So I tried to modify it.   It is now still dull and mostly useless, but it has less useless leather and more useful stuff on it.  

These knives are often incorrectly called "canopy breaker knives."   The canopy breaker tool that we fly with in ejection seat aircraft is much different from this knife--it weight about 4 pounds and has a blade that's only an inch and a half long.   It is your last resort to get out of your bubble.  

In any case, I have carried one of these knives for about 10 years now--and have rarely, if ever, used it.   The blade will not hold an edge, but it CAN be sharpened on just about any rock.   A good survival use for the knife is to use it to cut down a green tree of a 3-4 inch diameter.   You just pound the knife through the tree with a rock, then push, pull, and pound it horizontally.   While at USAF Survival School in Fairchild AFB, WA, they said this was perhaps the only use for this knife.   There's just not enough Communist Bunny Rabbits in the world today to go around.   I still carry the knife, but more out of habit than anything else.   You will find that your most useful knife will be a small folding (lock) blade.   This is true both for Ground Team members and Aircrew survival equipment.  

Incidentally, you should carry this (and other large knives) on your belt, not on your shoulder straps.   There are many reasons for this, but the best one is that a knife on your shoulder will significantly affect your compass when you bring it to your eye to shoot an azimuth.  

Enough preaching, sir, what do I need to do to make the USAF knife into a survival knife?   Put the blade of the knife in a vise.   Now saw the leather to the middle of the knife.   You will have to cut at a 45 degree angle in order to cut through several of the leather rings.   Cut vertically 45 degrees to the knife.   As it was mentioned, the handle is made up of circular leather rings stuck end-to-end on the knife, then the hexagonal "bolt" cap is added.   You want to keep the cap and cut off the leather.   Peel off as many rings as you can after you've made your cut, then cut again until all the leather is removed.  

I chose to wrap about 30 feet of snare wire and a bunch of fishing line onto my handle next.   Your choice!   Just wrap it on and tie it off.   When that is done, take a good length of 550' para cord and wrap it on the handle.   It took two layers for my knife, but it may take a third if you skimp on snare wire and fishing line.   Tie off the para cord flush with the end, and you're finished!   You've created an elegant addition to your still-mostly-useless survival knife.  

If you want to look pretty, buy the olive green nylon sheath from the CAP supply depot.   You can also buy the knife from the depot.   It will match your survival vest or web gear well.   An olive green handle also hides the knife from ground team leaders who don't trust you with a knife longer than their little finger.   Personally, if I don't trust you with the knife of your choice, then I don't trust you to be on my ground team.

Have fun and be safe with your knife.   Keep it as sharp as possible.