30_Apr_15_Proposed_FY16_Uniform_Rates_and_Rules_for_International_Service.pdf

30 April 15

MEMORANDUM FOR ALL CARRIERS

FROM: USTRANSCOM/TCAQ-P

508 Scott Drive Scott AFB IL 62225-5357

SUBJECT: Notice of Proposed Fiscal Year 2016 (FY16) Uniform Rates and Rules for

International Service – Solicitation Number HTC711-15-R-C001

(SUSPENSE: 5 JUN 15)

1. The proposed FY16 rates are based on fuel pegged at $3.17 per gallon for cargo and combi and $3.05 per gallon for passenger. The proposed rates for the various classes of service are as follows. All passenger rates are expressed per seat mile. All cargo rates are per ton mile; while, combi is per plane mile.

Effective Rate Linehaul Rate Stop Charge Large Class Passenger $0.12187 Medium Class Passenger $0.14595 Small Class Passenger $0.15341 $2,000 Large Class Cargo $0.46247 Medium Class Cargo $0.58578 Combi Service $28.06401

2. Carriers providing cost data for the rate review should provide comments and supporting documentation to USTRANSCOM/TCAQ-P, 508 Scott Drive, Scott AFB IL 62225-5357 by 4 p.m. on 5 Jun 15. It is imperative carriers identify all issues of concern prior to this deadline. If specific information is required on individual cost elements, analysts will provide detailed step-by-step treatment upon carrier request.

4. In accordance with our Memorandum of Understanding, please direct any questions or concerns to me at Jason.R.Logsdon2.civ@mail.mil or 618-220-7094.

//SIGNED//

JASON R LOGSDON

Chief, Cost & Pricing Branch Attachment:

30 April 2015 Proposed FY16 Uniform Rates and Rules for International Service

UNITED STATES TRANSPORTATION COMMAND

508 SCOTT DR

SCOTT AIR FORCE BASE, IL 62225-5357

mailto:Jason.R.Logsdon2.civ@mail.mil

Prepared By: United States Transportation Command, Command Acquisition, 508 Scott Drive, Scott AFB IL 62225-5357

UNITED STATES

TRANSPORTATION COMMAND

PROPOSED

UNIFORM RATES AND RULES

FOR

INTERNATIONAL SERVICE

FISCAL YEAR 2016

INTRODUCTION

USTRANSCOM developed the proposed FY16 USTRANSCOM Uniform Rates and Rules

(hereafter referred to as “Rates”) using rate-making procedures in compliance with the following: Federal Acquisition Regulation (FAR), Memorandum of Understanding (MOU) for FY13 through FY17, and methodologies previously established by the Civil Aeronautics

Board (CAB). The objective of the MOU is to establish guidelines to facilitate the ratemaking process for DOD airlift with carriers willing to participate in the Civil Reserve Air

Fleet (CRAF).

Late Information.

Information received too late for inclusion in this proposed rate will be evaluated and negotiated with individual carriers for consideration in the final rate.

Transparency.

Carriers are encouraged to discuss issues with their USTRANSCOM cost analyst at any point and will be invited to meet with USTRANSCOM Pricing Branch after comments have been received but before the final rate is issued. This meeting provides an opportunity for face to face discussions on carrier-specific cost/statistical data as well as general items of interest. In addition, individual carrier cut sheets will be provided to facilitate on-going discussions.

These cut sheets provide detailed information related to adjustments made by the analyst based on contractor’s costs and/or statistical data.

Comment Period

USTRANSCOM is providing approximately 30-days for comments. Comments are due by 4

PM CDT on 5 June 2015.

Participation.

USTRANSCOM rates are based on carriers’ historical costs, projected into the contract year, plus a profit element. Each carrier’s rates are weight averaged (based on USTRANSCOM revenues for a two-year period) into a single worldwide rate per seat-mile or ton-mile for each of the USTRANSCOM rate categories. In accordance with the MOU, carriers receiving 5 percent or greater of USTRANSCOM charter business, as calculated by USTRANSCOM’s internal database, P0F i P are required to submit their cost data. USTRANSCOM’s objective is to include a pool of accurate data fairly representing the cost of providing DoD charter service.

The FY16 rates were developed on experienced base year costs and statistical data from 11 carriers providing 17 proposals for the cost base year ending 30 June 2014. Carrier’s cost data was audited and USTRANSCOM analyzed carrier’s forecast operating cost projections in the development of the FY16 rates. Adjustments made to carriers forecast costs were based on past ratemaking practices, findings reported by the Defense Contract Audit Agency

(DCAA), the FAR, and the MOU.

Adjustment for Federal Aviation Regulation Crew Regulation 14 CFR Part 117

Effective January 2014, Federal Aviation Administration implemented new flight, duty, and rest regulations codified at 14 CFR Part 117. USTRANSCOM understands these regulations restrict crew duty days, reduce productivity thereby increasing crew costs while also increasing personnel expenses associated with travel, lodging, and per diem.

Carriers’ historical crew cost for July through December 2013, the first two quarters of the cost base period ending 30 June 2014 may not contain these increased crew cost since the new regulation was not effective until January 2014. USTRANSCOM, therefore, recognizes the uniform rate process of escalating cost incurred in the 12 month base period ending 30 Jun

2014 to determine for the FY16 proposed rates may not fully reflect actual crew cost to be incurred in the FY16 performance.

USTRANSCOM thereby requests carriers to quantify their crew cost increases attributable to the regulatory change and submit these cost increases with carrier comments for incorporation into the FY16 final rates.

Allowable Cabin Load (ACL) Adjustment.

Consistent with the adjustment described in the FY15 Final CRAF Rates and Rules published on 5 Sep 2014, for instances where a carrier performed missions below its standard ACL

USTRANSCOM adjusted certain cost elements that are likely understated and incommensurate with the standard ACL. This adjustment is not considered for instances where

ACLs have been decremented due to performance deficiencies. The adjustment amount is based on the ratio of the standard ACL to the weighted average ACL during the cost base year, weighted by revenues. An adjustment was made to Atlas’ operating costs for its large passenger aircraft since 69.8% of Atlas’ total revenues were attributable to performance at the standard ACL of 435 while the remaining revenues were attributable to performance at an ACL of 400. Based on these weightings, Atlas weighted ACL was 424. See Appendix C, page 1 for specific adjustments.

Fuel.

TCAQ pegs the price of fuel for charter services based on data from carrier provided fuel reports and industry data. Fuel reports are reviewed for commercial fuel price trends on DOD missions and ratio of DOD and commercial fuel uplifted in support of DOD missions. To develop the proposed pegged price of fuel for each category, TCAQ used a projection of commercial fuel cost and the known DLA fuel costs and weighted them based on the historical proportions used for each aircraft category. The DLA-E JP-5 and JP-8 fuel prices effective 1 Feb 15 were used in determining the pegged price of fuel. A composite DLA fuel cost based on both JP-5 and JP-8 was developed using a weighted average cost of DLA’s published prices for JP-8 ($3.26/gal) which received a 90% weighting and JP-5 ($3.29/gal) which received a 10% weighting yielding a projected composite DLA fuel cost of $3.26/gal. USTRANSCOM will update any known or estimated DLA fuel pricing for JP-5 and JP-8 in the final rates.

To estimate the average price of commercial fuel during the FY16 performance period, USTRANSCOM relied on the relationship between the IHS Global Insight Index (GII) for Jet Fuels

(PPI3241104Y) and the historical average quarterly cost of commercial fuel. Figure 1 shows that the actual average fuel cost per quarter for each category, passenger and cargo, demonstrates a similar trend over time with the Jet Fuels Producer Price Index (PPI). The average commercial cost of fuel and the Jet Fuels PPI data was used to estimate a linear relationship using MS Excel yielding two

Figure 1: Avg Fuel Prices & Jet Fuel PPI over time

Description (PASSENGER) Values

Forecasted Cost of Commercial Fuel - PAX $2.93

Current Cost of DLA Fuel (JP-8 w/ 90% wtg, JP-5 w/ 10% wtg) $3.26

Weighting of Commercial Fuel for past 13 months - PAX 0.6225

Weighting of DoD Fuel for past 13 months - PAX 0.3775

Proposed Pegged Rate of Fuel $3.05

Description (CARGO) Values

Forecasted Cost of Commercial Fuel - CARGO $2.99

Current Cost of DLA Fuel (JP-8 w/ 90% wtg, JP-5 w/ 10% wtg) $3.26

Weighting of Commercial Fuel for past 13 months - CARGO 0.3458

Weighting of DoD Fuel for past 13 months - CARGO 0.6542

Proposed Pegged Rate of Fuel $3.17 equations for forecasting the commercial price of fuel based on the Jet Fuels PPI projections, one for each category:

EQ (1): Average Quarterly Commercial Price (Pax)RtR = 1.8788 * (PPIRtR) + 0.1142

EQ (2): Average Quarterly Commercial Price (Cargo) RtR = 1.8784 * (PPIRtR) + 0.1769

Using these equations, the quarterly commercial fuel prices for both categories was forecasted for FY16 and are reported in table 1.

A review of carriers’ recent monthly fuel reports conclude cargo carriers receive 65.4 percent of their fuel at military installations and are charged the rate set by Defense Logistics Agency -

Energy (DLA-E). Conversely, passenger carriers receive 62.3 percent of their fuel commercially, which fluctuates up and down with the commercial fuel market.

The weightings between commercial fuel and military fuel and the project commercial fuel cost and military fuel costs results in a pegged fuel price of $3.05 for passenger and $3.17 per

U.S. gallon for cargo, and combi. UThe pegged price includes into-plane fees and taxes U.

USTRANSCOM will continue to closely monitor fuel prices for the FY16 contract performance period and make appropriate adjustments to the pegged fuel prices as we have done in prior contract periods.

Incorporation of Lean Six Sigma (LSS) recommendations.

During both the FY13 and FY14 rate reviews, USTRANSCOM worked with Lean Six Sigma

(LSS) experts from its Army Subordinate Command to determine ways to improve the ratemaking process. As a result, USTRANSCOM proposed six changes to the ratemaking process to industry in April 2013 which carriers agreed to.

Forecasted

Avg Qtrly Commercial Fuel Price

Period PPI Passenger Cargo

Oct-Dec 2015 1.41 $2.76 $2.83

Jan-Mar 2016 1.49 $2.91 $2.98

Apr-Jun 2016 1.49 $2.91 $2.98

Jul-Sep 2016 1.60 $3.12 $3.18

Average $2.93 $2.99

Table 1: Forecasted Commercial Fuel Costs for FY16

In accordance with these changes, USTRANSCOM only evaluated aircraft insurance, aircraft and traffic servicing, and general ground property in cargo service in the FY16 rates. Aircraft insurance, aircraft and traffic servicing, and general ground property in passenger service in the FY16 rates were held constant at the FY15 final uniform rate values for each aircraft rate class. Please note values for these three cost factors in the proposed rates changed slightly from the values included in the cost package due to rounding.

Additionally, the FY16 proposed rates applied the same rate factors used in the FY15 final rates general and FICA cost escalation and Eurocontrol surcharge. These rate factors, however, will be updated in the final rates to reflect the most current data available for the performance period.

USTRANSCOM, however, updated the pegged price of fuel in FY16 proposed rates to reflect the most current data available and will update it again in the final rates.

Profit

In accordance with the MOU, USTRANSCOM calculated profit using the weighted guidelines model described in detail in the Defense Federal Acquisition Regulation

Supplement (DFARS). The weighted guidelines model compensates CRAF participants for the risk and capital investment associated with providing DOD transportation and effectively replaces the full and minimum ROI models applied in historical rate reviews for the same purpose.

Cost Efficiency.

The cost efficiency factor in the weighted guidelines model is a potential profit element that may be earned by CRAF participants that demonstrate year-over-year cost savings. The cost efficiency factor was determined without consideration to aircraft insurance, aircraft and traffic servicing, and general ground property since these cost elements are constant for a two year period in accordance with the LSS changes.

Ferry.

USTRANSCOM changed the ferry rate for passenger services in FY02 from 75 percent to 90 percent. The ferry rate is a reduced rate based on savings of flying an empty aircraft. An empty aircraft does not incur costs such as food, full cabin crew salary, and passenger liability insurance. The aircraft in empty service is more fuel-efficient and flies a more direct route.

An empty aircraft in non-revenue service also incurs lower cost in “aircraft and traffic servicing.” Non-revenue enroute stops do not incur cost related to traffic handling personnel, gate requirements, security, and in some cases lower landing fees. In FY15, USTRANSCOM reviewed the current cost levels in all cost categories. On the basis of the FY15 review, the ferry rate for the FY16 proposed rates will remain at 90 percent of the effective rate for passenger and 87 percent of the effective rate for cargo. Ferry rates for both services will be updated for the FY16 final rates.

Live Mile Passenger Rate: Prior to the FY11, USTRANSCOM developed a one-way rate for passenger service and a one-way rate for cargo service on the basis of each service’s round-trip rate adjusted to reflect (1) cost savings associated with flying an empty aircraft in backhaul service and (2) reduction for carrier efficiencies in scheduling aircraft in empty backhaul service. In FY11, however, USTRANSCOM acknowledged a distortion produced by USTRANSCOM’S buying practice of calculating paid ferry miles on the basis of a formula developed by the Contracting Officer. To eliminate this distortion, USTRANSCOM replaced the separate one-way rate and separate round trip rate for passenger service with a single live mile rate applied to mission miles for all passenger missions, regardless if the miles were one-way or round trip to which the passenger carriers unanimously agreed.

After this live mile rate methodology was initially introduced in the FY11 proposed rates, USTRANSCOM, along with World Airways, recognized a problem. When developing the round trip rate, USTRANSCOM uses all pay miles (live, ferry and empty backhaul) to calculate the per mile rate for direct variable and indirect costs. If carriers were paid only the

“live rate” for live miles and 90% of that rate for ferry and empty return, their reimbursement could be understated and costs not fully covered. To make an allowance for this, USTRANSCOM adjusted the ferry and empty backhaul miles used in calculating the live mile rate by reducing the empty reverse and ferry miles by 10% to account for a 90% ferry rate.

USTRANSCOM is proposing to continue this live mile passenger rate methodology in the

FY16 performance period. On one-way missions, the carrier will continue to receive a “paid ferry return”, based on the ferry rate, for positioning or depositioning miles. Paid depositioning mileage, however, will not exceed the mileage required to return the aircraft to its originating station. Because this is considered ferry, carriers will be required to file ferry declarations with each paid ferry return.

Live Mile Cargo Rate: This year, USTRANCOM is observing the same distortion, described above in passenger service, developing in cargo service as the result of carriers requiring paid ferry to cover cost historically not required in cargo service.

For FY16, therefore, USTRANSCOM is proposing a live mile rate for cargo service as well as passenger using a similar live mile rate methodology as described above. Since the cargo ferry rate is 87%, the empty reverse and ferry miles were reduced by 13% instead of 10% to account for the adjustment to the live mile rate.

Cargo carriers, just like passenger carriers, will continue to receive any required “paid ferry return”, based on the ferry rate, for positioning or depositioning miles. Paid depositioning mileage, however, will not exceed the mileage required to return the aircraft to its originating station. Because this is considered ferry, all carriers will be required to file ferry declarations with each paid ferry return.

Stop Charges.

Stop charges were initially introduced as an attempt to better align carrier’s revenues with the cost of operations where certain DOD missions had significantly more revenue stops and the stage length among carriers reflected significantly different averages. At that time, there were fewer rate classes, narrowbody passenger, widebody passenger and cargo. Carriers contended missions such as the Mediterranean channel produced a short stage length, low speed and significantly higher operating costs than the typical long range DoD mission. Carriers operating the inefficient routes with short stage lengths and low utilization experienced higher operating costs per mile, but were receiving the same compensation under the uniform rate.

Stop charges were introduced in an effort to curve the revenues to accommodate for those inefficient routes with short stage lengths.

By FY10, USTRANSCOM had increased the number of rate classes to five (large, medium and small passenger plus large and medium cargo). Increasing the number of rate classes effectively eliminated the need for stop charges in all classes other than small passenger and medium cargo. Unlike the larger rate classes, the small passenger class still contained a significant amount of inefficient routes with shorter stage lengths and lower utilization than other routes in the class. The linehaul rate is a mathematical equation derived from the effective rate, using weight averaged stage lengths, average tons/seats per mission and the stop charge rateP1F ii P. Paying the effective rate versus, a linehaul rate plus a stop charge, should be revenue neutral for all carriers provided the following conditions are met: one, the average stage length for all carriers within a rate class remains similar to the weight averaged stage length used in the class and two, no extreme differences exist between the stage lengths of carriers within the same class. Each rate review, USTRANSCOM reviews base year data to determine relevancy of a stop charge in the individual rate classes.

USTRANSCOM performed a cursory examination of the average stage lengths of participants in all rate classes and determined to continue the linehaul and stop charge in the the small class passenger category only.

Incremental Passenger Movement.

USTRANSCOM will develop the incremental passenger rate at the time of the final rate publication based on the most current data available.

Appendices.

Appendix A provides procedures and rules for the application of USTRANSCOM Rates.

Appendix B provides the weighting and participation of carriers comprising the large, medium, and small class of passenger aircraft, the large and medium class of cargo aircraft and combi aircraft rates, respectively. Appendices C through H illustrate individual treatment of each carrier’s cost by aircraft type. Appendices I and J provide the Eurocontrol Surcharge and Cost Escalation Factor, respectively. Finally, Appendix K demonstrates the FICA calculation.

i The Commercial Operation Integrated System (COINS) database supports contracting of commercial airlift.

The database for contract dollars is maintained by USTRANSCOM/TCAQ-C.

ii Linehaul rate = Effective Rate - (Stop charge/(Average Stage Length * ACL))

INDEX OF APPENDICES

No.

Appendix Title Pages

A USTRANSCOM Uniform Negotiated Rates and Rules 5

B Computation of Uniform Rates: 6 Large Class Passenger Service Medium Class Passenger Service Small Class Passenger Service Large Class Cargo Service Medium Class Cargo Service Combi Class Service

C Costs Per Seat Mile by Carrier and Aircraft Type In Large Class Charter Passenger Service 3

D Costs Per Seat Mile by Carrier and Aircraft Type in Medium Class Charter Passenger Service 3

E Costs Per Seat Mile by Carrier and Aircraft Type in Small Class Charter Passenger Service 4

F Costs Per Ton Mile by Carrier and Aircraft Type in Large Class Cargo Service 4

G Costs Per Ton Mile by Carrier and Aircraft Type in Medium Class Cargo Service 2

H Cost Per Plane Mile by Carrier Charter Combi Service 1

I Eurocontrol Surcharge 6

J Cost Escalation Factor 2

K FICA Escalation 1

APPENDIX A

SCHEDULE OF UNIFORM NEGOTIATED RATES AND RULES (PROPOSED)

FISCAL YEAR 2016

A. RATES. Air transportation services shall be paid for at the following rates. In addition, carriers' monthly USTRANSCOM revenues based on the uniform rate will be adjusted for the variance in fuel price as provided in paragraph C of this Appendix A.

(1) CHARTER PASSENGER SERVICE PER SEAT MILE

Large

Live Effective Rate

$0.12187 Ferry Rate (Base - Effective Rate) 90% $0.10968 Incremental Passenger

$216

Fuel Pegged Rate

$3.05

Medium

$0.14595

Ferry Rate (Base - Effective Rate) 90% $0.13136

$3.05

Small

Live Line Haul Rate

$0.15341

Ferry Rate (Base - Effective Rate) 90% $0.14738 Stop Charge (Per Directed Landing) $2,000

Fuel Pegged Rate $3.05

(2) CHARTER CARGO SERVICE PER TON MILE

Large

$0.46247 Ferry Rate (Base - Effective Rate) 87% $0.40234

$3.17

Medium

Live Effective Rate:

$0.58578 Ferry Rate (Base - Effective Rate) 87% $0.50962 Fuel Pegged Rate $3.17

(3) CHARTER COMBI SERVICE PER PLANE MILE

$28.06401

Ferry Rate (Base - Effective Rate) 87% $24.41569 Fuel Pegged Rate $3.17

(4) EUROCONTROL. Eurocontrol applies where a carrier is required to transit countries with an ICAO prefix of "E" or "L" (i.e., EDAF, LIRA), with the exception of EGYP in the Falkland Islands. Eurocontrol will be paid on live miles only. On one way passenger missions when Eurocontrol is applicable to both the live and empty segment, Eurocontrol will be paid on the live miles plus an additional 85 percent of those miles (i.e., 6,000 mile one way passenger mission would be paid 2.1 percent on 6,000 miles + 5,100 miles). On one way cargo missions when Eurocontrol is applicable to both the live and empty segment, Eurocontrol will be paid on the live miles plus an additional 30 percent of those miles (i.e., 6,000 mile one way cargo mission would be paid 2.7 percent on 6,000 miles + 1,800 miles). Combi Carriers will be paid the applicable rate plus a surcharge of 0.31 percent

(5) FERRY. Ferry will be paid based on standard ACL or lesser amount.

(a) Positioning and depositioning ferry: Positioning and depositioning ferry shall be included with the offer and negotiated at time of award. Paid depositioning mileage will not exceed the mileage required to return the aircraft to its originating station.

(b) “Front/backhaul ferry” on one-way passenger and cargo missions will be applied to empty backhaul miles in addition to, and in the same manner as, positioning/depositioning ferry identified in subparagraph (a) above.

(6) INCREMENTAL PASSENGER MOVEMENT. The incremental passenger rate applies when the number of additional passengers above the standard ACL is identified for an exercise, SAAM or contingency. The incremental passenger movement rate is $216 for each additional passenger over the standard ACL. In cases when the per seat cost is lower than USTRANSCOM’s incremental passenger rate, USTRANSCOM will pay the lesser amount.

(7) TRIP CANCELLATION. A cancellation charge will be paid on missions canceled with notification given within the time frames noted below (see contract Section H, TRIP CANCELLATION). Times are all prior to scheduled departure. Reference to days means a continuous 24-hour period. All “days” refers to “calendar days.”

The cancellation charge will be applied to the trip price for the route segment only (ferry, stop charges, Eurocontrol surcharge or any other additional charges will not be included). Cancellation of one way passenger missions will be calculated on a trip price made up of the live miles plus 85 percent of those miles at the live mile rate (i.e., 6,000 mile one way mission would be paid the applicable cancellation percentage on 6,000 miles + 5,100 miles times the live mile rate). Cancellation of one way cargo missions will be calculated on a trip price made up of the live miles plus 30 percent of those miles at the live mile rate (i.e., 6,000 mile one way mission would be paid the applicable cancellation percentage on 6,000 miles + 1800 miles times the live mile rate) The charges are as follows:

Time Frame Service Type

Seven days or less

Passenger and Combi:

Cargo:

28.84% 27.97%

8 to 14 days

Passenger and Combi:

Cargo:

19.38% 23.18%

15 to 30 days

Passenger and Combi:

Cargo:

16.45% 19.58%

31 to 45 days Passenger and Combi 7.65% 31 to 75 days Cargo 7.19% Beyond 45 days Passenger and Combi 0% Beyond 75 days Cargo 0% Missions awarded less than 14 days prior to operating date and subsequently cancelled

Passenger and Combi:

Cargo:

19.38% 23.18%

(8) DEMURRAGE. Demurrage will be paid on completed cargo missions when departure is delayed over 3 hours beyond scheduled block time and the delay is Government controlled (see contract Section H, REIMBURSABLE SUBMISSION). Payment of delays of fractions of an hour will be calculated using normal rounding procedures, i.e., 29 minutes or less will be dropped, 30 minutes or more will be rounded to the next whole hour. Demurrage charges are as follows:

Aircraft Type ACL Demurrage B747-100/200 90 $2030

B747-400/400ER 100 $2255

MD11F 86 $1939

Aircraft Type ACL Demurrage

MD11C 86 $1939

B777F 88 $1985

DC10-30/40 75 $1691

A300-600ER 51 $1682

A300-400F 50 $1649 B767-200F 48 $1583

DC8 45 $1484

L100 23 $2091 B727-100 18 $905 B727-200 22 $1106

B. AIRCRAFT STANDARDS. The rate set forth in paragraph A shall be applied to the following standard aircraft loads. When an aircraft is offered for the fixed buy missions with fewer seats than the standard ACL, and the aircraft is not 34 inch seat pitch configuration, we will only pay for the actual number of seats.

PASSENGER AIRCRAFT CARGO AIRCRAFT

Aircraft Type Maximum Standard

Payload Aircraft Type Maximum Standard

Payload

Small Aircraft: Small Aircraft:

A319 135 B737-200 14

MD80 140 B727-200 22

B737-400/700 140 L100 23 B737-800 150 A320 150 A321 170

Medium Aircraft: Medium Aircraft:

B757-200/200ER 190 DC8 45

B757-300 200 B767-200F 48

B767-200/200ER 200 A300-B4(F) 50

A310 200 A300-600ER 51

A300 210

B767-300/300ER 240

B767-400ER 260

Large Aircraft: Large Aircraft:

A330-200 310 MD11 86

A330-300 330 B747-400 100

B777-200ER 330 B777F 88

DC10-30 330 B767-300F 61

A340 345

MD11/MD11ER 360 DC10-30/40 75

B777 Charter Config. 380 B747-100/200/300 90 B747 400 B747 Charter Config. 435

C. FUEL ADJUSTMENTS.

(1) The carrier shall be compensated for variance in fuel prices incurred on USTRANSCOM contracted full planeload missions bought at the USTRANSCOM rate. Compensation will not be made to the prime or subservicing carrier for substitute service or subcontracted miles. Adjustments will be made upward or downward if the price of fuel varies by more than one cent per gallon from the pegged price (as stated in the USTRANSCOM Uniform Negotiated Rates and Rules) used in establishing the USTRANSCOM rates.

(2) The solicitation/contract addresses the current fuel adjustment procedures (see PWS, Appendix 3, FUEL

ADJUSTMENT PROCEDURES).

D. COMPUTATION OF PASSENGER SEAT-MILES AND CARGO TON-MILES FOR PAY PURPOSES.

Long Range Service: Computation of miles and stop charges shall be computed as follows:

(1) If a live route segment is less than 4,000 miles, mileage shall be computed nonstop from origin to destination of that segment.

(2) When a live route segment is 4,000 miles or more the mileage shall be computed via an intermediate point(s) which yields the shortest mileage.

(3) The rate classes using a linehaul rate will receive a stop charge for enroute live and operational stops only.

Examples: KBWI*CYQX–EDDF–LTAG–EDDF*CYQX–KBWI-KCHS = 7 Paid Stops1/

KCHS#MMCZ-MPTO=1 Paid Stop2/

KWRI+KCOF-TAPA-FHAW-TAPA-KCOF+KWRI= 4 Paid Stops3/

1/ * This symbol used in the above example indicates operational stops.

2/ # This symbol used in the above example indicates special miles for circumnavigating countries which will not grant over flight clearances—stop charges do not apply.

3/ + This symbol used in the above example indicates ferry leg for which stop charges do not apply.

4/ / This symbol used to indicate Backhaul Mileage.

5/ - This symbol used in the above example to indicate live stops.

E. DEFINITIONS.

“Charter Service” means USTRANSCOM contracted airlift for the transportation of passengers in full planeload lots on aircraft chartered from the commercial air industry and paid at the USTRANSCOM negotiated rate.

These international charter flights are scheduled by AMC to and from designated commercial airports and/or AMC gateways and/or military aerial ports.

“Charter rate” means a commercial price that is in fact available to the general public for equivalent services.

Missions bought at a commercial charter price are all inclusive of taxes, eurocontrol and any other ancillary cost and are not subject to adjustments for fuel prices.

“Stop charge” The stop charge is paid by the government in the case of government directed landings ( enroute live and operational stops) identified by the contract or delivery order to support USTRANSCOM contracted missions. Operational stops allowed in accordance with Appendix A, Paragraph D (3) are considered directed stops.

Landings made by the contractor of his own discretion for maintenance, aborted flights, fuel stops, crew changes, or emergency landings are not considered "directed landings," and therefore receive no stop charge.

“Pay miles” means the statute miles used to compute the price of the mission in accordance with COINS.

COINS calculates distances based on longitude and latitude for geographical locations listed in the DoD Flight Information Publication (FLIP) and identified by location indicators assigned by the International Civil Aviation Organization (ICAO) and published in the Location Indicator, Doc 7910/67.

“Linehaul Rate” The Linehaul rate = Effective Rate - (Stop charge/(Average Stage Length * ACL))

APPENDIX B

COMPUTATION

USTRANSCOM UNIFORM RATE

PASSENGER SERVICE

LARGE CLASS AIRCRAFT

USTRANSCOM FY14 FY15 Total Adjusted Passenger Passenger Passenger

Aircraft Rate Per Revenues Revenues Revenues Weighted Carrier Type Pax Mile [000] [000] [000] Wgt % Rate

ATLAS AIR, INC. B747-400 0.11795$ 114,418$ 77,235$ $191,654 41.66% $0.04914

OMNI AIR INTERNATIONAL INC B777 0.12566$ 136,694$ 63,901$ $200,596 43.60% $0.05479

UNITED AIRLINES INC B747-400 0.12171$ 37,118$ 30,680$ $67,799 14.74% $0.01794

$460,048 1.0000

RATE -- WEIGHTED BY REVENUES $0.12187

Exclusive of Fuel $0.07752

COMPUTATION

USTRANSCOM UNIFORM RATE

PASSENGER SERVICE

MEDIUM CLASS AIRCRAFT

USTRANSCOM FY14 FY15 Total Adjusted Passenger Passenger Passenger

Aircraft Rate Per Revenues Revenues Revenues Weighted Carrier Type Pax Mile [000] [000] [000] Wgt % Rate

ATLAS AIR, INC. B767-300 0.15250$ 102,667$ 98,988$ $201,654 41.55% $0.06337

DELTA AIR LINES INC B767-300 0.13317$ 26,618$ 7,887$ $34,505 7.11% $0.00947

OMNI AIR INTERNATIONAL INC B767-300 0.14241$ 151,014$ 98,107$ $249,121 51.34% $0.07311

$485,280 1.0000

RATE -- WEIGHTED BY REVENUES $0.14595

Exclusive of Fuel $0.10202

COMPUTATION

USTRANSCOM UNIFORM RATE

PASSENGER SERVICE

SMALL CLASS AIRCRAFT

USTRANSCOM FY14 FY15 Total Adjusted Passenger Passenger Passenger

Aircraft Rate Per Revenues Revenues Revenues Weighted Carrier Type Pax Mile [000] [000] [000] Wgt % Rate

DELTA AIR LINES INC A319 0.16823$ 902$ -$ $902 2.46% $0.00413

MIAMI AIR INTERNATIONAL INC B737-800 0.17934$ 9,832$ 10,496$ $20,328 55.37% $0.09930

MN AIRLINES, LLC DBA SUN COUNTRY AIRLINES B737-800 0.14509$ 6,041$ 4,031$ $10,072 27.43% $0.03980

UNITED AIRLINES INC B737-800 0.13920$ 4,337$ 1,074$ $5,411 14.74% $0.02052

$36,713 1.0000

RATE -- WEIGHTED BY REVENUES $0.16375

Exclusive of Fuel $0.12560

Average Average Rate Per Linehaul Rate Effective Rate Stage Seats Per Directed Per Paid Per Seat Mile Length Mission Landing Seat Mile

$0.16375 1,289 150 $2,000 $0.15341

Note: The weighted average stage length and weighted average seats per mission are based on USTRANSCOM data from Jul 13 to Jun 14.

COMPUTATION

USTRANSCOM UNIFORM RATE

CARGO SERVICE

LARGE CLASS AIRCRAFT

USTRANSCOM FY14 FY15 Total Adjusted Cargo Cargo Cargo

Aircraft Rate Per Revenues Revenues Revenues Weighted Carrier Type Ton Mile [000] [000] [000] Wgt % Rate

ATLAS AIR, INC. B747-400 0.45292$ 94,748$ 70,972$ $165,720 54.70% $0.24775

FEDERAL EXPRESS CORPORATION MD11 0.54084$ 20,297$ 13,255$ $33,551 11.07% $0.05990

KALITTA AIR, LLC B747-400 0.43262$ 48,294$ 31,892$ $80,186 26.47% $0.11450

UNITED PARCEL SERVICE CO. MD11 0.51984$ 15,165$ 8,333$ $23,498 7.76% $0.04032

$178,503 $124,452

$302,955 1.0000

RATE -- WEIGHTED BY REVENUES $0.46247

Exclusive of Fuel $0.26478

COMPUTATION

USTRANSCOM UNIFORM RATE

CARGO SERVICE

MEDIUM CLASS AIRCRAFT

USTRANSCOM FY14 FY15 Total Adjusted Cargo Cargo Cargo

Aircraft Rate Per Revenues Revenues Revenues Weighted Carrier Type Ton Mile [000] [000] [000] Wgt % Rate

ABX AIR INC B767-200F 0.58160$ $2,583 $790 $3,373 50.58% $0.29414

AIR TRANSPORT INTERNATIONAL LLC B767-200F 0.59007$ $2,835 $461 $3,296 49.42% $0.29164

$5,418 $1,251

$6,669 1.0000

RATE -- WEIGHTED BY REVENUES $0.58578

Exclusive of Fuel $0.38326

COMPUTATION

USTRANSCOM UNIFORM RATE

COMBI SERVICE

COMBI AIRCRAFT

USTRANSCOM FY14 FY15 Total Adjusted Combi Combi Combi

Aircraft Rate Revenues Revenues Revenues Weighted Carrier Type Per Mile [000] [000] [000] Wgt % Rate

AIR TRANSPORT INTERNATIONAL LLC B757 $28.06401 $65,296 $91,067 $156,363 100.00% $28.06401

$156,363 1.0000

RATE -- WEIGHTED BY REVENUES $28.06401

Exclusive of Fuel $19.82302

APPENDIX C

ATLAS AIRLINES (GTI) Aircraft Type B747-400

LARGE CLASS AIRCRAFT Passenger Service

FY16 RATE REVIEW

FORECAST YEAR FY16

BY AS

CARRIER ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 1,936 1,904

AVERAGE DAILY AIRCRAFT UTILIZATION 7.8 7.8

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $3.9184 $3.9840 Fuel, Oil, & Aircraft Supplies 21.6114 20.8077 * Flight Equipment Maintenance 4.1265 4.1949

Total Direct Variable 29.6563 28.9866

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.6075 0.6075 Aircraft Rentals & Miscellaneous 0.0813 0.0814 Flight Equipment Depreciation & Obsolescence 1.2111 1.1988 Amortization of Preoperating Expense 0.0000 0.0000 Capital Gains & Losses 0.0000 0.0000

Total Direct Fixed 1.8999 1.8877

Indirect:

Maintenance & Depreciation-General Ground Property 0.1174 0.1174 Aircraft & Traffic Servicing 4.1190 4.2258 * Passenger Service 7.7698 8.0793 * General & Administrative 2.0188 1.9761

Total Indirect 14.0250 14.3986

TOTAL OPERATING COST 45.5812 45.2729

Profit 0.0000 6.0372 **

TOTAL COST $45.5812 $51.3101

Allowable Cabin Load 400 435

RATE PER SEAT MILE $0.11395 $0.11795

* Designates that the cost element was adjusted by a factor of 1.0259433 (435/424) to adjust the operating cost to be more reflective of costs from operating at the standard, 435 ACL.

** Profit was adjusted for consistency with original profit percentage.

OMNI AIR INTERNATIONAL (OAE) Aircraft Type B777-200CH

LARGE CLASS AIRCRAFT Passenger Service

FY16 RATE REVIEW

FORECAST YEAR FY16

BY AS

CARRIER ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 2,934 2,886

AVERAGE DAILY AIRCRAFT UTILIZATION 8.5 8.5

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $3.7854 $3.8385 Fuel, Oil, & Aircraft Supplies 15.1956 14.2698 Flight Equipment Maintenance 6.7394 6.7800

Total Direct Variable 25.7204 24.8883

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.6075 0.6075 Aircraft Rentals & Miscellaneous 0.0000 0.0282 Flight Equipment Depreciation & Obsolescence 4.6319 4.6166 Amortization of Preoperating Expense 0.0000 0.0000 Capital Gains & Losses 0.0000 0.0000

Total Direct Fixed 5.2394 5.2523

Indirect:

Maintenance & Depreciation-General Ground Property 0.1174 0.1174 Aircraft & Traffic Servicing 4.1190 4.1190 Passenger Service 5.3123 5.3308 General & Administrative 1.4258 1.6035

Total Indirect 10.9745 11.1707

TOTAL OPERATING COST 41.9343 41.3113

Profit 0.0000 6.4400

TOTAL COST $41.9343 $47.7513

Allowable Cabin Load 380 380

RATE PER SEAT MILE $0.11035 $0.12566

UNITED AIRLINES INC (UAL) Aircraft Type B747-400

LARGE CLASS AIRCRAFT Passenger Service

FY16 RATE REVIEW

FORECAST YEAR FY16

BY AS

CARRIER ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 778 766

AVERAGE DAILY AIRCRAFT UTILIZATION 14.1 14.1

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $4.1959 $4.4478 Fuel, Oil, & Aircraft Supplies 23.8114 21.8394 Flight Equipment Maintenance 3.8936 4.1273

Total Direct Variable 31.9009 30.4145

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.6075 0.6075 Aircraft Rentals & Miscellaneous 0.5266 0.5271 Flight Equipment Depreciation & Obsolescence 1.3630 1.4713 Amortization of Preoperating Expense 0.0000 0.0000 Capital Gains & Losses 0.0000 0.0000

Total Direct Fixed 2.4971 2.6059

Indirect:

Maintenance & Depreciation-General Ground Property 0.1174 0.1174 Aircraft & Traffic Servicing 4.1190 4.1190 Passenger Service 3.8819 3.9589 General & Administrative 1.3776 1.8446

Total Indirect 9.4959 10.0399

TOTAL OPERATING COST 43.8939 43.0604

Profit 0.0000 5.6232

TOTAL COST $43.8939 $48.6836

Allowable Cabin Load 400 400

RATE PER SEAT MILE $0.10973 $0.12171

APPENDIX D

ATLAS AIR, INC (GTI) Aircraft Type B767-300/ER

MEDIUM CLASS AIRCRAFT Passenger Service

FY16 RATE REVIEW

FORECAST YEAR FY16

BY AS

CARRIER ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 2,874 2,752

AVERAGE DAILY AIRCRAFT UTILIZATION 6.5 6.5

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $5.1967 $5.4288 Fuel, Oil, & Aircraft Supplies 10.8757 10.5475 Flight Equipment Maintenance 2.5394 2.5658

Total Direct Variable 18.6118 18.5421

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.4033 0.4033 Aircraft Rentals & Miscellaneous 0.1515 0.1464 Flight Equipment Depreciation & Obsolescence 1.8992 1.8983 Amortization of Preoperating Expense 0.0000 0.0000 Capital Gains & Losses 0.0000 0.0000

Total Direct Fixed 2.4540 2.4480

Indirect:

Maintenance & Depreciation-General Ground Property 0.1081 0.1081 Aircraft & Traffic Servicing 3.4437 3.4437 Passenger Service 4.7802 4.9782 General & Administrative 1.7611 1.6905

Total Indirect 10.0931 10.2205

TOTAL OPERATING COST 31.1589 31.2106

Return on Investment 0.0000 5.3883

TOTAL COST $31.1589 $36.5989

Allowable Cabin Load 240 240

RATE PER SEAT MILE $0.12983 $0.15250

DELTA AIR LINES (DAL) Aircraft Type B767-300/ER

MEDIUM CLASS AIRCRAFT Passenger Service

FY16 RATE REVIEW

FORECAST YEAR FY16

BY AS

CARRIER ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 705 835

AVERAGE DAILY AIRCRAFT UTILIZATION 5.6 11.5

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $5.3994 $3.9954 Fuel, Oil, & Aircraft Supplies 10.1143 10.7018 Flight Equipment Maintenance 3.1348 2.6566

Total Direct Variable 18.6485 17.3538

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.4033 0.4033 Aircraft Rentals & Miscellaneous 0.1562 0.1233 Flight Equipment Depreciation & Obsolescence 1.8389 1.8258 Amortization of Preoperating Expense 0.0000 0.0000 Capital Gains & Losses -0.0433 -0.0281

Total Direct Fixed 2.3551 2.3243

Indirect:

Maintenance & Depreciation-General Ground Property 0.7325 0.1081 Aircraft & Traffic Servicing 6.6452 3.4437 Passenger Service 3.5257 3.4500 General & Administrative 1.3850 1.0147

Total Indirect 12.2884 8.0165

TOTAL OPERATING COST 33.2920 27.6946

Return on Investment 0.0000 4.2665

TOTAL COST $33.2920 $31.9611

RATE PER SEAT MILE $0.13872 $0.13317

OMNI AIR INTERNATIONAL (OAE) Aircraft Type B767-300

MEDIUM CLASS AIRCRAFT Passenger Service

FY16 RATE REVIEW

FORECAST YEAR FY16

BY AS

CARRIER ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 4,260 4,245

AVERAGE DAILY AIRCRAFT UTILIZATION 7.4 7.1

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $3.2354 $3.4233 Fuel, Oil, & Aircraft Supplies 11.3547 10.5153 Flight Equipment Maintenance 4.8716 5.0917

Total Direct Variable 19.4617 19.0303

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.4033 0.4033 Aircraft Rentals & Miscellaneous 0.6621 0.7128 Flight Equipment Depreciation & Obsolescence 1.8481 1.9007 Amortization of Preoperating Expense 0.0000 0.0000 Capital Gains & Losses 0.0000 0.0000

Total Direct Fixed 2.9135 3.0168

Indirect:

Maintenance & Depreciation-General Ground Property 0.1081 0.1081 Aircraft & Traffic Servicing 3.4437 3.4437 Passenger Service 4.2857 4.3006 General & Administrative 1.0368 1.2232

Total Indirect 8.8743 9.0757

TOTAL OPERATING COST 31.2495 31.1228

Profit 0.0000 3.0567

TOTAL COST $31.2495 $34.1795

RATE PER SEAT MILE $0.13021 $0.14241

APPENDIX E

DELTA AIR LINES (DAL) Aircraft Type A319

SMALL CLASS AIRCRAFT Passenger Service

FY16 RATE REVIEW

FORECAST YEAR FY16

BY AS

CARRIER ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 705 47

AVERAGE DAILY AIRCRAFT UTILIZATION 5.6 6.7

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $3.1997 $3.2584 Fuel, Oil, & Aircraft Supplies 5.5394 5.1988 Flight Equipment Maintenance 3.9715 4.1439

Total Direct Variable 12.7106 12.6011

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.1567 0.1567 Aircraft Rentals & Miscellaneous 0.1360 0.1349 Flight Equipment Depreciation & Obsolescence 1.3431 1.3368 Amortization of Preoperating Expense 0.0000 0.0000 Capital Gains & Losses -0.0004 -0.0482

Total Direct Fixed 1.6354 1.5802

Indirect:

Maintenance & Depreciation-General Ground Property 0.2012 0.2012 Aircraft & Traffic Servicing 2.8589 2.8589 Passenger Service 2.7183 1.4617 General & Administrative 1.2364 0.8577

Total Indirect 7.0148 5.3794

TOTAL OPERATING COST 21.3608 19.5606

Profit 0.0000 3.1510

TOTAL COST $21.3608 $22.7116

Allowable Cabin Load 135 135

RATE PER SEAT MILE $0.15823 $0.16823

MIAMI AIR INTERNATIONAL, INC (BSK) Aircraft Type B737-800

SMALL CLASS AIRCRAFT Passenger Service

FY16 RATE REVIEW

FORECAST YEAR FY16

BY AS

CARRIER ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 287 272

AVERAGE DAILY AIRCRAFT UTILIZATION 5.7 5.6

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $3.8363 $4.0188 Fuel, Oil, & Aircraft Supplies 6.1187 5.7422 Flight Equipment Maintenance 4.6126 4.8447

Total Direct Variable 14.5676 14.6057

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.1567 0.1567 Aircraft Rentals & Miscellaneous 3.8339 3.8636 Flight Equipment Depreciation & Obsolescence 0.1371 0.1239 Amortization of Preoperating Expense 0.0000 0.0000 Capital Gains & Losses 0.0000 0.0000

Total Direct Fixed 4.1277 4.1442

Indirect:

Maintenance & Depreciation-General Ground Property 0.2012 0.2012 Aircraft & Traffic Servicing 2.8589 2.8589 Passenger Service 1.8245 1.8597 General & Administrative 0.8022 0.9986

Total Indirect 5.6868 5.9183

TOTAL OPERATING COST 24.3821 24.6682

Profit 0.0000 2.2321

TOTAL COST $24.3821 $26.9003

Allowable Cabin Load 150 150

RATE PER SEAT MILE $0.16255 $0.17934

SUN COUNTRY AIRLINES (SCX) Aircraft Type B737-800

SMALL CLASS AIRCRAFT Passenger Service

FY16 RATE REVIEW

FORECAST YEAR FY16

BY AS

CARRIER ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 148 145

AVERAGE DAILY AIRCRAFT UTILIZATION 8.4 8.4

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $2.9563 $3.0184 Fuel, Oil, & Aircraft Supplies 5.4207 5.2019 Flight Equipment Maintenance 1.7539 1.7868

Total Direct Variable 10.1309 10.0071

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.1567 0.1567 Aircraft Rentals & Miscellaneous 2.7527 2.6755 Flight Equipment Depreciation & Obsolescence 0.0401 0.0390 Amortization of Preoperating Expense 0.0000 0.0000 Capital Gains & Losses 0.0000 0.0000

Total Direct Fixed 2.9495 2.8712

Indirect:

Maintenance & Depreciation-General Ground Property 0.3154 0.2012 Aircraft & Traffic Servicing 2.9079 2.8589 Passenger Service 2.5174 2.5704 General & Administrative 1.0917 1.0990

Total Indirect 6.8324 6.7294

TOTAL OPERATING COST 19.9128 19.6076

Profit 0.0000 2.1557

TOTAL COST $19.9128 $21.7634

RATE PER SEAT MILE $0.13275 $0.14509

UNITED AIRLINES (UAL) Aircraft Type B737-800

SMALL CLASS AIRCRAFT Passenger Service

FY16 RATE REVIEW

FORECAST YEAR FY16

BY AS

CARRIER ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 246 240

AVERAGE DAILY AIRCRAFT UTILIZATION 11.0 11.0

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $2.5361 $2.5558 Fuel, Oil, & Aircraft Supplies 7.0478 6.6141 Flight Equipment Maintenance 2.1825 2.1995

Total Direct Variable 11.7664 11.3695

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.1567 0.1567 Aircraft Rentals & Miscellaneous 0.9891 0.9909 Flight Equipment Depreciation & Obsolescence 0.6825 0.6809 Amortization of Preoperating Expense 0.0000 0.0000 Capital Gains & Losses 0.0000 0.0000

Total Direct Fixed 1.8283 1.8284

Indirect:

Maintenance & Depreciation-General Ground Property 0.2012 0.2012 Aircraft & Traffic Servicing 2.8589 2.8589 Passenger Service 0.9535 1.0357 General & Administrative 0.7141 1.0167

Total Indirect 4.7277 5.1125

TOTAL OPERATING COST 18.3224 18.3103

Profit 0.0000 2.5691

TOTAL COST $18.3224 $20.8794

RATE PER SEAT MILE $0.12215 $0.13920

APPENDIX F

ATLAS AIRLINES (GTI) Aircraft Type B747-400

LARGE CLASS AIRCRAFT Cargo Service

FY16 RATE REVIEW

FORECAST YEAR FY16

BY AS

CARRIER ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 1,625 1,787

AVERAGE DAILY AIRCRAFT UTILIZATION 7.6 7.5

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $4.4032 $4.0039 Fuel, Oil, & Aircraft Supplies 23.8120 19.5492 Flight Equipment Maintenance 4.9351 4.4701

Total Direct Variable 33.1503 28.0232

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.1795 0.1843 Aircraft Rentals & Miscellaneous 4.9449 4.9980 Flight Equipment Depreciation & Obsolescence 1.5298 1.5346 Amortization of Preoperating Expense 0.0000 0.0000 Capital Gains & Losses 0.0000 0.0000

Total Direct Fixed 6.6542 6.7170

Indirect:

Maintenance & Depreciation-General Ground Property 0.0674 0.0613 Aircraft & Traffic Servicing 3.7021 3.3626 General & Administrative 1.8973 1.6586

Total Indirect 5.6668 5.0824

TOTAL OPERATING COST 45.4713 39.8226

Profit 0.0000 5.4697

TOTAL COST $45.4713 $45.2922

Allowable Cabin Load 100 100

RATE PER TON MILE $0.45471 $0.45292

FEDERAL EXPRESS CORPORATION (FDX) Aircraft Type MD11

LARGE CLASS AIRCRAFT Cargo Service

FY16 RATE REVIEW

FORECAST YEAR FY16

BY AS

CARRIER ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 312 312

AVERAGE DAILY AIRCRAFT UTILIZATION 6.5 6.5

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $5.6334 $5.6340 Fuel, Oil, & Aircraft Supplies 19.1546 17.9528 Flight Equipment Maintenance 10.0749 6.9751

Total Direct Variable 34.8629 30.5619

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.0800 0.0797 Aircraft Rentals & Miscellaneous 3.4212 2.5793 Flight Equipment Depreciation & Obsolescence 1.8520 1.8459 Amortization of Preoperating Expense 0.0000 0.0000 Capital Gains & Losses 0.0000 0.0000

Total Direct Fixed 5.3532 4.5050

Indirect:

Maintenance & Depreciation-General Ground Property 1.9863 0.2586 Aircraft & Traffic Servicing 4.0571 4.1151 General & Administrative 4.2588 1.5468

Total Indirect 10.3022 5.9205

TOTAL OPERATING COST 50.5183 40.9873

Profit 0.0000 5.5253

TOTAL COST $50.5183 $46.5126

Allowable Cabin Load 86 86

RATE PER TON MILE $0.58742 $0.54084

KALITTA AIR (CKS) Aircraft Type B747-400

LARGE CLASS AIRCRAFT Cargo Service

FY16 RATE REVIEW

FORECAST YEAR FY16

BY AS

CARRIER ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 1,078 1,066

AVERAGE DAILY AIRCRAFT UTILIZATION 7.2 7.2

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $3.7331 $4.0078 Fuel, Oil, & Aircraft Supplies 22.1136 20.3520 Flight Equipment Maintenance 6.3003 6.7638

Total Direct Variable 32.1470 31.1236

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.1704 0.1944 Aircraft Rentals & Miscellaneous 0.5917 0.5905 Flight Equipment Depreciation & Obsolescence 2.0666 2.0624 Amortization of Preoperating Expense 0.0678 0.0676 Capital Gains & Losses 0.0075 0.0075

Total Direct Fixed 2.9040 2.9224

Indirect:

Maintenance & Depreciation-General Ground Property 0.3739 0.3784 Aircraft & Traffic Servicing 5.7256 2.7193 General & Administrative 0.2640 0.2552

Total Indirect 6.3635 3.3530

TOTAL OPERATING COST 41.4145 37.3990

Profit 0.0000 5.8625

TOTAL COST $41.4145 $43.2615

Allowable Cabin Load 100 100

RATE PER TON MILE $0.41415 $0.43262

UNITED PARCEL SERVICE (UPS) Aircraft Type MD11

LARGE CLASS AIRCRAFT Cargo Service

FY16 RATE REVIEW

FORECAST YEAR FY16

BY AS

CARRIER ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 498 498

AVERAGE DAILY AIRCRAFT UTILIZATION 5.6 5.6

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $4.7625 $4.7651 Fuel, Oil, & Aircraft Supplies 16.5148 15.2506 Flight Equipment Maintenance 6.8019 6.8055

Total Direct Variable 28.0792 26.8212

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.1260 0.1293 Aircraft Rentals & Miscellaneous 0.0138 0.0138 Flight Equipment Depreciation & Obsolescence 5.1366 5.1477 Amortization of Preoperating Expense 0.0000 0.0000 Capital Gains & Losses 0.1776 0.1776

Total Direct Fixed 5.4540 5.4683

Indirect:

Maintenance & Depreciation-General Ground Property 0.1614 0.1812 Aircraft & Traffic Servicing 4.0457 4.1195 General & Administrative 1.3330 1.3401

Total Indirect 5.5401 5.6409

TOTAL OPERATING COST 39.0733 37.9304

Profit 0.0000 6.7757

TOTAL COST $39.0733 $44.7060

Allowable Cabin Load 86 86

RATE PER TON MILE $0.45434 $0.51984

APPENDIX G

ABX AIR INC. (ABX) Aircraft Type B767-200F

MEDIUM CLASS AIRCRAFT Cargo Service

FY16 RATE REVIEW

FORECAST YEAR FY16

BY AS

CARRIER ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 36 39

AVERAGE DAILY AIRCRAFT UTILIZATION 4.8 5.0

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $4.1472 $3.8157 Fuel, Oil, & Aircraft Supplies 16.9327 9.6154 Flight Equipment Maintenance 6.8999 6.3485

Total Direct Variable 27.9798 19.7796

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.0951 0.0881 Aircraft Rentals & Miscellaneous 5.4215 4.8227 Flight Equipment Depreciation & Obsolescence 3.5642 0.0243 Amortization of Preoperating Expense 0.0000 0.0000 Capital Gains & Losses 0.0000 0.0000

Total Direct Fixed 9.0808 4.9350

Indirect:

Maintenance & Depreciation-General Ground Property 0.0000 0.0000 Aircraft & Traffic Servicing 2.5935 0.4109 General & Administrative 1.5167 0.5774

Total Indirect 4.1102 0.9882

TOTAL OPERATING…