FY17_Uniform_Final_Rates_and_Rules_for_International_Service.pdf

20 July 16

MEMORANDUM FOR ALL CARRIERS

FROM: USTRANSCOM/TCAQ-P

508 Scott Drive Scott AFB IL 62225-5357

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

Service – Solicitation Number HTC711-16-R-C001

1. The final FY17 rates are based on fuel pegged at $1.90 per gallon for cargo and combi and $1.91 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 $0.10626 Medium Class Passenger $0.12318 Small Class Passenger $0.13481 $2,000 Large Class Cargo $0.35129 Medium Class Cargo $0.50755 Combi Service $26.46722

2. These rates are not effective until the start of the resultant contracts from solicitation HTC711-16- R-C001. The performance start date for the resultant contracts is 1 October 2016.

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//______________ 20 Jul 2016

SCOTT E. RADER DATE

Chief, Cost & Pricing Branch

Concur:

___//signed//____________ 20 Jul 2016

GREGORY V. HUNT DATE

Contracting Officer, TCAQ-C

Attachment:

20 July 2016 Final 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

FINAL

UNIFORM RATES AND RULES

FOR

INTERNATIONAL SERVICE

FISCAL YEAR 2017

INTRODUCTION

The final FY17 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 FY13 through

FY17, 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

FY17 rates updated general escalation and FICA escalation factors. The general escalation decreased by approximately 28% from 4.20% applied in the proposed rates and rules to the

3.04% applied in the final rates and rules. Further, the FICA escalation decreased by 57% from 1.99% to .84%. When considering the rates excluding fuel costs, the large and small passenger class decreased marginally by approximately 1% and 3% respectively compared to the final FY16 rates. These decreases are primarily attributable to the reduced escalation factors. Compared to the final FY16 rates, without fuel, the medium passenger decreased approximately 9% and large cargo decreased 11%. While a portion of these decreases is explained by the reduced escalation factors, USTRANSCOM has reviewed the costs for the medium passenger and large cargo and the decreases are further explained below:

Medium Passenger Class

Excluding fuel, the medium passenger class rate is down 8.82%. This reduction is attributable to a reduction in the weighted average cost elements of 2% in crew and 22% in Aircraft

Traffic and Servicing (ACTS.) These two elements account for approximately 29% of this rate. During FY16, crew cost included an estimated increase to the proposed rate based upon an expected increase related to Federal Aviation Regulation 117. ACTS cost were held constant with FY15 cost based upon the Lean Six Sigma (LSS) study. During FY16, USTRANSCOM received comments carriers were at a disadvantage due to the elapse time and recommended applying escalation. Due to this recommendation, USTRANSCOM applied escalation to ACTS in FY16 and abandoned the practice of only determining the costs for these categories every other year as was recommended by the LSS study.

USTRANSCOM did not adjust highly weighted carrier’s proposals in these two cost elements during FY17.

Large Cargo Class

Excluding fuel, the large cargo class rate decreased 10.86%. This reduction is primarily attributable to a change in weighting composition compared to FY16 in which carriers with historically higher than average crew and ACTS cost received less weighting in the rate. This contributed to a 5% decrease in the weighted average crew cost and a 14% decrease in ACTS.

These two cost elements comprise 37% of the rate.

Carrier Comments

On 22 April 2016, USTRANSCOM posted the FY17 proposed rate to Federal Business

Opportunities. On 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 23 May 2016. The FY17 final rates consist of a total of

18 proposals submitted by 12 carriers.

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

Transport International (ATI), Atlas Air (Atlas), Delta Airlines (Delta), Federal Express

(FedEx), Miami Air International (Miami), Omni Air International (Omni), United Airlines

(United) and United Parcel Service (UPS). The following topics address the general rate issues identified and USTRASCOM’s response.

General rate comments received during the FY16 rate discussions related to the following topics:

1. Fly American Act

2. Transparency

3. Weighted Guidelines (WGL) Profit

4. National Institute of Standards and Technology (NIST)

1. Fly America Act

Atlas / Omni Comment: During FY17 rate review, DCAA questioned cost in the large and medium passenger categories related to travel expenses that did not comply with the Fly

America Act and clause 52.247-63 -- Preference for U.S.-Flag Air Carriers of the CRAF contract. Atlas/Omni argues the Fly America Act does not apply to CRAF carriers because:

1. The U.S. Government does not reimburse carriers for crew travel

2. USTRANSCOM has not provided guidance on compliance

3. Carriers do not submit expense reports or vouchers

4. Fly America Act has not previously been enforced and should not be applied retroactively

5. Several carriers have code share agreements with foreign air carriers

Recommendation: USTANSCOM disagree with the DCAA finding and the Fly America

Statute, and conclude the Fly American Act does not apply to CRAF carriers.

USTRANSCOM Response: USTRANSCOM declines to concur with the Atlas / Omni request regarding the Fly America Act and instead concurs with DCAA that the statute does apply to carriers awarded a CRAF contract pursuant to FAR 52.247-63.

1. Individual contractors are responsible to be in compliance with the contract and therefore, USTRANSCOM will not further dictate the process by which carriers should comply with the Act.

2. The term voucher is believed to be used in the general sense as an expense report a person would fill out after travel or payment from a carrier to another carrier for travel provided versus a contractor voucher reimbursement under a cost type contract.

USTRANSCOM agrees to lessen the impact on the overall rate by allowing the cost for

FY17’s rate only as consideration for assertion of retroactive enforcement. USTRANSCOM also agrees a code share agreement(s) do not violate the Fly American Act provided these agreements are provided upon request. USTRANSCOM also notes DCAA enforcement of this requirement was announced to certain carriers in December 2015 during the audit process. Furthermore, in February 2016 at the pre-solicitation day for the CRAF contract, industry was again made aware of 52.247-63 clause and requirement of the Fly America Act and on 22 April 2016 in the FY17 proposed rate.

2. Transparency

Omni Comment: Lack of transparency in the introductions and footnotes make analysis of the uniform rates difficult and does not allow carriers to have a full understanding of

USTRANSCOM’s process.

Recommendation: There should be an appendix showing all carriers profit and weighted guidelines assigned values.

USTRANSCOM Response: All carriers receive complete detail of all adjustments and

DCAA Audit Reports if applicable. If carriers unanimously agree to release individual data, USTRANSCOM has no objections.

3. Weighted Guidelines (WGL) Profit Elements

Omni/United Comment: The weighted guidelines were introduced in the FY13 to FY17

MOU for industry ratemaking to provide a capital compensation element to carriers. The weighted guidelines methodology takes into account four profit factors: Performance Risk, Contract Type Risk, Facilities Capital Employed, and Cost Efficiency. Performance Risk is further comprised of an assessment of Technical Risk and Management / Cost Control.

Performance Risk - Technical Risk. CRAF contracts are more complex and higher risk than the majority of Department of Defense (DoD) service contracts. The DoD demands and places high importance on schedule reliability. The technical risk rating based on DFARs

Part 215 can be justified as above normal based on the importance of delivery schedules, inherent risk of the program, DoD requirements, skill level of employees and type of risk associated with DoD airlift missions.

Performance Risk - Management / Cost Control. The management / cost control risk rating should be higher due to the logistics of providing crews and maintenance support for complex and costly worldwide operations. The logistics of providing crews and maintenance support for worldwide operations are complex and costly. Further, this factor should consider the carrier’s ability to control costs while performing difficult requirements.

Contract Type Risk. Operating costs are assigned a value of 5% while fuel costs are assigned a value of 0%. The DFARs recommended range for Firm-Fixed Priced contracts with no financing is 4% to 6% with a normal value of 5%. Fuel cost should be included and compensated by this risk category since the fuel adjustment procedure is not a true cost reimbursement and places some risk on the carrier. Further, when considering the rate assigned for operating costs and the 0% assigned for fuel costs the composite value falls below the DFARs recommended range of 4% to 6%.

Cost Efficiency. The methodology for determining when to assign a cost efficiency factor is flawed. In order for carriers to realize a cost efficiency factor, it must reduce its costs by more than the general cost escalation in order to demonstrate a year-over-year cost reduction and receive credit in this category. Further, fixed costs cannot be controlled by carriers in the short term.

Recommendation: The following were recommendations regarding the specific risk elements from the weighted guidelines:

Performance Risk – Technical Risk. Assign higher than normal value to this risk element (range is 3% to 7%; normal value is 5%).

Performance Risk – Management / Cost Control. Assign higher than normal value to this risk element (range is 3% to 7%; normal value is 5%).

Contract Type Risk. Assign maximum value of 6% on all costs, including fuel.

Cost Efficiency. Use more reasonable methods to assign the rates for the cost efficiency factor.

USTRANSCOM Response: USTRANSCOM disagrees with the recommendations made regarding the specific risk elements. In considering the recommendations, USTRANSCOM considered each of the identified elements as well as the overall profit. The weighted profits realized1 by category are as follows:

Large Class Passenger 10.6% Medium Class Passenger 9.1% Small Class Passenger 18.4% Large Cargo 3.4% Medium Cargo 7.1% Combi 9.1%

USTRANSCOM reviewed the overall profits produced by the assigned risk element values.

USTRANSCOM considers the overall profits to represent a fair profit allowance.

Performance Risk – Technical Risk. USTRANSCOM disagrees with the recommendation to assign a higher than the normal 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 given the program’s maturity, repetitive nature and routineness of the service compared to other services acquired by DoD.

Performance Risk – Management / Cost Control. USTRANSCOM disagrees with the recommendation to assign a higher than the normal 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

1 The expected realized profit is determined for each carrier based on the difference between the applicable FY17 rate and a carrier’s operating costs per seat-mile (or ton-mile for cargo) divided by the applicable FY17 rate.

The expected realized profits are then weighted according to the same weightings used to derive the rates for each category to arrive at the reported weighted profits realized.

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 and assigned a higher than normal value.

Contract Type Risk. USTRANSCOM disagrees with the assignment of a risk value on fuel costs for this element. The 0% value assigned to fuel and the 5% value assigned to other operating costs is specified in the MOU. These values result in a composite value for each carrier anywhere between 2.4% and 3.9%. The assertion that this composite value is below the designated range of 4% to 6% established for a firm-fixed-price contract type with no financing fails to consider the fuel economic price adjustment provision and the deviation from the Prompt Payment Act allowing CRAF carriers to be paid more expeditiously than other DoD contractors. These contract provisions reduce the contract type risk and provide a level of expedited financing that is not considered in the designated range of 4% to 6% for the firm-fixed-price, no financing contract type. USTRANSCOM does recognize there is some level of fuel risk since monthly reimbursable fuel costs are done according to an annually established fuel burn rate. However, the overall fuel price risk is reduced by the fuel EPA clause. The residual risk in fuel is accounted for by the assigned risk values on fuel in the performance risk categories.

Cost Efficiency. The MOU establishes a cost efficiency factor to be assigned based upon the individual carrier’s percentage decrease in total operating cost less fuel compared to the carrier’s total operating costs less fuel from the immediately preceding period.2

USTRANSCOM recognizes this may be a difficult threshold to meet. However, DFARs identifies that this factor is meant to provide a special incentive for contractors to reduce costs. This incentive and reward for reducing or controlling costs is already a feature of the uniform rates and rules methodology. The uniform rate methodology establishes rates based

2 A carrier’s year-to-year costs for the cost efficiency category were considered exclusive of the LSS cost elements since those were fixed this rate cycle for passenger categories and fixed last rate cycle for cargo categories.

on a composite of several participants’ costs for each category building in an incentive and profit reward for achieving lower costs. The development of a composite rate based proportionally on contractors’ costs is unique among DoD service contracts. Since the purpose of the cost efficiency factor of promoting and rewarding cost control/reduction is provided for by the uniform rate methodology, USTRANSCOM does not agree the methodology for assigning a cost efficiency factor needs to be adjusted and the methodology is therefore unchanged. Further, of the 18 cost proposals, 7 were awarded a cost efficiency increase demonstrating that credit for this factor under the current guidelines is attainable.

4. United B747 Utilization

Omni/United Comment: Utilization of 14.1 block hours per day for United’s B747 is not logical for USTRANSCOM service. This utilization represents United’s commercial service, but is not representative of DoD service.

Recommendation: USTRANSCOM should substitute United’s utilization for a utilization rate reflective of DoD daily utilization.

USTRANSCOM Response: USTRANSCOM only considers DoD specific utilization in instances for carrier’s that rely heavily on DoD business and only when the carrier can substantiate a specific DoD utilization. Each carrier’s utilization is typically determined based on the carrier’s Department of Transportation (DoT) Form 41 data of Airborne Hours

(acct: Z610) divided by Aircraft Days Assigned to Service (acct: Z810). The utilization is used in calculating the forecast year Constructed Mileage Base (CMB). The CMB is then used as the divisor for the carrier’s reported fixed costs to determine a cost per mile for the

Direct Fixed cost elements. USTRANSCOM disagrees with the recommended adjustment to

United’s utilization rate because United does not rely heavily on DoD business and the carrier’s “system” utilization rate is an equitable utilization for converting aggregate fixed costs into a per mile cost. Applying an unsubstantiated lower utilization rate unreasonably increases United’s unit fixed costs and unfairly reduces the benefits to USTRANSCOM from

United’s economies of scale.

Fuel

The TCAQ pegged price of fuel is lower than was published with the FY17 proposed Uniform

Rates and Rules. The reduction to the pegged price of fuel compared to the prices published in the FY17 proposed rates and rules is a result of reduced GII projections for the Jet Fuels producer price index during the performance period. 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 $1.91 per gallon and $1.90 per gallon for cargo service, and combi. The pegged price includes into-plane fees and taxes.

Live Mile Cargo Rate

In the FY16 proposed Uniform Rates and Rules, USTRANSCOM proposed a live mile rate for cargo service in lieu of the round-trip and one-way rate model. No carriers submitted any comments or objections to this proposal. Therefore, the FY17 Uniform Rates and Rules reflect a live mile rate and do not include a “round-trip” or a “one-way” rate. Under the live mile rate, cargo carriers will continue to receive any required “paid ferry”, based on the ferry rate for positioning and depositioning miles. Paid depositioning mileage will not exceed the mileage required to return the aircraft to its originating station. Because this is considered ferry, all carriers will be required to file ferry declarations.

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 FY17 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.

Aircraft Standards

On appendix A, paragraph B of the FY17 Proposed Uniform Rates and Rules, the B767-300F was incorrectly categorized as a large cargo aircraft. It is correctly categorized as a medium cargo aircraft in the FY17 Final Uniform Rates and Rules.

Cost Escalation

The 27-month cost escalation factor is 3.04 percent for FY17. This is based on the calculations agreed upon in the FY13-17 MOU. This is a decrease from the 27 month factor of 4.20 percent for FY16. Appendix J provides detailed information on this calculation. The actual travel cost index was -.33 percent but USTRANSCOM raised it to 0 percent in the final calculation.

Eurocontrol

The FY17 Euro control surcharges have been calculated as follows: 2.4 percent for passenger, 2.7 percent for cargo missions, 0.28 percent for combi. This is a slight increase from the FY16 Euro control of 2.0 percent, 2.1 percent and .25 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 FY17 Incremental

Passenger Rate is $181iv. 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 FY17 Large Class passenger rate of $0.10626 (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 FY16 Large Class cargo rate of $0.35129 (effective rate) per ton mile. The cargo ferry rate and paid ferry return rate will be 90% of the effective rate.

SUBJECT: FY17 Final Ferry Rate Passenger

Large Class

Wgt'd Percentage Cost

Cost Category Cost Allowed Allowed Rate %

Crew 1.04859 100% 1.0486 Fuel, Oil & Supplies 2.84230 88% 2.4870 Maintenance 1.23075 100% 1.2307 Insurance 0.06289 100% 0.0629 Rent 0.02388 100% 0.0239 Depreciation 0.77195 100% 0.7719 Preop 0.00000 100% 0.0000 Capital Gains/Losses 0.03660 0% 0.0000 Grd Property 0.08078 100% 0.0808 Aircraft & Traffic Service 1.12235 85% 0.9540 Passenger Service 1.62210 65% 1.0544 G&A 0.46282 100% 0.4628 Profit 1.32102 100% 1.3210 Total 10.626

9.498

0.8938

Medium Class

Crew 1.97243 100% 1.9724 Fuel, Oil & Supplies 2.77633 88% 2.4293 Maintenance 1.49722 100% 1.4972 Insurance 0.15128 100% 0.1513 Rent 0.15786 100% 0.1579 Depreciation 0.63066 100% 0.6307 Preop 0.00000 100% 0.0000 Capital Gains/Losses 0.00000 0% 0.0000 Grd Property 0.01709 100% 0.0171 Aircraft & Traffic Service 1.17527 85% 0.9990 Passenger Service 1.87982 65% 1.2219 G&A 0.56580 100% 0.5658 Profit 1.49382 100% 1.4938 Total 12.318

11.136

0.9041

Total Weighted Passenger Ferry Rate 89.92%

FY17 Large Class

Crew 4.1118 100% 4.1118 Fuel, Oil & Supplies 11.7186 75% 8.7889 Maintenance 5.8158 100% 5.8158 Insurance 0.1453 100% 0.1453 Rent 2.3425 100% 2.3425 Depreciation 1.6012 100% 1.6012 Preop 0.0103 100% 0.0103 Cap Gains/Losses 0.0105 0% 0.0000 Grd Property 0.2458 100% 0.2458 Aircraft & Traffic Service 2.8036 85% 2.3831 G&A 1.3477 100% 1.3477 Profit 4.9755 100% 4.9755 Total 35.1286

31.7679

90.43% ii Linehaul rate = Effective Rate - (Stop charge/(Average Stage Length * ACL))

The following example is for informational purposes only.

$0.14973 = $0.15911 - (($2,000 / (1,421 * 150)) iii

Average Stage Length

Large Class Pax Weighted Avg 2703

GTI B747-400 2964

DAL B747-400 2442

OAE B777 2487

UAL B747-400 2680

Medium Class Pax Weighted Avg 2314

GTI B767 2296

NAC B757 2224

OAE B767 2343

Small Class Pax Weighted Avg 1323

BSK B737 1389

SCX B737 1243

UAL B737 1015

Large Class Cargo Weighted Avg 2804

GTI B747-400 2815

FDX MD11 2265

CKS B747-400 2937

NAC B747-400 2978

UPS MD11 1948

Medium Class Cargo Weighted Avg 1198

ABX B767-200 1204

ATI B767-200 1187

Combi ATI B757 2185 iv Incremental Passenger Rate calculation

One-Way Round-Trip Total

Avg Live Pay Miles

792,952 3,865,392 4,658,344 FY17 Passenger Seat Mile Rate 0.18744 0.10626

59,518,534 164,475,149

Total Dollars

223,993,683 Total Trips

Total Passengers

166,182 Avg Passenger per Trip

Avg Price Per Trip

539,743.81 Avg Seat Miles Per Trip 4,494,895.26 Avg Miles Per Trip

11,225

Additional passenger service cost per trip $181

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

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

$0.10626

Ferry Rate (Base - Effective Rate) 90% $0.09563 Incremental Passenger

$181

Fuel Pegged Rate

$1.91

Medium

$0.12318

Ferry Rate (Base - Effective Rate) 90% $0.11086

$1.91

Small

Live Line Haul Rate

$0.13481

Ferry Rate (Base - Effective Rate) 90% $0.12133 Stop Charge (Per Directed Landing)

$2,000

Fuel Pegged Rate $1.91

(2) CHARTER CARGO SERVICE PER TON MILE

Large

$0.35129 Ferry Rate (Base - Effective Rate) 90% $0.31616

$1.90

Medium

Live Effective Rate:

$0.50755 Ferry Rate (Base - Effective Rate) 90% $0.45680 Fuel Pegged Rate $1.90

(3) CHARTER COMBI SERVICE PER PLANE MILE

$26.46722

Ferry Rate (Base - Effective Rate) 90% $23.55583 Fuel Pegged Rate $1.90

(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 2.4 percent on 6,000 miles + 5,100 miles). On one way cargo missions when Eurocontrol is applicable to both the live and empty segment, Eurocontrol will be paid on the live miles plus an additional 30 percent of those miles (i.e., 6,000 mile one way cargo mission would be paid 2.7 percent on 6,000 miles + 1,800 miles). Combi Carriers will be paid the applicable rate plus a surcharge of 0.28 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 $181 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:

35.45% 32.44%

8 to 14 days

Passenger and Combi:

Cargo:

24.17% 25.81%

15 to 30 days

Passenger and Combi:

Cargo:

20.70% 21.26%

31 to 45 days Passenger and Combi 9.49% 31 to 75 days Cargo 8.50% 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:

24.17% 25.81%

(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 $1836

B747-400/400ER 100 $2040

MD11F 86 $1754

MD11C 86 $1754

B777F 88 $1795

DC10-30/40 75 $1530

B767-300F 61 $1862

A300-600ER 51 $1557

A300-400F 50 $1526 B767-200F 48 $1465

DC8 45 $1374

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 B767-300F 61 A300 210

B767-300/300ER 240

B767-400ER 260

Large Aircraft: Large Aircraft:

A330-200 310 DC10-30/40 75

A330-300 330 MD11 86

B777-200ER 330 B777F 88

DC10-30 330 B747-100/200/300 90

A340 345 B747-400 100

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 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 0.09813$ 111,643$ 86,550$ $198,193 41.54% $0.04076

DELTA AIR LINES INC B747-400 0.11428$ 38,735$ 14,818$ $53,553 11.22% $0.01283

OMNI AIR INTERNATIONAL INC B777 0.11250$ 112,146$ 56,039$ $168,185 35.25% $0.03966

UNITED AIRLINES INC B747-400 0.10858$ 39,115$ 18,086$ $57,200 11.99% $0.01302

$477,132 1.0000

RATE -- WEIGHTED BY REVENUES $0.10626

Exclusive of Fuel $0.07784

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 0.13088$ 132,632$ 99,476$ $232,108 45.33% $0.05932

NATIONAL AIR CARGO GROUP B757-200 0.13415$ 25,346$ 9,425$ $34,771 6.79% $0.00911

OMNI AIR INTERNATIONAL INC B767-300 0.11433$ 152,517$ 92,664$ $245,181 47.88% $0.05474

$512,059 1.0000

RATE -- WEIGHTED BY REVENUES $0.12318

Exclusive of Fuel $0.09541

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 0.15513$ 16,447$ 12,200$ $28,647 64.70% $0.10038 MN AIRLINES, LLC DBA SUN COUNTRY AIRLINES B737-800 0.12831$ 7,388$ 5,441$ $12,829 28.98% $0.03718

UNITED AIRLINES INC B737-800 0.11598$ 1,756$ 1,041$ $2,798 6.32% $0.00733

$44,274 1.0000

RATE -- WEIGHTED BY REVENUES $0.14489

Exclusive of Fuel $0.12115

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

$0.14489 1,323 150 $2,000 $0.13481

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 0.35142$ 141,182$ 121,100$ $262,282 45.30% $0.15920

FEDERAL EXPRESS CORPORATION MD11 0.50278$ 19,553$ 19,514$ $39,067 6.75% $0.03393

KALITTA AIR, LLC B747-400 0.30734$ 87,840$ 99,887$ $187,727 32.43% $0.09966

NATIONAL AIR CARGO GROUP B747-400 0.35144$ 43,461$ 24,650$ $68,111 11.76% $0.04135

UNITED PARCEL SERVICE CO. MD11 0.45632$ 16,470$ 5,292$ $21,762 3.76% $0.01715

$308,505 $270,443

$578,948 1.0000

RATE -- WEIGHTED BY REVENUES $0.35129

Exclusive of Fuel $0.23410

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 0.48298$ $2,765 $7,466 $10,231 65.54% $0.31653

AIR TRANSPORT INTERNATIONAL LLC B767-200F 0.55428$ $3,168 $2,212 $5,380 34.46% $0.19103

$5,934 $9,678

$15,611 1.0000

RATE -- WEIGHTED BY REVENUES $0.50755

Exclusive of Fuel $0.38829

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 $26.46722 $89,379 $57,773 $147,152 100.00% $26.46722

$147,152 1.0000

RATE -- WEIGHTED BY REVENUES $26.46722

Exclusive of Fuel $21.67309

APPENDIX C

ATLAS AIRLINES (GTI) Aircraft Type B747-400

LARGE CLASS AIRCRAFT Passenger Service

FY17 RATE REVIEW

FORECAST YEAR FY17

USTRANSCOM FINAL

PROPOSED ADJUSTED

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

AVERAGE DAILY AIRCRAFT UTILIZATION 7.6 7.6

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $3.9092 $3.8915 Fuel, Oil, & Aircraft Supplies 14.1170 12.6589 Flight Equipment Maintenance 3.7999 3.7597

Total Direct Variable 21.8260 20.3101

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.4259 0.4259 Aircraft Rentals & Miscellaneous 0.0905 0.0895 Flight Equipment Depreciation & Obsolescence 1.3478 1.3478 Amortization of Preoperating Expense 0.0000 0.0000 Capital Gains & Losses 0.3697 0.3697

Total Direct Fixed 2.2339 2.2329

Indirect:

Maintenance & Depreciation-General Ground Property 0.0805 0.0805 Aircraft & Traffic Servicing 2.7886 2.7575 Passenger Service 8.3717 8.9847 General & Administrative 1.8493 1.8950

Total Indirect 13.0901 13.7177

TOTAL OPERATING COST 37.1500 36.2607

Profit 4.9324 4.9155

TOTAL COST $42.0824 $41.1762

Allowable Cabin Load 420 420

RATE PER SEAT MILE $0.10029 $0.09813

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

LARGE CLASS AIRCRAFT Passenger Service

FY17 RATE REVIEW

FORECAST YEAR FY17

USTRANSCOM FINAL

PROPOSED ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 738 738

AVERAGE DAILY AIRCRAFT UTILIZATION 11.7 11.7

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $4.3711 $4.4851 Fuel, Oil, & Aircraft Supplies 13.0415 11.6946 Flight Equipment Maintenance 2.3711 2.3513

Total Direct Variable 19.7838 18.5310

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.0259 0.0301 Aircraft Rentals & Miscellaneous 0.1796 0.1776 Flight Equipment Depreciation & Obsolescence 2.3109 2.1058 Amortization of Preoperating Expense 0.0000 0.0000 Capital Gains & Losses 0.0000 0.0000

Total Direct Fixed 2.5164 2.3135

Indirect:

Maintenance & Depreciation-General Ground Property 1.1214 1.3184 Aircraft & Traffic Servicing 8.7208 8.6236 Passenger Service 6.8050 6.7740 General & Administrative 2.0104 2.0073

Total Indirect 18.6576 18.7232

TOTAL OPERATING COST 40.9578 39.5678

Profit 6.5700 6.1430

TOTAL COST $47.5278 $45.7107

Allowable Cabin Load 400 400

RATE PER SEAT MILE $0.11882 $0.11428

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

LARGE CLASS AIRCRAFT Passenger Service

FY17 RATE REVIEW

FORECAST YEAR FY17

USTRANSCOM FINAL

PROPOSED ADJUSTED

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

AVERAGE DAILY AIRCRAFT UTILIZATION 8.4 8.4

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $4.2271 $4.2128 Fuel, Oil, & Aircraft Supplies 10.4023 9.3328 Flight Equipment Maintenance 7.1743 7.1072

Total Direct Variable 21.8036 20.6528

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.1923 0.1923 Aircraft Rentals & Miscellaneous 0.0295 0.0292 Flight Equipment Depreciation & Obsolescence 5.7435 5.7435 Amortization of Preoperating Expense 0.0000 0.0000 Capital Gains & Losses 0.0000 0.0000

Total Direct Fixed 5.9653 5.9650

Indirect:

Maintenance & Depreciation-General Ground Property 0.0350 0.0350 Aircraft & Traffic Servicing 4.2116 4.1646 Passenger Service 4.8176 4.7746 General & Administrative 1.5546 1.5445

Total Indirect 10.6189 10.5188

TOTAL OPERATING COST 38.3878 37.1366

Profit 5.6830 5.6132

TOTAL COST $44.0709 $42.7498

Allowable Cabin Load 380 380

RATE PER SEAT MILE $0.11598 $0.11250

UNITED AIR LINES INC (UAL) Aircraft Type B747-400

LARGE CLASS AIRCRAFT Passenger Service

FY17 RATE REVIEW

FORECAST YEAR FY17

USTRANSCOM FINAL

PROPOSED ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 677 677

AVERAGE DAILY AIRCRAFT UTILIZATION 10.0 10.0

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $4.5271 $4.8954 Fuel, Oil, & Aircraft Supplies 14.7084 13.1893 Flight Equipment Maintenance 4.4900 4.4483

Total Direct Variable 23.7255 22.5330

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.0684 0.0684 Aircraft Rentals & Miscellaneous 0.2448 0.2445 Flight Equipment Depreciation & Obsolescence 1.5569 1.5569 Amortization of Preoperating Expense 0.0000 0.0000 Capital Gains & Losses 0.0000 0.0000

Total Direct Fixed 1.8701 1.8698

Indirect:

Maintenance & Depreciation-General Ground Property 1.0865 1.0865 Aircraft & Traffic Servicing 7.4599 7.3767 Passenger Service 3.3497 3.3265 General & Administrative 2.4993 2.5235

Total Indirect 14.3954 14.3132

TOTAL OPERATING COST 39.9911 38.7160

Profit 4.7658 4.7170

TOTAL COST $44.7568 $43.4330

Allowable Cabin Load 400 400

RATE PER SEAT MILE $0.11189 $0.10858

APPENDIX D

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

MEDIUM CLASS AIRCRAFT Passenger Service

FY17 RATE REVIEW

FORECAST YEAR FY17

USTRANSCOM FINAL

PROPOSED ADJUSTED

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

AVERAGE DAILY AIRCRAFT UTILIZATION 7.7 7.7

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $4.7305 $6.3099 Fuel, Oil, & Aircraft Supplies 7.3362 6.5785 Flight Equipment Maintenance 2.3305 2.3057

Total Direct Variable 14.3972 15.1941

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.4655 0.4655 Aircraft Rentals & Miscellaneous 0.1981 0.1959 Flight Equipment Depreciation & Obsolescence 1.5232 1.5232 Amortization of Preoperating Expense 0.0000 0.0000 Capital Gains & Losses 0.0000 0.0000

Total Direct Fixed 2.1868 2.1846

Indirect:

Maintenance & Depreciation-General Ground Property 0.0440 0.0440 Aircraft & Traffic Servicing 3.1704 3.1350 Passenger Service 4.7316 5.0782 General & Administrative 1.5010 1.6637

Total Indirect 9.4470 9.9210

TOTAL OPERATING COST 26.0310 27.2997

Profit 4.4920 4.1106

TOTAL COST $30.5230 $31.4103

Allowable Cabin Load 240 240

RATE PER SEAT MILE $0.12718 $0.13088

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

MEDIUM CLASS AIRCRAFT Passenger Service

FY17 RATE REVIEW

FORECAST YEAR FY17

USTRANSCOM FINAL

PROPOSED ADJUSTED

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

AVERAGE DAILY AIRCRAFT UTILIZATION 8.1 8.1

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $3.8614 $3.8434 Fuel, Oil, & Aircraft Supplies 5.2810 4.7361 Flight Equipment Maintenance 5.4351 5.4001

Total Direct Variable 14.5776 13.9796

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.5132 0.5132 Aircraft Rentals & Miscellaneous 1.0687 1.0609 Flight Equipment Depreciation & Obsolescence 0.5334 0.5334 Amortization of Preoperating Expense 0.0000 0.0000 Capital Gains & Losses 0.0000 0.0000

Total Direct Fixed 2.1154 2.1075

Indirect:

Maintenance & Depreciation-General Ground Property 0.0132 0.0132 Aircraft & Traffic Servicing 1.4278 1.4119 Passenger Service 3.8553 3.8275 General & Administrative 1.6296 1.6194

Total Indirect 6.9259 6.8720

TOTAL OPERATING COST 23.6189 22.9591

Profit 2.5660 2.5299

TOTAL COST $26.1849 $25.4890

Allowable Cabin Load 190 190

RATE PER SEAT MILE $0.13782 $0.13415

OMNI AIR INTERNATIONAL (OAE) Aircraft Type B767-300

MEDIUM CLASS AIRCRAFT Passenger Service

FY17 RATE REVIEW

FORECAST YEAR FY17

USTRANSCOM FINAL

PROPOSED ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 4,146 4,146

AVERAGE DAILY AIRCRAFT UTILIZATION 6.3 6.3

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $3.2357 $3.2246 Fuel, Oil, & Aircraft Supplies 7.6221 6.8399 Flight Equipment Maintenance 4.3935 4.3545

Total Direct Variable 15.2514 14.4191

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.2257 0.2257 Aircraft Rentals & Miscellaneous 0.4160 0.4158 Flight Equipment Depreciation & Obsolescence 1.6235 1.6235 Amortization of Preoperating Expense 0.0000 0.0000 Capital Gains & Losses 0.0000 0.0000

Total Direct Fixed 2.2652 2.2650

Indirect:

Maintenance & Depreciation-General Ground Property 0.0416 0.0416 Aircraft & Traffic…