Order 2015-4-16

Served: April 20, 2015

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 20th day of April, 2015

Applications of

 EASTERN AIR LINES GROUP, INC.

for certificates of public convenience and necessity, 

under 49 U.S.C. § 41102 to engage in interstate and 

foreign charter air transportation of persons, 

property, and mail 

Docket DOT-OST 2014-0012

Docket DOT-OST-2014-0013

 

ORDER TO SHOW CAUSE

PROPOSING ISSUANCE OF CERTIFICATE AUTHORITY

Summary

By this order, we tentatively find that Eastern Air Lines Group, Inc., (“Eastern”) is a citizen of the 

United States and is fit, willing, and able to conduct interstate and foreign charter air transportation of 

persons, property and mail as a U.S. certificated air carrier; and should be issued certificates of public 

convenience and necessity authorizing such operations, subject to conditions.

Background

Section 41102 of Title 49 of the United States Code (“the Transportation Code”) directs us to determine 

whether companies proposing to engage in interstate and foreign charter air transportation are “fit, 

willing, and able” to perform such service, and to comply with the Transportation Code and the 

regulations and requirements of the Department. In making fitness findings, the Department uses a 

three-part test that reconciles the Airline Deregulation Act’s liberal entry policy with Congress’ concern 

for operational safety and consumer protection. In addition to determining that the applicant is a U.S. 

citizen, the three areas of inquiry that must be addressed in order to determine an air carrier’s fitness are 

whether the applicant: (1) will have the managerial skills and technical ability to conduct the proposed 

operations, (2) will have sufficient financial resources to commence the operations proposed without 

posing an undue risk to consumers, and (3) will comply with the Transportation Code and regulations 

imposed by Federal and State agencies. 

On January 28, 2014, Eastern filed applications in Dockets DOT-OST-2014-0012 and 

DOT-OST-2014-0013 for authority to conduct interstate and foreign charter air transportation of 

persons, property, and mail pursuant to section 41102 of the Transportation Code. Eastern accompanied 

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION
its applications with fitness information required by section 204.3 of our regulations.

1

 On June 3, 2014, 

Mr. Sean Raimbeault filed a comment objecting to Eastern’s applications, alleging that certain of 

Eastern’s investors had engaged in fraudulent actions. Shortly thereafter, on June 18, 2014, 

Mr. Raimbeault filed suit against these investors, among others, in the U.S. District Court for the 

Southern District of Florida.

2

 On November 26, 2014, the civil lawsuit was dismissed with the consent 

of all parties. In addition, on January 21, 2015, Eastern submitted a statement signed by Mr. Raimbeault 

recanting his earlier statement, claiming that his objection had no factual basis. 

No other answers were filed to the applications and no special issues regarding the applicant have come

to our attention. Under these circumstances, we propose to decide the issue of the applicant's fitness on 

the basis of the written record, and we tentatively conclude that Eastern is a U.S. citizen and has met the 

fitness test to conduct interstate and foreign charter operations. We will, however, give interested 

parties an opportunity to show cause why we should not adopt as final the tentative findings and 

conclusions stated herein. 

FITNESS

The Company

Eastern, a non-operating entity, was founded in 2011 by Mr. Edward J. Wegel, a U.S. citizen, for the 

purpose of acquiring the intellectual property of the estate of the former Eastern Air Lines and launching 

a new air carrier. The applicant is incorporated as a Delaware company with corporate offices in Miami, 

Florida. Eastern has issued two classes of stock, preferred and common, both of which have voting 

rights. The largest shareholders, owning more than 10 percent of the stock, are VV-DC Eastern 

Investments, LLC (“VV-DC”) (61.2 percent) and 1848 Skyworks LLC (“Skyworks”) (16.95 percent). 

The remaining shareholders own an aggregate of 21.83 percent of the shares: PPO Stockholders 

(7.84 percent),3

ACPG LLC (“ACPG”) (7.12 percent), Mr. Wegel (3.33 percent), Pitcairn Aviation LLC 

(“Pitcairn”) (2.37 percent), and Mr. William Owens (1.14 percent).4

 

Managerial Competence

Eastern’s Board of Directors consists of the following six individuals, all of whom are U.S. citizens:

(1) Mr. Vincent Viola (Chairman), (2) Mr. Douglas A. Cifu (Vice Chairman), (3) Mr. Joseph DaGrosa, 

Jr., (4) Mr. Edward J. Wegel, (5) Admiral (Ret.) William A. Owens, and (6) Mr. Manuel Diaz.

Mr. Vincent Viola, the majority shareholder of both Eastern and VV-DC, is the Chairman and Owner of 

the Florida Panthers hockey team (2013-present). Mr. Viola is the Founder and CEO of Virtu Financial 

(2008-present) and the Founder and Owner of Independent Banking Group (1996-present). 

 1

Eastern requested confidential treatment of stockholder agreements and various other capitalization documents as well as 

copies of the FAA licenses held by certain of its key personnel. By letter dated March 11, 2015, the Department granted the 

applicant’s request in part and directed that certain material be redacted and filed in the public docket in this proceeding, 

which Eastern did on March 12. Eastern filed information supplementing its applications most recently on April 15, 2015. 2

See Raimbeault v. Accurate Machine and Tool, LLC., No. 14-CIV-20136 (S.D. Fla 2014). 3

PPO Stockholders is a group of 22 private investors that collectively hold 7.84 percent of Eastern’s common stock, with 

no individual investor holding more than 1.56 percent. 4

A more detailed description of Eastern’s ownership is contained in the CITIZENSHIP section of this order.
Mr. Douglas A. Cifu also represents VV-DC’s interests on the Eastern Board of Directors. He is the 

Vice-Chairman of the Florida Panthers hockey team (2013-present) and the Co-Founder and Vice 

Chairman of Virtu Financial (2008-2013), and most recently its President and CEO (2013-present). 

Previously, he was an Associate and Partner with the Law Firm of Paul, Weiss, Rifkind, Wharton and 

Garrison LLP (1990-2008). 

Mr. Joseph E. DaGrosa, Jr. represents the interests of Skyworks on Eastern’s Board of Directors and is 

the Co-Founder of 1848 Capital Partners LLC, a private equity firm (2003-Present). Previously, Mr. 

DaGrosa was the Founding Partner of MapleWood Partners LLC (1996-2003) and a Vice President of 

Special Accounts with Paine Webber Inc. (1986-1996). 

Mr. Edward J. Wegel, President and CEO of Eastern since its inception, has had a lengthy career in the 

airline industry. In addition to serving in his current capacity with the applicant, Mr. Wegel is also the 

Founder and Managing Partner of investment company Aviation Capital Partners Group, LLC (2008-

present) as well as Aviation Capital Partners LLC (1993-present). He was also the Chief Restructuring 

Officer and CEO of One Travel Holdings, Inc. (2004-2008); Executive Vice President, Planning and 

Development of Mesa Air Group, Inc. (2003-2005); Chief Operating Officer at Tower Airlines (2000-

2002); and Senior Vice President with SH&E, an aviation consulting firm (1999-2002). Mr. Wegel also 

served as President and CEO with Chautauqua Airlines/USAirways Express (1997-1999); President and 

Chief Operating Officer with BWIA International Airways (1995-1997); Co-Founder, Board Member, 

and Senior Vice President-Finance of Atlantic Coast Airlines (1991-1995); and Vice President with 

Shearson Lehman Brothers (1987-1991). Mr. Wegel also served as a Captain in the U.S. Army (1980-

1985).

Admiral (Ret.) William A. Owens is the Chairman of AEA Investors (Asia) Limited (2009-present). He 

previously was the Executive Chairman and CEO of AEA Holdings Asia (2005- 2009). He also was 

CEO and Vice Chairman of Nortel Networks Corporation (2004-2005), CEO and Chairman of Teledesic 

LLC (1998-2004), and President, CEO, and Vice Chairman with SAIC (1997-1998) and its Vice 

President for Government (1996-1997). Prior to his public sector career, Admiral Owens held several 

positions with the U.S. Navy, including Vice Chairman of the Joint Chiefs of Staff (1994-1996), Deputy 

Chief of Naval Operations (1991-1993), Commander of the U.S. Sixth Fleet (1990-1991), Senior 

Military Assistant to the Secretary of Defense (1988-1991), Director of the Office of Program Appraisal 

for the Secretary of the Navy (1988) and Commander of Submarine Group Six (1987). 

Mr. Manuel Diaz is the former mayor of the city of Miami, Florida (2001-2009). He is currently the 

Senior Partner with Lydecker Diaz Law Firm (2010-present). Mr. Diaz also held the position of Vice 

President and General Counsel of both Monty’s Restaurant Holdings (1991-2001), and Terremark, Inc. 

(1986-1991). He was also a Partner with Berkowitz & Diaz (1980-1985). 

Eastern’s key management personnel consist of the following individuals, all of whom are U.S. citizens: 

Mr. Edward J. Wegel Founder, President, and Chief Executive Officer (“CEO”) 

Mr. James R. Tolzien Chief Financial Officer (“CFO”)

Mr. Terry Lee Pentecost Director of Maintenance

Mr. John Furneaux Vice President, Flight Operations

Mr. Terry C. Austin Director of Safety 
Mr. Michael Jefferson Chief Inspector

Mr. Juan P. Nunez Chief Pilot

Mr. James R. Tolzien is Eastern’s CFO, a position he has held since June 2014. Previously he was the 

Operating Partner and CEO of Sunbelt Diversified Enterprises, LLC (2007-June 2014). He was the 

President (2003-2007) and CFO (2000-2003) of Around the World Travel Inc., Operations and Finance 

Director with Dancing Bear Investments (1997-1999), and Senior Vice President of North American 

Operations (1996) and Vice President of Finance (1997) with Alamo Rent-A-Car. Mr. Tolzien was also 

employed as a Regional Director for Commonwealth Capital Partners (1992-1995) and held positions of 

increasing responsibility with Budget Rent-A-Car Corporation including Executive Vice President/CFO, 

Senior Vice President of Strategic Planning, Vice President/Corporate Controller, and Controller (1976-

1992). 

Eastern’s Director of Maintenance, Mr. Terry Lee Pentecost was most recently Eastern’s Director of 

Quality Control (June 2014-April 2015). Prior to this, he served as Director of Quality Control for 

World Atlantic Airlines (January 2013-June 2014), and for Silver Airways (December 2011-January 

2013). He was also Director of Maintenance and Quality Control for Executive Airlines (September 

2008-December 2011). A licensed Airframe and Powerplant Mechanic, Mr. Pentecost also held several 

positions of increasing responsibility at American Eagle/American Airlines, including Director of 

Maintenance, Quality Control Manager, Heavy Maintenance Supervisor, CRJ and Saab Program 

Manager, Maintenance Base Manager, and Reliability Technical Analyst (December 1998-September 

2008) He was also employed with Business Express Airlines as a Component Repair Manager 

(December 1997-December 1998) and served in the U.S. Air Force (February 1977-February 1997). 

Mr. Pentecost is a graduate of Embry-Riddle Aeronautical University.

Mr. John N. Furneaux, Eastern’s Vice President of Flight Operations since May 2014, was most recently 

the Chief Pilot in USAirways’ Test Pilot division (2006-2014). A licensed Airline Transport Pilot, he 

was also a Pilot and Check Airman with USAirways (1983-2014), a Pilot with Air Florida (1980-1983), 

and a Pilot and Instructor in the U.S. Air Force (1971-1980). 

Mr. Terry C. Austin, Eastern’s Director of Safety, is a licensed Airline Transport Pilot with over 11,000 

flight hours. He was most recently employed with the FAA as an Aviation Safety Inspector (March 

2009-January 2014) and a Principal Operations Inspector (July 2007-March 2009). Mr. Austin was the 

Director of Safety and Security with Centurion Air Cargo (March 2005-July 2007), a Flight Officer with 

Independence Airlines (August 2001-February 2005), President of Savanna Group Consulting (May 

2001-August 2002), Director of Safety with Pro Air (December 1999-May 2001), First Officer with 

Kitty Hawk International (1999), and Director of Flight Safety with American International Airways, 

Inc., (July 1997-January 1999). Mr. Austin also interspersed several stints working as a FAA Principal 

Operations Inspector (July 1994-July 1997, August 1989-February 1991, August 1984-March 1988) 

with assignments as a Standardization Auditor, Instructor Pilot and Instrument Flight Examiner for the 

U.S. Army (February 1991-July 1994, March 1988-August 1989, March 1981-August 1984). 

Mr. Michael Jefferson is Eastern’s Director of Quality Control, a position he has held since April 2015. 

A licensed Airframe and Powerplant Mechanic, Mr. Jefferson previously was a Consultant for 

Airworthiness International, Inc. (August 2014-April 2015; January 2007-January 2014; JanuaryDecember 2004); Vice President of Technical Operations for Dynamic Airways, LLC (January 2014-
August 2014); and Vice President/Director of Maintenance for MaxJet Airways, Inc. (December 2004-

January 2007). Additionally, he was Vice President of Maintenance (November 2002-January 2004) 

and Director of Quality Assurance (October 2000-November 2002) for Midway Airlines; an Assistant 

Principal Maintenance Inspector for the FAA (September 1997-October 2000); a Maintenance Manager 

for International Air Leases, Inc. (January 1992-September 1997); and a Maintenance Supervisor for 

Eastern Air Lines Inc. (February 1986-January 1992). Mr. Jefferson also served in the U.S. Marine 

Corps (February 1983-February 1986).

Mr. Juan P. Nunez, a licensed Airline Transport Pilot, joined Eastern as a 737 Pilot in January 2015 and 

was promoted to Chief Pilot in April 2015. He previously held positions as a Simulator and Ground 

School Instructor for Boeing Flight Training Services (May 2012-January 2015), Amerijet International 

Inc. (April 2012-January 2015), Flight Training International (January 2014-January 2015), and Pan Am 

Flight Academy (May 2007-August 2013). Mr. Nunez was also a Captain with Miami Air International 

(May 1997-May 2012). 

In view of the experience and background of the applicant's key personnel, we tentatively conclude that 

Eastern has demonstrated that it possesses the managerial skills and technical ability to conduct its 

proposed charter operations.

5

Operating Proposal and Financial Condition

If granted the interstate and foreign charter authority it seeks, Eastern intends to operate charter flights 

from its hub in Miami to points in Latin America, Cuba, and the Caribbean using ACMI contracts that 

will rely on the charterer to pay for, among other things, fuel, landing fees, and ground handling 

expenses, while Eastern will incur the costs of aircraft, crew, maintenance, and insurance. The air 

carrier plans to initially operate two B737-800s and one B737-700 configured for 134-162 passengers 

and envisions a transition to scheduled service and further fleet growth, having recently announced an 

order from Boeing for 10 B737-800 aircraft with deliveries planned for 2017.

In establishing financial fitness, the Department typically asks an applicant to demonstrate that it has 

access to financial resources sufficient to cover its pre-operating expenses and any negative working 

capital balance, plus a working capital reserve equal to the operating costs that are reasonably projected 

to be incurred during three months of “normal” operations. Because projected expenses during the first 

several months of air service frequently do not include all costs that will be incurred during a “normal” 

period of operations, it is our practice to base our three-month test on one-quarter of the first year’s 

operating costs. Further, in calculating available resources, projected revenues may not be used.

Eastern provided the Department with a balance sheet dated February 28, 2015, which shows the 

company as having current assets of $3.15 million and current liabilities of $1.48 million, giving the 

company a positive working capital balance of $1.67 million. Eastern also provided the Department 

with its pre-operating and first-year expense forecasts. The applicant expects to incur about $4.90

million in pre-operating expenses, which includes conformity of maintenance manuals, proving runs, 

 5

Before authorizing an air carrier to conduct air transportation operations, the FAA also evaluates certain of the air 

carrier's key personnel with respect to the minimum qualifications for those positions as prescribed in the Federal Aviation 

Regulations. The FAA’s evaluation of these key personnel provides an added practical and in-person test of their skills and 

technical ability. All of Eastern’s key technical personnel have been approved by the FAA to hold their positions.
crew training, and FAA/DOT certification costs. Eastern states it has already expensed approximately 

$4.11 million of this amount as of February 2015, leaving $797,781 million in pre-operating expenses 

yet to be paid. Eastern expects to incur first-year expenses of approximately $20.31 million. 

We have reviewed Eastern’s forecasts and find them to be reasonable. Thus, in order to meet our 

financial fitness criteria, Eastern will need access to approximately $5.87 million.6 

In support of its ability to meet our financial fitness test, Eastern provided information related to the 

financial resources available to it. The applicant raised $2.5 million from PPO Stockholders through a 

private placement offering (“PPO”) of Eastern common stock. Eastern also raised $5.0 million from 

VV-DC in exchange for Eastern’s preferred stock. Eastern also provided a letter from majority 

shareholder and VV-DC manager Mr. Vincent Viola, pledging a 2-year senior secured $5.0 million line 

of credit from VV-DC to support Eastern’s proposed operations together with a statement from 

Goldman, Sachs & Co., dated July 7, 2014, showing the balance of Mr. Viola’s personal bank accounts 

to be in excess of $5.0 million. Eastern also provided a letter from City National Bank which stated the 

company had in its accounts, as of March 26, 2015, funds in excess of $2.0 million.

In light of the above, we tentatively conclude that Eastern will have sufficient financial resources 

available to it to enable it to commence its proposed charter operations without posing an undue risk to 

consumers or their funds. We note that, as is our practice, prior to making any authority awarded to 

Eastern effective, we will require the company to demonstrate that it continues to have access to the 

financial resources needed to meet our financial test. 

Compliance Disposition

Other than the lawsuit brought by Mr. Raimbeault, which ultimately was dismissed, Eastern states that 

there have been no charges of fraud, felony or antitrust violations, or of unfair, anticompetitive or 

deceptive business practices filed against it, its owners, or its key personnel in the past 10 years.

Moreover, we note that Mr. Raimbeault subsequently recanted on the record in this proceeding the 

allegations of fraud he made in his June 3, 2014, objection to Eastern’s applications. Further, the

applicant states that neither it nor any of its key personnel have been involved in an accident or

incident in the year preceding its application or at any time in the past which remains under

investigation by the FAA, the National Transportation Safety Board, or the company itself.

The FAA advises us that it has no objections to the Department’s grant of Eastern’s request for charter 

authority and knows of no reason why the air carrier should not be granted the authority it is seeking. A 

review of our records and other information available to us has uncovered no derogatory information 

regarding Eastern, its owners, or its key personnel. 

In light of these circumstances, we tentatively find that Eastern has the proper regard for the laws and 

regulations governing its services to ensure that its aircraft and personnel conform to applicable safety 

standards and that acceptable consumer relations practices will be followed.

 6

 The $5.87 million noted here is one quarter of the applicant’s forecast of approximately $20.31 million in first year 

expenses plus $797,781 remaining to be paid in pre-operating costs.
CITIZENSHIP

49 U.S.C. § 41102 requires that authority to engage in air transportation be held only by citizens of the 

United States as defined in 49 U.S.C. § 40102(a)(15). That section requires that the president and 

two-thirds of the Board of Directors and other managing officers be U.S. citizens, that at least 75 percent 

of the voting interest be owned by U.S. citizens, and that the air carrier must be under the actual control 

of U.S. citizens.

As previously stated, Eastern is a Delaware corporation owned in the percentages indicated, by the 

following, most of which are U.S. citizens: (1) VV-DC (61.2 percent), (2) Skyworks (16.95 percent), (3) 

PPO Stockholders (7.84 percent), (4) ACPG (7.12 percent), (5) Mr. Wegel (3.33 percent), (6) Pitcairn 

(2.37 percent), and (7) Mr. Owens (1.14 percent). The applicant has issued two classes of stock, 

preferred and common, both of which have voting rights. 

The applicant’s majority owner, VV-DC, a Delaware limited liability company, holds Eastern’s Series A 

preferred stock and has the right to appoint two members to the applicant’s Board of Directors. VV-DC 

is owned by Mr. Vincent Viola (85.07 percent), Mr. Douglas A. Cifu (9.45 percent), and Mr. Matthew 

Caldwell (5.0 percent), and one other individual (0.5 percent), all of whom are U.S. citizens. Mr. 

Caldwell serves as VV-DC’s manager and owns Eastern’s Series B preferred stock.7

 

Skyworks, a Delaware limited liability company, owns 16.95 percent of Eastern’s common stock. 

Skyworks is majority-owned by 1848 Aviation Partners LLC (“Aviation Partners) (86.5 percent), a 

Florida limited liability company, which is, in turn, owned by Messrs. Joseph DaGrosa, Jr., and David 

Neithardt, and three other individuals, all of whom are U.S. citizens. The remaining 13.5 percent of 

Skyworks is owned by 1848 Blueco LLC (“Blueco”), a Florida limited liability company owned by 

33 individual investors and/or investment entities, none owning ultimately more than 0.5 percent of 

Eastern’s common stock. Skyworks is managed by a Miami-based private equity firm, 1848 Capital 

Partners LLC (“1848 Capital Partners”), a Florida limited liability company founded by Messrs. 

DaGrosa, Neithardt, and John Sicilian, all of whom are U.S. citizens.

8

 Eastern states that 21 percent of 

Blueco is owned by PIMCO Investment, Inc., a fund managed by a subsidiary of Allianz SE of 

Germany. Eastern did not provide information regarding the citizenship of investors owning less than 

10 percent of Blueco. While Blueco’s manager is a U.S. citizen, absent further information regarding 

the citizenship of its investors, Blueco cannot be considered a U.S. citizen by Statute. However, since 

Blueco only holds 13.5 percent of the equity in Skyworks with the remaining equity held by U.S. 

citizens, we find Skyworks to be a U.S. citizen. 

PPO Stockholders is a group of 22 private investors (18 individuals and 4 entities) that contributed, 

through a private placement offering, $2.5 million in exchange for shares of Eastern’s common stock. 

PPO Stockholders hold shares directly in Eastern and collectively hold 7.84 percent of Eastern’s 

common stock with no individual investor holding more than 1.56 percent. In addition, of the total 

percentage of shares held by PPO Stockholders, only 2.3 percent are held by non-U.S. citizens. 

 7

Eastern states that Series B stock is an internal designation solely for VV-DC profit-sharing purposes. 8

Eastern states that the third 1848 Capital Partners founder, Mr. John Sicilian, has no economic or voting interest in 

Eastern.
ACPG and Pitcairn, both Delaware limited liability companies, are affiliated with 1848 Capital Partners, 

the equity firm that manages Skyworks, and are part of Eastern’s original founding investor group. 

ACPG is managed by Mr. Wegel and its ownership of 7.12 percent of Eastern common stock is held by 

two individuals and one investment entity, all U.S. citizens. Pitcairn holds 2.37 percent of Eastern 

common stock and is owned by two individuals, both U.S. citizens.

9

 

Eastern further notes that it intends to provide employee stock options to its key personnel, all of whom 

are U.S. citizens. The company also intends to issue warrants equal to three percent of Eastern common 

stock to the estate of the legacy Eastern Air Lines, and warrants equal to one percent of Eastern common 

stock each to financiers Credit Agricole and Raymond James & Associates, which may further dilute the 

amount of common stock. 

Additionally, Eastern’s president, board of directors, and other key personnel are identified as U.S.

citizens and the company has provided an affidavit attesting that it is a U.S. citizen within the meaning 

of the Statute and that it actually is controlled by U.S. citizens. The company provided an amendment to 

its Certificate of Incorporation which provides for a separate stock record for the registration of stock 

that is beneficially owned by non-U.S. citizens and at no time will ownership of Eastern share’s 

representing more than the maximum percentage allowable by law will be registered.

Our review of the applicant’s citizenship has uncovered no reason to suggest that control of Eastern rests 

with non-U.S. citizens, thus, based on the above information, we tentatively conclude that Eastern is a 

citizen of the United States and is fit, willing, and able to provide the interstate and foreign charter 

service it proposes as a U.S. certificated air carrier.

PUBLIC CONVENIENCE AND NECESSITY

No finding of consistency with the public convenience and necessity is required for the award of 

authority for interstate charter air transportation under section 41102, although such a finding is required 

for authority to engage in foreign charter air transportation.

We tentatively find that the foreign charter air transportation proposed by Eastern is consistent with the 

public convenience and necessity. By Order 78-7-106, which instituted the Former Large Irregular Air 

Service Investigation, the Civil Aeronautics Board found that there was a continuing demand and need 

for additional charter air carriers. Therefore, if the Department finalizes the tentative conclusions of this 

order, Eastern will receive certificates authorizing it to engage in interstate and foreign charter air 

transportation of persons, property, and mail under section 41102.10

OBJECTIONS

On February 26, 2015, Eastern filed a motion requesting that, upon the issuance of a show-cause order 

tentatively finding Eastern fit, willing, and able to engage in interstate and foreign charter air 

transportation as a U.S. certificated air carrier, the Department reduce its standard 14-day objection and 

7-day answer period to 5 days for objections and 3 days for answers.

 9

Eastern requested confidential treatment of persons or entities holding less than 10 percent ownership of Eastern stock. 

The company provided sufficient information to verify the U.S. citizenship of Pitcairn and ACPG. 10

Pursuant to 49 U.S.C. § 41307, issuance of foreign certificate authority to Eastern is subject to Presidential review.
On March 4, 2015 Eastern advised the Department that it had polled interested parties and there were no 

objections to shortening the answer period. Under these circumstances, we have decided to grant 

Eastern’s request for a shortened answer period in this case. Therefore, we will give interested persons 

5 business days following the service date of this order to show cause why the tentative findings and 

conclusions set forth here should not be made final; answers to objections will be due within 3 business 

days. We expect that persons objecting to our tentative findings and conclusions will support their 

objections with relevant and material facts.11 We will not entertain general, vague, or unsupported 

objections. If no substantive objections are filed, we will issue orders that will make final our tentative 

findings and conclusions with respect to certification and fitness and will issue Eastern certificates that 

will contain an exact copy of the attached Terms, Conditions and Limitations.

CERTIFICATE CONDITIONS AND LIMITATIONS

If Eastern is found fit and issued the certificates it seeks, its authority will not become effective until the

air carrier has fulfilled all of the requirements for effectiveness as set forth in the terms, conditions and 

limitations attached to its certificates. This includes, among other things, (1) a copy of the holder's Air 

Carrier Certificate and Operations Specifications authorizing charter operations from the FAA, (2) a 

fully-executed OST Form 6410 evidencing liability insurance for all of its aircraft that meets the 

requirements of 14 CFR §205.5(b) of our rules, (3) verification of available funding necessary to meet 

the Department’s fitness requirements, and (4) a statement of changes that Eastern has undergone in its 

ownership, management, operations, finance, or compliance disposition since the issuance of this order.

Additionally, our tentative findings stated above are based on the operating plan described in Eastern’s 

applications that utilizes up to three aircraft in charter operations. These findings might no longer apply 

if the company were to substantially change the scope of its operations through the introduction of 

additional aircraft. Therefore, once the applicant’s certificates become effective, should Eastern propose 

to operate additional aircraft, it must notify the Department in writing at least 45 days in advance and 

demonstrate its fitness for such operations prior to implementing service with those additional aircraft. 

Furthermore, we remind Eastern of the requirements of 49 U.S.C. § 41110(e). Specifically, that section 

requires that, once an air carrier is found fit initially, it must remain fit in order to hold its authority. To 

be assured that certificated air carriers continue to be fit after effective authority has been issued to them, 

we require that they supply information describing any subsequent substantial changes they may

undergo in areas affecting fitness.

12

 The compliance of the company with this requirement is essential if 

we are to carry out our responsibilities under 49 U.S.C. § 41110(e).13

 11

If an oral evidentiary hearing or discovery procedures are requested, the objector should state in detail why such hearing 

or discovery is considered necessary, and what material issues of decisional fact the objector would expect to establish 

through a hearing or discovery that cannot be established in written pleadings. The objector should consider whether 

discovery procedures alone would be sufficient to resolve material issues of decisional fact. If so, the type of procedure 

should be specified (see Part 302, Rules 19 and 20); if not, the reasons why not should be explained. 12

Eastern may contact our Air Carrier Fitness Division to report proposed substantial changes in its operations, ownership, 

or management, and to determine what additional information, if any, will be required under section 204.5. Moreover, by 

notice dated July 21, 1998, the Department requested air carriers to provide a 30-day advance notification of any proposed 

change in ownership, restructuring, or recapitalization. If the air carrier fails to file the information or if the information fails 

to demonstrate that the air carrier will continue to be fit upon implementation of the substantial change, the Department may 
Finally, to aid the Department in monitoring the fitness of new air carriers, we require that all newly 

certificated air carriers submit a detailed progress report, within 45 days following the end of the first 

year of certificated operations, to the Air Carrier Fitness Division. The report should include a 

description of the air carrier’s current operations (number and type of aircraft, principal markets served, 

total number of full-time and part-time employees), a summary of how these operations have changed 

during the year, a discussion of any changes it anticipates from its current operations during its second 

year, current financial statements,

14

and a listing of current senior management and key technical 

personnel. The air carrier should also be prepared to meet with staff members of the Fitness Division to 

discuss its current and future operations.

ACCORDINGLY:

1. We direct all interested persons to show cause why we should not issue orders making final the 

tentative findings and conclusions stated above and award certificates to Eastern Air Lines Group, Inc., 

authorizing it to engage in interstate and foreign charter air transportation of persons, property, and mail, 

subject to the attached specimen Terms, Conditions, and Limitations.

2. We grant the request of Eastern Air Lines Group, Inc., in Dockets DOT-OST-2014-0012 and DOTOST-2014-0013 to shorten the time to file objections to 5 business days and for answers to any 

objections to 3 business days thereafter. 

3. We direct any interested persons having objections to the issuance of orders making final any of the 

proposed findings, conclusions, or the certificate awards set forth here to file such objections with the 

Department of Transportation Dockets, 1200 New Jersey Avenue, SE., West Building Ground Floor, 

Room W12-140, Washington, D.C. 20590, in Dockets DOT-OST-2014-0012 and 

DOT-OST-2014-0013, and serve them upon all persons listed in Attachment A no later than 5 business 

days after the service date of this order; answers to objections shall be filed no later than 3 business days 

thereafter.

4. If timely and properly supported objections are filed, we will accord full consideration to the matters 

or issues raised by the objections before we take further action.

15

 

take such action as is appropriate, including enforcement action or steps to modify, suspend, or revoke the air carrier's charter 

authority.

13

We also remind Eastern of the requirements of section 204.7 of our rules. This section provides, among other things, 

that (1) the certificate authority granted to a company shall be revoked if the company does not commence actual flying 

operations under that authority within one year of the date of the Department's determination of its fitness; (2) if the company 

commences operations for which it was found fit and subsequently ceases such operations, it may not resume certificated 

operations unless its fitness has been redetermined; and (3) if the company does not resume operations within one year of its 

cessation, its authority shall be revoked for dormancy.

14

These financial statements should include a balance sheet as of the end of the company’s first full year of actual flight

operations and a twelve-month income statement ending that same date. 15

Since we have provided for the filing of objections to this order, we will not entertain petitions for reconsideration.
5. In the event that no objections are filed, we will consider all further procedural steps to be waived 

and we will enter an order making final our tentative findings and conclusions. 

6. We will serve a copy of this order on the persons listed in Attachment A.

7. We will publish a summary of this order in the Federal Register.

By:

SUSAN L. KURLAND

Assistant Secretary for Aviation 

and International Affairs

An electronic version of this document is available at

http://www.regulations.gov
Attachment

Specimen

Terms, Conditions, and Limitations

EASTERN AIR LINES GROUP, INC.

is authorized to engage in interstate charter air transportation of persons, property, and mail 

between any point in any State, territory, or possession of the United States or the District of 

Columbia, and any other point in any of those entities.

This authority is subject to the following provisions:

(1) The authority to operate under this certificate will not become effective until six 

(business) days after the Department has received the following documents; provided, 

however, that the Department may stay the effectiveness of this authority at any time prior to 

that date:

(a) A copy of the holder's Air Carrier Certificate and Operations Specifications 

authorizing such operations from the Federal Aviation Administration (FAA).

(b) A certificate of insurance on OST Form 6410 evidencing liability insurance 

coverage meeting the requirements of 14 CFR 205.5(b) for all of its aircraft.

(c) A statement of any changes the holder has undergone in its ownership, key 

personnel, operating plans, financial posture, or compliance history, since the date of 

the Show Cause Order in this case.

(d) A revised list of pre-operating expenses already paid and those remaining to 

be paid, as well as independent verification that the holder has available to it funds 

sufficient to cover any remaining pre-operating expenses and to provide a working 

capital reserve equal to the operating costs that would be incurred in three months of 

operations.

(2) Pending receipt of effective authority, the holder may not accept payment of any kind 

(i.e., cash, check, or credit card), or enter into contracts for the operations proposed under 

this certificate, and any advertisement by the holder must prominently state: "This service is 

subject to receipt of government operating authority." 

(3) The holder shall at all times conduct its operations in accordance with the regulations 

prescribed by the Department of Transportation for the services authorized by this certificate, 

and with such other reasonable terms, conditions, and limitations as the Department of 

Transportation may prescribe in the public interest.

(4) The holder's authority under this certificate is effective only to the extent that such 

operations are also authorized by the Federal Aviation Administration (FAA), and comply 
2

with all U.S. Government requirements concerning security, including, but not limited to 49 

CFR Part 1544. ∗

(5) The holder shall at all times remain a "Citizen of the United States" as required by 49 

U.S.C. 40102(a)(15).

(6) The holder shall maintain in effect liability insurance coverage as required under 14 

CFR Part 205. Failure to maintain such insurance coverage will render a certificate 

ineffective, and this or other failure to comply with the provisions of Subtitle VII of Title 49 of 

the United States Code or the Department's regulations shall be sufficient grounds to revoke 

this certificate.

(7) The holder is not authorized to engage in air transportation operations between points 

within the State of Alaska.

(8) Should the holder propose any substantial change in its ownership, management, or 

operations (as defined in 14 CFR 204.2(l)), it must first comply with the requirements of 14 

CFR 204.5.

(9) In the event that the holder does not commence actual flying operations under this 

certificate within one year of the date of the Department's determination of its fitness, its 

authority shall be revoked for dormancy, unless the holder is conducting operations under 

another type of certificate authority. Further, in the event that the holder commences 

operations for which it was found "fit, willing, and able" and subsequently ceases all such 

operations, its authority under all certificates held shall be suspended under the terms of 14 

CFR 204.7 and the holder may neither recommence nor advertise such operations unless its 

fitness to do so has been redetermined by the Department. Moreover, if the holder does not 

resume operations within one year of its cessation, its authority shall be revoked for 

dormancy.

 ∗

To assure compliance with all applicable U.S. Government requirements concerning security, the holder shall, 

before commencing any new service (including charter flights) to or from a foreign airport, contact its Principal 

Security Inspector (PSI) to advise the PSI of its plans and to find out whether the Transportation Security 

Administration has determined that security is adequate to allow such airport(s) to be served.
Attachment

Specimen

Terms, Conditions, and Limitations

EASTERN AIR LINES GROUP, INC.

is authorized to engage in foreign charter air transportation of persons, property and mail: 

Between any place in the United States and any place outside thereof.

This authority is subject to the following provisions:

(1) The authority to operate under this certificate will not become effective until six 

(business) days after the Department has received the following documents; provided, 

however, that the Department may stay the effectiveness of this authority at any time prior to 

that date:

(a) A copy of the holder's Air Carrier Certificate and Operations Specifications 

authorizing such operations from the Federal Aviation Administration (FAA).

(b) A certificate of insurance on OST Form 6410 evidencing liability insurance 

coverage meeting the requirements of 14 CFR 205.5(b) for all of its aircraft.

(c) A statement of any changes the holder has undergone in its ownership, key 

personnel, operating plans, financial posture, or compliance history, since the date of 

the Show Cause Order in this case.

(d) A revised list of pre-operating expenses already paid and those remaining to 

be paid, as well as independent verification that the holder has available to it funds 

sufficient to cover any remaining pre-operating expenses and to provide a working 

capital reserve equal to the operating costs that would be incurred in three months of 

operations.

(2) Pending receipt of effective authority, the holder may not accept payment of any kind 

(i.e., cash, check, or credit card), or enter into contracts for the operations proposed under 

this certificate, and any advertisement by the holder must prominently state: "This service is 

subject to receipt of government operating authority." 

(3) The holder shall at all times conduct its operations in accordance with the regulations 

prescribed by the Department of Transportation for the services authorized by this certificate, 

and with such other reasonable terms, conditions, and limitations as the Department of 

Transportation may prescribe in the public interest.

(4) The holder shall at all times conduct its operations in accordance with all treaties and 

agreements between the United States and other countries, and the exercise of the privileges 

granted by this certificate is subject to compliance with such treaties and agreements and 
2

with any orders of the Department of Transportation issued under them or for the purpose of 

requiring compliance with them.

(5) The exercise of the authority granted here is subject to the holder's first obtaining 

from the appropriate foreign governments such operating rights as may be necessary.

(6) The holder's authority is effective only to the extent that such operations are also 

authorized by the FAA, and comply with all Department of Transportation and Department of 

Homeland Security requirements concerning security, including, but not limited to 49 CFR 

Part 1544.∗

(7) The holder shall at all times remain a "Citizen of the United States" as required by 49 

U.S.C. 40102(a)(15).

(8) The holder shall maintain in effect liability insurance coverage as required under 14 

CFR Part 205. Failure to maintain such insurance coverage will render a certificate 

ineffective, and this or other failure to comply with the provisions of Subtitle VII of Title 49 of 

the United States Code or the Department's regulations shall be sufficient grounds to revoke 

this certificate.

(9) Should the holder propose any substantial changes in its ownership, management, or 

operations (as that term is defined in 14 CFR 204.2(l)), it must first comply with the 

requirements of 14 CFR 204.5.

(10) In the event that the holder does not commence actual flying operations under this 

certificate within one year of the date of the Department's determination of its fitness, its 

authority shall be revoked for dormancy, unless the holder is conducting operations under 

another type of certificate authority. Further, in the event that the holder commences 

operations for which it was found "fit, willing, and able" and subsequently ceases all such 

operations, its authority under all certificates held shall be suspended under the terms of 14 

CFR 204.7 and the holder may neither recommence nor advertise such operations unless its 

fitness to do so has been redetermined by the Department. Moreover, if the holder does not 

resume operations within one year of its cessation, its authority shall be revoked for 

dormancy.

 ∗

To assure compliance with all applicable U.S. Government requirements concerning security, the 

holder shall, before commencing any new service (including charter flights) to or from a foreign 

airport, contact its Principal Security Inspector (PSI) to advise the PSI of its plans and to find out 

whether the Transportation Security Administration has determined that security is adequate to allow 

such airport(s) to be served.
3

ATTACHMENT A

SERVICE LIST FOR

EASTERN AIR LINES GROUP, INC.

MR ED WEGEL

CEO

EASTERN AIRLINES

MIAMI INTL AIRPORT

MIAMI FL 33142

MR JOHN MIETUS

LAW OFFICE OF JOHN MIETUS LLC

6701 DEMOCRACY BLVD

BETHESDA MD 20817-7500

MR BRIAN KARNS

CERTIFICATION PROJECT MANAGER

FEDERAL AVIATION ADMINISTRATION

MIRAMAR FL 33027

MR PETER LYNCH AGC-300

ASST CHIEF COUNSEL FOR 

ENFORCEMENT

FEDERAL AVIATION ADMINISTRATION

800 INDEPENDENCE AVE SW

WASHINGTON DC 20591

MR MICHAEL HAMBRICK 

MR STEPHEN LEGERE

MR DAVID SAUCIER

FEDERAL AVIATION ADMINISTRATION

MIRAMAR FL 33027

MR WILLIAM CHADWICK

OFFICE OF AIRLINE INFO

DEPT OF TRANSPORTATION

1200 NEW JERSEY AVE SE

WASHINGTON DC 20590

MR MARK MAZOR AFS-900

MANAGER CSET

FAA SUITE 203B

45005 AVIATION DRIVE

DULLES VA 20166-7537

KATHERINE TATUM

TECHNICAL PROGRAMS BRANCH

AFS 260

FEDERAL AVIATION ADMINISTRATION

800 INDEPENDENCE AVE SW

WASHINGTON DC 20591