BEFORE THE DEPARTMENT OF TRANSPORTATION OFFIG:E OF THE SECRETARY WASHINGTON, D.C. 

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## DEC 30 pi!: 

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Application of ) ) Menagerie Enterprises, Inc. d/b/a ) Monarch Air ) ) For 'authority to conduct scheduled ) Passenger operations as a commuter air ) Carrier under 49 U.S.C. 41738 ) ) DOCKET DOT-OST-2014-0192

APPLICATION OF MENAGERIE ENTERPRISES, INC. D/B/A MONARCH AIR
Response to Information Request

Communications with respect to this document should be sent to:

Rebecca B. MacPherson Jones Day 51 Louisiana Ave., NW Washington, DC 20001 Telephone: 202-879-3939 Fax: 202-626-1700 Email: rmacpherson@jonesday.com

December 23,2014BEFORE THE DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C. Application of Menagerie Enterprises, Inc. d/b/a Monarch Air For authority to conduct scheduled Passenger operations as acommuter air Carrier under 49 U.S.C. 41738 ) ) ) ) ) ) ) ) ) DOCKET DOT-OST-2014-0192

APPLICA nON OF MENAGERIE ENTERPRISES, INC. D/B/A MONARCH AIR Response to Information Request

General Information i. in its application, Monarch states that ithas various related companies, including Trey Aviation, LLC, TreyAviation, inc., and Menagerie Aircraft Management LLC. is there aparent company that manages and oversees the activities ofall these companies? lfso, please provide an organizational chart illustrating the relationships. There is no parent company that oversees the various related companies described by Monarch Air in its application. Rather, the companies are arelated group of companies owned and operated by the same family. As the application noted in section (g) ofthe appendix, all of the companies are wholly-owned by the same individual, Raymond Sawtelle. In addition, Mr. Sawtelle's son, Trey and wife, Sheila, serve as directors for the various companies. Operations and Financial Information 1. Please provide a detailed description ofRise's business. The description should include the answers to thefollowing questions:

a. Does Rise engage in activities other thanproviding air transportation for its members? b. How many members does Rise have and how many does itanticipate will participate in the air transportation portion ofits business?c. What is the total cost ofmembership; are there initial sign-up costs, annual

membership dues, and monthlyfees? d Does Monarch receive anyportion orpercentage ofthe membership fees collected? Ifso, what is thepercentage ofthe total cost ofmembership received? 

### RiseAlpha LLC.(Rise) isamembership organization that arranges air transportation services onbehalf ofits members. Riseexpects to also arrange other services, such as surface travel, forits members. Rise's analysis shows strong demand forair service inhigh-volume short-haul business markets like Dallas-Houston, Dallas-Midland, and Dallas-Austin. Today,the car is the best way to get from Dallasto Austin, forexample. Transportation bycar inthat market can take nearly four hours. Riseexpects that the overwhelming majority of members willbe businesspeople, with the knowledge and experience to evaluate the costs and benefits ofmembership. Theprogram allows members to buy aconvenient high-quality air service inbulk. Overtime, the membership may add more markets. From time to time, Risemembers may also wish to arrange non-scheduled charters. Riseplans to charter airtransportation from Monarch Aironbehalf ofitsmembers. Initially, Risewillarrange forMonarch Airtoprovide high-frequency daily flights for Rise members between Dallas and Houston, and between Dallas and Austin. Rise's membership feewill entitle amember to travel on any Monarch flight operated onbehalf ofRise's membership where space isavailable with no additional fees or other costs. Members willbe able to reserve space on Rise-arranged flights,but a member's membership level will dictate the number ofadvanced reservations amember can make. Additionally, amember willhave the option ofpurchasing companion passes on Rise-arranged flights. Risewillbe acting solely as an agent forits members when arranging air transportation. Allcontracts ofcarriage for such transportation will be directly between the members and the direct air carrier. Risewill collect allmembership dues, maintain such dues, and pay the direct air carrier forthe airtransportation that Riseprocures. . Does Rise engage in activities other than providing airtransportation forits members? Risedoes not propose to provide air transportation, nor does ithold outto do so. Riseisan organization that arranges air transportation as agent onbehalf ofits membership with direct air carriers, likeMonarch Air. Riseis not an air carrier, direct or indirect, and alladvertising and promotion will so state. Risedoes not hold outto offer, sell, or provide air transportation. Risemay also arrange orprovide ground transportation, aircraft catering, member parking at airports, airport facilities formembers, and concierge services formembers.

### How many members does Rise have and how many does it anticipate will participate in the air transportation portion ofits business? Risedoes not provide airtransportation, nor willitofferto sell orprovide air transportation. Risedoes not currently have any members, as itisawaiting the outcome of this proceeding. Asnoted above, astrong interest exists forair service inthe proposed markets. Risecurrently has over 100 memberships reserved. Riseanticipates that itwill have 150 members when itopens.

What is the total cost ofmembership; are there initial sign-up costs, annual membership dues, and monthly fees? Each membership is subject to amonthly price that isdifferent foreach ofthe three membership levels and aone-time initiation feeof$750. Members may also book transportation for acompanion non-member on aflightchartered byRisefor $750. No other dues or fees apply; prices are subject to change. The following table identifies the current pricing foreach membership level. A membership is subject to an initial 90-day minimum, payable on amonthly basis. Afterthe first 90 days, amember may cancel amembership on 30 days' notice. Under this arrangement, Risewillnever hold more than 30 days' worth ofconsumer funds. Below isthe total cost foreach membership levelbased onthe minimum 90-day initial membership period. Membership Monthly Price Initiation Minimum term Total Cost Level Fee Express $1,650 $750 90 days $5,700 Executive $2,150 $750 90 days $7,200 Chairman $2,650 $750 90 days $8,700

. 

### Does Monarch receive any portion or percentage ofthe membership fees collected? Ifso, what is the percentage ofthe total cost ofmembership received? No. Risewill pay Monarch acontractually agreed amount forits services. Although the membership fees are the source offunds, Monarch Airis not compensated based on a proportion ofthe membership fee,nor does its compensation vary bythe number of members. The economic risk ofoperations isborn by Rise. 2. Pleaseprovide the Department with acopyofthe agreement between Monarchand Rise. The parties have entered into abinding commitment letter, which isinExhibitAto this submission. The parties intend to enter into adefinitive contract later, but before Rise opens forbusiness.3. Please provide a description oftheproposedform and source ofcapital to support the

acquisition ofthe three King Air 350 aircraft Monarch proposes to use in its commuter operations. Ifthe resources ofan individual(s) orother organization(s) will be made available toMonarch to support its operations, provide a statementfrom such individual(s) or organization(s) ofthe amount ofsuch available resources and terms and conditions under which suchfunds will beprovided Ifborrowed capital ora line-ofcredit is to be employed, the total amount, current balance, source, security, payment schedule, provisions to convert the debt to equity and terms ofrepayment to the lender should be stated IdentifY theparticipants in each arrangement and supply their commitments, citizenship, and any relationship with any acquiring shareholders or affiliates. In addition, copies ofthefunding agreements should be submitted Monarch intends to purchase three King Air 350 aircraft to support its first year of operations. A purchase and sale agreement has already been signed for the first aircraft. Funding for the aircraft is being provided by Texas Legacy Bank and a letter detailing the intent to provide funding as well as the terms of such funding is provided as Exhibit B to this submission. Texas Legacy Bank has also agreed to provide a line of credit to support Rise operations, as noted and provided inthe initial application; however, Monarch does not intend to utilize this line of credit in the normal course ofbusiness. Rather, Monarch intends to support the Rise operations by drawing on aline ofcredit provided by Rise. Funds are to be made available as detailed in the agreement between Rise and Monarch provided in response to information request 2 as Exhibit A to this submission. As noted in Exhibits B, C and Dto this submission, both Texas Legacy Bank and Rise are U.S. citizens. Texas Legacy Bank is completely separate and umelated to Monarch Air or its affiliates, as is Rise, LLC; Menagerie Enterprises, Inc. (Monarch) will possess a 10% interest in Rise Alpha, LLC. 4. Please provide third-party verificationfrom a recognizedfinancial institutionfor all funds currently (within 3months ofthe date ofthe application filed) on deposit inMonarch's name. Monarch Air uses a single bank, Texas Legacy Bank for all its day-to-day banking. While Monarch Air has a line of credit with BB&T (as noted inthe appendix to the original application), it does not maintain an account there. Exhibit E verifies the funds currently on deposit in Monarch Air's name. 5. Please provide a consolidated forecast balance sheet andprofit and loss statement (broken down by month)for thefirst twelvefull monthsfor the entire business as well as separateforecast statements for each operating segment, including theproposed commuter operations. These documents should include ample notes explaining the basis ofcomputation of the amounts shown. The expense data should show:

a. Detail ofexpense category (direct and indirect), indicating how the amounts were computed If

proposing to operate more than one aircraft type or model, theforecast should include separate estimates ofexpensesfor training, maintenance, preparation ofmanuals, etc., for each aircraft type or model.b. For indirect expenses, since Monarch is engaged in other aviation-related

operations (aircraft leasing, repair stations, etc.) expenses should be allocated on a rational basis between proposed commuter operations and other operation, with appropriate explanations.

c. Ifaircraft or otherfacilities are to be required to conduct proposed services, a description oftheplansfor obtaining andfinancing those items should beprovided. Please see Exhibits F and G to this submission for responses to subparagraphs a and b. please see response to question 3 forresponse to subparagraph c. 6. Please provide an estimate ofthe amount ofcapital Monarch will need to commence operations. Please include the basis ofthe estimate (e.g., the amountsfor pre-operalingcosts, including aircraft deposits, or leases, office and hangar space, insurance, salaries, training, FAA and Department certifications, working capital, etc.). Monarch has determined that approximately $422,349 in capital will be required to commence the contemplated commuter operations. These costs consist ofthe costs associated with filing the application and securing any needed changes to Monarch air's existing operating certificate and operations specifications (professional services and application fee) (approximately $60,000), additional hangar space for one aircraft (approximately $1,500.00), salaries for atwo-man crew and additional maintenance and administrative staff to support the commuter operations (approximately $53,283), a one-time training cost for the new flight crew (approximately $70,000.00), and aircraft insurance (approximately $3,000.00), as well as other operating costs such as fuel, maintenance costs and trip and crew expenses (approximately $234,566). The agreement between Monarch Air and Rise provides initial start-up funding that will be use to cover much ofthese costs; the rest will be covered by adraw on the Rise line of credit. Because Monarch Air will only be providing service to Rise members, Rise will be responsible for all marketing expenses. Additionally, there will be no need for additional office space or revisions to the existing manuals as Monarch Air already operates the King Air 350 in commercial operations under 14C.F.R. part 135. There will be no closing costs associated with purchasing the aircraft, which is and no loan payments are due within the first 30 days. Accordingly, the first month's interest payment is not reflected here. Should DOT approval take longer than anticipated, the interest payment associated with the aircraft will be approximately $14,000.APPLICATION OF MENAGERIE ENTERPRISES, INC. D/B/A MONARCH AIR DOCKET DOT-OST-2014-0192 Response to Information Request

Exhibit A Confidential Treatment has been RequestedAPPLICATION OF MENAGERIE ENTERPRISES, INC. D/B/A MONARCH AIR DOCKET DOT-OST-20l4-0l92 Response to Information Request

Exhibit B Confidential Treatment has been RequestedTo: Ms. Lauralyn J. Remo Chief, Air Carrier Fitness Division Office ofAviation Analysis U.S. Department ofTransportation 1200 New Jersey Avenue SE Washington, DC 20590 Re: DOT-OST-2014-0192; Citizenship of Rise, LLC. Date: December 19, 2014 Re: Statement in Support of Citizenship of a Limited Liability Company Dear Ms. Remo:

Rise, LLC (the "LLC") is submitting this statement to assist the Department in its analysis ofthe commuter fitness of Monarch Air. Rise isthe parent and holding company of Rise Alpha, LLC. Neither Rise nor Rise Alpha is required to be a citizen of the United States, although each meet the statutory criteria. This statement certifies that the LLC is a citizen ofthe United States as defined in 49 U.S.C. S40102(al(15). In this regard, we make the following representations: I. The state in which the LLC is lawfully organized: Texas II. The effective date of the LLC: March 11, 2014 III. Name

Nick Kennedy Clynt Taylor Type of Entity

Individual Individual US Citizenship Verification
Yes Yes Percentage

. Interest
51% 49%

IV. This LLC is managed by _X_ Manager(s)

__ Member(s)

__ Managing Member(s)

__ Officer(s) V. The manager(s), member(s), managing member(s), or officer(s) referred to in Section IVabove, may act independently: Yes_X_ No

__ VI. The name of each of the persons or entities in a management position with the LLC, as referred to above in Sections IV and V (Le., managers, members, managing members, or officers), and the type of entity of each such person: (i.e., individual, corporation, partnership, etc.)Name Nick Kennedy Title

Manager Entity Type U.S. Citizenship Verification

Individual Y_X_ N

__ If additional space is required, please attach another page. 49 U.S.C. Section 40102(a)(15): 'citizen ofthe United States' means (A) an individual who is

### a citizen ofthe United States (8) 

### a partnership each of whosepartners is an individual who is

### a citizen ofthe United States; or (C) 

### a corporation orassociation organized under the laws ofthe United States or

### a State, the District of Columbia, or

### a territory orpossession ofthe United States, of which thepresident and atleast twothirds ofthe board ofdirectors and othermanaging officers are citizens ofthe United States, which is under the actual control ofcitizens ofthe United States andin which at least 75 percent ofthe voting interest is owned orcontrolled bypersons thatare citizens ofthe United States.

If any entity referred to in Sections IV and VI above are anything other than an individual citizen of the United States (e.g., a corporation, limited liability company, trust, or partnership), please attach a certificate to support the position that such entities qualify as a citizen ofthe United States as defined in 49 U.S.C. Section 40102(a)(15). If any such entity is a limited liability company, please provide a Statement in Support of Registration (this form) with respect to each such limited liability company.

Additionally, if any member ofthe LLC is not a citizen ofthe United States as defined in 49 U.S.C. Section 40102(a)(15), please attach an explanation to support the certification that the LLC is a citizen ofthe United States as defined by 49 U.S.C. Section 401 02(a)(15)(C). Name of LLC: Rise, LLC

By:

_ Nick Kennedy, its sole Managerxhibit

# ~.l To: Ms. Lauralyn J. Remo Chief, Air Carrier Fitness Division Office ofAviation Analysis U.S. Department ofTransportation 1200 New Jersey Avenue SE Washington, DC 20590 Re: DOT-OST-2014-0192; Citizenship of Rise Alpha, LLC. Date: December 16, 2014 Re: Statement in Support of Citizenship of a Limited Liability Company

Rise Alpha, LLC (the "LLC") is submitting this statement to assist the Department in its analysis of the commuter fitness of Monarch Air. Rise Alpha is partly owned by Rise LLC, but is controlled entirely by Rise, LLC. As a ticket agent under 49 USC 40102, Rise Alpha is not required to be a citizen ofthe United States, although it meets the statutory criteria

.. This statement certifies that the LLC is a citizen ofthe United States as defined in 49 U.S.C. 

## S 401 02(a)(15). Inthis regard, we make the following representations: I. The state in which the LLC is lawfully organized: Texas II. The effective date of the LLC: March 11, 2014 III. The names of the members who, together, hold 75% of the voting membership interest in the LLC and the type of entity of each such member (i.e.: individual, corporation, partnership, etc). For confidentiality and privacy reasons, Rise is not providing information concerning all the members, but would be prepared to do so under an assurance of confidential treatment. To the best of our knowledge and belief, all other members are individual U.S. citizens: Name Type of Entity U.S. Citizenship Verification Rise, LLC (65%) Texas LLC Y

## _X_ N Y N Menagerie Texas Corp. Y

## _X_ N Enterprises, Inc. Y N (Monarch) (10%) Y N

If additional space is required, please attach another page. IV. This LLC is managed by _X_ Manager(s)

__ Member(s)

__ Managing Member(s)

__ Officer(s) V. The manager(s), member(s), managing member(s), or officer(s) referred to in Section IV above, may act independently: Yes _X_ No

__VI. The name of each of the persons or entities in a management position with the LLC, as referred to above in Sections IV and V (i.e., managers, members, managing members, or officers), and the type of entity of each such person: (i.e., individual, corporation, partnership, etc.)

Manager Entity Type U.S. Citizenship Verification 

### Y

__ N

__ Y N

__ Texas LLC Y_X_ N

__ Y

__ N

__ Y

__ N

__ If additional space is required, please attach another page. Name

Rise, LLC

49 U.S.C. Section 40102(a)(15): 'citizen ofthe United States' means (A) an individual who 

### is a citizen ofthe United States (B)

### a partnership each ofwhose partners 

### is an individual who

### is a citizen ofthe United States; or (C)

### a corporation orassociation organized under the laws ofthe United States or

### a State, the District of Columbia, or

### a territory orpossession ofthe United States, of which thepresident and atleast twothirds ofthe board ofdirectors and other managing officers are citizens ofthe United States, which is under the actual control ofcitizens ofthe United States and in which at least 75 percent ofthe voting interest 

### is owned orcontrolled bypersons that are citizens ofthe United States.

If any entity referred to in Sections IV and VI above are anything other than an individual citizen of the United States (e.g., a corporation, limited liability company, trust, or partnership), please attach a certificate to support the position that such entities qualify as a citizen of the United States as defined in 49 U.S.C. Section 40102(a)(15). If any such entity is a limited liability company, please provide a Statement in Support of Registration (this form) with respect to each such limited liability company.

Additionally, if any member of the LLC is not a citizen of the United States as defined in 49 U.S.C. Section 40102(a)(15), please attach an explanation to support the certification that the LLC is a citizen of the United States as defined by 49 U.S.C. Section 401 02(a)(15)(C). Name of LLC: Rise Alpha, LLC

By its Manager: Rise, LLC


### By:

_ Nick Kennedy, its sole Manager

# :BtI

LEGACvTEXAS

BAN K

December 18, 2014

To Whom It May Concern: Menagerie Enterprises, Inc. dba Monarch Air has requested that we verify the existing available balances in their accounts maintained at LegacyTexas Bank asof December 18, 2014. The purpose of this letter isto provide the reader verification of these deposits. Menagerie Enterprises Operating ACcount $214,511.16 Menagerie Enterprises
- Dallas Executive Account $ 456.39 Menagerie Enterprises
- McKinney Account $ 1,026.83 Menagerie Enterprises
- Money Market #1 $113,491.82 Menagerie Enterprises
- Money Market #2 $ 42,080.50 TOTALAVAILABLE BALANCEASOF 12/18/14 $371,566.70

Exhibit E 

## i Should you need any further information regarding the above information, please

feel free to contact the undersigned directly at (972)-461-4806 or by email at steve.you ng@legacytexas.com 

# 4U6~

Steve Young

# 7Y Executive Vice President



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PO Box869111 Plano.Tx75086-9111 972.461.1300 Metro 972.562.5600 www.legacyTexas.com

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