U.S.Departmentof Transportation OffiCeoftheSecretary 

### otTronsportation**~r.JonathanBiank** 

### K&L Gates LLP 1601 

### KStreet, NW Washington, DC 20006 Dear**~r.** 

### Blank: Assi$lonl Secretory
March 19, 2012 1200 New Jersey Avenue, SE Washington, DC 20590

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### Thank you for your letter concerning the U.S. Department ofTransportation's (Department) citizenship investigation ofVIH Cougar Helicopters, Inc. (VIH Cougar). On**~arch** 

### 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. §

### 40I02(a)( 15) and proposing to cancel its airtaxi 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 entering the docket number, DOT-OST-2012-0022, into the simple search function at the Department's Docket Management System (OMS) website, which is http://www.regulations.gov. Finally, since this matter is pending, Iam unable to comment on the merits ofVIH Cougar's submissions. Iassure you, however, that the Department will give full consideration to all comments on the record in the docket. As is our nonnal practice, Iam placing acopy ofyour letter and this response in Docket DOT-OST-20I2-0022 as a contact outside the record ofthis matter. Iappreciate your interest in this proceeding. Sincerely yours,

Susan L. Kurland Assistant Secretary for Aviation and International Affairs

# K&LjGATES

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: 

### Vlli Cougar Helicopters, Inc
Dear Secretary Kurland, K&l Gates ttP 1601 KStreet NW Washington. DG 20006-1600
1 202.778

.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 Cougar Helicopters, Inc, (VIH Cougar) concerning their status as a part 298 AirTaxi Operator

. Inthat letter you cited "overwhelming evidence" that 

### Vlli Cougaris not in compliance with the requirements ofthe Federal Aviation Act that certificated airline operators be citizens ofthe United States.
As PHI has long maintained, you have concluded that although VIH Cougartheoretically complies with the numerical ownership requirements ofthe statute, it is not under the actual control ofcitizens ofthe United States. You note four reasons, including the agency relationship ofMr. SteeperbyMr. Nourie, the provision oftechnical and operational services and equipment bythe VIH Group to VIH Cougar, contractual relationships among the Vlli 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. Eachone ofthese alone would be grounds for a finding 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 Cougar has been the beneficiary ofits illegal relationship with the VIH Group at the expense ofthese U.S. companies. Since October 6, 2011, it has continued to do business without any apparent change. 

### Ifanything, it is now incentivized to seek additional market share as part ofwhatever restmcturing it may offer to the Department.



### X1-120314-003

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

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 Vlli Group remains in control ofVlli Cougar almost three months after the 30-day deadline for compliance included in your October 6, 2011letter, we respectfully request that immediate 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 not be 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 not be allowed to continue to operate in the United States unless it has met the requirements ofthe Federal Aviation Act that certificated airline operators becitizens 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 Register Feb 9, 2012 indicates the serious concern the Department is showing with regard to assuring close regulatory oversight ofU.S

.registered aircraft and operations. Likewise, in this matter, the operatorbas persistentlyevaded statutory requirements for actual citizen control. Just as the Department is taking action to assure that regulatory oversight on leased U.S. registered aircraft is 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 Department's informal proceedings may have public policybenefits in enabling operators to arrange their citizenship affairs privately when they are seeking to comply with the law, butthat does not apply in this case. Here, Vlli Cougar circumvented the law in a calculated 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 government in matters ofregulatory compliance. Any efforts by the Departmentto ensure that VlliCougar divests and restructures should be open, transparent and public.



### X1-120314-003