per Oder 2013-6-5, made final by Order 2013-7-25, and Appendix D of this attachment for the YE 9-30-13.Attachment D Terminal Appendix C Page 2 of 2

y = 0.0001x
- 1.8753 R2 = 0.9311

2.15 2.20 2.25 2.30 2.35 2.40 2.45 2.50 2.55 2.60

Jan-04 May-05 Oct-06 Feb-08 Jul-09 Nov-10 Apr-12 Aug-13Unit Cost per Wtd. Departure, Natural Log

YE June 30, 2004, through September 30, 2013 

# Unit Terminal Cost per Weighted Departure, Actual vs. PredictedAttachment D Terminal Appendix D Schedule F-2 Expenses, Year Ended September 30, 2013 -1- -2- -3- -4- -5- -6- -7- -8- -9- -10- #1 plus #2 #3 less #4 #4 ÷ #6 #5 x #7 Oper. Less Capacity Adjusted Wtd. Carrier Directs Indirects Operating Capacity Departure Capacity Markup Departure Wtd. Deps. $/Dep. 1 40-Mile $698,977 $240,791 $939,768 $96,534 $62,938 $843,234 11.45% $70,144 5,284 $13.27 2 . Air Excursion $918,266 $593,548 $1,511,814 $222,384 $105,083 $1,289,430 17.25% $123,210 18,705 $6.59 3 . Al. Seaplane $2,208,696 $1,437,831 $3,646,527 $757,755 $477,055 $2,888,772 26.23% $602,187 51,515 $11.69 4 . Bering $19,282,106 $5,776,372 $25,058,478 $1,578,337 $2,420,855 $23,480,141 6.72% $2,583,536 271,451 $9.52 Era Aviation $47,943,132 $24,823,971 $72,767,103 $9,627,922 $7,074,594 $63,139,181 15.25% $8,153,470 738,653 $11.04 5 Era Adj. 1/ $2,639,234 239,098 $11.04 6 . Grant $17,807,304 $12,485,995 $30,293,299 $3,135,609 $2,950,088 $27,157,690 11.55% $3,290,823 379,976 $8.66 7 Hageland $56,370,678 $21,479,705 $77,850,383 $7,389,003 $11,569,848 $70,461,380 10.49% $12,783,525 856,995 $14.92 8 . Iliamna $2,348,773 $298,226 $2,646,999 $107,446 $92,276 $2,539,553 4.23% $96,179 41,613 $2.31 9 . Island $1,518,485 $1,058,711 $2,577,196 $491,936 $385,718 $2,085,260 23.59% $476,709 40,921 $11.65 10 . Pacific $1,615,875 $818,694 $2,434,569 $297,181 $409,722 $2,137,388 13.90% $466,673 43,062 $10.84 PenAir $51,005,373 $23,963,014 $74,968,387 $6,771,335 $7,891,061 $68,197,052 9.93% $8,674,643 497,040 $17.45 11 PenAir Adj. 1/ $5,550,330 318,023 $17.45

. PM Air 3/ $4,843,254 $2,967,519 $7,810,773 $434,358 $1,768,174 $7,376,415 5.89% $1,872,319 100,523 $18.63 12 PMAir, Adj. 1/ $1,500,697 80,571 $18.63 13 Ryan Air $6,799,190 $4,268,315 $11,067,505 $1,699,423 $2,539,597 $9,368,082 18.14% $3,000,280 154,186 $19.46 Seaport $14,752,720 $6,528,398 $21,281,118 $1,968,002 $3,672,498 $19,313,116 10.19% $4,046,726 244,061 $16.58 14 Seaport Adj. 1/ $1,476,586 89,054 $16.58 15 . Servant $1,107,073 $464,141 $1,571,214 $153,494 $307,518 $1,417,720 10.83% $340,822 19,424 $17.55 16 . Smokey $521,573 $290,885 $812,458 $125,029 $133,263 $687,429 18.19% $157,504 22,444 $7.02 17 . Spernak $1,201,001 $554,536 $1,755,537 $409,124 $129,475 $1,346,413 30.39% $168,822 26,095 $6.47 18 . Tanana $457,454 $236,560 $694,014 $79,923 $122,630 $614,091 13.01% $138,584 9,325 $14.86 19 . Venture $3,060,439 $1,523,616 $4,584,055 $602,637 $555,451 $3,981,418 15.14% $639,546 47,925 $13.34 20 . Warbelows $6,370,118 $1,050,929 $7,421,047 $276,182 $446,848 $7,144,865 3.87% $464,141 84,863 $5.47 21 . Wright $9,996,690 $3,129,853 $13,126,543 $1,089,223 $1,450,277 $12,037,320 9.05% $1,581,527 133,384 $11.86 22 . Yute $4,923,656 $1,994,818 $6,918,474 $410,823 $1,529,692 $6,507,651 6.31% $1,626,216 141,984 $11.45 Total -- Reflects only the adjusted amount. $39,777,275 3,075,898 $12.93 1/ Reflects a pro rata portion of intra-Alaska bush weighted departures from Appendix E.Attachment D, Terminal Appendix E Year Ended September 30, 2013 Carrier 2-Ltr. A/C Deps. GTOW Wtd. Deps 40-Mile Air Q5 31 121 3.0 363 35 1,118 3.7 4,137 80 74 1.8 133 194 88 7.4 651 40-Mile Air, Total 1,401 5,284 Air Excursion X4 30 3 3.3 10 35 280 3.7 1,036 40 5 5.1 26 79 2,880 3.6 10,368 194 839 7.4 6,209 415 116 9.1 1,056 Air Excursion, Total 4,123 18,705 Alaska Seaplane J5 30 297 3.3 980 35 594 3.7 2,198 40 4,266 5.1 21,757 79 4,176 3.6 15,034 194 381 7.4 2,819 415 959 9.1 8,727 Alaska Seaplane, Total 10,673 51,515 Bering Air Inc. 8E 35 29 3.7 107 194 8,505 7.4 62,937 355 72 3.0 216 360 304 2.4 730 405 1,995 16.8 33,516 406 1,460 12.5 18,250 412 770 17.0 13,090 416 16,023 8.9 142,605 Bering, Total 29,158 271,451 Era Aviation, Bush 7H 405 14,232 16.8 239,098 Era Aviation, Mainline 7H 483 14,273 35.0 499,555 Era Aviation, Total 28,505 738,653Attachment D, Terminal Appendix E Year Ended September 30, 2013 Grant Aviation GV 35 17,405 3.7 64,398 194 4,767 7.4 35,276 406 3,146 12.5 39,325 416 27,076 8.9 240,976 Grant, Total 52,394 379,975 Hageland Aviation H6 30 15 3.0 45 35 41,351 3.7 152,999 194 11,615 7.4 85,951 405 10,293 16.8 172,922 416 44,962 8.9 400,162 417 4,537 9.9 44,916 Hageland, Total 112,773 856,995 Iliamna Air Taxi V8 10 540 3.3 1,782 35 2,365 3.7 8,751 40 539 5.1 2,749 117 467 5.4 2,522 479 2,607 9.9 25,809 Iliamna, Total 6,518 41,613 Island Air Service 2O 40 1,611 5.1 8,216 79 3,014 3.6 10,850 131 3,525 6.2 21,855 Island Air, Total 8,150 40,921 Pacific Airways, Inc. 3F 33 605 3.3 1,997 40 8,052 5.1 41,065 Pacific, Total 8,657 43,062 PenAir, Bush KS 79 957 3.6 3,445 170 34 8.9 303 416 10 8.9 89 456 9,220 29 267,380 459 1,614 29 46,806 PenAir, Bush, Subtotal 11,835 318,023 PenAir, Mainline, Outside AK 456 6,173 29.0 179,017 PenAir, Total 18,008 497,040Attachment D, Terminal Appendix E Year Ended September 30, 2013 PM Air, LLC Z3 40 9,974 5.1 50,867 Z3 42 3,713 8.0 29,704 PMAir, Intra-AK 80,571 Outside AK Z3 42 2,494 8.0 19,952 PM Air, Total 16,181 100,523 Ryan Air 7S 35 7,322 3.7 27,091 412 6,883 17.0 117,011 479 189 9.9 1,871 486 657 12.5 8,213 Ryan Air, Total 15,051 154,186 Seaport K5 35 6,295 3.7 23,292 416 7,389 8.9 65,762 Intra-AK 13,684 89,054 416 9,155 8.9 81,480 479 7,427 9.9 73,527 Outside-AK 16,582 155,007 Seaport, Total 30,266 244,061 Servant Air Inc. 8D 35 4,384 3.7 16,221 40 101 5.1 515 416 302 8.9 2,688 Servant Total 4,787 19,424 Smokey Bay, Total 2E 35 6,066 3.7 22,444 Spernak Airways Inc. SNK 35 6,899 3.7 25,526 SNK 36 237 2.4 569 Spernak, Total 7,136 26,095 Tanana Air Service 4E 30 80 3.3 264 33 355 3.3 1,172 35 981 3.7 3,630 39 131 3.2 419 79 598 3.6 2,153 194 228 7.4 1,687 Tanana, Total 2,373 9,325 Venture, Total K3 40 9,397 5.1 47,925 Warbelow, Total 4W 194 11,468 7.4 84,863Attachment D, Terminal Appendix E Year Ended September 30, 2013 Wright Air 8V 10 333 3.3 1,099 8V 34 1,780 3.8 6,764 8V 35 1,012 3.7 3,744 8V 194 1,117 7.4 8,266 8V 416 12,754 8.9 113,511 Wright, Total 16,996 133,384 Yute, Total 4Y 35 38,374 3.7 141,984 For Reference Purposes Only Tatonduk 1/ 79 561 3.6 2,020 416 568 8.9 5,055 479 430 9.9 4,257 1,559 11,332 1/ Tatonduk's bush operation is such a small part of its total, we have excluded.