FY18_Uniform_Rates_and_Rules.pdf

27 April 17

MEMORANDUM FOR ALL CARRIERS

FROM: USTRANSCOM/TCAQ-P

508 Scott Drive Scott AFB IL 62225-5357

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

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

(SUSPENSE: 30 MAY 17)

1. The proposed FY18 rates are based on fuel pegged at $2.17 per gallon for cargo and combi and $2.10 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 $0.11493 Medium Class Passenger $0.13083 Small Class Passenger $0.15043 $2,000 Large Class Cargo $0.37408 Medium Class Cargo $0.42507 Combi Service $26.34586

2. Carriers providing cost data for the rate review should provide comments and supporting documentation via email to scott.e.rader.civ@mail.mil and cc to Shelby.v.baybordi.civ@mail.mil by 4 p.m. on 30 May 17. If specific information is required on individual cost elements, analysts will provide detailed step-by-step treatment upon carrier request.

3. 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:

27 April 2017 Proposed FY18 Uniform Rates and Rules for International Service DRAFT FY18-FY22 Memorandum of Understanding

UNITED STATES TRANSPORTATION COMMAND

508 SCOTT DR

SCOTT AIR FORCE BASE, IL 62225-5357

mailto:scott.e.rader.civ@mail.mil mailto:Shelby.v.baybordi.civ@mail.mil 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 2018

INTRODUCTION

USTRANSCOM developed the proposed FY18 USTRANSCOM Uniform Rates and Rules

(hereafter referred to as “Rates”), with the exception of general escalation, using rate-making procedures in compliance with the following: Federal Acquisition Regulation (FAR), DRAFT Memorandum of Understanding (MOU) for FY18 through FY22, 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 FY18 rate is the first rate covered by the attached DRAFT MOU.

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 30 May 2017. The final rates must be published and the MOU signed before the Option Period can be exercised.

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 attached DRAFT 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 FY18 rates were developed on experienced base year costs and statistical data from 9 carriers providing 13 proposals for the cost base year beginning 01 July 2015 and ending 30 June 2016. Carrier’s cost data was audited and

USTRANSCOM analyzed carrier’s forecast operating cost projections in the development of the FY18 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 DRAFT 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 68% 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 424.

Passenger Head Taxes.

Passenger head taxes including Immigration fees, Custom fees, APHIS fees and Federal

Excise taxes have been included in the three passenger and combi aircraft rate classes for the

FY18 Proposed Rate. USTRANSCOM utilized data solicited from the passenger carriers as well as data obtained from Wide Area Workflow (WAWF) to determine the cost included in the FY18 Rate Review. These costs were included in Aircraft and Traffic Servicing (ACTS) and treated as direct assignments. General escalation will not be applied to these costs as the adjustments do not follow a consistent annual pattern.

The net effect these adjustments have on the FY18 proposed rates for each category are as follows: (1) Large Passenger FY18 rate increased 1.63 percent, (2) Medium Passenger

FY18 rate increased 2.44 percent; (3) Small Passenger FY18 rate increased 2.42 percent; and

(4) Combi FY18 rate increased 0.42 percent. These costs were not included in the FY17

Rates and therefore excluded from the calculation to determine the applicability of a cost efficiency factor for each carrier.

Escalation.

The general escalation factor applied to the FY18 proposed rates is the escalation percentage calculated for the FY17 final rates. This was calculated using the NAICS 481112 at 80 percent weighting and the GII Travel Cost index at 20 percent weighting. This will be updated for the FY18 final rates utilizing the indices and weightings in the finalized MOU.

Removal of Carriers’ Cost Data from Rate.

At the date of publication of the FY18 proposed rates, USTRANSCOM is unable to complete a conclusive evaluation for one of the large cargo carrier’s costs submitted for inclusion in the

FY18 large cargo rate. As a result, USTRANSCOM is excluding this carrier’s B747 costs from the FY18 proposed large cargo rate. If costs are included, carriers in the large cargo rate class will be updated accordingly prior to the issuance of the final rate.

After proposal submissions, USTRANSCOM was informed a large class passenger carrier does not plan to utilize their B747 fleet after calendar year 2017. As in past practices when a fleet is retired, USTRANSCOM will exclude this aircraft cost inputs from the large class passenger rate.

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 October 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 ($2.26/gal) which received a 90% weighting and JP-5

($2.29/gal) which received a 10% weighting yielding a projected composite DLA fuel cost of $2.26/gal. USTRANSCOM will update any known or estimated DLA fuel pricing for JP-5 and JP-8 in the final rates.

To estimate the average price of commercial fuel during the FY18 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)RtR = 1.9333 * (PPIRtR) + 0.0339

EQ (2): Average Quarterly Commercial Price (Cargo)RtR = 1.9377 * (PPIRtR) + 0.03

Using these equations, the quarterly commercial fuel price for both categories was forecasted for FY18 and is reported in

Table 1.

A review of carriers’ recent monthly fuel reports conclude cargo carriers receive 63.0 percent of their fuel at military installations and are charged the rate set by DLA-E. Conversely, Forecasted Commercial Fuel Price Period PPI Passenger Cargo

Oct-Dec 2017 1.02 $2.00 $2.00 Table 1: Forecasted Commercial Fuel Costs for FY18

Figure 1: Avg Fuel Prices & Jet Fuel PPI over time passenger carriers receive 63.5 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 $2.10 for passenger and $2.17 per

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

USTRANSCOM will update the pegged price for fuel in the FY18 final rate calculation and continue to closely monitor fuel prices for the FY18 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 FY18 proposed rates applied the same rate factors used in the FY17 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 FY18 proposed rates to reflect the most current data available and will update it again in the final rates.

Profit

In accordance with the attached DRAFT 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.

ID Description (PASSENGER) Values 1 Forecasted Cost of Commercial Fuel - PAX $2.00 2 Current Cost of DLA Fuel (JP-8 w/ 90% wtg, JP-5 w/ 10% wtg) $2.26 3 Weighting of Commercial Fuel for past 13 months- PAX 63.45% 4 Weighting of DoD Fuel for past 13 months - PAX 36.55%

Proposed Pegged Rate of Fuel $2.10

ID Description (CARGO) Values 1 Forecasted Cost of Commercial Fuel - CARGO $2.00 2 Current Cost of DLA Fuel (JP-8 w/ 90% wtg, JP-5 w/ 10% wtg) $2.26 3 Weighting of Commercial Fuel for past 13 months - CARGO 37.01% 4 Weighting of DoD Fuel for past 13 months - CARGO 62.99%

Proposed Pegged Rate of Fuel $2.17

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 FY17 review, the ferry rate for the FY18 proposed rates will remain at 90 percent of the effective rate for passenger and cargo. Ferry rates for both services will be updated for the FY18 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 rateii. 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.

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

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

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

INDEX OF APPENDICES

No.

Appendix Title Pages

A USTRANSCOM Uniform Negotiated Rates and Rules 5

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

C Costs Per Seat Mile by Carrier and Aircraft Type In Large Class Charter Passenger Service 2

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

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

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

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

H Cost Per Plane Mile by Carrier Charter Combi Service 1

I Eurocontrol Surcharge 6

J Cost Escalation Factor 2

K FICA Escalation 1

APPENDIX A

SCHEDULE OF UNIFORM NEGOTIATED RATES AND RULES (PROPOSED)

FISCAL YEAR 2018

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

(1) CHARTER PASSENGER SERVICE PER SEAT MILE

Large

Live Effective Rate

$0.11493 Ferry Rate (Base - Effective Rate) 90% $0.10344 Incremental Passenger

$178

Fuel Pegged Rate

$2.10

Medium

$0.13083

Ferry Rate (Base - Effective Rate) 90% $0.11775

$2.10

Small

Live Line Haul Rate

$0.15043

Ferry Rate (Base - Effective Rate) 90% $0.14383 Stop Charge (Per Directed Landing) $2,000

Fuel Pegged Rate $2.10

(2) CHARTER CARGO SERVICE PER TON MILE

Large

$0.37408 Ferry Rate (Base - Effective Rate) 89% $0.33667

$2.17

Medium

Live Effective Rate:

$0.42507 Ferry Rate (Base - Effective Rate) 89% $0.38256 Fuel Pegged Rate $2.17

(3) CHARTER COMBI SERVICE PER PLANE MILE

$26.34586

Ferry Rate (Base - Effective Rate) 89% $23.44782 Fuel Pegged Rate $2.17

(4) EUROCONTROL. Eurocontrol applies where a carrier is required to transit countries with an ICAO prefix of "E" or "L" (i.e., EDAF, LIRA), with the exception of EGYP in the Falkland Islands. Eurocontrol will be paid on live miles only. On one way passenger missions when Eurocontrol is applicable to both the live and empty segment, Eurocontrol will be paid on the live miles plus an additional 85 percent of those miles (i.e., 6,000 mile one way passenger mission would be paid 2.4 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 0.27 percent

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

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

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

(6) INCREMENTAL PASSENGER MOVEMENT. The incremental passenger rate applies when the number of additional passengers above the standard ACL is identified for an exercise, SAAM or contingency. The incremental passenger movement rate is $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:

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). Demurrage charges are limited to delays in loading or unloading but exclude delays due to damage resulting from the negligence of Government personnel. Delays due to Acts of God, Air Traffic Control (ATC) or Contractor controllable reasons will not be compensated. Payment of delays of fractions of an hour will be calculated using normal rounding procedures, i.e., 29 minutes or less will be dropped, 30 minutes or more will be rounded to the next whole hour. Demurrage charges are as follows:

Aircraft Type ACL Demurrage B747-100/200 90 $1836

B747-400/400ER 100 $2040

MD11 86 $1754

B777F 88 $1795

A300-600ER 51 $1557

A300-400F 50 $1526 B767-300F 61 $1862 B767-200F 48 $1465

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

PASSENGER AIRCRAFT CARGO AIRCRAFT

Aircraft Type Maximum Standard

Payload Aircraft Type Maximum Standard

Payload

Small Aircraft: Small Aircraft:

A319 135 L100 23

MD80 140

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

Medium Aircraft: Medium Aircraft:

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

B757-300 200 A300-B4(F) 50

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

A310 200 B767-300F 61 B767-200 Charter Config. 207 A300 210

B767-300/300ER 240

B767-400ER 260

Large Aircraft: Large Aircraft:

A330-200 310 MD11 86

A330-300 330 B747-400 100

B777-200ER 330 B777F 88

A340 345 B747-100/200/300 90

MD11/MD11ER 360

B777 Charter Config. 380 B747 400 B747 Charter Config. 435

C. FUEL ADJUSTMENTS.

(1) The carrier shall be compensated for variance in fuel prices incurred on USTRANSCOM contracted full planeload missions bought at the USTRANSCOM rate. COMPENSATION WILL NOT BE MADE TO THE PRIME OR SUBSERVICING CARRIER FOR SUBSTITUE SERVICE OR SUBCONTRACTED MILES. Adjustments will be made upward or downward if the price of fuel varies by more than one cent per gallon from the pegged price (as stated in the USTRANSCOM Uniform Negotiated Rates and Rules) used in establishing the USTRANSCOM rates.

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

ADJUSTMENT PROCEDURES).

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

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

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

(2) When a live route segment is 4,000 miles or more the live mileage shall be computed via an intermediate point(s) which yields the shortest mileage. This does not apply to ferry segments.

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

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

KCHS#MMCZ-MPTO=1 Paid Stop2/

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

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

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

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

4/ / This symbol used to indicate Backhaul Mileage.

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

E. DEFINITIONS.

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

These international charter flights are scheduled by AMC to and from designated commercial airports and/or AMC gateways and/or military aerial ports. Standard cancellation rates (paragraph 7) to not apply.

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

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

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

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

“Pay miles” means the great circle statute miles used to compute the price of the mission in accordance with COINS. COINS calculates distances based on longitude and latitude for geographical locations listed in the DoD Flight Information Publication (FLIP) and identified by location indicators assigned by the International Civil Aviation Organization (ICAO) and published in the Location Indicator, Doc 7910/67.

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

APPENDIX B

USTRANSCOM FY16 FY17 Total Adjusted Passenger Passenger Passenger

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

ATLAS AIR, INC. B747-400 0.09942$ 117,424$ 72,977$ $190,401 57.26% $0.05693

OMNI AIR INTERNATIONAL INC B777 0.13571$ 77,990$ 64,114$ $142,104 42.74% $0.05800

$332,506 1.0000

RATE -- WEIGHTED BY REVENUES $0.11493

Exclusive of Fuel $0.08519

LARGE CLASS AIRCRAFT

PASSENGER SERVICE

USTRANSCOM UNIFORM RATE

COMPUTATION

USTRANSCOM FY16 FY17 Total Adjusted Passenger Passenger Passenger

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

ATLAS AIR, INC. B767-300 0.13815$ 146,906$ 99,646$ $246,552 51.61% $0.07129

OMNI AIR INTERNATIONAL INC B767-200/300 0.12303$ 149,372$ 81,824$ $231,196 48.39% $0.05954

$477,748 1.0000

RATE -- WEIGHTED BY REVENUES $0.13083

Exclusive of Fuel $0.10085

MEDIUM CLASS AIRCRAFT

COMPUTATION

USTRANSCOM UNIFORM RATE

PASSENGER SERVICE

USTRANSCOM FY16 FY17 Total Adjusted Passenger Passenger Passenger

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

MIAMI AIR INTERNATIONAL INC B737-400/800 0.16880$ 18,687$ 13,301$ $31,988 68.18% $0.11508 MN AIRLINES, LLC DBA SUN COUNTRY AIRLINES B737-800 0.14054$ 7,803$ 7,127$ $14,930 31.82% $0.04472

$46,918 1.0000

RATE -- WEIGHTED BY REVENUES $0.15981

Exclusive of Fuel $0.13286

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

$0.15981 1,442 148 $2,000 $0.15043

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

COMPUTATION

USTRANSCOM UNIFORM RATE

PASSENGER SERVICE

SMALL CLASS AIRCRAFT

USTRANSCOM FY16 FY17 Total Adjusted Cargo Cargo Cargo

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

ATLAS AIR, INC. B747-400 0.37823$ 170,725$ 125,575$ $296,300 52.00% $0.19667

KALITTA AIR, LLC B747-400 0.34094$ 149,350$ 85,205$ $234,554 41.16% $0.14034

FEDERAL EXPRESS CORPORATION MD11 0.54180$ 21,460$ 17,531$ $38,991 6.84% $0.03707

$569,846 1.0000

RATE -- WEIGHTED BY REVENUES $0.37408

Exclusive of Fuel $0.24009

COMPUTATION

USTRANSCOM UNIFORM RATE

CARGO SERVICE

LARGE CLASS AIRCRAFT

USTRANSCOM FY16 FY17 Total Adjusted Cargo Cargo Cargo

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

ABX AIR INC B767-200F 0.41378$ $7,466 $0 $7,466 51.88% $0.21468

AIR TRANSPORT INTERNATIONAL LLC B767-200F 0.43723$ $6,924 $0 $6,924 48.12% $0.21039

$14,390 1.0000

RATE -- WEIGHTED BY REVENUES $0.42507

Exclusive of Fuel $0.30532

COMPUTATION

USTRANSCOM UNIFORM RATE

CARGO SERVICE

MEDIUM CLASS AIRCRAFT

USTRANSCOM FY16 FY17 Total Adjusted Combi Combi Combi

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

AIR TRANSPORT INTERNATIONAL LLC B757 $26.34586 $75,752 $73,823 $149,576 100.00% $26.34586

$149,576 1.0000

RATE -- WEIGHTED BY REVENUES $26.34586

Exclusive of Fuel $20.80974

COMPUTATION

USTRANSCOM UNIFORM RATE

COMBI SERVICE

COMBI AIRCRAFT

APPENDIX C

ATLAS AIRLINES (GTI) Aircraft Type B747-400

LARGE CLASS AIRCRAFT Passenger Service

FY18 RATE REVIEW

FORECAST YEAR FY18

BY AS

CARRIER ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 2,435 2,395

AVERAGE DAILY AIRCRAFT UTILIZATION 8.0 8.0

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $4.4633 $4.4634 Fuel, Oil, & Aircraft Supplies 12.6851 14.0204 Flight Equipment Maintenance 4.2775 4.2774

Total Direct Variable 21.4259 22.7611

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.3687 0.3686 Aircraft Rentals & Miscellaneous 0.1169 0.2772 Flight Equipment Depreciation & Obsolescence 1.3508 1.3508 Amortization of Preoperating Expense 0.0000 0.0000 Capital Gains & Losses 0.0000 0.0000

Total Direct Fixed 1.8364 1.9966

Indirect:

Maintenance & Depreciation-General Ground Property 0.0971 0.0946 Aircraft & Traffic Servicing 2.9219 2.7095 Passenger Service 8.2706 7.7182 General & Administrative 1.7182 1.6157

Total Indirect 13.0077 12.1380

TOTAL OPERATING COST 36.2700 36.8958

Profit TBD 5.2545

TOTAL COST $36.2700 $42.1503

Allowable Cabin Load 420 424

RATE PER SEAT MILE $0.08636 $0.09942

APPENDIX C

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

LARGE CLASS AIRCRAFT Passenger Service

FY18 RATE REVIEW

FORECAST YEAR FY18

BY AS

CARRIER ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 1,972 1,920

AVERAGE DAILY AIRCRAFT UTILIZATION 6.6 6.7

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $8.6043 $5.0557 Fuel, Oil, & Aircraft Supplies 8.7004 9.6036 Flight Equipment Maintenance 8.6801 8.5246

Total Direct Variable 25.9848 23.1839

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.2627 0.2608 Aircraft Rentals & Miscellaneous 0.0297 0.1397 Flight Equipment Depreciation & Obsolescence 8.1773 6.6859 Amortization of Preoperating Expense 0.0000 0.0000 Capital Gains & Losses 0.0000 0.0000

Total Direct Fixed 8.4697 7.0864

Indirect:

Maintenance & Depreciation-General Ground Property 0.0847 0.1222 Aircraft & Traffic Servicing 2.3178 3.1789 Passenger Service 7.2280 5.3010 General & Administrative 2.5076 2.0737

Total Indirect 12.1381 10.6759

TOTAL OPERATING COST 46.5926 40.9462

Profit TBD 10.6246

TOTAL COST $46.5926 $51.5709

Allowable Cabin Load 380 380

RATE PER SEAT MILE $0.12261 $0.13571

APPENDIX D

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

MEDIUM CLASS AIRCRAFT Passenger Service

FY18 RATE REVIEW

FORECAST YEAR FY18

BY AS

CARRIER ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 4,266 4,190

AVERAGE DAILY AIRCRAFT UTILIZATION 8.2 8.2

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $7.2689 $7.2724 Fuel, Oil, & Aircraft Supplies 6.5232 7.2139 Flight Equipment Maintenance 2.4981 2.4995

Total Direct Variable 16.2902 16.9857

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.1726 0.1723 Aircraft Rentals & Miscellaneous 0.1570 0.2471 Flight Equipment Depreciation & Obsolescence 1.2192 1.2182 Amortization of Preoperating Expense 0.0000 0.0000 Capital Gains & Losses 0.0000 0.0000

Total Direct Fixed 1.5488 1.6377

Indirect:

Maintenance & Depreciation-General Ground Property 0.0595 0.0559 Aircraft & Traffic Servicing 3.1043 3.6548 Passenger Service 5.4825 5.1192 General & Administrative 1.5685 1.5382

Total Indirect 10.2148 10.3681

TOTAL OPERATING COST 28.0537 28.9915

Profit TBD 4.1634

TOTAL COST $28.0537 $33.1549

Allowable Cabin Load 240 240

RATE PER SEAT MILE $0.11689 $0.13815

APPENDIX D

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

MEDIUM CLASS AIRCRAFT Passenger Service

FY18 RATE REVIEW

FORECAST YEAR FY18

BY AS

CARRIER ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 4,236 4,594

AVERAGE DAILY AIRCRAFT UTILIZATION 6.3 7.0

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $6.5620 $3.2711 Fuel, Oil, & Aircraft Supplies 6.5251 7.0626 Flight Equipment Maintenance 4.9862 4.9441

Total Direct Variable 18.0733 15.2779

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.1356 0.1357 Aircraft Rentals & Miscellaneous 0.4557 0.5438 Flight Equipment Depreciation & Obsolescence 1.7805 1.7810 Amortization of Preoperating Expense 0.0000 0.0000 Capital Gains & Losses 0.0000 0.0000

Total Direct Fixed 2.3718 2.4605

Indirect:

Maintenance & Depreciation-General Ground Property 0.0979 0.0716 Aircraft & Traffic Servicing 2.4844 3.0511 Passenger Service 5.8419 4.1726 General & Administrative 1.5845 1.2744

Total Indirect 10.0087 8.5696

TOTAL OPERATING COST 30.4538 26.3080

Profit TBD 2.7472

TOTAL COST $30.4538 $29.0552

Allowable Cabin Load 236 236

RATE PER SEAT MILE $0.12895 $0.12303

APPENDIX E

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

SMALL CLASS AIRCRAFT Passenger Service

FY18 RATE REVIEW

FORECAST YEAR FY18

BY AS

CARRIER ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 836 891

AVERAGE DAILY AIRCRAFT UTILIZATION 5.4 5.4

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $3.8045 $3.8226 Fuel, Oil, & Aircraft Supplies 3.5498 4.1036 Flight Equipment Maintenance 4.6731 4.6952

Total Direct Variable 12.0274 12.6214

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.2683 0.2683 Aircraft Rentals & Miscellaneous 3.5320 3.5436 Flight Equipment Depreciation & Obsolescence 0.0993 0.0993 Amortization of Preoperating Expense 0.0000 0.0000 Capital Gains & Losses 0.0000 0.0000

Total Direct Fixed 3.8996 3.9113

Indirect:

Maintenance & Depreciation-General Ground Property 0.0483 0.0502 Aircraft & Traffic Servicing 2.2938 2.6877 Passenger Service 2.6151 2.4554 General & Administrative 0.9750 0.9904

Total Indirect 5.9322 6.1838

TOTAL OPERATING COST 21.8592 22.7164

Profit TBD 2.0967

TOTAL COST $21.8592 $24.8131

Allowable Cabin Load 147 147

RATE PER SEAT MILE $0.14870 $0.16880

APPENDIX E

SUN COUNTRY AIRLINES (SCX) Aircraft Type B737-800

SMALL CLASS AIRCRAFT Passenger Service

FY18 RATE REVIEW

FORECAST YEAR FY18

BY AS

CARRIER ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 445 352

AVERAGE DAILY AIRCRAFT UTILIZATION 9.1 9.1

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $3.4616 $3.2920 Fuel, Oil, & Aircraft Supplies 3.3049 3.7299 Flight Equipment Maintenance 1.6785 1.5963

Total Direct Variable 8.4450 8.6182

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.0415 0.0406 Aircraft Rentals & Miscellaneous 2.1779 2.1600 Flight Equipment Depreciation & Obsolescence 0.0796 0.0778 Amortization of Preoperating Expense 0.0021 0.0021 Capital Gains & Losses 0.0000 0.0000

Total Direct Fixed 2.3011 2.2804

Indirect:

Maintenance & Depreciation-General Ground Property 0.2659 0.2177 Aircraft & Traffic Servicing 3.4295 3.3485 Passenger Service 3.3934 3.2803 General & Administrative 1.5330 1.5111

Total Indirect 8.6219 8.3576

TOTAL OPERATING COST 19.3680 19.2562

Profit TBD 1.8253

TOTAL COST $19.3680 $21.0815

Allowable Cabin Load 150 150

RATE PER SEAT MILE $0.12912 $0.14054

APPENDIX F

ATLAS AIRLINES (GTI) Aircraft Type B747-400

LARGE CLASS AIRCRAFT Cargo Service

FY18 RATE REVIEW

FORECAST YEAR FY18

BY AS

CARRIER ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 4,214 4,122

AVERAGE DAILY AIRCRAFT UTILIZATION 9.5 7.9

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $4.6765 $4.8440 Fuel, Oil, & Aircraft Supplies 11.5554 13.1284 Flight Equipment Maintenance 4.4369 4.5085

Total Direct Variable 20.6689 22.4808

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.1016 0.1220 Aircraft Rentals & Miscellaneous 3.8022 4.5785 Flight Equipment Depreciation & Obsolescence 1.2527 1.5033 Amortization of Preoperating Expense 0.0000 0.0000 Capital Gains & Losses 0.0000 0.0000

Total Direct Fixed 5.1564 6.2038

Indirect:

Maintenance & Depreciation-General Ground Property 0.0663 0.0659 Aircraft & Traffic Servicing 2.7208 2.7554 General & Administrative 1.3402 1.3967

Total Indirect 4.1274 4.2180

TOTAL OPERATING COST 29.9527 32.9026

Profit TBD 4.9207

TOTAL COST $29.9527 $37.8233

Allowable Cabin Load 100 100

RATE PER TON MILE $0.29953 $0.37823

KALITTA AIR (CKS) Aircraft Type B747-400

LARGE CLASS AIRCRAFT Cargo Service

FY18 RATE REVIEW

FORECAST YEAR FY18

BY AS

CARRIER ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 2,960 3,210

AVERAGE DAILY AIRCRAFT UTILIZATION 9.0 9.0

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $4.5384 $4.1851 Fuel, Oil, & Aircraft Supplies 13.2840 13.8577 Flight Equipment Maintenance 6.7969 6.2678

Total Direct Variable 24.6193 24.3106

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.0877 0.0877 Aircraft Rentals & Miscellaneous 0.8230 0.8230 Flight Equipment Depreciation & Obsolescence 1.3759 1.3760 Amortization of Preoperating Expense 0.0692 0.0692 Capital Gains & Losses 0.0000 0.0052

Total Direct Fixed 2.3558 2.3611

Indirect:

Maintenance & Depreciation-General Ground Property 0.3732 0.3441 Aircraft & Traffic Servicing 2.6502 2.4396 General & Administrative 0.6459 0.6021

Total Indirect 3.6693 3.3858

TOTAL OPERATING COST 30.6444 30.0576

Profit TBD 4.0366

TOTAL COST $30.6444 $34.0942

Allowable Cabin Load 100 100

RATE PER TON MILE $0.30644 $0.34094

FEDERAL EXPRESS CORPORATION (FDX) Aircraft Type MD11

LARGE CLASS AIRCRAFT Cargo Service

FY18 RATE REVIEW

FORECAST YEAR FY18

BY AS

CARRIER ADJUSTED

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

AVERAGE DAILY AIRCRAFT UTILIZATION 6.4 6.4

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $0.0560 $6.0270 Fuel, Oil, & Aircraft Supplies 9.5528 10.9092 Flight Equipment Maintenance 10.9619 11.0476

Total Direct Variable 20.5707 27.9838

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.0725 0.0731 Aircraft Rentals & Miscellaneous 3.6956 3.7171 Flight Equipment Depreciation & Obsolescence 1.5304 1.5424 Amortization of Preoperating Expense 0.0000 0.0000 Capital Gains & Losses 0.0000 0.0000

Total Direct Fixed 5.2985 5.3326

Indirect:

Maintenance & Depreciation-General Ground Property 2.0632 1.8091 Aircraft & Traffic Servicing 2.3192 1.8930 General & Administrative 3.2975 4.1818

Total Indirect 7.6799 7.8838

TOTAL OPERATING COST 33.5490 41.2002

Profit TBD 5.3948

TOTAL COST $33.5490 $46.5951

Allowable Cabin Load 86 86

RATE PER TON MILE $0.39010 $0.54180

APPENDIX G

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

MEDIUM CLASS AIRCRAFT Cargo Service

FY18 RATE REVIEW

FORECAST YEAR FY18

BY AS

CARRIER ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 240 300

AVERAGE DAILY AIRCRAFT UTILIZATION 4.5 5.0

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $4.5683 $3.8468 Fuel, Oil, & Aircraft Supplies 6.6681 7.5431 Flight Equipment Maintenance 6.9063 5.8155

Total Direct Variable 18.1427 17.2053

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.0707 0.0731 Aircraft Rentals & Miscellaneous 4.1982 4.5498 Flight Equipment Depreciation & Obsolescence 0.0332 0.0345 Amortization of Preoperating Expense 0.0000 0.0000 Capital Gains & Losses 0.0000 0.0000

Total Direct Fixed 4.3021 4.6574

Indirect:

Maintenance & Depreciation-General Ground Property 0.0000 0.0000 Aircraft & Traffic Servicing 2.2868 0.6370 General & Administrative 0.9579 0.7927

Total Indirect 3.2447 1.4297

TOTAL OPERATING COST 25.6895 23.2924

Profit TBD 1.9483

TOTAL COST $25.6895 $25.2407

Allowable Cabin Load 48 61

RATE PER TON MILE $0.53520 $0.41378

APPENDIX G

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

MEDIUM CLASS AIRCRAFT Cargo Service

FY18 RATE REVIEW

FORECAST YEAR FY18

BY AS

CARRIER ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 203 175

AVERAGE DAILY AIRCRAFT UTILIZATION 4.8 5.0

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $2.3198 $2.3362 Fuel, Oil, & Aircraft Supplies 6.2978 7.0472 Flight Equipment Maintenance 7.2198 7.2697

Total Direct Variable 15.8374 16.6531

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.0728 0.0734 Aircraft Rentals & Miscellaneous 4.6012 4.6485 Flight Equipment Depreciation & Obsolescence 0.7187 0.7259 Amortization of Preoperating Expense 0.0000 0.0000 Capital Gains & Losses 0.0000 0.0000

Total Direct Fixed 5.3926 5.4478

Indirect:

Maintenance & Depreciation-General Ground Property 0.0092 0.0145 Aircraft & Traffic Servicing 0.9985 0.4371 General & Administrative 0.7752 0.7544

Total Indirect 1.7829 1.2060

TOTAL OPERATING COST 23.0129 23.3070

Profit TBD 3.3642

TOTAL COST $23.0129 $26.6711

Allowable Cabin Load 48 61

RATE PER TON MILE $0.47943 $0.43723

APPENDIX H

AIR TRANSPORT INTERNATIONAL (ATN) Aircraft Type B757

COMBI CLASS AIRCRAFT Combi Service

FY18 RATE REVIEW

FORECAST YEAR FY18

USTRANSCOM AS

PROPOSED ADJUSTED

TOTAL REVENUE & BACKHAUL/PAID MILES (000) 2,946 2,938

AVERAGE DAILY AIRCRAFT UTILIZATION 4.7 5.0

COST PER REVENUE/PAID AIRCRAFT MILE

Direct Variable:

Crew $3.4404 $3.2956 Fuel, Oil, & Aircraft Supplies 4.8749 5.5361 Flight Equipment Maintenance 4.9973 4.5551

Total Direct Variable 13.3126 13.3869

Direct Fixed:

Hull, Public Liability, & Property Damage Insurance 0.1388 0.1353 Aircraft Rentals & Miscellaneous 6.4648 5.3017 Flight Equipment Depreciation & Obsolescence 0.6982 0.6812 Amortization of Preoperating Expense 0.0000 0.0000 Capital Gains & Losses 0.0000 0.0000

Total Direct Fixed 7.3017 6.1182

Indirect:

Maintenance & Depreciation-General Ground Property 0.0108 0.0107 Aircraft & Traffic Servicing 1.0094 1.1194 Passenger Service 2.4265 2.3709 General & Administrative 0.9329 0.8499

Total Indirect 4.3796 4.3509

TOTAL OPERATING COST 24.9937 23.8560

Profit TBD 2.4899

RATE PER PLANE MILE $24.9937 $26.3459

APPENDIX I

Euro As Pay Trip Euro Percent of

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

MIAMI AIR INTERNATIONAL INC B737-800 150 KATL KSSC CYQX EINN LGIR HDAM OKBK OJAQ LGIR EINN CYQX KPSM KBIF KJQF 16,170 $326,979 $7,310.21 2.24%

DELTA AIR LINES INC B777 330 KATL KBOI KHRT CYQX EINN OJAQ OTBH OKBK OMAM OJAQ EINN KDTW KGRK KATL 19,101 $669,793 $17,801.76 2.66%

DELTA AIR LINES INC B747-400 400 KBIF KNGU EINN OJAQ OMAM OTBH OKBK OJAQ EINN KBWI KFWA KDTW 15,142 $643,597 $18,572.22 2.89%

DELTA AIR LINES INC B747-400 400 KDTW KBIF KMSP EINN OJAQ OKBK OJAQ EINN KIND KBIF KDTW 16,705 $710,030 $18,615.70 2.62%

DELTA AIR LINES INC B-767-300 240 KLAX KNGU EINN OJAQ OMAM OBBS OJAQ EINN KORD KLAW KLAX 15,407 $455,465 $11,491.97 2.52%

DELTA AIR LINES INC A330-300 330 KGRK KBIF KMSP EINN OJAQ OTBH LRCK EINN KNKT KPOB KATL 13,960 $489,519 $12,356.49 2.52%

DELTA AIR LINES INC A330-300 330 KSEA KHIF CYWG EINN OJAQ OTBH OKBK OJAQ LRCK EINN KNKT KRIV KATL 17,701 $620,701 $12,445.10 2.01%

DELTA AIR LINES INC B747-400 400 KMSP KBIF KMSP EINN OJAQ OKBK OJAQ EINN KMSP KBIF KMSP 16,634 $707,013 $20,377.54 2.88%

NATIONAL AIR CARGO GROUP, INC. B757-200 190 KSFB KHOP BIKF LERT GLRB LRCK BIKF CYEG PAEI KSFB 14,205 $332,445 $8,886.00 2.67%

UNITED AIRLINES INC B747-400 352 KBWI ETAR LIPA LTAG LIPA ETAR KBWI 11,358 $424,830 $14,169.55 3.34%

UNITED AIRLINES INC B747-400 400 KSFO KHOP KNKT EINN LRCK OJAQ OKBK OTBH OJAQ EINN KBWI KORD 14,763 $627,488 $17,043.60 2.72%

UNITED AIRLINES INC B767-400 260 KEWR KCOS KMSP EINN OJAQ OKBK OTBH OJAQ EINN KBWI KEWR 14,937 $478,368 $13,137.25 2.75%

UNITED AIRLINES INC B747-400 400 KSFO KRIV CYWG EINN OJAQ OKBK OJAQ OJAM EINN CYWG KRIV KSFO 17,284 $734,640 $19,085.94 2.60%

OMNI AIR INTERNATIONAL INC B777 380 KBWI ETAR OJAQ OKBK OJAQ ETAR KBWI 13,564 $547,699 $14,191.39 2.59%

OMNI AIR INTERNATIONAL INC B777-charter 380 KBWI KRIV KSSC KBGR EINN LRCK HDAM OKBK OTBH OMAM OKBK OJAQ EGUL KBGR KWRB K 19,727 $796,554 $14,064.89 1.77%

OMNI AIR INTERNATIONAL INC B777-charter 380 EDDN OJAQ OTBH LRCK EINN KWRI KCOS KDTW 9,442 $381,257 $10,405.76 2.73%

OMNI AIR INTERNATIONAL INC B777-charter 380 KFWA KNGU EINN OJAQ OTBH OMAM OJAQ EINN KBWI 15,143 $611,457 $13,907.74 2.27%

OMNI AIR INTERNATIONAL INC B767-300 240 KSEA KFOE KORD EINN OJAQ OKBK OJAQ EINN KDTW KGRK KSEA 15,580 $460,579 $11,196.83 2.43%

OMNI AIR INTERNATIONAL INC B767-300 240 KDFW KBIF KMSP EINN LTAG LRCK EINN KHOP KDFW 12,798 $378,337 $9,856.71 2.61%

OMNI AIR INTERNATIONAL INC B777-charter 380 KHOP EINN LRCK EINN CYWG KRIV KDFW 12,480 $503,928 $10,658.23 2.12%

OMNI AIR INTERNATIONAL INC B767-300 240 KOSC PHIK PANC EINN OJAQ OKBK OBBS OJAQ EINN KMSP KBIF KDFW 19,106 $564,815 $11,043.69 1.96%

OMNI AIR INTERNATIONAL INC B777- charter 380 KNGU EINN OJAQ OKBK OTBH OJAQ BIKF KTCM KBWI 17,678 $713,818 $6,219.26 0.87%

OMNI AIR INTERNATIONAL INC B767-300 240 KDFW KHOP EINN OJAQ OKBK OJAQ EINN KAGS KDFW 14,592 $431,371 $11,749.96 2.72%

OMNI AIR INTERNATIONAL INC B767-300 240 KBIF KMSP EINN LIRF HDAM LIRF EINN KORD KFOE KIWA 16,932 $500,547 $11,832.86 2.36%

OMNI AIR INTERNATIONAL INC B777- charter 380 KCOS KMSP EINN OJAQ OKBK OJAQ EINN KFOE KBWI 15,439 $623,409 $14,972.42 2.40%

EUROCONTROL SURCHARGE:

PASSENGER

USTRANSCOM

Euro As Pay Trip Euro Percent of

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

OMNI AIR INTERNATIONAL INC B767-300 240 KSEA KTIK KNGU EINN OJAQ OTBH OMAM EINN KGSB KSEA 15,818 $467,615 $12,073.31 2.58%

OMNI AIR INTERNATIONAL INC B767-300 240 KDFW KNGU EINN OJAQ OTBH OKBK OJAQ EINN KDTW KGRK KDFW 15,147 $447,778 $11,970.37 2.67%

OMNI AIR INTERNATIONAL INC B777- charter 380 LIPA OJAQ OTBH OKBK OJAQ EINN CYWG KRIV KDFW 11,303 $456,402 $10,411.75 2.28%

OMNI AIR INTERNATIONAL INC B767-200 207 KLAS KCOS KMSP EINN OJAQ OKBK OJAQ EINN KDTW KGRK KCOS KLAS 16,578 $422,696 $10,675.86 2.53%

OMNI AIR INTERNATIONAL INC B767-300 240 KDFW KGRK KNKT LEMO OJAQ OKBK ETAR EINN KSVN KDFW 12,843 $379,667 $11,697.96 3.08%

OMNI AIR INTERNATIONAL INC B777-charter 380 KDFW KLAW KTIK KLFI EINN OJAQ OKBK OMAM LRCK EINN KNKT KTUL 13,904 $561,428 $14,131.40 2.52%

OMNI AIR INTERNATIONAL INC B777-charter 380 UGTB EDDN LICZ LEMO KNKT 6,739 $272,113 $17,241.38 6.34%

OMNI AIR INTERNATIONAL INC B777-charter 380 KNKT KNZY CYWG EINN OJAQ OBBI OMDM OKBK OTBH OJAQ EINN KBWI KHRT KNKT 17,385 $701,987 $17,781.51 2.53%

OMNI AIR INTERNATIONAL INC B767-300 240 KGPT KBIF KMSP EINN OJAQ OKBK LRCK LEMO KNKT KSEA 14,055 $415,497 $13,758.46 3.31%

OMNI AIR INTERNATIONAL INC B767-300 240 KDFW KSVN EINN ETAR EINN KSVN KDFW 9,072 $268,188 $4,697.40 1.75%

ATLAS AIR, INC. B767-300 240 KBWI ETAR LIPA ETAR KBWI 8,696 $257,073 $6,456.15 2.51%

ATLAS AIR, INC. B767-300 240 KBWI ETAR LIPA LTAG LIPA ETAR KBWI 11,358 $335,767 $9,637.93 2.87%

ATLAS AIR, INC.