U.S.Departmentof Transportation Officeofthe Secretary ofTransportation

Mr. Jonathan Blank K&L Gates LLP 1601 K Street, NW Washington, DC 20006
Dear Mr. Blank: Assistant Secretary

March 19, 2012

Thank you for your letter concerning the U.S. Department ofTransportation's (Department) citizenship investigation ofVIH Cougar Helicopters, Inc. (VIH Cougar). On March 12,2012,the Department issued Order 2012-3-7 tentatively finding that VIH Cougar is not aU.S. citizen as defined in 49 U.S.C. §40102(a)(15) and proposing to cancel its air taxi authority. Interested parties are provided 21 days from the date ofits issuance to file objections to the Department's tentative findings. Access to the docket is available by enteringthe docket number, DOT-OST-2012-0022, into the simple search function atthe Department's Docket Management System (DMS) website, which is http://www.regulations.gov. Finally, since this matter is pending, I am unable to comment onthe merits ofVIH Cougar's submissions. I assure you, however, thatthe Department will give full consideration to all comments on the record inthe docket. As is our normal practice, I am placing a copy ofyour letter and this response in Docket DOT-OST-2012-0022 as acontact outside the record ofthis matter. I appreciate your interest in this proceeding. Sincerely yours,

Susan L. Kurland Assistant Secretaryfor Aviation and InternationalAffairs**~;"~ -·~""-,.;.**  

# K&LIGATES K&l Gates nP 1601 K Street NW Washington. DC 20006·1600

March 2, 2012
Ms. Susan Kurland Assistant Secretary ofTransportation for Aviation

and International Affairs United States Department ofTransportation 1200 New Jersey Avenue, S.E. Washington, DC 20590



### re: VlliCougarHelicopters, Inc
Dear Secretary Kurland, r 202.778.9000 www.klgates.com

Jonathan Blank D 202.661.6250 jonathan.blank@klgates.com

I am writing on behalfofPetroleum Helicopters, Inc (PHI). Additionally, the Alaska Air Carriers Association and Maritime Helicopters, headquartered in Homer, Alaska, concur with the sentiments expressed in this letter. (Copies oftheir letters are attached.).
On October 6, 2011, you wrote to counsel for VIH CougarHelicopters, Inc, (VIH Cougar) concerning their status as apart 298 AirTaxi Operator. In that letter you cited "overwhelming evidence" that VlliCougaris not in compliance with the requirements ofthe Federal Aviation Actthat certificated airline operators be citizens ofthe United States.
As PHI has long maintained, you have concluded that although VIH Cougar theoretically complies with the numerical ownership requirements ofthe statute, it is not underthe actual control ofcitizens ofthe United States. You note four reasons, including the agency relationship of

### Mr. Steeperby Mr. Nourie, the provision oftechnical and operational services and equipment by the VIH Group to VIH Cougar, contractual relationships among the VIH Group and VIH Cougar, and, tellingly, information discrepancies provided to the Department. Additionally, VIH Cougar officials have made public statements revealing that company's Canadian ties. Each one ofthese alone wouldbe grounds for afinding on non-compliance, but together they show a premeditated and willful lack ofcompliance disposition as well as non-citizenship. During the entire period ofthis investigation, VIH Cougarhas been competing unfairly with PHI and otherU.S. citizen operators in the GulfofMexico offshore trade. VIH Cougarhas been the beneficiary ofits illegal relationship with the VIH Group at the expense ofthese U.S. companies. Since October 6, 2011, ithas continued to do business without any apparent change. Ifanything, itis now incentivized to seek additional market share as part ofwhatever restructuring it may offerto the Department.

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## K&LIGATES
Ms. Susan Kurland March 2, 2012 Page2

While PHI appreciates the Department's very thorough review ofthe allegations against VIH Cougar, we believe that the time has come to stop VIH Cougar's lengthy history offlaunting the citizenship requirements and competing unfairly against U.S. citizen operators. As the VIH Group remains in control ofVIH Cougar almost three months after the 30-day deadline for compliance included in your October 6, 2011letter, we respectfully request thatimmediate action be taken to bring an end to this illegal situation.
We urge the Department to move quickly and openly to end this situation, which has gone on for several years. VIH Cougar should notbe allowed to continue to engage in unlawful competition that disadvantages U.S. citizen operators as it delays compliance with U.S. law to maximize its ill-gotten gains. VIH Cougar should notbe allowed to continue to operate in the United States unless ithas met the requirements ofthe Federal Aviation Act that certificated airline operators be citizens ofthe United States. The Department's recent Notice ofProposed Policy Clarification for the Registration ofAircraft to U.S. Citizen Trustees in Situations Involving Non-U.S. Citizen Trusters and Beneficiaries, Federal RegisterFeb 9, 2012 indicates the serious concern the Departmentis showing with regard to assuring close regulatory oversight ofU.S. registered aircraft and operations. Likewise, in this matter, the operatorhas persistently evaded statutory requirements for actual citizen control. Just as the Department is taking action to assure thatregulatory oversight on leased U.S. registered aircraftis not avoided through complex ownership instruments, the Department should move to quickly close down VIH Cougar's evasion ofthe statute. Finally, PHI stronglybelieves that there is no public policy that can be served any longerby shielding VIH Cougar's citizenship status from the public. Having made the preliminary findings based on "overwhelming evidence," we respectfully request that the Departmentbring transparency to any further proceedings in this matter. The Departmenfs informal proceedings may have public policy benefits in enabling operators to arrange their citizenship affairs privately when they are seeking to comply with the law, but that does not apply in this case. Here, VIH Cougarcircumvented the law in acalculated manner and did not merely seek to ascertain the limits ofthe citizenship requirements. Instead, it established, and long operated under, an egregious scheme which violated the citizenship requirements and engaged in deception to do so. PHI and other U.S. citizens are entitled to transparency and open governmentin matters ofregulatory compliance. Any efforts by the Department to ensure that VIH Cougar divests and restmctures shouldbe open, transparent and public. VerytJ;uly yours,
.



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## --**~**.. ·' Jonathan Blanl< 

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