21_July_2017_Final_FY18_Uniform_Rates_and_Rules_for_International_Service.pdf

21 July 17

MEMORANDUM FOR ALL CARRIERS

FROM: USTRANSCOM/TCAQ-P

508 Scott Drive Scott AFB IL 62225-5357

SUBJECT: Notice of Final Fiscal Year 2018 (FY18) Uniform Rates and Rules for International

Service – Solicitation Number HTC711-16-R-C001

1. The final FY18 rates are based on fuel pegged at $2.09 per gallon for cargo and combi and $2.04 per gallon for passenger. The final 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 $0.11607 Medium Class Passenger $0.13153 Small Class Passenger $0.15175 $2,000 Large Class Cargo $0.37142 Medium Class Cargo $0.42327 Combi Service $27.50529

2. These rates are not effective until the start of Option Period One of the resultant contracts from solicitation HTC711-16-R-C001. The performance start date for Option Period One is 1 October 2017.

4. In accordance with our Memorandum of Understanding, please direct any questions or concerns to me at scott.e.rader.civ@mail.mil or 618-220-6711.

//SIGNED//

SCOTT E. RADER

Chief, Cost & Pricing Branch

Attachment:

21 July 2017 Final FY18 Uniform Rates and Rules for International Service

UNITED STATES TRANSPORTATION COMMAND

508 SCOTT DR

SCOTT AIR FORCE BASE, IL 62225-5357

mailto:scott.e.rader.civ@mail.mil

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

UNITED STATES

TRANSPORTATION COMMAND

FINAL

UNIFORM RATES AND RULES

FOR

INTERNATIONAL SERVICE

FISCAL YEAR 2018

INTRODUCTION

The final FY18 USTRANSCOM Uniform Rates and Rules (hereafter referred to as “Rates”) have been developed using rate-making procedures in compliance with the Federal

Acquisition Regulation (FAR), Memorandum of Understanding (MOU) for FY18 through

FY22, and methodologies previously established by the Civil Aeronautics Board (CAB).

Rate Overview

In addition to changes and adjustments based on carrier comments and negotiations, the final

FY18 rates updated general escalation and FICA escalation factors. The general escalation increased by approximately 64% from 3.04% applied in the proposed rates and rules to the

4.98% applied in the final rates and rules. Further, the FICA escalation increased from 0.84% to 12.77%. When considering the rates excluding fuel costs, the large, medium and small passenger class as well as large cargo class increased by approximately 12%, 7%, 11%, and

4% respectively compared to the final FY17 rates. Compared to the final FY17 rates, without fuel, the medium passenger decreased approximately 21% and combi experienced less than a

1% change. The substantial decrease in the medium cargo rate is explained by the change in aircraft model proposed and the associated available cabin load (ACL).

Carrier Comments

On 27 April 2017, USTRANSCOM posted the FY18 proposed rate to Federal Business

Opportunities. Prior to this date, USTRANSCOM also supplied each carrier its individual cut sheet detailing USTRANSCOM’s adjustments to its individual proposed costs and statistical data as well as the carrier’s individual profit calculation. Carriers were advised to provide comments, if applicable, no later than 30 May 2017. The FY18 final rates consist of a total of

12 proposals submitted by 8 carriers.

The following carriers provided feedback or written comments to the proposed rate: Air

Transport International (ATI), Atlas Air (Atlas), and Omni Air International (Omni). The following topics address the general rate issues identified and USTRASCOM’s response.

General rate comments received during the FY18 rate discussions focused on two topics, future union agreements and weighted guidelines (WGL) profit.

1. Future Union Agreements

Omni Comment: During the FY18 contract period carriers may enter collective bargaining agreements (CBA) subsequent to the issuance of the final rates. This will be an increase cost on carriers not accounted for in the FY18 rate.

Recommendation: USTANSCOM commit if these CBA’s are executed, the rates will be reviewed for an equitable adjustment.

USTRANSCOM Response: USTRANSCOM acknowledges a new CBA could significantly affect operating costs. Therefore, upon notice from a carrier to TCAQ-P, USTRANSCOM will review the rates to determine the significance and potential need for adjustment.

2. Profit / Weighted Guidelines

Atlas Comment: Performance Risk – Technical. Contract requirements warrant maximum value of 7%, as carriers are required to provide the following elements of service:

1. Highly trained and skilled employees;

2. The Contractors investment has significantly reduced the costs for the Government to provide the services themselves;

3. The contractor regularly accepts accelerated delivery schedules to meet DoD requirements for expansion and especially short notice missions; and,

4. The contractor has assumed additional risk through the penalty provision under the contract.

Guidance provides that when any of the above elements are required, an above normal rating is appropriate.

Performance Risk – Management / Cost Control. When any of the following elements are required the higher than Normal value should be assigned:

1. The contractor's value added is both considerable and reasonably difficult;

2. The effort involves a high degree of integration or coordination;

3. The contractor has a good record of past performance;

4. The contractor provides fully documented and reliable cost estimates;

5. The contractor makes appropriate make-or-buy decisions; or

6. The contractor has a proven record of cost tracking and control.

Recommendation: Maximum value of 7% for technical and management / cost control should be assigned.

USTRANSCOM Response: Guidance for the weighted guidelines methodology is in the

Defense Federal Acquisition Regulations (DFARS) 215.404-4. USTRANSCOM disagrees with the implication that if “any” of the indicators exist for above normal, a higher value should apply. Guidance before each evaluation factor states the contracting officer (CO)

“may assign a higher than normal value” before each list of evaluation criteria. Likewise, guidance states the CO “may assign a lower than normal value” before the list of evaluation criteria. Stating if any one of the above normal conditions exist, a higher than normal value is warranted, than it would be implied if any one of the below normal conditions exist, a lower than normal value is warranted. As a point of example, USTRANSCOM agrees with the above normal evaluation that the contractor, on occasion, accepts accelerated delivery schedules (i.e. short notice expansion) which is an above normal indicator. However, this acquisition is also a follow on acquisition effort and the program is mature which are below normal indicators.

Performance Risk – Technical Risk. USTRANSCOM disagrees with the recommendation to assign maximum value for this risk element. The range for this risk element is 3% to 7%.

DFARs states the normal value for this element is 5% and the normal value should represent average conditions on the prospective contract when compared to all goods and services acquired by DoD. This risk element addresses the contractor’s degree of risk in fulfilling the contract requirements due to the technical uncertainties of performance. USTRANSCOM considers the technical risk values assigned to be representative of the technical risk of the

CRAF contract and evaluates annually for changing conditions.

Performance Risk – Management / Cost Control. USTRANSCOM disagrees with the recommendation to assign maximum value for this risk element. The range for this risk element is 3% to 7%. DFARs states the normal value for this element is 5% and the normal value should represent average conditions on the prospective contract when compared to all goods and services acquired by DoD. This risk element addresses the contractor’s degree of risk in fulfilling the contract requirements by assessing the degree of management effort necessary to ensure contract requirements are met and to reduce and control costs.

USTRANSCOM considers the management / cost control risk values to generally be representative of the normal level of management effort required to meet contract requirements compared to other DoD contracts. Where a carrier had demonstrated cost reductions, USTRANSCOM did consider an additional increase for this factor.

Omni Comment: The mark up rates in the weighted guidelines are theoretical, as they do not reflect the true experience of the profitability for DOD Charter carriers. The markup rate is a mathematical profit margin before taxes and all other non-operating cost.

Recommendation: USTRANSCOM continue to review actual profit margins and to consider non-operating expenses such as taxes, teaming, etc., which are part of a true return on invested capital.

USTRANSCOM Response: USTRANSCOM agrees the weighted guidelines do not represent actual profit or net income. FAR 15.404-4(a)(1) even states as much in “Profit or fee prenegotiation objectives do not necessarily represent net income to contractors. Rather, they represent that element of the potential total remuneration that contractors may receive for contract performance over and above allowable costs.” As such, USTRANSCOM continues to review profit as standard practice during each rate review cycle. Items reviewed include, but are not limited to mark up, profit, and expected realized profit. Whereas markup is the mathematical percentage determined by the weighted guidelines and profit is total allowable operating cost multiplied by the markup. Expected realized profit is determined for each carrier based on the difference between the applicable FY18 rate and a carrier’s operating costs per seat-mile (or ton-mile for cargo). This review relies upon information made available to us, and on occasion audited by DCAA, during the rate review process.

USTRANSCOM welcomes to opportunity to analyze additional independent financial data to ensure a reasonable return.

Fuel

The TCAQ pegged price of fuel is lower than was published with the FY18 proposed Uniform

Rates and Rules. The reduction to the pegged price of fuel compared to the prices published in the FY18 proposed rates and rules is a result of reduced DLA fuel costs going into effect 1 July

2017. To develop the proposed pegged price of fuel for each category, TCAQ used a projection of commercial fuel cost and the DLA fuel costs for the performance period and weighted them based on the historical proportions used for each aircraft category. The pegged fuel price for passenger service is $2.04 per gallon and $2.09 per gallon for cargo service, and combi. The pegged price includes into-plane fees and taxes.

Ferry

USTRANSCOM changed the ferry rate 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. USTRANSCOM reviewed the current cost levels in all cost categories. On the basis of this review, the ferry rate for FY18 is 90 percent of the effective rate for passenger and 90 percent of the effective rate for cargo.i Also see Appendix A for ferry rates.

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 and medium cargo classes 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 rate.ii 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.

This year’s analysis supports stop charges for the small passenger class only.iii In order to increase payloads, USTRANSCOM buyers continue to routinely combine missions whenever possible. This practice does decrease the average stage length for some missions in all classes below the weight averaged stage length used in the linehaul calculation; however, the number of these lower stage length missions in the larger rate classes is too small to create a significant variation between the average stage length experienced by each carrier in the class and the weight averaged stage length. Consistent with previous rate reviews, however, requirements in the small passenger class continue to differ significantly in volume and areas of operation causing a significant variation in average stage length between carriers.

Cost Escalation

The 27-month cost escalation factor is 4.98 percent for FY18. This is based on the calculations agreed upon in the FY18-22 MOU. This is an increase from the 27 month factor of 3.04 percent for FY17. Appendix J provides detailed information on this calculation.

Eurocontrol

The FY18 Euro control surcharges have been calculated as follows: 2.2 percent for passenger, 2.5 percent for cargo missions, 0.27 percent for combi. This is a slight decrease from the FY17 Euro control of 2.4 percent, 2.7 percent and .27 percent for passenger, cargo and combi, respectively. The mission samples and analysis for euro control is provided at

Appendix I.

Incremental Passenger Movement

In FY02, USTRANSCOM developed an incremental passenger service rate for periodical requirements requiring the use of extra seats above the standard ACL. The rate applies when the number of additional passengers above the standard ACL is identified in advance for an exercise, SAAM, or contingency. This is not authorized for additional passengers on channel missions. TCAQ updated all factors incorporated into this rate; and the FY18 Incremental

Passenger Rate is $134iv. See Appendix A for details.

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 analysis of the Passenger ferry rate was performed using the Final FY18 Large Class passenger rate of $0.11607 (effective rate) per seat mile. The passenger ferry rate and paid ferry return rate will be 90% of the effective rate. The analysis of the Cargo ferry rate was performed using the FY18 Large Class cargo rate of $0.37142 (effective rate) per ton mile. The cargo ferry rate and paid ferry return rate will be 90% of the effective rate.

SUBJECT: FY18 Final Ferry Rate Passenger

Large Class

Wgt'd Percentage Cost

Cost Category Cost Allowed Allowed Rate %

Crew 1.21436 100% 1.2144 Fuel, Oil & Supplies 2.8832 88% 2.5228 Maintenance 1.5710 100% 1.5710 Insurance 0.07898 100% 0.0790 Rent 0.0534 100% 0.0534 Depreciation 1.0073 100% 1.0073 Preop 0.0000 100% 0.0000 Capital Gains/Losses 0.0000 0% 0.0000 Grd Property 0.0266 100% 0.0266 Aircraft & Traffic Service 0.7388 85% 0.6279 Passenger Service 1.6574 65% 1.0690 G&A 0.4647 100% 0.4647 Profit 1.9118 100% 1.9118 Total 11.607

10.548

0.9087

Medium Class

Crew 2.256878 100% 2.2569 Fuel, Oil & Supplies 2.913264 88% 2.5491 Maintenance 1.574556 100% 1.5746 Insurance 0.064849 100% 0.0648 Rent 0.165406 100% 0.1654 Depreciation 0.627051 100% 0.6271 Preop 0 100% 0.0000 Capital Gains/Losses 0 0% 0.0000 Grd Property 0.026703 100% 0.0267 Aircraft & Traffic Service 1.432631 85% 1.2106 Passenger Service 1.982161 65% 1.2785 G&A 0.598931 100% 0.5989 Profit 1.510342 100% 1.5103 Total 13.153

11.863

0.9019

Total Weighted Passenger Ferry Rate 90.47%

FY18 Large Class

Crew 4.7995 100% 4.7995

Fuel, Oil & Supplies 12.9097 75% 9.6823 Maintenance 5.8736 100% 5.8736 Insurance 0.1053 100% 0.1053 Rent 2.9978 100% 2.9978 Depreciation 1.4692 100% 1.4692 Preop 0.0289 100% 0.0289 Cap Gains/Losses 0.0022 0% 0.0000 Grd Property 0.3166 100% 0.3166 Aircraft & Traffic Service 2.6380 85% 2.2423 G&A 1.3084 100% 1.3084 Profit 4.6925 100% 4.6925 Total 37.1416

33.5164

90.24% ii Linehaul rate = Effective Rate - (Stop charge/(Average Stage Length * ACL))

The following example is for informational purposes only.

$0.15174 = $0.16112 - (($2,000 / (1,441 * 148)) iii

Average Stage Length Large Class Pax Weighted Avg 2712

GTI B747-400 2702

OAE B777 2724

Medium Class Pax Weighted Avg 2380

GTI B767-300 2296

OAE B767-200/300 2451

Small Class Pax Weighted Avg 1441

BSK B737-700/800 1408

SCX B737 1515

Large Class Cargo Weighted Avg 2929

GTI B747-400 2859

FDX MD11 3141

CKS B747-400 2984

Medium Class Cargo Weighted Avg 2808

ABX B767-300 3524

ATI B767-300 2037

Combi ATI B757 2197 iv Incremental Passenger Rate calculation

One-Way Round-Trip Total

Avg Live Pay Miles

639,725 2,926,888 3,566,613 FY18 Passenger Seat Mile Rate 0.21102 0.11607

54,646,867 137,525,798

Total Dollars

192,172,665 Total Trips

Total Passengers

126,303 Avg Passenger per Trip

Avg Price Per Trip

615,938.03 Avg Seat Miles Per Trip 4,627,639.07 Avg Miles Per Trip

11,431

Additional passenger service cost per trip $134

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 2

D Costs Per Seat Mile by Carrier and Aircraft Type in Medium Class Charter Passenger Service 2

E Costs Per Seat Mile by Carrier and Aircraft Type in Small Class Charter Passenger Service 2

F Costs Per Ton Mile by Carrier and Aircraft Type in Large Class Cargo Service 3

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 13

J Cost Escalation Factor 2

K FICA Escalation 1

APPENDIX A

SCHEDULE OF UNIFORM NEGOTIATED RATES AND RULES (FINAL)

FISCAL YEAR 2018

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

$0.11607 Ferry Rate (Base - Effective Rate) 90% $0.10447 Incremental Passenger

$134

Fuel Pegged Rate

$2.04

Medium

$0.13153

Ferry Rate (Base - Effective Rate) 90% $0.11837

$2.04

Small

Live Line Haul Rate

$0.15175

Ferry Rate (Base - Effective Rate) 90% $0.14501 Stop Charge (Per Directed Landing) $2,000

Fuel Pegged Rate $2.04

(2) CHARTER CARGO SERVICE PER TON MILE

Large

$0.37142 Ferry Rate (Base - Effective Rate) 90% $0.33427

$2.09

Medium

Live Effective Rate:

$0.42327 Ferry Rate (Base - Effective Rate) 90% $0.38094 Fuel Pegged Rate $2.09

(3) CHARTER COMBI SERVICE PER PLANE MILE

$27.50529

Ferry Rate (Base - Effective Rate) 90% $24.75476 Fuel Pegged Rate $2.09

(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 2.2 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 2.5 percent on 6,000 miles + 1,800 miles). Combi Carriers will be paid the applicable rate plus a surcharge of 0.27 percent

(5) FERRY. Ferry will be paid based on standard ACL or lesser amount. However, no ferry miles will be paid if actual flown ferry miles (combines total of ferry/backhaul) are less than 250 miles.

(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 $134 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:

35.76% 33.26%

8 to 14 days

Passenger and Combi:

Cargo:

25.08% 27.13%

15 to 30 days

Passenger and Combi:

Cargo:

21.48% 22.80%

31 to 45 days Passenger and Combi 10.30% 31 to 75 days Cargo 9.34% 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:

25.08% 27.13%

(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). Demurrage charges are limited to delays in loading or unloading but exclude delays due to damage resulting from the negligence of Government personnel. Delays due to Acts of God, Air Traffic Control (ATC) or Contractor controllable reasons will not be compensated. 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 $2151

B747-400/400ER 100 $2390

MD11 86 $2055

B777F 88 $2103

A300-600ER 51 $1198

A300-400F 50 $1175 B767-300F 61 $1433 B767-200F 48 $1128

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 L100 23

MD80 140

B737-400/700 140 B737-800 150 A320 150 B737-900 165 A321 170

Medium Aircraft: Medium Aircraft:

B757-200/200ER 190 B767-200F 48

B757-300 200 A300-B4(F) 50

B767-200/200ER 200 A300-600ER 51

A310 200 B767-300F 61 B767-200 Charter Config. 207 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

A340 345 B747-100/200/300 90

MD11/MD11ER 360

B777 Charter Config. 380 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 SUBSTITUE 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 live mileage shall be computed via an intermediate point(s) which yields the shortest mileage. This does not apply to ferry segments.

(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. Standard cancellation rates (paragraph 7) to not apply.

“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 great circle 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

USTRANSCOM FY16 FY17 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 0.09965$ 117,424$ 92,635$ $210,059 56.47% $0.05627

OMNI AIR INTERNATIONAL INC B777 0.13739$ 78,329$ 83,610$ $161,939 43.53% $0.05981

$371,998 1.0000

RATE -- WEIGHTED BY REVENUES $0.11607

Exclusive of Fuel $0.08724

LARGE CLASS AIRCRAFT

PASSENGER SERVICE

USTRANSCOM UNIFORM RATE

COMPUTATION

USTRANSCOM FY16 FY17 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 0.13918$ 146,906$ 128,856$ $275,761 51.55% $0.07174

OMNI AIR INTERNATIONAL INC B767-200/300 0.12338$ 149,372$ 109,837$ $259,210 48.45% $0.05978

$534,971 1.0000

RATE -- WEIGHTED BY REVENUES $0.13153

Exclusive of Fuel $0.10240

MEDIUM CLASS AIRCRAFT

COMPUTATION

USTRANSCOM UNIFORM RATE

PASSENGER SERVICE

USTRANSCOM FY16 FY17 Total Adjusted Passenger Passenger Passenger

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

MIAMI AIR INTERNATIONAL INC B737-400/800 0.16987$ 18,687$ 19,428$ $38,115 69.25% $0.11763 MN AIRLINES, LLC DBA SUN COUNTRY AIRLINES B737-800 0.14142$ 7,803$ 9,125$ $16,928 30.75% $0.04349

$55,043 1.0000

RATE -- WEIGHTED BY REVENUES $0.16112

Exclusive of Fuel $0.13491

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

$0.16112 1,442 148 $2,000 $0.15175

Note: The weighted average stage length and weighted average seats per mission are based on USTRANSCOM data from Jul 15 to Jun 16.

COMPUTATION

USTRANSCOM UNIFORM RATE

PASSENGER SERVICE

SMALL CLASS AIRCRAFT

USTRANSCOM FY16 FY17 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 0.37748$ 170,725$ 174,307$ $345,032 51.74% $0.19532

KALITTA AIR, LLC B747-400 0.33740$ 149,350$ 128,797$ $278,147 41.71% $0.14074

FEDERAL EXPRESS CORPORATION MD11 0.54034$ 21,460$ 22,164$ $43,624 6.54% $0.03535

$666,803 1.0000

RATE -- WEIGHTED BY REVENUES $0.37142

Exclusive of Fuel $0.24232

COMPUTATION

USTRANSCOM UNIFORM RATE

CARGO SERVICE

LARGE CLASS AIRCRAFT

USTRANSCOM FY16 FY17 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 0.41158$ $7,466 $0 $7,466 51.88% $0.21353

AIR TRANSPORT INTERNATIONAL LLC B767-200F 0.43586$ $6,924 $0 $6,924 48.12% $0.20973

$14,390 1.0000

RATE -- WEIGHTED BY REVENUES $0.42327

Exclusive of Fuel $0.30793

COMPUTATION

USTRANSCOM UNIFORM RATE

CARGO SERVICE

MEDIUM CLASS AIRCRAFT

USTRANSCOM FY16 FY17 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 $27.50529 $75,752 $72,595 $148,347 100.00% $27.50529

$148,347 1.0000

RATE -- WEIGHTED BY REVENUES $27.50529

Exclusive of Fuel $22.17233

COMPUTATION

USTRANSCOM UNIFORM RATE

COMBI SERVICE

COMBI AIRCRAFT

APPENDIX C

ATLAS AIRLINES (GTI) Aircraft Type B747-400

LARGE CLASS AIRCRAFT Passenger Service

FY18 RATE REVIEW

FORECAST YEAR FY18

USTRANSCOM FINAL

PROPOSED ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 2,395 2,395

AVERAGE DAILY AIRCRAFT UTILIZATION 8.0 8.0

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $4.6809 $4.7285 Fuel, Oil, & Aircraft Supplies 14.0204 13.6198 Flight Equipment Maintenance 4.2774 4.3549

Total Direct Variable 22.9787 22.7033

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.3686 0.3686 Aircraft Rentals & Miscellaneous 0.2772 0.2799 Flight Equipment Depreciation & Obsolescence 1.3508 1.3508 Amortization of Preoperating Expense 0.0000 0.0000 Capital Gains & Losses 0.0000 0.0000

Total Direct Fixed 1.9966 1.9994

Indirect:

Maintenance & Depreciation-General Ground Property 0.0946 0.0946 Aircraft & Traffic Servicing 2.7095 2.7607 Passenger Service 7.7182 7.8168 General & Administrative 1.6323 1.6534

Total Indirect 12.1546 12.3254

TOTAL OPERATING COST 37.1298 37.0281

Profit 5.1714 5.2164

TOTAL COST $42.3012 $42.2445

Allowable Cabin Load 423.9478 423.9478

RATE PER SEAT MILE $0.09978 $0.09965

APPENDIX C

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

LARGE CLASS AIRCRAFT Passenger Service

FY18 RATE REVIEW

FORECAST YEAR FY18

USTRANSCOM FINAL

PROPOSED ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 1,920 1,920

AVERAGE DAILY AIRCRAFT UTILIZATION 6.7 6.7

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $5.0557 $5.1026 Fuel, Oil, & Aircraft Supplies 9.6036 9.3322 Flight Equipment Maintenance 8.5246 8.6505

Total Direct Variable 23.1839 23.0852

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.2608 0.2608 Aircraft Rentals & Miscellaneous 0.1397 0.1403 Flight Equipment Depreciation & Obsolescence 7.2226 7.2226 Amortization of Preoperating Expense 0.0000 0.0000 Capital Gains & Losses 0.0000 0.0000

Total Direct Fixed 7.6232 7.6237

Indirect:

Maintenance & Depreciation-General Ground Property 0.1222 0.1222 Aircraft & Traffic Servicing 3.1789 3.2390 Passenger Service 5.3010 5.3793 General & Administrative 2.1117 2.1338

Total Indirect 10.7139 10.8743

TOTAL OPERATING COST 41.5209 41.5832

Profit 10.5180 10.6233

TOTAL COST $52.0389 $52.2064

Allowable Cabin Load 380 380

RATE PER SEAT MILE $0.13694 $0.13739

APPENDIX D

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

MEDIUM CLASS AIRCRAFT Passenger Service

FY18 RATE REVIEW

FORECAST YEAR FY18

USTRANSCOM FINAL

PROPOSED ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 4,190 4,190

AVERAGE DAILY AIRCRAFT UTILIZATION 8.2 8.2

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $7.2724 $7.3536 Fuel, Oil, & Aircraft Supplies 7.2139 7.0078 Flight Equipment Maintenance 2.4995 2.5445

Total Direct Variable 16.9857 16.9058

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.1723 0.1723 Aircraft Rentals & Miscellaneous 0.2471 0.2501 Flight Equipment Depreciation & Obsolescence 1.2182 1.2182 Amortization of Preoperating Expense 0.0000 0.0000 Capital Gains & Losses 0.0000 0.0000

Total Direct Fixed 1.6377 1.6406

Indirect:

Maintenance & Depreciation-General Ground Property 0.0559 0.0559 Aircraft & Traffic Servicing 3.6548 3.7115 Passenger Service 5.1192 5.1846 General & Administrative 1.5382 1.5573

Total Indirect 10.3681 10.5093

TOTAL OPERATING COST 28.9915 29.0558

Profit 4.1634 4.3480

TOTAL COST $33.1549 $33.4037

Allowable Cabin Load 240 240

RATE PER SEAT MILE $0.13815 $0.13918

APPENDIX D

OMNI AIR INTERNATIONAL (OAE) Aircraft Type B767-200/300

MEDIUM CLASS AIRCRAFT Passenger Service

FY18 RATE REVIEW

FORECAST YEAR FY18

USTRANSCOM FINAL

PROPOSED ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 4,594 4,594

AVERAGE DAILY AIRCRAFT UTILIZATION 7.0 7.0

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $3.2711 $3.3021 Fuel, Oil, & Aircraft Supplies 7.0626 6.8634 Flight Equipment Maintenance 4.9441 5.0108

Total Direct Variable 15.2779 15.1763

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.1357 0.1357 Aircraft Rentals & Miscellaneous 0.5438 0.5444 Flight Equipment Depreciation & Obsolescence 1.7810 1.7810 Amortization of Preoperating Expense 0.0000 0.0000 Capital Gains & Losses 0.0000 0.0000

Total Direct Fixed 2.4605 2.4611

Indirect:

Maintenance & Depreciation-General Ground Property 0.0716 0.0716 Aircraft & Traffic Servicing 3.0511 3.0974 Passenger Service 4.1726 4.2337 General & Administrative 1.2744 1.2890

Total Indirect 8.5696 8.6917

TOTAL OPERATING COST 26.3080 26.3291

Profit 2.7472 2.8099

TOTAL COST $29.0552 $29.1389

Allowable Cabin Load 236 236

RATE PER SEAT MILE $0.12303 $0.12338

APPENDIX E

MIAMI AIR INTERNATIONAL, INC (BSK) Aircraft Type B737-400/800

SMALL CLASS AIRCRAFT Passenger Service

FY18 RATE REVIEW

FORECAST YEAR FY18

USTRANSCOM FINAL

PROPOSED ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 891 891

AVERAGE DAILY AIRCRAFT UTILIZATION 5.4 5.4

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $3.8226 $3.8742 Fuel, Oil, & Aircraft Supplies 4.1036 3.9863 Flight Equipment Maintenance 4.6952 4.7666

Total Direct Variable 12.6214 12.6271

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.2683 0.2683 Aircraft Rentals & Miscellaneous 3.5436 3.5464 Flight Equipment Depreciation & Obsolescence 0.0993 0.0993 Amortization of Preoperating Expense 0.0000 0.0000 Capital Gains & Losses 0.0000 0.0000

Total Direct Fixed 3.9113 3.9140

Indirect:

Maintenance & Depreciation-General Ground Property 0.0502 0.0512 Aircraft & Traffic Servicing 2.6877 2.7276 Passenger Service 2.4554 2.4870 General & Administrative 0.9904 1.0015

Total Indirect 6.1838 6.2673

TOTAL OPERATING COST 22.7164 22.8083

Profit 2.0967 2.1628

TOTAL COST $24.8131 $24.9711

Allowable Cabin Load 147 147

RATE PER SEAT MILE $0.16880 $0.16987

APPENDIX E

SUN COUNTRY AIRLINES (SCX) Aircraft Type B737-800

SMALL CLASS AIRCRAFT Passenger Service

FY18 RATE REVIEW

FORECAST YEAR FY18

USTRANSCOM FINAL

PROPOSED ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 352 352

AVERAGE DAILY AIRCRAFT UTILIZATION 9.1 9.1

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $3.2920 $3.3367 Fuel, Oil, & Aircraft Supplies 3.7299 3.6241 Flight Equipment Maintenance 1.5963 1.6210

Total Direct Variable 8.6182 8.5818

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.0406 0.0406 Aircraft Rentals & Miscellaneous 2.1600 2.1608 Flight Equipment Depreciation & Obsolescence 0.0778 0.0778 Amortization of Preoperating Expense 0.0021 0.0021 Capital Gains & Losses 0.0000 0.0000

Total Direct Fixed 2.2804 2.2812

Indirect:

Maintenance & Depreciation-General Ground Property 0.2177 0.2180 Aircraft & Traffic Servicing 3.3485 3.4067 Passenger Service 3.2803 3.3287 General & Administrative 1.5111 1.5302

Total Indirect 8.3576 8.4836

TOTAL OPERATING COST 19.2562 19.3467

Profit 1.8253 1.8664

TOTAL COST $21.0815 $21.2131

Allowable Cabin Load 150 150

RATE PER SEAT MILE $0.14054 $0.14142

APPENDIX F

ATLAS AIRLINES (GTI) Aircraft Type B747-400

LARGE CLASS AIRCRAFT Cargo Service

FY18 RATE REVIEW

FORECAST YEAR FY18

USTRANSCOM FINAL

PROPOSED ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 4,122 4,122

AVERAGE DAILY AIRCRAFT UTILIZATION 7.9 7.9

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $4.9358 $4.9875 Fuel, Oil, & Aircraft Supplies 13.1284 12.6444 Flight Equipment Maintenance 4.5085 4.5910

Total Direct Variable 22.5727 22.2229

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.1220 0.1220 Aircraft Rentals & Miscellaneous 4.5785 4.5810 Flight Equipment Depreciation & Obsolescence 1.5033 1.5033 Amortization of Preoperating Expense 0.0000 0.0000 Capital Gains & Losses 0.0000 0.0000

Total Direct Fixed 6.2038 6.2062

Indirect:

Maintenance & Depreciation-General Ground Property 0.0659 0.0659 Aircraft & Traffic Servicing 2.7554 2.8074 General & Administrative 1.4037 1.4180

Total Indirect 4.2249 4.2913

TOTAL OPERATING COST 33.0014 32.7205

Profit 4.9305 5.0274

TOTAL COST $37.9319 $37.7479

Allowable Cabin Load 100 100

RATE PER TON MILE $0.37932 $0.37748

KALITTA AIR (CKS) Aircraft Type B747-400

LARGE CLASS AIRCRAFT Cargo Service

FY18 RATE REVIEW

FORECAST YEAR FY18

USTRANSCOM FINAL

PROPOSED ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 3,210 3,210

AVERAGE DAILY AIRCRAFT UTILIZATION 9.0 9.0

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $4.1851 $4.2198 Fuel, Oil, & Aircraft Supplies 13.8577 13.3469 Flight Equipment Maintenance 6.2678 6.3397

Total Direct Variable 24.3106 23.9064

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.0877 0.0877 Aircraft Rentals & Miscellaneous 0.8230 0.8230 Flight Equipment Depreciation & Obsolescence 1.3760 1.3760 Amortization of Preoperating Expense 0.0692 0.0692 Capital Gains & Losses 0.0052 0.0052

Total Direct Fixed 2.3611 2.3611

Indirect:

Maintenance & Depreciation-General Ground Property 0.3441 0.3468 Aircraft & Traffic Servicing 2.4396 2.4899 General & Administrative 0.6021 0.6082

Total Indirect 3.3858 3.4449

TOTAL OPERATING COST 30.0576 29.7124

Profit 4.0366 4.0279

TOTAL COST $34.0942 $33.7403

Allowable Cabin Load 100 100

RATE PER TON MILE $0.34094 $0.33740

FEDERAL EXPRESS CORPORATION (FDX) Aircraft Type MD11

LARGE CLASS AIRCRAFT Cargo Service

FY18 RATE REVIEW

FORECAST YEAR FY18

USTRANSCOM FINAL

PROPOSED ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 516 516

AVERAGE DAILY AIRCRAFT UTILIZATION 6.4 6.4

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $6.0270 $6.0270 Fuel, Oil, & Aircraft Supplies 10.9092 10.5103 Flight Equipment Maintenance 11.0476 11.2195

Total Direct Variable 27.9838 27.7569

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.0731 0.0731 Aircraft Rentals & Miscellaneous 3.7171 3.7351 Flight Equipment Depreciation & Obsolescence 1.5424 1.5424 Amortization of Preoperating Expense Capital Gains & Losses

Total Direct Fixed 5.3326 5.3505

Indirect:

Maintenance & Depreciation-General Ground Property 1.8091 1.8121 Aircraft & Traffic Servicing 1.8930 1.9287 General & Administrative 4.1818 4.2185

Total Indirect 7.8838 7.9592

TOTAL OPERATING COST 41.2002 41.0666

Profit 5.3948 5.4022

TOTAL COST $46.5951 $46.4688

Allowable Cabin Load 86 86

RATE PER TON MILE $0.54180 $0.54034

APPENDIX G

ABX AIR INC. (ABX) Aircraft Type B767-300F

MEDIUM CLASS AIRCRAFT Cargo Service

FY18 RATE REVIEW

FORECAST YEAR FY18

USTRANSCOM FINAL

PROPOSED ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 300 300

AVERAGE DAILY AIRCRAFT UTILIZATION 5.0 5.0

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $3.8468 $3.8884 Fuel, Oil, & Aircraft Supplies 7.5431 7.2650 Flight Equipment Maintenance 5.8155 5.8939

Total Direct Variable 17.2053 17.0473

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.0731 0.0731 Aircraft Rentals & Miscellaneous 4.5498 4.5537 Flight Equipment Depreciation & Obsolescence 0.0345 0.0345 Amortization of Preoperating Expense 0.0000 0.0000 Capital Gains & Losses 0.0000 0.0000

Total Direct Fixed 4.6574 4.6613

Indirect:

Maintenance & Depreciation-General Ground Property 0.0000 0.0000 Aircraft & Traffic Servicing 0.6370 0.6490 General & Administrative 0.7927 0.7999

Total Indirect 1.4297 1.4490

TOTAL OPERATING COST 23.2924 23.1575

Profit 1.9483 1.9491

TOTAL COST $25.2407 $25.1066

Allowable Cabin Load 61 61

RATE PER TON MILE $0.41378 $0.41158

APPENDIX G

AIR TRANSPORT INTERNATIONAL (ATN) Aircraft Type B767-300F

MEDIUM CLASS AIRCRAFT Cargo Service

FY18 RATE REVIEW

FORECAST YEAR FY18

USTRANSCOM FINAL

PROPOSED ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 175 175

AVERAGE DAILY AIRCRAFT UTILIZATION 5.0 5.0

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $2.3362 $2.3591 Fuel, Oil, & Aircraft Supplies 7.0472 6.7884 Flight Equipment Maintenance 7.2697 7.3956

Total Direct Variable 16.6531 16.5431

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.0734 0.0734 Aircraft Rentals & Miscellaneous 4.6485 4.6485 Flight Equipment Depreciation & Obsolescence 0.7259 0.7259 Amortization of Preoperating Expense 0.0000 0.0000 Capital Gains & Losses 0.0000 0.0000

Total Direct Fixed 5.4478 5.4478

Indirect:

Maintenance & Depreciation-General Ground Property 0.0145 0.0145 Aircraft & Traffic Servicing 0.4371 0.4453 General & Administrative 0.7544 0.7621

Total Indirect 1.2060 1.2219

TOTAL OPERATING COST 23.3070 23.2128

Profit 3.3642 3.3747

TOTAL COST $26.6711 $26.5875

Allowable Cabin Load 61 61

RATE PER TON MILE $0.43723 $0.43586

APPENDIX H

AIR TRANSPORT INTERNATIONAL (ATN) Aircraft Type B757

COMBI CLASS AIRCRAFT Combi Service

FY18 RATE REVIEW

FORECAST YEAR FY18

USTRANSCOM AS

PROPOSED ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 2,938 2,938

AVERAGE DAILY AIRCRAFT UTILIZATION 5.0 5.0

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $3.2956 $3.4784 Fuel, Oil, & Aircraft Supplies 5.5361 5.3330 Flight Equipment Maintenance 4.5551 4.6248

Total Direct Variable 13.3869 13.4361

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.1353 0.1353 Aircraft Rentals & Miscellaneous 5.3017 5.7951 Flight Equipment Depreciation & Obsolescence 0.6812 0.6812 Amortization of Preoperating Expense 0.0000 0.0000 Capital Gains & Losses 0.0000 0.0000

Total Direct Fixed 6.1182 6.6117

Indirect:

Maintenance & Depreciation-General Ground Property 0.0107 0.0107 Aircraft & Traffic Servicing 1.1194 1.1388 Passenger Service 2.3709 2.4077 General & Administrative 0.8499 0.8889

Total Indirect 4.3509 4.4461

TOTAL OPERATING COST 23.8560 24.4939

Profit 2.4899 3.0114

RATE PER PLANE MILE $26.34586 $27.50529

APPENDIX I

Euro As Pay Trip Euro Percent of

Carrier Aircraft ACL Routing Miles Revenues Charges (USD) Trip Rev

ATLAS AIR, INC. B747-400 charter 435 KBWI - KSVN - KNKT * EINN - ETAR # OJAQ - OBBS - OKBK # OJAQ * EINN * CYWG - KNYL + KIAH 16,363 $826,175 $13,690.89 1.66%

ATLAS AIR, INC. B747-400 charter 435 KBWI - KGRK - KNGU * EINN # OJAQ - OKBK - OMAM - OTBH + OKBK # OJAQ * EINN * CYWG - KRIV + KBWI 17,497 $883,431 $15,608.46 1.77%

ATLAS AIR, INC. B747-400 charter 435 KBWI - KBIF * KMSP * EINN # OJAQ - OTBH - OKBK # OJAQ * EINN * KMSP - KCOS + KBWI 16,830 $849,754 $14,947.21 1.76%

ATLAS AIR, INC. B747-400 charter 435 / KBWI - EEEI - EVRA - EYVI - ETAR - EDDN * EINN - KSVN + KBWI 5,996 $302,741 $9,699.78 3.20%

ATLAS AIR, INC. B747-400 charter 435 KGRK * KDTW * EINN # OJAQ - OKBK # OJAQ * EINN * KDTW - KGRK 16,042 $809,968 $14,768.31 1.82%

ATLAS AIR, INC. B747-400 charter 435 KGRK * KDTW * EINN # OJAQ - OKBK # OJAQ * EINN * KDTW - KGRK 16,042 $809,968 $15,831.91 1.95%

ATLAS AIR, INC. B747-400 charter 435 KGRK * KDTW * EINN # OJAQ - OKBK # OJAQ * EINN - KHOP - KBIF + KIAH 16,480 $832,083 $11,156.21 1.34%

ATLAS AIR, INC. B747-400 charter 435 KIAH - KGRK - KCOS - KLFI * EINN # OJAQ - OKBK - OTBH # OJAQ * EINN - KOFF - KGRK + KCOS 17,827 $900,093 $14,714.56 1.63%

ATLAS AIR, INC. B747-400 charter 435 KCOS * KMSP * EINN # OJAQ - OKBK + EVRA - ETAR * EINN - KSVN + KIAH 13,284 $670,715 $14,078.92 2.10%

ATLAS AIR, INC. B747-400 charter 435 KIAH - KNGU * EINN # OJAQ - OTBH + OKBK # OJAQ * EINN - KGTB - KAEX + KIAH 14,922 $753,418 $15,308.59 2.03%

ATLAS AIR, INC. B747-400 charter 435 KAEX - KHOP - KNKT * CYQX - LRCK - LTAG # OJAQ - OKBK + OTBH # OJAQ * EINN - KBWI - KHRT + KAEX 15,645 $789,923 $13,979.56 1.77%

ATLAS AIR, INC. B747-400 charter 435 KIAH - KAEX - KNGU * EINN # OJAQ - OKBK - OJMS * EINN - KBWI + KIAH 14,508 $732,515 $14,395.42 1.97%

ATLAS AIR, INC. B747-400 charter 435 KBWI - KNKT - LEMO + OTBH - LICZ - LEMO - ETAR * EINN - KNKT + KBWI 12,618 $637,088 $22,168.27 3.48%

ATLAS AIR, INC. B747-400 charter 435 KNKT - KBIF - KVPS * CYQX * EINN # OJAQ - OTBH # OJAQ - ETAR * BIKF - KRCA + KRNO 16,849 $850,714 $14,127.12 1.66%

ATLAS AIR, INC. B747-400 charter 435 KBWI - KCOS * KMSP * EINN # OJAQ - OKBK - OTBH # OJAQ * EINN * CYQX - KHRT - KFOE - KCVS + KBWI 17,422 $879,645 $14,156.26 1.61%

ATLAS AIR, INC. B747-400 charter 435 KIAH - PAED - KHOP - KGTB * EINN # OJAQ - OKBK # OJAQ * EINN - KGTB + KIAH 16,998 $858,237 $14,393.53 1.68%

ATLAS AIR, INC. B747-400 charter 435 KBWI - KWRB - KNGU - KCEF - EHAM # OJAQ - OTBH + OKBK # OJAQ * EINN - KNKT - KGRK + KBWI 15,914 $803,505 $15,022.18 1.87%

ATLAS AIR, INC. B747-400 charter 435 KBWI - KRIV - KSVN * EINN - LBBG # OJAQ - OKBK - OJMS + OKBK - OJMS # OJAQ * EINN * CYWG - KRIV + KBWI 18,842 $951,341 $15,216.65 1.60%

ATLAS AIR, INC. B747-400 charter 435 KIAH - KNGU - KGTB * EINN # OJAQ - OKBK - OTBH - OKBK * EINN * CYQX - KHRT + KIAH 15,091 $761,951 $13,876.45 1.82%

ATLAS AIR, INC. B747 400 KBWI - ETAR # OJAQ * OKBK - OTBH # OJAQ - ETAR - KBWI 14,180 $658,349 $13,293.62 2.02%

ATLAS AIR, INC. B747-400 charter 435 KBWI - KHOP * EINN # OJAQ - OKBK - OTBH # OJAQ * EINN - KGTB - KGTF + KBWI 16,198 $817,844 $13,851.19 1.69%

ATLAS AIR, INC. B747-400 charter 435 KBWI - KBIF * KMSP * EINN # OJAQ - OTBH - OBBS + EVRA - EDDN + KBWI 9,393 $474,257 $14,743.50 3.11%

ATLAS AIR, INC. B747-400 charter 435 KIAH - KGRK - KBIF * KMSP * EINN # HECA # HAGN - HDAM - OKBK # OJAQ * EINN - KGTB + KIAH 17,320 $874,495 $14,176.89 1.62%

ATLAS AIR, INC. B747-400 charter 435 KIAH - KMIB - KSVN * EINN - EGVA - EDDN + LBBG - LRCK - EPWR + KIAH 7,072 $357,068 $11,196.97 3.14%

ATLAS AIR, INC. B747-400 charter 435 KBWI - KBIF * KMSP * EINN # OJAQ - OKBK - OTBH # OJAQ * EINN - KNKT - KWRB + KBWI 16,328 $824,408…