22_April_2016_Proposed_FY17_Uniform_Rate_and_Rules_for_International_Service.pdf

22 April 16

MEMORANDUM FOR ALL CARRIERS

FROM: USTRANSCOM/TCAQ-P

508 Scott Drive Scott AFB IL 62225-5357

SUBJECT: Notice of Proposed Fiscal Year 2017 (FY17) Uniform Rates and Rules for

International Service – Solicitation Number HTC711-16-R-C001

(SUSPENSE: 23 MAY 16)

1. The proposed FY17 rates are based on fuel pegged at $2.05 per gallon for cargo and combi and $2.13 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 $0.10960 Medium Class Passenger $0.12361 Small Class Passenger $0.13739 $2,000 Large Class Cargo $0.36332 Medium Class Cargo $0.51652 Combi Service $26.91793

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 23 May 16. 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 scott.e.rader.civ@mail.mil or 618-220-6711.

//SIGNED//

SCOTT E. RADER

Chief, Cost & Pricing Branch

Attachment:

22 April 2016 Proposed FY17 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

PROPOSED

UNIFORM RATES AND RULES

FOR

INTERNATIONAL SERVICE

FISCAL YEAR 2017

INTRODUCTION

USTRANSCOM developed the proposed FY17 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). The FY17 rate is the last rate covered by the current MOU. USTRANSCOM will be requesting input from carriers for the next MOU effective FY18 though FY22 along with cost input requested for the FY18 rate review in August 2016.

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 23 May 2016.

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, i 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 FY17 rates were developed on experienced base year costs and statistical data from 12 carriers providing 18 proposals for the cost base year beginning 01 July 2014 and ending

30 June 2015. Carrier’s cost data was audited and USTRANSCOM analyzed carrier’s forecast operating cost projections in the development of the FY17 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.

Allowable Cabin Load (ACL) Adjustment.

Consistent with the FY16 Final CRAF Rates and Rules for instances where a carrier performed missions below its standard ACL, USTRANSCOM divided total operating costs per mile by the carrier’s average ACL weighted by revenues. Missions flown at ACLs decremented due to performance deficiencies were not included in the weighted average ACL calculation. Atlas’ operating costs for its large passenger aircraft were divided by its weighted average ACL since 60% 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. On the basis of these weightings, Atlas’ weighted ACL was 420.

Fly America Act.

Section 5 of the International Air Transportation Fair Competitive Practices Act of 1974 (49

U.S.C. 40118) (Fly America Act) requires all federal agencies and government contractors and subcontractors use U.S.-flag air carriers for U.S. government-financed air transportation of personnel (and their personal effects) or property, to the extent that service by those carriers is available. As prescribed in FAR 47.405, the contracting officer “shall” insert the clause at FAR 52.247-63 – Preference for U.S. – Flag Air Carriers in each subcontract or purchase under a contract that may involve international air transportation. As a result, the

CRAF solicitation for the FY17 and FY18 performance periods contains this clause requiring carrier adherence as discussed with carriers at Pre-Solicitation Day with Industry held at Scott

AFB on 24 Feb 16.

In accordance with FAR 52.247-63 (c) and (d), contractors are required to use U.S.-flag carriers, if available, in performing work under this contract for international air transportation of personnel (and their personal effects) or property. In the event, the contractor selects a carrier other than a U.S.-flag carrier for international air transportation, the contractor is required to include a “Statement of Unavailability of U.S.-Flag Air Carriers” on vouchers involving such transportation. Per FAR 47.403-3, USTRANSCOM is required to disallow expenditures for U.S government-financed commercial international air transportation on foreign-flag air transportation without annotation on the voucher adequately explaining why service by U.S.-flag carriers was not available or why it was necessary to use foreign-flag air carriers.

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 the 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 costs and the known Defense Logistics Agency - Energy (DLA-E) 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 01 April 2016 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 ($1.88/gal) which received a 90% weighting and JP-5 ($1.91/gal) which received a 10% weighting yielding a projected composite DLA fuel cost of $1.88/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 FY17 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 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) t = 1.8408 * (PPI t ) + 0.1657

EQ (2): Average Quarterly Commercial Price (Cargo) t = 1.8447 * (PPI t ) + 0.1701

Using these equations, the quarterly commercial fuel price for both categories was forecasted for FY17 and is reported in

Table 1.

A review of carriers’ recent monthly fuel reports conclude cargo carriers receive 58.5 percent of their fuel at military installations and are charged the rate set by DLA-E. Conversely, passenger carriers receive 62.8 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 projected commercial fuel cost and military fuel costs results in a pegged fuel price of $2.13 for passenger and $2.05 per

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

Forecasted Commercial Fuel Price

Period PPI Passenger Cargo Oct-Dec 2016 1.15 $2.28 $2.29

Table 1: Forecasted Commercial Fuel Costs for FY17

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

ID Description (PASSENGER) Values 1 Forecasted Cost of Commercial Fuel - PAX $2.28 2 Current Cost of DLA Fuel (JP-8 w/ 90% wtg, JP-5 w/ 10% wtg) $1.88 3 Weighting of Commercial Fuel for past 13 months- PAX 0.6277 4 Weighting of DoD Fuel for past 13 months - PAX 0.3723

Proposed Pegged Rate of Fuel $2.13

ID Description (CARGO) Values 1 Forecasted Cost of Commercial Fuel - CARGO $2.29 2 Current Cost of DLA Fuel (JP-8 w/ 90% wtg, JP-5 w/ 10% wtg) $1.88 3 Weighting of Commercial Fuel for past 13 months - CARGO 0.4147 4 Weighting of DoD Fuel for past 13 months - CARGO 0.5853

Proposed Pegged Rate of Fuel $2.05

USTRANSCOM will update the pegged price for fuel in the FY17 final rate calculation and continue to closely monitor fuel prices for the FY17 contract performance period making 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 LSS experts from its Army Subordinate Command to determine ways to improve the ratemaking process.

In accordance with these changes, the FY17 proposed rates applied the same rate factors used in the FY16 final rates for general escalation, FICA cost escalation and the Eurocontrol surcharge. These rate factors 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 FY17 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 (WGL) model described in detail in the Defense Federal Acquisition Regulation

Supplement (DFARS) 215-404-71. The WGL 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.

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 costs related to traffic handling personnel, gate requirements, security, and in some cases landing fees. On the basis of the FY16 review, the ferry rate for the FY17 proposed rates will remain at 90 percent of the effective rate for passenger and 89 percent of the effective rate for cargo. Ferry rates for both services will be updated for the FY17 final 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 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 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: (1) the average stage length for all carriers within a rate class remains similar to the weight averaged stage length used in the class and (2), 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 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. Appendix K demonstrates the FICA calculation.

Finally, Appendix L provides explanatory notes to USTRANSCOM adjustments to carriers proposed costs.

Appendix Changes in Future Rates.

USTRANSCOM does not believe the base year system costs provided on Appendices C through H as well as explanatory notes provided on Appendix L add enough value to continue to provide in future rates. Base year system costs are available to the public at Department of

Transportation (DOT) website free of charge.iii To protect proprietary information, explanatory notes are too general in nature to provide any meaningful insight.

USTRANSCOM proposes to remove explanatory notes along with base year system costs in future rates.

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)) iii http://www.transtats.bts.gov/databases.asp?Mode_ID=1&Mode_Desc=Aviation&Subject_ID2=0

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 4

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 3

F Costs Per Ton Mile by Carrier and Aircraft Type in Large Class Cargo Service 5

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

L Explanatory Notes 5

APPENDIX A

SCHEDULE OF UNIFORM NEGOTIATED RATES AND RULES (PROPOSED)

FISCAL YEAR 2017

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

$0.10960 Ferry Rate (Base - Effective Rate) 90% $0.09864 Incremental Passenger

$178

Fuel Pegged Rate

$2.13

Medium

$0.12361

Ferry Rate (Base - Effective Rate) 90% $0.11125

$2.13

Small

Live Line Haul Rate

$0.13739

Ferry Rate (Base - Effective Rate) 90% $0.13275 Stop Charge (Per Directed Landing) $2,000

Fuel Pegged Rate $2.13

(2) CHARTER CARGO SERVICE PER TON MILE

Large

$0.36332 Ferry Rate (Base - Effective Rate) 89% $0.32335

$2.05

Medium

Live Effective Rate:

$0.51652 Ferry Rate (Base - Effective Rate) 89% $0.45970 Fuel Pegged Rate $2.05

(3) CHARTER COMBI SERVICE PER PLANE MILE

$26.91793

Ferry Rate (Base - Effective Rate) 89% $23.95696 Fuel Pegged Rate $2.05

(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 2.0 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 2.1 percent on 6,000 miles + 1,800 miles). Combi Carriers will be paid the applicable rate plus a surcharge of 0.25 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 $178 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:

31.79% 29.25%

8 to 14 days

Passenger and Combi:

Cargo:

21.84% 23.63%

15 to 30 days

Passenger and Combi:

Cargo:

18.68% 20.13%

31 to 45 days Passenger and Combi 8.36% 31 to 75 days Cargo 7.02% 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:

21.84% 23.63%

(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 $1959

B747-400/400ER 100 $2176

MD11F 86 $1871

MD11C 86 $1871

B777F 88 $1915

DC10-30/40 75 $1632

A300-600ER 51 $1905

A300-400F 50 $1867 B767-200F 48 $1793

DC8 45 $1681

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 B737-900 165 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

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

DC10-30 330 B767-300F 61

A340 345 DC10-30/40 75

MD11/MD11ER 360 B747-100/200/300 90

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 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 FY15 FY16 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 0.10029$ 111,643$ 55,572$ $167,215 39.71% $0.03982

DELTA AIR LINES INC B747-400 0.11882$ 38,735$ 11,028$ $49,763 11.82% $0.01404

OMNI AIR INTERNATIONAL INC B777 0.11598$ 112,146$ 42,587$ $154,733 36.74% $0.04261

UNITED AIRLINES INC B747-400 0.11189$ 39,115$ 10,310$ $49,425 11.74% $0.01313

$421,136 1.0000

RATE -- WEIGHTED BY REVENUES $0.10960

Exclusive of Fuel $0.07802

COMPUTATION

USTRANSCOM UNIFORM RATE

PASSENGER SERVICE

MEDIUM CLASS AIRCRAFT

USTRANSCOM FY15 FY16 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 0.12718$ 132,632$ 67,251$ $199,883 44.73% $0.05688

NATIONAL AIR CARGO GROUP B757-200 0.13782$ 25,346$ 4,973$ $30,318 6.78% $0.00935

OMNI AIR INTERNATIONAL INC B767-300 0.11833$ 152,517$ 64,166$ $216,683 48.49% $0.05737

$446,884 1.0000

RATE -- WEIGHTED BY REVENUES $0.12361

Exclusive of Fuel $0.09265

COMPUTATION

USTRANSCOM UNIFORM RATE

PASSENGER SERVICE

SMALL CLASS AIRCRAFT

USTRANSCOM FY15 FY16 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 B737-800 0.15818$ 16,447$ 7,388$ $23,835 63.58% $0.10057 MN AIRLINES, LLC DBA SUN COUNTRY AIRLINES B737-800 0.13181$ 7,388$ 3,454$ $10,842 28.92% $0.03812

UNITED AIRLINES INC B737-800 0.11740$ 1,756$ 1,057$ $2,813 7.50% $0.00881

$37,491 1.0000

RATE -- WEIGHTED BY REVENUES $0.14750

Exclusive of Fuel $0.12102

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

$0.14750 1,319 150 $2,000 $0.13739

Note: The weighted average stage length and weighted average seats per mission are based on USTRANSCOM data from Jul 14 to Jun 15.

COMPUTATION

USTRANSCOM UNIFORM RATE

CARGO SERVICE

LARGE CLASS AIRCRAFT

USTRANSCOM FY15 FY16 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 0.36209$ 141,182$ 77,077$ $218,258 45.33% $0.16415

FEDERAL EXPRESS CORPORATION MD11 0.51406$ 19,553$ 14,514$ $34,067 7.08% $0.03637

KALITTA AIR, LLC B747-400 0.31813$ 87,840$ 60,041$ $147,881 30.72% $0.09772

NATIONAL AIR CARGO GROUP B747-400 0.36367$ 43,461$ 19,214$ $62,675 13.02% $0.04734

UNITED PARCEL SERVICE CO. MD11 0.45990$ 16,470$ 2,098$ $18,568 3.86% $0.01774

$308,505 $172,944

$481,449 1.0000

RATE -- WEIGHTED BY REVENUES $0.36332

Exclusive of Fuel $0.23674

COMPUTATION

USTRANSCOM UNIFORM RATE

CARGO SERVICE

MEDIUM CLASS AIRCRAFT

USTRANSCOM FY15 FY16 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 0.49085$ $2,765 $5,662 $8,428 66.92% $0.32845

AIR TRANSPORT INTERNATIONAL LLC B767-200F 0.56843$ $3,168 $999 $4,167 33.08% $0.18806

$5,934 $6,661

$12,594 1.0000

RATE -- WEIGHTED BY REVENUES $0.51652

Exclusive of Fuel $0.38817

COMPUTATION

USTRANSCOM UNIFORM RATE

COMBI SERVICE

COMBI AIRCRAFT

USTRANSCOM FY15 FY16 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 $26.91793 $89,379 $41,935 $131,313 100.00% $26.91793

$131,313 1.0000

RATE -- WEIGHTED BY REVENUES $26.91793

Exclusive of Fuel $21.74652

APPENDIX C

ATLAS AIRLINES (GTI) Aircraft Type B747-400

LARGE CLASS AIRCRAFT Passenger Service

FY17 RATE REVIEW

FORECAST YEAR FY17

YE JUN 15

CARRIER BY AS

SYSTEM CARRIER ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 2,867 2,098 A 2,098

AVERAGE DAILY AIRCRAFT UTILIZATION 7.8 7.6 B 7.6

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $3.2511 $3.9094 C $3.9092 Fuel, Oil, & Aircraft Supplies 15.7930 18.3587 D 14.1170 Flight Equipment Maintenance 3.6044 3.7998 E 3.7999

Total Direct Variable 22.6485 26.0679 21.8260

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.3893 0.4240 F 0.4259 Aircraft Rentals & Miscellaneous 0.0868 0.0906 G 0.0905 Flight Equipment Depreciation & Obsolescence 2.1451 1.3422 H 1.3478 Amortization of Preoperating Expense 0.0000 0.0000 I 0.0000 Capital Gains & Losses 0.3697 0.3696 0.3697

Total Direct Fixed 2.9909 2.2264 2.2339

Indirect:

Maintenance & Depreciation-General Ground Property 0.0828 J 0.0805 Aircraft & Traffic Servicing 2.7893 K 2.7886 Passenger Service 9.0548 L 8.3717 General & Administrative 1.9190 M 1.8493

Total Indirect 13.8459 13.0901

TOTAL OPERATING COST 42.1402 37.1500

Profit TBD 4.9324

TOTAL COST $42.1402 $42.0824

Allowable Cabin Load 400 420

RATE PER SEAT MILE $0.10535 $0.10029

DELTA AIR LINES INC (DAL) Aircraft Type B747-400

LARGE CLASS AIRCRAFT Passenger Service

FY17 RATE REVIEW

FORECAST YEAR FY17

YE JUN 15

CARRIER BY AS

SYSTEM CARRIER ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 29,547 751 A 738

AVERAGE DAILY AIRCRAFT UTILIZATION 11.7 11.7 B 11.7

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $2.4760 $5.3118 C $4.3711 Fuel, Oil, & Aircraft Supplies 25.9848 17.0862 D 13.0415 Flight Equipment Maintenance 2.1112 2.8082 E 2.3711

Total Direct Variable 30.5720 25.2062 19.7838

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.0192 0.0482 F 0.0259 Aircraft Rentals & Miscellaneous 0.2433 3.4701 G 0.1796 Flight Equipment Depreciation & Obsolescence 1.0110 1.2344 H 2.3109 Amortization of Preoperating Expense 0.0000 0.0000 I 0.0000 Capital Gains & Losses 0.0159 0.0000 0.0000

Total Direct Fixed 1.2893 4.7527 2.5164

Indirect:

Maintenance & Depreciation-General Ground Property 1.4628 J 1.1214 Aircraft & Traffic Servicing 12.4641 K 8.7208 Passenger Service 7.9888 L 6.8050 General & Administrative 3.0593 M 2.0104

Total Indirect 24.9750 18.6576

TOTAL OPERATING COST 54.9339 40.9578

Profit TBD 6.5700

TOTAL COST $54.9339 $47.5278

Allowable Cabin Load 400 400

RATE PER SEAT MILE $0.13733 $0.11882

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

LARGE CLASS AIRCRAFT Passenger Service

FY17 RATE REVIEW

FORECAST YEAR FY17

YE JUN 15

CARRIER BY AS

SYSTEM CARRIER ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 2,647 2,149 A 2,146

AVERAGE DAILY AIRCRAFT UTILIZATION 8.4 8.4 B 8.4

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $3.8893 $4.2338 C $4.2271 Fuel, Oil, & Aircraft Supplies 0.0503 13.8003 D 10.4023 Flight Equipment Maintenance 6.6968 7.2885 E 7.1743

Total Direct Variable 10.6363 25.3226 21.8036

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.2082 0.1932 F 0.1923 Aircraft Rentals & Miscellaneous 0.0283 0.0297 G 0.0295 Flight Equipment Depreciation & Obsolescence 6.3110 5.7723 H 5.7435 Amortization of Preoperating Expense 0.0000 0.0000 I 0.0000 Capital Gains & Losses 0.0000 0.0000 0.0000

Total Direct Fixed 6.5475 5.9951 5.9653

Indirect:

Maintenance & Depreciation-General Ground Property 0.0344 J 0.0350 Aircraft & Traffic Servicing 2.1287 K 4.2116 Passenger Service 6.1305 L 4.8176 General & Administrative 1.6252 M 1.5546

Total Indirect 9.9188 10.6189

TOTAL OPERATING COST 41.2365 38.3878

Profit TBD 5.6830

TOTAL COST $41.2365 $44.0709

Allowable Cabin Load 380 380

RATE PER SEAT MILE $0.10852 $0.11598

UNITED AIRLINES INC (UAL) Aircraft Type B747-400

LARGE CLASS AIRCRAFT Passenger Service

FY17 RATE REVIEW

FORECAST YEAR FY17

YE JUN 15

CARRIER BY AS

SYSTEM CARRIER ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 44,940 677 A 677

AVERAGE DAILY AIRCRAFT UTILIZATION 10.0 10.0 B 10.0

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $4.0447 $4.5271 C $4.5271 Fuel, Oil, & Aircraft Supplies 16.3471 19.1279 D 14.7084 Flight Equipment Maintenance 3.9290 4.4900 E 4.4900

Total Direct Variable 24.3209 28.1449 23.7255

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.0240 0.0682 F 0.0684 Aircraft Rentals & Miscellaneous 0.6326 0.2516 G 0.2448 Flight Equipment Depreciation & Obsolescence 2.3096 1.4319 H 1.5569 Amortization of Preoperating Expense 0.0000 0.0000 I 0.0000 Capital Gains & Losses 0.0000 0.0000 0.0000

Total Direct Fixed 2.9661 1.7516 1.8701

Indirect:

Maintenance & Depreciation-General Ground Property 1.0886 J 1.0865 Aircraft & Traffic Servicing 7.4722 K 7.4599 Passenger Service 3.3497 L 3.3497 General & Administrative 2.4638 M 2.4993

Total Indirect 14.3742 14.3954

TOTAL OPERATING COST 44.2706 39.9911

Profit TBD 4.7658

TOTAL COST $44.2706 $44.7568

Allowable Cabin Load 400 400

RATE PER SEAT MILE $0.11068 $0.11189

APPENDIX D

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

MEDIUM CLASS AIRCRAFT Passenger Service

FY17 RATE REVIEW

FORECAST YEAR FY17

YE JUN 15

CARRIER BY AS

SYSTEM CARRIER ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 4,245 3,619 A 3,619

AVERAGE DAILY AIRCRAFT UTILIZATION 8.5 7.7 B 7.7

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $4.7432 $6.3401 C $4.7305 Fuel, Oil, & Aircraft Supplies 9.0512 9.5405 D 7.3362 Flight Equipment Maintenance 2.2004 2.4373 E 2.3305

Total Direct Variable 15.9948 18.3179 14.3972

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.3925 0.4649 F 0.4655 Aircraft Rentals & Miscellaneous 0.1901 0.2072 G 0.1981 Flight Equipment Depreciation & Obsolescence 2.0138 1.5208 H 1.5232 Amortization of Preoperating Expense 0.0000 0.0000 I 0.0000 Capital Gains & Losses 0.0000 0.0000 0.0000

Total Direct Fixed 2.2040 2.1929 2.1868

Indirect:

Maintenance & Depreciation-General Ground Property 0.0489 J 0.0440 Aircraft & Traffic Servicing 3.3137 K 3.1704 Passenger Service 5.2898 L 4.7316 General & Administrative 1.7224 M 1.5010

Total Indirect 10.3748 9.4470

TOTAL OPERATING COST 30.8856 26.0310

Profit TBD 4.4920

TOTAL COST $30.8856 $30.5230

Allowable Cabin Load 240 240

RATE PER SEAT MILE $0.12869 $0.12718

NATIONAL AIR CARGO GROUP (NCR) Aircraft Type B757-200

MEDIUM CLASS AIRCRAFT Passenger Service

FY17 RATE REVIEW

FORECAST YEAR FY17

YE JUN 15

CARRIER BY AS

SYSTEM CARRIER ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 1,392 788 A 1,101

AVERAGE DAILY AIRCRAFT UTILIZATION 8.1 8.1 B 8.1

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $3.4148 $5.4192 C $3.8614 Fuel, Oil, & Aircraft Supplies 8.0307 10.1718 D 5.2810 Flight Equipment Maintenance 4.6383 7.2030 E 5.4351

Total Direct Variable 16.0838 22.7941 14.5776

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.9225 0.5066 F 0.5132 Aircraft Rentals & Miscellaneous 2.0512 1.7895 G 1.0687 Flight Equipment Depreciation & Obsolescence 0.9943 0.5267 H 0.5334 Amortization of Preoperating Expense 0.0000 0.0000 I 0.0000 Capital Gains & Losses 0.0000 0.0000 0.0000

Total Direct Fixed 3.9680 2.8227 2.1154

Indirect:

Maintenance & Depreciation-General Ground Property 0.0191 J 0.0132 Aircraft & Traffic Servicing 2.9701 K 1.4278 Passenger Service 9.6359 L 3.8553 General & Administrative 3.3279 M 1.6296

Total Indirect 15.9529 6.9259

TOTAL OPERATING COST 41.5698 23.6189

Profit TBD 2.5660

TOTAL COST $41.5698 $26.1849

Allowable Cabin Load 190 190

RATE PER SEAT MILE $0.21879 $0.13782

OMNI AIR INTERNATIONAL (OAE) Aircraft Type B767-300

MEDIUM CLASS AIRCRAFT Passenger Service

FY17 RATE REVIEW

FORECAST YEAR FY17

YE JUN 15

CARRIER BY AS

SYSTEM CARRIER ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 7,286 4,236 A 4,146

AVERAGE DAILY AIRCRAFT UTILIZATION 6.3 6.3 B 6.3

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $2.9245 $3.2358 C $3.2357 Fuel, Oil, & Aircraft Supplies 0.0506 9.8957 D 7.6221 Flight Equipment Maintenance 4.0257 4.4724 E 4.3935

Total Direct Variable 7.0009 17.6039 15.2514

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.2892 0.2257 F 0.2257 Aircraft Rentals & Miscellaneous 0.4034 0.4152 G 0.4160 Flight Equipment Depreciation & Obsolescence 1.5783 1.6233 H 1.6235 Amortization of Preoperating Expense 0.0000 0.0000 I 0.0000 Capital Gains & Losses 0.0000 0.0000 0.0000

Total Direct Fixed 2.2709 2.2642 2.2652

Indirect:

Maintenance & Depreciation-General Ground Property 0.0397 J 0.0416 Aircraft & Traffic Servicing 2.1100 K 2.7003 Passenger Service 4.5750 L 3.9646 General & Administrative 1.0526 M 0.9777

Total Indirect 7.7773 7.6842

TOTAL OPERATING COST 27.6454 25.2008

Profit TBD 3.1982

TOTAL COST $27.6454 $28.3989

Allowable Cabin Load 240 240

RATE PER SEAT MILE $0.11519 $0.11833

APPENDIX E

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

SMALL CLASS AIRCRAFT Passenger Service

FY17 RATE REVIEW

FORECAST YEAR FY17

YE JUN 15

CARRIER BY AS

SYSTEM CARRIER ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 3,876 660 A 660

AVERAGE DAILY AIRCRAFT UTILIZATION 5.3 B 5.4

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $3.7103 $4.0134 C $3.7525 Fuel, Oil, & Aircraft Supplies 5.5962 5.4838 D 4.0075 Flight Equipment Maintenance 3.6280 3.9832 E 3.7495

Total Direct Variable 12.9345 13.4804 11.5096

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.3258 0.3224 F 0.3941 Aircraft Rentals & Miscellaneous 3.4407 0.1662 G 3.9964 Flight Equipment Depreciation & Obsolescence 0.1019 0.1205 H 0.1190 Amortization of Preoperating Expense 0.0000 0.0000 I 0.0000 Capital Gains & Losses 0.0000 0.0000 0.0000

Total Direct Fixed 3.8685 0.6091 4.5095

Indirect:

Maintenance & Depreciation-General Ground Property 0.0367 J 0.0370 Aircraft & Traffic Servicing 1.9705 K 1.9868 Passenger Service 2.3450 L 2.3039 General & Administrative 0.6901 M 0.8709

Total Indirect 5.0423 5.1985

TOTAL OPERATING COST 19.1318 21.2176

Profit TBD 2.5098

TOTAL COST $19.1318 $23.7274

Allowable Cabin Load 150 150

RATE PER SEAT MILE $0.12755 $0.15818

SUN COUNTRY AIRLINES (SCX) Aircraft Type B737-800

SMALL CLASS AIRCRAFT Passenger Service

FY17 RATE REVIEW

FORECAST YEAR FY17

YE JUN 15

CARRIER BY AS

SYSTEM CARRIER ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 4,897 292 A 292

AVERAGE DAILY AIRCRAFT UTILIZATION 8.4 B 8.2

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $1.0213 $3.6954 C $3.3521 Fuel, Oil, & Aircraft Supplies 4.9159 5.1094 D 3.8756 Flight Equipment Maintenance 1.7496 2.1177 E 1.9189

Total Direct Variable 7.6868 10.9225 9.1466

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.1540 0.0445 F 0.0417 Aircraft Rentals & Miscellaneous 8.4226 1.7932 G 2.2474 Flight Equipment Depreciation & Obsolescence 0.1781 0.0498 H 0.0467 Amortization of Preoperating Expense 0.0000 0.0000 I 0.0000 Capital Gains & Losses 0.0000 0.0000 0.0000

Total Direct Fixed 8.7547 1.8875 2.3358

Indirect:

Maintenance & Depreciation-General Ground Property 0.2576 J 0.1964 Aircraft & Traffic Servicing 3.3424 K 2.6887 Passenger Service 2.5346 L 2.5327 General & Administrative 0.9949 M 0.9730

Total Indirect 7.1295 6.3909

TOTAL OPERATING COST 19.9395 17.8733

Profit TBD 1.8985

TOTAL COST $19.9395 $19.7718

RATE PER SEAT MILE $0.13293 $0.13181

UNITED AIRLINES (UAL) Aircraft Type B737-800

SMALL CLASS AIRCRAFT Passenger Service

FY17 RATE REVIEW

FORECAST YEAR FY17

YE JUN 15

CARRIER BY AS

SYSTEM CARRIER ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 43,244 47 A 47

AVERAGE DAILY AIRCRAFT UTILIZATION 8.4 8.4 B 8.4

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $2.3949 $2.6465 C $2.6464 Fuel, Oil, & Aircraft Supplies 5.2724 5.2487 D 4.0360 Flight Equipment Maintenance 1.9852 2.2497 E 2.2497

Total Direct Variable 9.6525 10.1449 8.9321

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.0237 0.0347 F 0.0348 Aircraft Rentals & Miscellaneous 4.4659 1.3451 G 1.3510 Flight Equipment Depreciation & Obsolescence 2.9917 0.7848 H 0.7884 Amortization of Preoperating Expense 0.0000 0.0000 I 0.0000 Capital Gains & Losses 0.0499 0.0000 0.0000

Total Direct Fixed 7.5312 2.1646 2.1742

Indirect:

Maintenance & Depreciation-General Ground Property 0.4755 J 0.4755 Aircraft & Traffic Servicing 2.1138 K 1.8422 Passenger Service 0.7327 L 0.7326 General & Administrative 1.1390 M 1.1102

Total Indirect 4.4610 4.1605

TOTAL OPERATING COST 16.7705 15.2669

Profit TBD 2.3427

TOTAL COST $16.7705 $17.6095

RATE PER SEAT MILE $0.11180 $0.11740

APPENDIX F

ATLAS AIRLINES (GTI) Aircraft Type B747-400

LARGE CLASS AIRCRAFT Cargo Service

FY17 RATE REVIEW

FORECAST YEAR FY17

YE JUN 15

CARRIER BY AS

SYSTEM CARRIER ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 40,749 2,746 A 2,737

AVERAGE DAILY AIRCRAFT UTILIZATION 10.2 8.9 B 8.9

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $3.6129 $4.4386 C $4.4521 Fuel, Oil, & Aircraft Supplies 7.2711 18.3387 D 12.2825 Flight Equipment Maintenance 4.0581 4.4058 E 4.3965

Total Direct Variable 14.9421 27.1831 21.1312

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.1104 0.1351 F 0.1342 Aircraft Rentals & Miscellaneous 3.0820 3.9797 G 3.9547 Flight Equipment Depreciation & Obsolescence 0.7545 1.3695 H 1.3606 Amortization of Preoperating Expense 0.0000 0.0000 I 0.0000 Capital Gains & Losses -0.0040 -0.0040 -0.0040

Total Direct Fixed 3.9429 5.4804 5.4456

Indirect:

Maintenance & Depreciation-General Ground Property 0.0598 J 0.0597 Aircraft & Traffic Servicing 2.9041 K 2.9526 General & Administrative 1.5175 M 1.5109

Total Indirect 4.4814 4.5232

TOTAL OPERATING COST 37.1449 31.0999

Profit TBD 5.1093

TOTAL COST $37.1449 $36.2092

Allowable Cabin Load 100 100

RATE PER TON MILE $0.37145 $0.36209

FEDERAL EXPRESS CORPORATION (FDX) Aircraft Type MD11

LARGE CLASS AIRCRAFT Cargo Service

FY17 RATE REVIEW

FORECAST YEAR FY17

YE JUN 15

CARRIER BY AS

SYSTEM CARRIER ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 74,177 476 A 476

AVERAGE DAILY AIRCRAFT UTILIZATION 6.6 6.6 B 6.6

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $0.0392 $6.1103 C $6.1040 Fuel, Oil, & Aircraft Supplies 0.0600 15.9757 D 10.7250 Flight Equipment Maintenance 0.0000 10.1634 E 10.1518

Total Direct Variable 0.0992 32.2494 26.9808

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.0723 0.0875 F 0.0875 Aircraft Rentals & Miscellaneous 0.2958 3.1678 G 3.1664 Flight Equipment Depreciation & Obsolescence 0.0000 1.7281 H 1.7273 Amortization of Preoperating Expense 0.0000 0.0000 I 0.0000 Capital Gains & Losses 0.0000 0.0000 0.0000

Total Direct Fixed 0.3682 4.9834 4.9811

Indirect:

Maintenance & Depreciation-General Ground Property 1.9122 J 1.1568 Aircraft & Traffic Servicing 3.1854 K 1.9426 General & Administrative 4.3613 M 4.0283

Total Indirect 9.4589 7.1277

TOTAL OPERATING COST 46.6917 39.0896

Profit TBD 5.1199

TOTAL COST $46.6917 $44.2095

Allowable Cabin Load 86 86

RATE PER TON MILE $0.54293 $0.51406

KALITTA AIR (CKS) Aircraft Type B747-400

LARGE CLASS AIRCRAFT Cargo Service

FY17 RATE REVIEW

FORECAST YEAR FY17

YE JUN 15

CARRIER BY AS

SYSTEM CARRIER ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 14,344 1,170 A 1,170

AVERAGE DAILY AIRCRAFT UTILIZATION 9.6 9.6 B 9.6

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $2.6659 $3.0140 C $3.0108 Fuel, Oil, & Aircraft Supplies 5.6375 18.9990 D 12.7629 Flight Equipment Maintenance 6.1956 6.1216 E 6.1150

Total Direct Variable 14.4990 28.1346 21.8886

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.1016 0.0983 F 0.0902 Aircraft Rentals & Miscellaneous 0.2861 0.6451 G 0.6450 Flight Equipment Depreciation & Obsolescence 1.7373 1.4155 H 1.4155 Amortization of Preoperating Expense 0.0000 0.0318 I 0.0318 Capital Gains & Losses 0.0177 0.0177 0.0177

Total Direct Fixed 2.1427 2.2085 2.2002

Indirect:

Maintenance & Depreciation-General Ground Property 0.3226 J 0.3219 Aircraft & Traffic Servicing 2.3635 K 2.3586 General & Administrative 0.3387 M 0.3376

Total Indirect 3.0247 3.0180

TOTAL OPERATING COST 33.3678 27.1069

Profit TBD 4.7065

TOTAL COST $33.3678 $31.8134

RATE PER TON MILE $0.33368 $0.31813

NATIONAL AIR CARGO GROUP (NCR) Aircraft Type B747-400

LARGE CLASS AIRCRAFT Cargo Service

FY17 RATE REVIEW

FORECAST YEAR FY17

YE JUN 15

CARRIER BY AS

SYSTEM CARRIER ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 2,338 727 A 498

AVERAGE DAILY AIRCRAFT UTILIZATION 9.3 9.3 B 5.6

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $2.9422 $3.6502 C $3.6064 Fuel, Oil, & Aircraft Supplies 8.5127 22.0777 D 14.1155 Flight Equipment Maintenance 5.4242 6.6008 E 6.6590

Total Direct Variable 16.8791 32.3287 24.3809

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.4708 0.3550 F 0.3762 Aircraft Rentals & Miscellaneous 1.2526 1.2043 G 0.7955 Flight Equipment Depreciation & Obsolescence 1.9560 1.4243 H 1.5095 Amortization of Preoperating Expense 0.0000 0.0000 I 0.0000 Capital Gains & Losses 0.0000 0.0000 0.0000

Total Direct Fixed 3.6794 2.9836 2.6812

Indirect:

Maintenance & Depreciation-General Ground Property 0.0335 J 0.0318 Aircraft & Traffic Servicing 5.1497 K 3.3620 General & Administrative 2.1833 M 1.5935

Total Indirect 7.3665 4.9872

TOTAL OPERATING COST 42.6788 32.0493

Profit TBD 4.3174

TOTAL COST $42.6788 $36.3667

RATE PER TON MILE $0.42679 $0.36367

UNITED PARCEL SERVICE (UPS) Aircraft Type MD11

LARGE CLASS AIRCRAFT Cargo Service

FY17 RATE REVIEW

FORECAST YEAR FY17

YE JUN 15

CARRIER BY AS

SYSTEM CARRIER ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 20,272 331 A 331

AVERAGE DAILY AIRCRAFT UTILIZATION 5.7 5.7 B 5.7

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $4.5683 $5.2476 C $5.2962 Fuel, Oil, & Aircraft Supplies 12.5470 14.9628 D 10.0293 Flight Equipment Maintenance 6.4829 7.1074 E 7.1731

Total Direct Variable 23.5982 27.3178 22.4985

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.2940 0.0943 F 0.0943 Aircraft Rentals & Miscellaneous 0.0000 0.0280 G 0.0280 Flight Equipment Depreciation & Obsolescence 0.0000 4.8803 H 4.8780 Amortization of Preoperating Expense 0.0000 0.0000 I 0.0000 Capital Gains & Losses -0.1500 0.1500 -0.1500

Total Direct Fixed 0.1441 5.1526 4.8503

Indirect:

Maintenance & Depreciation-General Ground Property 0.4676 J 0.4683 Aircraft & Traffic Servicing 4.3044 K 4.0035 General & Administrative 1.3298 M 1.2997

Total Indirect 6.1018 5.7715

TOTAL OPERATING COST 38.5722 33.1203

Profit TBD 6.4309

TOTAL COST $38.5722 $39.5512

Allowable Cabin Load 86 86

RATE PER TON MILE $0.44851 $0.45990

APPENDIX G

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

MEDIUM CLASS AIRCRAFT Cargo Service

FY17 RATE REVIEW

FORECAST YEAR FY17

YE JUN 15

CARRIER BY AS

SYSTEM CARRIER ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 18,633 98 A 98

AVERAGE DAILY AIRCRAFT UTILIZATION 4.6 4.6 B 5.0

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $3.4402 $4.1916 C $3.8533 Fuel, Oil, & Aircraft Supplies 1.0495 7.4946 D 5.8071 Flight Equipment Maintenance 4.9630 6.7495 E 5.6745

Total Direct Variable 9.4527 18.4357 15.3349

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.0465 0.0909 F 0.0832 Aircraft Rentals & Miscellaneous 2.9934 4.9770 G 4.5809 Flight Equipment Depreciation & Obsolescence 0.4459 0.1143 H 0.1051 Amortization of Preoperating Expense 0.0000 0.0000 I 0.0000 Capital Gains & Losses 0.0000 0.0000 0.0000

Total Direct Fixed 3.4858 5.1822 4.7692

Indirect:

Maintenance & Depreciation-General Ground Property 0.0000 J 0.0000 Aircraft & Traffic Servicing 0.0000 K 0.4568 General & Administrative 0.0000 M 0.7845

Total…