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June 20, 2012

Ms. Catherine O'Toole

Air Carrier Fitness Division

Office of Aviation Analysis

U.S. Department of Transportation

1200 New Jersey Avenue, SE

Washington, DC 20590

Re: Application of People Express Airlines, Inc. for a Certificate -

Response to DOT Information Request of May 30, 2012

(Docket DOT-OST-2012-0042)

Dear Ms. O'Toole:

People Express Airlines, Inc. (“People Express”) hereby submits responses to the

Department’s second Information Request dated May 30, 2012. People Express’s

response includes confidential exhibits, which are being submitted under seal.

Consequently, this response is accompanied by a Motion for Confidential Treatment.

Please contact me if the Department requires additional information to advance the

processing of People Express’s application.

Respectfully submitted,

Robert E. Cohn

Counsel for People Express Airlines, Inc.

Enclosures

cc: Michael Morisi, President, People Express

Nicholas Scarpinato, Jr., Manager, Washington FSDO, FAA
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PEOPLE EXPRESS AIRLINES, INC.

RESPONSE TO SECOND INFORMATION REQUEST

OPERATIONS AND FINANCIAL POSITION

1. An updated PASI (PreApplication Statement of Intent) filed with the FAA

on May 5, 2012, indicates that PEX is planning to add Boeing B737-300

aircraft to its fleet. Please provide a detailed explanation of any

agreements to finance the acquisition and/or lease of PEX's proposed

aircraft and provide copies of such agreements.

Response: People Express is still in the process of finalizing its aircraft acquisition

plan. People Express does not currently intend to operate Boeing 737-300 aircraft.

It is the Company’s current plan to lease exclusively Boeing 737-400 aircraft. In its

previous submission, People Express provided a copy of a Term Sheet for a Boeing

737-400 aircraft. People Express will update the Department when aircraft

transaction documents are finalized.

2. Please provide an updated first year cost forecast that reflects the addition

of the B737-300s to the PEX fleet and any other changes to the planned

operation.

Response: As noted in response to Item 1, above, the Company does not currently

plan to use B737-300 aircraft. The forecast presented in Exhibit PEX-7 to People

Express’ Application filed on March 19, 2012 reflects the Company’s current plans.

People Express will advise the Department of any changes to its planned

operations.

COMPLIANCE DISPOSITION

1. Referencing Stockholders' Agreement (Exhibit PEX-IR-9), it is not clear that

PEX requests proof of citizenship from potential stockholders. Please

indicate how the air carrier will ensure that any potential stockholder or

owner is a U.S. citizen.

Response: People Express has modified its Stock Subscription Agreement, which

all current and future stockholders will be required to sign. A copy of the revised

Stock Subscription Agreement is set forth in Exhibit PEX-IR2-1. Each current

stockholder has been required and each additional stockholder will be required to

sign the revised Stock Subscription Agreement, which contains the following

certification regarding U.S. citizenship (See Section 7):

“The undersigned hereby certifies under penalties of perjury that he, she or it is a “citizen of the United

States” within the meaning of 49 USC § 40102(a)(15)(A), and that the undersigned has checked the

appropriate box below to indicate what part of 49 USC § 40102(a)(15)(A) applies to the undersigned:

☐ an individual who is a citizen of the United States;

☐ a partnership each of whose partners is an individual who is a citizen of the United States; or
People Express Response to DOT Information Request #2

Page 2

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☐ a corporation or association organized under the laws of the United States or a State, the District of

Columbia, or a territory or possession of the United States, of which the president and at least twothirds of the board of directors and other managing officers are citizens of the United States, which is

under the actual control of citizens of the United States, and in which at least 75 percent of the voting

interest is owned or controlled by persons that are citizens of the United States.”

2. Regarding Exhibit PEX-IR-10, please provide an updated list indicating the

citizenship of each stockholder. For all persons who are not citizens of the

United States as defined in 49 U.S.C. 40102(a)(15) and who directly or

indirectly hold an equity interest in the air carrier, describe the nature of the

interest and the particular rights and liabilities of the parties. Detail any

actual or potential ability on the part of the non-citizen entities to influence

or control, directly or indirectly, the affairs of the air carrier. Provide any

documents describing the rights or obligations of such entity.

Response: All but one of the current stockholders of People Express is a citizen of

the United States. The only stockholder who is not a U.S. citizen is a Canadian

citizen, and he owns only 1.75% of the issued and outstanding shares of the

Company. He does not have the ability to influence or control, directly or indirectly,

the Company.

3. Please provide an updated PEX-IR-10, the list of Key Stockholders. Please

confirm that this is the same document referenced in PEX-IR-9 as

"Exhibit 1".

Response: A list of all current stockholders of People Express is set forth in Exhibit

PEX-IR2-2, attached hereto. This exhibit is the updated version of the document

referenced in PEX-IR-9 as “Exhibit 1.”

4. Item 11(j) of Exhibit PEX-IR-9 references joinder agreements Exhibit 2 and

Exhibit 3. Please provide these exhibits.

Response: First, as noted above, Exhibit PEX-IR-9 has been superseded by the

revised Stock Subscription Agreement contained in Exhibit PEX-IR2-1, which all

shareholders are required to sign. The revised agreement does not reference

“joinder agreements.” Second, there are no Exhibits 2 and 3 to the original

agreement. Reference to those agreements was a drafting error and should have

been deleted.
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Certification

I, Michael Morisi, President and Chief Operating Officer of People Express Airlines,

Inc. hereby provide the following certification:

The contents of the foregoing supplemental submission of People Express

and the exhibits attached hereto are true and correct to the best of my

knowledge and belief. Pursuant to Title 18 United States Code Section

1001, I further state that in my individual capacity and as the authorized

representative of the applicant, I have not in any manner knowingly and

willfully falsified, concealed or failed to disclose any material fact or

made any false, fictitious, or fraudulent statement or knowingly used any

documents which contain such statements in connection with the

preparation, filing or prosecution of the application. I understand

that an individual who is found to have violated the provisions of 18

U.S.C. Section 1001 can be fined or imprisoned not more than five years,

or both.

Michael Morisi

President and Chief Operating Officer

People Express Airlines, Inc.

June 20, 2012

Date
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EXHIBIT LIST

Exhibit

Revised Stock Subscription Agreement (Confidential).................. PEX-IR2-1

Updated Stock Journal (Confidential)............................................ PEX-IR2-2
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Confidential Exhibit PEX-IR2-1

Revised Stock Subscription Agreement
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Confidential Exhibit PEX-IR2-2

Updated Stock Journal