Order 2013-12-3

Served: December 6, 2013

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 6th of December, 2013

INTRA-ALASKA MAINLINE

SERVICE MAIL RATES

Under 49 U.S. C. 41901 et seq.

Docket OST-2003-14695

(Docket OST-95-429)

ORDER TO SHOW CAUSE ESTABLISHING NEW 

MAINLINE SERVICE MAIL RATES

Summary

By this Order, the Department proposes to establish new intra-Alaska mainline1 mail rates 

for the next annual period, beginning on or about January 1, 2014. The rates that are 

currently in effect were established by Order 2012-9-26, adjusted by Order 2013-6-15 for 

the fuel costs for the quarter ended March 31, 2013. The cost pool consists of the mainline 

operations of five carriers: Alaska Airlines (AS), Era Aviation, Inc. (7H, Era),2 Lynden Air 

Cargo (L2, Lynden), Northern Air Cargo (NAC, NC), and Tatonduk Outfitters, Ltd., d/b/a 

Everts Air Cargo (Tatonduk, 5V). Alaska and NAC provide all of their service with 

mainline aircraft; Era and Tatonduk provide most of their service with mainline 

equipment.3 As shown in the Appendices, we have separated the bush traffic and expenses 

from the mainline for each carrier that provides both mainline and bush services. As shown 

in Appendix E, PenAir no longer meets the one percent threshold, so we have excluded that 

carrier from the calculations.

Background

Because mail rates are made effective on a final, prospective basis, but are based on 

historical unit costs, we project what costs will be in the forthcoming year based on ten 

 

1 Mainline aircraft are defined as aircraft with more than 7,500 pounds payload, and mainline mail is mail 

transported on mainline aircraft. The Postal Service pays a lower rate for mainline than bush mail to reflect 

the greater efficiency of large aircraft when transporting higher loads. 

2 HoTH, Inc., a/k/a Era Alaska, is a regional airline holding company whose wholly-owned subsidiaries 

include Era Aviation, Inc., Hageland Aviation Services, Inc., and Frontier Flying Service, Inc. Those three 

subsidiaries operate as independent carriers throughout the state of Alaska. Era Aviation, Inc. operates as a 

code share partner with Alaska Airlines, Inc. for some of its destinations within Alaska. 

3 The Dash 8-100 aircraft operated by Era are mainline aircraft, as they have more than 7,500 pounds of 

payload. In prior years, we excluded Era from the calculation of the mainline mail rate because it transported 

less than one percent of Intra-Alaska mainline mail. 
-2-

years of data – if ten years of data are available. Until Order 2004-8-26 was issued, we 

estimated the long-term cost trend based on a ten-year moving average that included only 

NAC and AS,4 the only two carriers for which we had ten years of data. Order 2004-8-26 

temporarily abandoned the use of a ten-year trend for a five-year trend – the entire period 

for which we had data for the four carriers5 then constituting the mainline cost pool -- but 

added a successive year with each new annual update until, as contemplated by 

Order 2004-8-26, we had a full ten years. We propose to maintain the use of a ten-year 

trend by adding the most recent year, March 31, 2013, and dropping the earliest year, 

March 31, 2003. 

As is our usual practice, the proposed rates, contained in Appendix A, reflect the 

application of cost adjustment factors, developed in Appendix B, to the basic mail rate 

structure established by the Civil Aeronautics Board in Order 82-11-23. We have used the 

carriers’ reported operating expenses and traffic for the year ended March 31, 2013. When 

the final Order is issued, we will update unit costs of fuel for the most recent quarter 

available at that time. We have increased the carriers’ non-fuel unit costs and their terminal 

unit costs to the mid-point of the new rate period based on the long-term (ten-year) annual 

change in unit costs for all of the carriers.6 

Results of the Updated Data

The proposed line-haul and terminal rates differ from the rates currently in effect by the 

amounts shown in the table:

Order 2013-6-15 Proposed7 Increase (%)8

Line-haul, $/RTM9 Priority $3.5841 $3.7009 3.26

Non-priority $2.1698 $2.2405 3.26

Terminal, $/Pound Enplaned Priority $0.3456 $0.3854 11.52

Non-priority $0.2970 $0.3311 11.48

Line-haul unit costs, including fuel, experienced a slight year-over-year increase whereas 

the terminal rate underwent a larger year-over-year increase. The combination of changes 

in the line-haul and terminal unit costs results in proposed rates that are 6.27 percent higher

than those in effect for the current period for a 434-mile10 average length of haul.

 

4 The long-term trend was based on the expenses of Alaska and NAC, even though a total of four carriers –

(Alaska, NAC, Lynden, and Tatonduk) transported sufficient volumes of mainline mail that their traffic and 

expense data were included in calculating annual unit costs, because other than for Alaska and NAC, ten years 

of data was not available. 

5 Alaska, NAC, Everts, and Lynden.

6 The final rate will rely on unit fuel costs for the quarter ending June 30, 2013.

7 Includes fuel expense for the quarter ended March 31, 2013.

8 Any difference between Priority and Non-priority is due to rounding.

9 The proposed line-haul rates are the sum of the non-fuel line-haul expense, with a 10-year average inflation 

factor applied, and the most recent fuel expense unadjusted for inflation.

10 21,643,354 mail RTMs divided by 49,853 mail tons enplaned per Appendix D.
-3-

General Matters

Appendix E shows all the mail transported by carriers operating mainline equipment within 

Alaska for the year ended March 31, 2013. Consistent with our longstanding policy, we 

have tentatively excluded from the line-haul calculation for that period the data of all 

aircraft types transporting less than one percent of Intra-Alaska mainline revenue ton miles 

of mail, and from the terminal calculation the data of those carriers enplaning less than one 

per cent of Intra-Alaska mainline mail tons enplaned. In this case, that means excluding the 

unit costs of PenAir’s Saab 340 and Tatonduk’s Brasilia, and including Northern Air 

Cargo’s 737-300.

To determine the long-term trends, we propose to continue our practice of separately 

regressing annual unit costs against the corresponding years, in this instance, the ten-year 

period from March 31, 2004, through March 31, 2013. The results of both the line-haul and 

terminal regressions are shown in Appendices C-1 and C-2. We will not retroactively 

recreate the results of the prior nine years that are part of the ten-year trend by excluding 

the unit costs of PenAir’s Saab 340 and Tatonduk’s Brasilia or by including Northern Air 

Cargo’s 737-300.11 First, such an adjustment would have a de minimis effect, because each 

of the three made up only slightly more than one percent of the mail. Second, we typically 

do not adjust the final results for prior years making up the ten-year trend.12 

Non-fuel Line Haul Results

Appendix C-1, Non-fuel Line Haul, shows an average annual increase of 1.65 percent in unit 

costs over the ten-year period with a T-Value of 5.10, indicating a high degree of confidence 

in the upward trend in the proposed non-fuel line haul costs. The average annual increase in 

the long-term trend has decreased from 3.06 percent per Order 2012-9-26, to 1.65 percent 

this year. 

Fuel Expense

Last year, we modified the method for calculating the unit cost of fuel by relying on fuel 

expenses for Alaska, NAC, and Lynden reported on Form 41 Schedule P12 that all major 

carriers routinely submit to the Department’s Office of Airline Information. The current 

calculations again rely on Schedule P12, which shows the costs and gallons for Scheduled 

Intra-Alaska operations. As usual, we did not apply this to Tatonduk because the 

Schedule P12 does not differentiate fuel expense by aircraft type or between Avgas and JetA. 

Tatonduk operated various aircraft burning significant amounts of each fuel type, with each 

fuel type differing in price; thus, it would be inappropriate to apply an average price per 

gallon for that carrier. For Tatonduk, we will continue our practice of relying on unit fuel 

costs per aircraft type as reported on Schedule P5.1. Because Lynden, unlike the other 

carriers, has only one aircraft type operating in Alaska, we determined its fuel burn by 

dividing its intra-Alaska gallons burned in scheduled service by intra-Alaska scheduled block 

hours. 

 

11 In other words, we could have adjusted prior year results by pulling PenAir’s data out of those annual 

results in order to maintain a more consistent pool of carriers since in this, the tenth year of the trend, PenAir 

did not pass the one percent marker.

12 If there were strong reasons to believe that adjusting an annual result before making it part of the ten-year 

trend were necessary, we would do so. For example, Order 2011-10-3 made such an adjustment for the bush 

carriers. 
-4-

Terminal Results

As shown in Appendix C-2, the terminal regression calculated an average annual increase 

of 3.33 percent in unit costs over the ten-year period, with a T-Value of 6.11, indicating a 

high degree of confidence in the upward trend in unit terminal costs. Year-over-year unit 

terminal costs have increased by 7.09 percent, from $386.70 per ton in 2012 to $414.10 in 

2013, as shown in Appendix D of this Order. While the most recent 7.09 percent yearover-year increase is higher than the long term average annual increase of 3.33 percent, the 

results for this year is right on the 10-year trend line, as shown in Appendix C-2. This 

reflects the fact that the prior year result was significantly below trend. 

Other Matters

We recognize that the issuance of this Order is approximately three months later than usual. 

Lynden has grown such that it is now required by the Department’s regulations to 

separately report international and domestic operations. Lynden first reported 

Schedule P5.2 for the quarter ended September 30, 2012, reverted to reporting 

Schedule P5.1 for the quarter ended December 31, 2012, and since then has reported 

Schedule P5.2.13 As shown in Appendix G, Lynden’s data shows that its domestic nonfuel 

unit cost per flight hour, the costs that should be used for calculating mail rates, exceeded 

those for its international operations by a factor of ten.14 Also, the revenue flight hours it 

reports on the T-100 Segment report exceed the total (revenue plus non-revenue) flight 

hours it reports on its Form 4115. To correct those apparent problems, we combined 

Lynden’s domestic and international data. 

For Era, we continued our adjustment of that carrier’s terminal expense, as we did for the 

bush class rate, by determining the average unit costs of Frontier Flying Service, Inc., Era 

Aviation, Inc., and Hageland Air Services, Inc., all commonly owned carriers, and applying 

that figure to the mainline payload generated by Era’s Dash 8 aircraft, its only mainline 

operation. 

ACCORDINGLY,

1. We direct all interested persons to show cause, no later than ten (10) days after the 

service date of this Order, why the Department should not adopt the foregoing tentative 

findings and conclusions and fix, determine and publish the proposed final annual rates 

specified in Appendix A, to be effective on or about January 1, 2014, subject to the 

quarterly fuel adjustment, as discussed. Vague or unsupported Answers that do not include 

all proposed adjustments and backup data will not be accepted;

 

13 Department regulations require that carriers with less than $100 million annual operating revenues file the 

P5.1, while those with $100 million or more must file the P5.2.

14 For example, for QE 3-31-13 Lynden’s data indicates that its domestic operations cost $14,524.03 per 

flight (airborne) hour and the corresponding amount for its international operations $1,427.64.

15 For example, for the QE 9-30-12, Lynden reported on its Form 41, total domestic flight hours, revenue plus 

nonrevenue, of 417, but revenue flight hours reported on its T-100 report of 675.
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2. If no objection is filed within the designated time, or if no timely-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 serve this Order upon all parties on the Service List for this Docket.

By: 

Susan L. Kurland

Assistant Secretary for

Aviation and International Affairs

(SEAL)

An electronic version of this document is available on the World Wide Web at

http://www.regulations.gov
Appendix A

Intra-Alaska Class Service Mail Rates 

Effective: 1/ On or about January 1, 2014

Column (1) (2) (3) (4) (5)

Base Year Adjustment Proposed Current Rate, Change from

Rates 2/ Factors 3/ Final Rates 4/ Order 2013-6-15 Prior Rate 5/

Linehaul Charge per Billing Ton-Mile

Priority $1.1969 209.21% $3.7009 $3.5841 3.26%

Non-priority $0.7246 209.21% $2.2405 $2.1698 3.26%

Terminal Charge per Pound Originated

Priority $0.1697 127.11% $.3854 $.3456 11.52%

Non-priority $0.1458 127.11% $.3311 $.2970 11.48%

1/ Both the current and proposed linehaul rates below include fuel expense for the quarter ended March 31, 2012, 

the most current data available at this time. As discussed in the body of the Order, we anticipate including fuel 

expense for the quarter ended June 30, 2012, in the final Order. 

2/ Per Order 82-11-23.

3/ See Appendix B.

4/ Column (1) increased by Column (2).

5/ Any differences due to rounding.
Appendix B

Intra-Alaska Class Service Mail Rates Cost Adjustment Factors

(1) (2) (3) (4) (5) (6)

Average Annual Percent 

Base Year Change Midpoint to Estimated Change 1980

Ended Year Ended YE 3/31/04 Midpoint Unit Cost at Base Year to

9/30/80 1/ 3/31/13 2/ to YE 3/31/13 3/ Change 4/ 4/1/14 5/ 4/1/14 6/

Unit Cost per Available Ton-Mile

 Fuel $0.52411 na na $0.576050

 Nonfuel $0.64313 1.65% 2.49% $0.659144

 Total $0.399469 $1.16724 $1.235194 209.21%

 Unit Cost per Ton Enplaned $191.54 $414.10 3.33% 5.05% $435.01 127.11%

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

2/ For nonfuel, we used YE March 31, 2013, App. D; for fuel expense, we used Order 2013-6-15, App. C. 

3/ See the regression results in Appendix C. 

4/ Reflects the fact that from the mid point of the reporting period to the midpoint of the prospective rate is 1 and 1/2 years. 

1.0165 x 1.00825, where 1.00825 is the average annual unit cost increase projected for a 6-month period. 

1.0333 x 1.01665 where 1.01665 is the average annual unit cost increase projected for a 6-month period. 

5/ Column (2) multiplied by column (4), except for fuel. As indicated in Order 97-9-37, we will rely on the

most recent fuel costs, with no inflation factor. Fuel for the QE 3/31/13 is the most recent available at this time, 

but we anticipate in the final order adding fuel for the QE 9/30/13.

6/ $1.230306 in preceding column divided by $.399469 in the base period, and $435.01 in the 

preceeding column divided by $191.54 in the base period.
Appendix C-1

Linehaul

Page 1 of 2

Calculation of the Linehaul Portion of the 10-Year Trend

Actual Y

Natural Log

$/ATM $/ATM Predicted

Order Non-Fuel Non-Fuel Annual 

Number YE 3/31/ Linehaul Linehaul Predicted Y Residuals EXP (Y) Increase

2004-8-26 2004 0.5225 -0.649130 0.495112364 0.027387636 1.640682582 1.65%

2005-9-16 2005 0.5312 -0.632617 0.511469394 0.019730606 1.667739962

2006-9-23 2006 0.5312 -0.632617 0.527826424 0.003373576 1.695243561

2007-8-26 2007 0.4924 -0.708464 0.544183455 -0.051783455 1.723200736

2008-9-3 2008 0.51562 -0.662385219 0.560540485 -0.044920485 1.751618968

2009-9-1 2009 0.57542 -0.55265507 0.576897515 -0.001477515 1.78050586

2010-8-7 2010 0.61927 -0.479213914 0.593254545 0.026015455 1.809869142

2011-9-6 2011 0.62396 -0.471669015 0.609611576 0.014348424 1.839716669

2012-9-26 2012 0.63249 -0.458090869 0.625968606 0.006521394 1.870056428

New 2013 0.64313 -0.441408398 0.642325636 0.000804364 1.900896537

ANOVA

df SS MS F Significance F

Regression 1 0.022073076 0.022073076 26.05193509 0.000925144

Residual 8 0.006778176 0.000847272

Total 9 0.028851253

Coefficients Std. Error T Stat P-value Lower 95% Upper 95%

Intercept -32.28437636 6.436603317 -5.015747402 0.001032335 -47.12721023 -17.4415425

X Variable 1 0.01635703 0.003204678 5.104109628 0.000925144 0.008967028 0.023747032

Regression Statistics

Multiple R 0.874679797

R Square 0.765064747

Adj. R Square 0.73569784

Std. Error 0.029107938

Observations 10
Appendix C-1

Linehaul

Page 2 of 2

y = 0.0164x - 32.284

R2 = 0.7651

0.45

0.5

0.55

0.6

0.65

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Unit Cost per ATM, Natural Log

Years Ended March 31, 2004, through March 31, 2013

Unit Cost per ATM, Nonfuel Linehaul, Actual vs. Predicted
Appendix C-2

Terminal

Page 1 of 2

Calculation of the Terminal Portion of the 10-Year Trend

Actual Y

Natural Log

Order $/Ton Enp. $/Ton Enp. Annual 

Number YE 3/31 Terminal Terminal Predicted Y Residuals EXP (Y) Increase

2004-8-26 2004 $302.64 5.712544 5.73270009 -0.020156091 308.8019 3.33%

2005-9-16 2005 $304.91 5.720017 5.76547538 -0.045458382 319.0907

2006-9-23 2006 $318.30 5.762994 5.79825067 -0.035256673 329.7223

2007-8-26 2007 $368.53 5.909522 5.83102596 0.078496036 340.7081

2008-9-3 2008 $363.29 5.895201 5.86380125 0.031399745 352.0599

2009-9-1 2009 $386.29 5.956588 5.89657655 0.060011455 363.7899

2010-8-7 2010 $384.09 5.950877 5.92935184 0.021525164 375.9108

2011-9-6 2011 $368.85 5.910390 5.96212713 -0.051737127 388.4355

2012-9-26 2012 $386.70 5.957649 5.99490242 -0.037253418 401.3775

New 2013 $414.10 6.026107 6.02767771 -0.001570709 414.7507

ANOVA

df SS MS F Significance F

Regression 1 0.08862312 0.08862312 37.324706 0.000286491

Residual 8 0.01899506 0.00237438

Total 9 0.10761818

Coefficients Std. Error T Stat. P-value Lower 95% Upper 95%

Intercept -59.9489829 10.7750833 -5.5636677 0.00053238 -84.79636962 -35.10159616

X Variable 1 0.032775291 0.00536474 6.10939489 0.00028649 0.020404187 0.045146394

Regression Statistics

Multiple R 0.907466705

R Square 0.823495821

Adjusted R Sq 0.801432799

Standard Error 0.048727635

Observations 10
Appendix C-2

Terminal

Page 2 of 2

y = 0.0328x - 59.949

R2 = 0.8235

5.70

5.75

5.80

5.85

5.90

5.95

6.00

6.05

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Unit Cost per Ton Enplaned, Natural Log

Year Ended March 31, 2004, through March 31, 2013 

Terminal, Unit Cost per Ton Enplaned, Actual vs. Predcited
Appendix D

Operating Expenses and Unit Costs, Intra-Alaska Mainline Operations, Year Ended March 31, 2013

Linehaul Calculations

Alaska Era Lynden Northern Air Cargo Tatonduk 

AS 7H L2 NC NC 5V 5V

#617 #483 #556 #619 #620 #218 #640

Total 737-400 Dash 8 Hercules 737-300 737-200 DC-6 DC-9-30

Fuel $222,521,000 $9,219,908 $13,222,078 $4,886,613 $17,928,170 $7,579,084 $7,637,552

N-Fuel $261,438,000 $21,981,565 $46,505,049 $4,608,270 $14,827,080 $10,218,506 $6,881,967

Ʃ Domestic 1/ $483,959,000 $31,201,473 $59,727,127 $9,494,883 $32,755,250 $17,797,590 $14,519,519

Intra-AK Skd. BH 2/ 25,784 12,867 1,535 321 4,562 2,641 2,155

Ʃ Domestic 3/ 87,007 14,963 9,081 1,612 5,832 3,865 2,188

Intra-AK Fuel $65,942,757 $7,928,394 $2,234,984 $973,079 $14,024,059 $5,178,877 $7,522,360

Intra-AK N-Fuel $77,475,575 $18,902,412 $7,860,946 $917,652 $11,598,275 $6,982,425 $6,778,171

 Total $143,418,332 $26,830,806 $10,095,930 $1,890,731 $25,622,334 $12,161,302 $14,300,531

Intra-AK S-ATMs 2/ 135,130,166 9,856,935 9,736,931 1,757,234 23,372,939 7,481,565 12,750,622

$/ATM, Fuel $0.487994 $0.804347 $0.229537 $0.553756 $0.600013 $0.692218 $0.589960

$/ATM, N-Fuel $0.573340 $1.917676 $0.807333 $0.522214 $0.496227 $0.933284 $0.531595

 Total $1.061334 $2.722023 $1.036870 $1.075970 $1.096240 $1.625502 $1.121555

IntraAK Mail RTMs 2/ 21,643,354 4,759,688 320,290 3,553,240 425,574 5,911,182 2,500,814 4,172,566

RTM % of Total 100.00% 21.991% 1.480% 16.417% 1.966% 27.312% 11.555% 19.279%

$/ATM, Fuel $0.52539 $0.10731 $0.01190 $0.03768 $0.01089 $0.16388 $0.07999 $0.11374

$/ATM, N-Fuel $0.64313 $0.12608 $0.02838 $0.13254 $0.01027 $0.13553 $0.10784 $0.10249

Wtd. $/ATM, Total $1.16852 $0.233390 $0.040280 $0.170220 $0.021160 $0.299410 $0.187830 $0.216230

Terminal Calculations

Alaska Era Lynden Northern Air Cargo Tatonduk

AS 7H L2 NC 5V

Terminal Expense 4/ $8,218,125 $18,442,976 $11,377,010

Tons Enplaned 5/ 44,946 33,288 32,802

Intra-AK Skd. Svc. Exp. $48,415,834 6/ $4,214,268 6/

Intra-AK Skd. Svc. Tons 150,256 6/ 9,722 6/

$/Ton Enplaned $322.22 $182.84 $433.48 $554.04 $346.84

Intra-AK Mail Tons 7/ 49,853 10,207 1,029 7,580 15,043 15,994

Mail Tons % of Total 100.00% 20.474% 2.064% 15.205% 30.175% 32.082%

Wtd. $/Ton Enplaned $414.10 $65.97 $3.77 $65.91 $167.18 $111.27
Appendix E

Exclude Operations Below the One Percent Threshhold, YE 3-31-13

T-100 Segment, Linehaul Results, Intra-Alaska Mail Revenue Ton Miles (RTMs)

Mainline Aircraft Only

Carrier Aircraft Intra-AK, Intra-AK, Mail RTMs

Code Carrier Type Mail RTMs Percentage Mainline-Only Carriers

NC NAC 620 5,914,235 26.75% NC 6,339,809

AS Alaska 617 4,759,688 21.52% AS 4,775,483

5V Tatonduk 640 4,172,566 18.87% L2 3,539,634

L2 Lynden 556 3,539,664 16.01%

5V Tatonduk 218 2,500,877 11.31% Tatonduk, Main+Bush

NC NAC 619 425,574 1.92% 79 7,666

7H Era 483 321,273 1.45% 150 82,087

5V Tatonduk 461 203,384 0.92% 218 2,500,877

KS PenAir 1/ 456 185,210 0.84% 416 13,110

5V Tatonduk 150 82,087 0.37% 461 203,384

AS Alaska 612 11,473 0.05% 479 6,743

AS Alaska 614 4,120 0.02% 640 4,172,566

5Z UPS 819 8 0.00% 6,986,433

AS Alaska 634 202 0.00%

22,120,361 100.03% ERA, Main+Bush

483 321,273

PenAir, Intra-AK Mail RTMs 405 70,292

Order Quarter Mainline Total 391,565

2013-6-15 QE 3-31-13 35,428 322,728

2013-4-8 QE 12-31-12 46,118 360,044 PenAir, Main+Bush

2012-12-5 QE 9-30-12 47,923 429,657 79 13,949

2012-9-26 QE 6-30-12 55,741 503,943 170 1,762

185,210 1,616,372 416 48,324

456, Mainline 185,210

T-100 Market, Terminal Results, Enplaned Mail, Exclude Those Carriers 456, Bush 335,616

Enplaning less than 1% of Mainline Mail 459 1,031,511

Intra-AK, 3/ Intra-AK Mail RTMs Adjusted % of 1,616,372

Carrier Mail Tons Main A/C 4/ All A/C 5/ Mail Tons Total

5V 16,745 6,958,914 6,986,370 16,679 32.646%

AS 10,241 4,775,483 4,775,483 10,241 20.045%

NC 15,051 6,339,809 6,339,809 15,051 29.460%

L2 7,636 3,539,634 3,539,634 7,636 14.946%

7H 1,257 321,273 391,565 1,031 2.018%

KS 3,948 185,210 1,616,372 452 0.885%

Total 54,878 22,120,323 23,649,233 51,090 100.00%

1/ See quarterly fuel updates below.

2/ A special report of PenAir breaks out the mainline and bush portion of its service.

3/ T-100 Market Report.

4/ T-100 Segment Report, all mainline aircraft, including those mainline aircraft enplaning less than

1 percent of Mail RTMs.

5/ T-100 Segment Report, all aircraft, mainline and bush.
Appendix F

Year Ended March 31, 2013

Calculation of Terminal Expenses for Era Aviation

Carrier Schedule F-2 Expense Payload in Tons Unit Cost

Era Aviation Capacity/Administrative Related $9,344,827

Era Aviation Departure/Station Related $6,508,292

$15,853,119 77,629 $204.22

Frontier Capacity/Administrative Related $12,549

Frontier Departure/Station Related $4,810

$17,359 1,248 $13.91

Hageland Capacity/Administrative Related $7,099,379

Hageland Departure/Station Related $12,164,799

$19,264,178 145,979 $131.97

Total, All Three Carriers $35,134,656 224,856 $156.25

Payload, Tons, ERA's Dash 8, 52,596

The Only Mainline Aircraft

Expenses, Allocated by Dash 8, 

The Only Mainline Aircraft $8,218,125 1/

1/ 52,596 tons of mainline paylod multiplied by average unit costs, mainline and bush, of $156.25.
Appendix G

Lynden Linehaul Costs

QE 6-30-12 QE 9-30-12 QE 12-31-12 QE 3-31-13 YE 3-31-13

Domestic

1. Fuel $1,972,362 $2,245,808 $2,223,075 $2,721,872

2. Total Directs $12,827,861 $11,175,759 $12,247,169 $11,596,052

3. Non-Fuel Directs $10,855,499 $8,929,951 $10,024,094 $8,874,180

4. Total Airborne Hours 710 417 696 611

5. Non-fuel Unit Cost, Form 41 $15,289.44 $21,414.75 $14,402.43 $14,524.03

6.Revenue Flt. Hours, T-100 752 675 794 612

7. #4 ÷ #6 less one. -5.59% -38.22% -12.34% -0.16%

International

1. Fuel $ 1,345,650 $ 947,018 $ 1,564,268 $ 202,025

2. Total Directs $ 3,713,363 $ 2,409,579 $ 4,157,659 $ 1,599,685

3. Non-Fuel Directs $2,367,713 $1,462,561 $2,593,391 $1,397,660

4. Total Airborne Hours 1,541 1,330 1,459 979

5. Non-fuel Unit Cost, Form 41 $1,536.48 $1,099.67 $1,777.51 $1,427.64

6.Revenue Flt. Hours, T-100 1,501 1,162 857 1,872

7. #4 ÷ #6 less one. 2.66% 14.46% 70.25% -47.70%

Combined

1. Fuel $3,318,012 $3,192,826 $3,787,343 $2,923,897 $13,222,078

2. Total Directs $16,541,224 $13,585,338 $16,404,828 $13,195,737 $59,727,127

3. Non-Fuel Directs $13,223,212 $10,392,512 $12,617,485 $10,271,840 $46,505,049

4. Total Airborne Hours 2,251 1,747 2,155 1,590 7,743

5. Non-fuel Unit Cost, Form 41 $5,874.37 $5,948.78 $5,854.98 $6,460.28 $5,654.11

6.Revenue Flt. Hours, T-100 2,253 1,837 1,651 2,484 8,225

7. #4 ÷ #6 less one. -0.09% -4.90% 30.53% -35.99% -5.86%

Note: Total Directs is either Account #7098.9 on Schedule P5.2 or #90 on Schedule P5.1

Note: Fuel Expense is either Account #5145.1 on Schedule P5.2 or #40 on Schedule P5.1