U.S. Department of Transportation Research and Innovative Technology Administration

Ms. Joy Journeay AACA Executive Director Alaska Air Carriers Association 2301 Merrill Field, Drive A-3 Anchorage, AK 99501

DearMs. Journeay: - :
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1200 New Jersey. S. E Washington. D.C. 20590

December 5, 2013

The Office ofAirline Information (OAI) has received several inquiries regarding ourAugust 6 letter about improving both the timeliness and reliability ofthe carriers' financial reporting, specifically Schedules F-1 and F-2. The challenge oflate or inaccurate F-1 and F-2 filings affects all carriers through delayed or inaccurate mail rates, and also creates a burden for OAI staffthat mustthen follow up on these late or inaccurate filings. Our goal is to encourage the carriers to give the same priority to reporting the critical financial reports that they have displayed in filing their T-100 Marketreports.

To clarify our earlier letter, I am providing the following concrete example ofits implementation:

Consistent with 14 CFR 298.60, the bush carriers' financial schedules for the quarter ending December 31,2013, are due on orbefore February 10, 2014; 1 while the traffic reports for the month ofDecember are due on orbeforeJanuary 30,2014. Ifa particular carrier's financial and traffic reports are submitted on a timely basis, and ifall ofthe data are determined by edit checks to be error free, OAI will continue its currentpractice and forward the T-100 Market data, used for determining mail tender, to the Postal Service on the scheduledrelease date: March 18, 2014.2

1 On February 3, 2014 as under currentpractice, the Office ofAirline Information (OAI) will email a reminderto the carriers about the approaching deadline. In that email OAI would reiterate the thrust ofthis letter- that all ofthe data must be timely and free ofany edit checks for OAI to forward to the Postal Service that data without caveat 2The 3'd Tuesday ofthe 3'd month following the end ofthe period.However, ifany carrier does not file "errorfree" financial and traffic databy those respective due dates, OAI will only forward T-100 Market data for the 11 months through November 30, 2013; i.e., excluding traffic for the month ofDecember. OAI will so notify the Postal Service.3 Thus, any carrier submitting any required data on a delayed basis or ofpoor quality would lose credit with the Postal Service for approximately one-twelfth ofits annual totals ofpassengers and freight. While there mightbe no significant costto the carrier after only one month, the risk would grow with eachpassing month; ifall problems have not beenresolved bythe next scheduled release date, only ten months ofdata will be forwarded to the Postal Service.

Carriers should recognize that the result ofsubmitting unreliable financial ortraffic data is equivalent to not submittingthat data at all. Rather than creating an overly harsh reporting regime, we believe that with the advent ofthe 298C web-based reporting, the carriers can now themselves apply some ofthe edit checks before submitting the 298C data to OAI, thereby simplifying and speeding the process considerably. OAI will still subjectthe data to additional internal edit checks and will endeavorto quickly advise the carrier when edit checks produce errors or warnings- hopefully well before the regulatory deadline. Given this new business model, carriers are strongly encouraged to submittheir data early to allow adequate time for OAI to process the data, and to give the carrier ample opportunity to reconcile any problematic data before the due date.

In brief, while late orinaccurate reports typically involve only a few carriers, buthave an adverse impact on the entire industry. These straightforward incentives will encourage compliant reporting, but the alternative oftaking enforcement action will remain.

As we indicated in our earlier letter, we are available to discuss these matters with you, the carriers, orthe Postal Service, by phone, either individually orby conference call.

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# ~:**l~ \\~**  wmiam cbadwick,n Director, Office ofAirltrfe1nformation

CC: Kevin Schlemmer, DOT/OST, Kevin Adams, DOT/OST Kevin Hartner, United States Postal Service Paul Hendrickson, The Postal Service Carriers Workgroup (PAWS) Jennifer Rodes, DOT/BTS/OAI, Marianne Seguin, DOT/BTS/OAI

3 Ofcourse, OAI cannot forward to the Postal Service data it does not have, or data that was not submitted on a timely basis. OAI will inform carriers ifand when problems are found with the data.