BEFORE THE

DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.

) Application of ) ) AVIATION SERVICES, LTD. ) DOCKET DOT-OST-2010- (d/b/a FREEDOM AIR (Guam)) ) ) for a Certificate of Public Convenience ) and Necessity (Foreign Passenger ) Charter Service) ) )

APPLICATION OF AVIATION SERVICES, LTD. (d/b/a FREEDOM AIR (Guam)) FOR A CERTIFIC ATE OF PUBLIC CONVENIENCE AND

NECESSITY

Communications with respect to th is document should be sent to:

Gregory P. Cirillo Wiley Rein LLP

7925 Jones Branch Drive McLean, Virginia 22102

Ph: 703-905-2800

Fx: 703-905-6701 E: GCirillo@wileyrein.com

APPLICANT REQUESTS THAT THIS APPLICATION BE PROCESSED THROUGH EXPEDITED, NON-HEARI NG PROCEDURES PURSUANT TO SUBPART B OF

THE DEPARTMENT’S PROCEDURAL REGULATIONS.

NOTICE: Any person may support or oppose this application by filing an answer no later than __________, 2010 and serving a copy of the answer on counsel for Applicant and upon persons served with this application.

June 14, 20101 BEFORE THE

DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.

) Application of ) ) AVIATION SERVICES, LTD. ) DOCKET DOT-OST-2010- (d/b/a FREEDOM AIR (Guam)) ) ) for a Certificate of Public Convenience ) and Necessity (Foreign Passenger ) Charter Service) ) )

APPLICATION OF AVIATION SERVICES, LTD. (d/b/a FREEDOM AIR (Guam) FOR A CERTIFIC ATE OF PUBLIC CONVENIENCE AND

NECESSITY

Pursuant to 49 U.S.C. § 41102, Parts 201 and 204 of the Department’s Economic

Regulations, subpart B of the Departme nt’s Procedural Regulations, and the

Department’s Streamlining Initiative in Docket OST-2005-22228, Aviation Services, Ltd.

(d/b/a Freedom Air (Guam)) (hereinafter “Freedom Air”) respectfully applies for a

certificate of public convenience and necessity authorizing Freedom Air to engage in

foreign charter air transporta tion of persons, property, and mail. A parallel application

for interstate (domestic) charter air transportation will be filed contemporaneously

herewith, or shortly thereaft er. As Freedom Air wishes to begin expanded operations

subject to the amended certificate in October 2010, or as soon thereafter as possible, it

requests that the Department process this application expeditiously using written

submissions and simplified, non-hearing proced ures as contemplat ed by sections 302.15

and 302.207 of the Department’s Procedural Regulations.2 By this application, Freedom Air is looking to take an important step in its growth

as an air carrier serving Gu am and the Northern Mariana Islands by offering longer-range

charter service on modern 150+ seat jet aircraft . This will enhance th e mobility of people

in the region, and propagate a local air transportation resource to the benefit of the region

and the U.S. air transportation infrastructure . As noted below, the increased authority

sought by Freedom Air is within its mana gement and operational capabilities, and

entirely supportable from a financial standpoint.

In support of its application, Freedom Ai r provides the information as required by

14 C.F.R. §§ 201.4 and 204.3 in the Exhibits atta ched to this applic ation, in addition to

the following introductory information.

INTRODUCTION

1. Freedom Air is an air carrier based in Guam, USA. It has been in continuous

operation for 35 years. It holds an active Federal Aviation Regulat ions (“FAR”) Part 121

certificate for flag and supplemental operati ons from the Federal Av iation Administration

(“FAA”). Freedom Air’s Part 121 Certifi cate is attached hereto as Exhibit S-1 . In

addition, Freedom Air has DOT commuter air carrier authority pursuant to 14 C.F.R.

§298.50. Freedom Air seeks foreign charter authority from the DOT (and

contemporaneously seeks interstate charter au thority) to expand its sh ort-range operations

to include longer range foreign charters usi ng modern, large commerci al aircraft (Boeing

737-300 or equivalent) (her einafter referred to as “Proposed Charters”).

2. Freedom Air currently has 120 employees, and operates a fleet of twelve aircraft

described on Exhibit N-1 attached hereto. Operations c onsist of approximately fifty daily

departures, carrying approximate ly 72,500 passengers per year.3 3. Freedom Air is owned by four individuals (including the estate of one) all of

whom are U.S. Citizens. Exhibit F/G attached hereto includes a listing of the

equityholders of Freedom Air as of the date hereof. There are no outstanding securities,

debt obligations, options, warrants or similar instruments that carry voting rights or are

convertible into or exchangeable for instru ments carrying voting rights. Freedom Air has

no debt obligations other than trade credit incurred and paid in the ordinary course of

business.

4. By pursuing the Proposed Charters in a ssociation with WAI Asia, Ltd. (“WAI”)

(as described in the Exhibits and paragraph “(t)” of the supporting information), Freedom

Air has the financial strength to initiate a nd maintain the Proposed Charters without

posing an undue risk to c onsumers or their funds.

5. Senior Freedom Air manageme nt already has extensive e xperience in air carrier

management and operation, and the necessary bu siness expertise and te chnical ability to

offer and manage the Proposed Charters wh ile complying effectively with relevant

transportation laws. Freedom Air is alr eady a successful, Part 121 operation and the

proposed expansion is a natura l extension of it operating capabilities and footprint.

6. Grant of the requested certificate authority is in the public interest, as it will allow

Freedom Air to offer charterers new pr ice and service options for passenger

transportation. This is particularly valuable in the Pacific region where options are

limited, and particularly in Guam, the largest island in Micronesia and the southernmost

island in the Mariana Islands. Adding a comm ercial jet operation in Guam will be a

stepping stone to potential service throughout the Pacific, connecting Guam with the

growing Asian economies. As noted below, in connection with the arrangement with4 WAI, Freedom Air will be obtaining enhanced air carrier authority utilizing the capital

resources of WAI and that expanded authority will open up additional opportunities

beyond the Proposed Charters, and will be a continuing asset beyond the term of the

relationship between Freedom Air and WAI.

7. The expanded operations will be funded and supported by WAI as more fully

described in paragraph “(t)” be low and related Exhibits T-1 and T-2. WAI is not a U.S.

citizen as that term is defined in the Federa l Aviation Act as interpreted by the DOT. The

relationship between Freedom Air and WAI and the role of WAI in the transaction does

not affect the citizenship of Freedom Air. Freedom Air is 100% owned by U.S. citizens,

and its entire management team and board of di rectors is comprised of U.S. citizens. The

proposed relationship with WAI would not ch ange any of the foregoing – Freedom Air

will remain 100% owned, controlled and managed by U.S. citizens. WAI will be

designated and will act as Freedom Air’s General Sales Agent in several foreign

countries. In addition to traditional promotional and sales activities, WAI will be

providing the financial support necessary to a dd the large commercial aircraft to Freedom

Air’s operating certificate, includ ing all staffing and training co sts, and as credit support

party to the underlying aircraft leases. Free dom Air will remain in sole and exclusive

control of all aviation operations, including (i) operational control of all flights including

flight planning and flight following, (ii) re tention, training, sche duling, supervision and

termination of all cabin crew , ground crew and other flight -oriented personnel, (iii) all

maintenance and repair of aircraft, and (iv) all regulatory compliance relating to aircraft

operations (FAA, TSA and fo reign equivalents).5 The ownership and management of Freedom Air will remain unaffected and

exclusively U.S. controlled; and the partic ipation and role of WAI as General Sales

Agent, and in providing financial support falls well below any threshold implicating

actual control. In the relatively recent ASTAR Ai r Cargo decision 1 the DOT found that

substantial financial influence was not sufficient to constitute actual cont rol. In that case,

the financial support was far more pervasive, with the air carrie r having a single, nonU.S. customer dictating virtually all operations, in addition to having multiple

management ties. Moreover, virtually all of ASTAR’s operations from its inception were

those procured through its relatio nship with the non-U.S. entity. In contrast, Freedom Air

has decades of operating history unrelated to its WAI relationship and will continue to

have pre-existing scheduled operations without regard to the charter operations supported

by WAI. And like ASTAR, Freedom Air will have the ability to expand operations of the

new, commercial jet fleet and is by no means limited to operations designated or

approved by WAI. The parallel application for economic aut hority to engage in domestic

charter service will include uses of the larger aircraft in charter operations outside of the

current arrangement with WAI.

8. Freedom Air requests that it be allowed to retain its commuter air carrier authority

notwithstanding the grant of charter aut hority. As noted, Freedom Air has a longstanding and substantial business operating sche duled flights using sm aller aircraft under

the DOT’s commuter air carrier exemption, and it intends to continue those operations.

The charter authority being re quested here does not explici tly or implicitly permit the

1 Recommended Decision of Administrative Law Judge, Dec. 19, 2003, No. OST-2002-
13089-594, 2 available at [http://dmses.dot.gov/docimages/pdf88/262152_web.pdf].6 commuter services, and thus while it may be viewed as a “higher” level of DOT

authority, it is actually insufficient for opera tions. Freedom Air asks that the commuter

air carrier authority be pres erved, or other exemption be granted to the same effect.

8. Further supporting information is provided in Exhibits D-V to this application.8 INFORMATION SUPPLIED PURSUANT

TO THE DEPARTMENT’S REGULATIONS

Aviation Services, Ltd. (d/b/a Freedom Air (Guam)) (“Freedom Air”) hereby

supplies, in support of its certificate a pplication, the information required by the

Department pursuant to 14 C.F.R. § 204.3. Subpa ragraphs and Exhibits correlate to each

subsection in 14 C.F.R. § 204.3.

(a) Name, address, and telephone number of applicant.

Aviation Services, Ltd. (d/b/a Freedom Air (Guam))

Box 1578

Hagatna, Guam 96932

1-671-647-8359

(b) Freedom Air is a corporation.

(c) Freedom Air is organized unde r the laws of Guam U.S.A.

(d) Attached as Exhibit D is a Certificate of Good St anding issued by Guam U.S.A.

(e) Citizenship affidavit. The affida vit of James Gazley, Vice President of Maintenance, declaring Freedom Air to be a U.S. citizen under 49 U.S.C. § 40102(a)(15), as required by 49 U.S.C. § 41102, is attached as Exhibit E

.

(f) Information relating to key personnel and shareholders.

See Exhibit F/G

.

(g) Relevant affiliated corporations; pers ons having a substantial interest in the applicant.

Freedom Air is owned by four individuals (including the estate of one), all of

whom are U.S. citizen s. See Exhibit F/G

.

(h) Subsidiaries.

Freedom Airs owns a minority share in Aviation Services (CNMI), Ltd., which serves as a local operator for the Sa ipan, Rota and Tinian. See Exhibit H for corporate

information.9 (i) Shares held by Freedom Air in other aeronautical businesses.

None.

(j - k) Corporate documents.

(1) Balance Sheet.

See Exhibit K-1

.

(2 - 3) Income Statements includi ng footnotes, preparer /auditor letter and accounting methods.

See Exhibit K-2 . As described in (5) below, the financial statements were prepared by Filipinas E. Torres, and not an outside preparer or auditor.

(4) Significant events since mo st recent balance sheet.

None.

(5) Identity of person/entity prep aring financial information, including his/her/its qualifications.

The financial information for Freedom Air is prepared by Filipinas E. Torres, a minority equityholder (1/1000 shares) and di rector of Freedom Air. His contact

information is included in Exhibit F/G . His resume is attached hereto as Exhibit K-5

(l) List of actions and judgment exceeding $5,000 against Freedom Air or any key personnel.

There have been no judgments against Freedom Air. The following are the only relevant actions, which bot h resulted in settlement:

• October 2007 Settlement - $225,000; passenge r stumbled while stepping off the

aircraft air stair.

• 2001 - $30,000 settlement; bodily injury resu lting for a failed main gear while taxiing.

(m) Number of actions and ju dgments for less than $5,000.

None.

(n) Fleet.

(1) Current fleet.10 See Exhibit N-1

.

(2) Plans for aircraft acquisition.

Freedom Air and WAI are in the pro cess of negotiating a letter of intent, to be followed by a definitive lease and sublease relating to two (2) Boeing 737-300 aircraft. The lessor is Airtrust Capital Cor poration (or a special purpose entity affiliated therewith). The letter of intent will be on arm’s length terms and will involve the lease of the aircraft to WAI, with a sublease to Freedom Air.

(3) Affidavit as to aircraft compliance with FAA standards.

See Exhibit N-3

.

(o) Description of any and all pending DOT or FAA investig ations or actions applicable to Freedom Air or key personnel:

None.

(p) Description of charges of unfair or deceptive or anticompetitive business practices, fraud, felony or antitrus t violations, including disposition.

None.

(q) Description of aircraft accidents or incidents (49 CF R 830.2) including date, type of flight, passengers and crew on board, inju ries or fatalities, and aircraft damage (including any in the past 12 months, or any remaining under investigation).

None.

(r) Narrative history.

For over 35 years Freedom Air has proudl y served Guam and the Commonwealth of Northern Marianas Islands, offering sche duled and demand passenger services, as well as cargo operations. As a local, family-o wned company, Freedom Air passengers enjoy an authentic experience of warmth and hospitali ty. The origins of Freedom Air began in 1974 when Joaquin Flores, together with hi s mother, brother and sister, commenced business operating three aircraft, a Cessna 172, 150 and Piper Apache. That company has evolved into Freedom Air, the Mariana Isla nds oldest Guam based airline. In 1976 our nation’s bicentennial, Aviation Services, Lt d. chose the business name of Freedom Air which at that time engaged in flight inst ruction, sightseeing, and a commuter air carrier between Saipan and Tinian. From 1978 th rough 1991, Freedom Air added more small aircraft and operations. Begi nning in 1992, larger (30 seat) tu rboprops were added to the Freedom Air fleet. In 1997, Freedom Air was certified under Part 121 of the FARs.11 Freedom Air also plays a role in Guam’s local community and donates to numerous charitable orga nizations. See Exhibit R for brief statement to this effect.

The expanded authority requested in this application is the next major step in the growth of Freedom Air and an exciting expansion of travel opportunities in and to Guam.

(s) State and federal authority for operations.

(1) Federal authority. Freedom Air hol ds an active Part 121 certificate for flag and supplemental operations from th e FAA, Certificate Number AVSA040A Certificate Issue Date 11/27/1974 (Attached as Exhibit S-1 ).

(2) Freedom Air holds the following st ate/territorial aviation authorities:

None.

(3) In conjunction with this Applicat ion, and to conduct the operations associated herewith, Freedom Air has init iated the process of upgrading its Part 121 certificate and operating specifications to permit the operation of narrow-body, commercial jet aircraft. That application for upgraded auth ority is pending before the FAA Honolulu Flight Standards District Office. Freedom Air will pursue amendments to its security plan with the Transportation S ecurity Administration as well. Freedom Air has a long-standing and favorable relationshi p with the Honolulu FSDO as an existing

Part 121 carrier.

(t) Service to be operated.

As an extension of its current opera tions, Freedom Air proposes to set up, promote, sell and operate charter flig hts between Guam and Hong Kong, Manila, Shanghai, Taipei and Palau using narro w-body commercial jet aircraft (the “ Proposed

Charters ”). The expanded economic authority sought by this application is the authority required to operate the Proposed Charters. The origins and destinations will be determined based on market conditions and perf ormance. As detailed below, all aircraft operations relating to the Propos ed Charters will be undert aken exclusively by Freedom Air as the operating lessee of the aircraft de scribed below. The contractual relationship

between Freedom Air and WAI is reflected in the two Memoranda of Understanding

attached as Exhibits T-1 and T-2

.

The marketing and sales activity rela ting to the Proposed Charters, and the financial burden of aircraft acquisition, conf ormity, maintenance, repair and operation, and associated staff retention, training and compensation will be predominantly underwritten by WAI Asia, Ltd., a limited liabi lity company formed under the laws of Hong Kong, Special Administrative Region of the People’s Republic of China either directly and/or through an entity controll ed by or under common control with WAI Asia, Ltd. (hereinafter referred to collectively as “WAI”). WAI is a well established service provider in the business of acting as a general sales agent (“GSA”) for air carriers, and is12 engaged in promotion and consulting in the aviation field. WAI is not a “citizen of the United States” as defined in 49 U.S.C. 40102(a)(15).

The project contemplates the lease by Freedom Air of two Boeing 737-300 aircraft, or equivalent comme rcial aircraft, to perform the Proposed Charters. These aircraft will be acquired speci fically for this purpose and will be the only Freedom Air aircraft engaged in the Proposed Charters (as Freedom Air’s current fleet does not suit operations of that type). The aircraft will be available for other operations at Freedom Air’s discretion to the extent they are not committed to Proposed Charters. WAI will provide the financial credit needed to secure these leases, either as a guarantor of Freedom Air’s obligations, or as a prime lessee with a sublease of the aircraft to Freedom Air. Freedom Air will receive from WAI a base compensation on a calendar basis with additional compensation as a percentage of gr oss revenues from the Proposed Charters to the extent that percentage exceeds the base compensation. As noted above, substantially all of the jet operation will be funded by WAI.

Freedom Air shall be solely and exclus ively responsible for the conduct of all aircraft operations and deci sions including sole and excl usive responsibility for:

a. Aircraft selection, configurati on, conformity, maintenance and repair; b. Ground handling, airport relationshi ps and third party contracts; c. Flight and cabin crew hi ring, training and supervision; d. Hiring, training and superv ision of supporting personnel; e. Flight planning a nd flight following; and f. Operational licensing, permits and regulatory compliance, and procurement of customary insurances and th ird party services in all locations where Proposed Charters take place.

WAI shall be responsible for marke ting and sales relating to the Proposed Charters. As a general sales agent, WAI will be marketing air transportation services of Freedom Air. WAI’s responsibilitie s in this regard will include:

a. Licensing and legal compliance to the extent necessary for the sale of air transportation to consumers or intermediaries in the markets where the Proposed Charters will operate; b. Determining the manner in which seats will be marketed including selecting and paying for all forms of adve rtisement and promotion in the relevant markets; c. Pricing of transportatio n and ancillary services; and d. Establishing at its sole expense systems and staffing to interface with passengers and with intermediary charter organizers.

In summation, the new operation will al low Freedom Air to gr aduate from shortrange turboprop operations to longer-range , narrow-body jet operation s. If successful, this expansion will allow Freedom Air to le verage its regulatory authority and expanded13 operational authority to offer regi onal service that it does not offer today. Moreover, this opportunity has attracted and will bring capital into the avia tion industry; specifically the capital of WAI which will finance the expansion and offer a valuable transportation

service.

Note that the financial information refere nced below and in the Exhibits reflects capital costs that will be incurred to prep are Freedom Air to en gage in the Proposed Charters. The financial relationship be tween Freedom Air and WAI provides that Freedom Air’s participation in the arrangement will be limited to receipt of a flat monthly fee from WAI of $12,000 or one percent (1%) of gross revenues from the Proposed Charters, whichever is greater. All setup and operating costs are borne by WAI. (See

Exhibit T-2 ). Accordingly, a pro-forma income st atement solely for Freedom Air would simply show the addition of the monthly in come and projected interest in the gross revenues. The expanded financial in formation contained in Exhibit T-3 is provided to demonstrate the scope of the undertaking and the economics of the Proposed Charters, as

a whole.

(u) Montreal Agreement (relating to liab ility); family assistance and passenger manifest plans.

See Exhibit U

.

(v) Certification.

See Exhibit V

.15 EXHIBIT INDEX

EXHIBIT D Certificat e of Good Standing

EXHIBIT E Citizenship Affidavit

EXHIBIT F/G Owner, Officer and Key Personnel Information

EXHIBIT K-1 Balance Sheets

EXHIBIT K-2 Income Statements

EXHIBIT K-5 Resume of Filipinas E. Torres (Accountant)

EXHIBIT N-1 Operation Specifica tions for Current Aircraft Fleet

EXHIBIT N-3 Affidavit of Safety Compliance

EXHIBIT R Community Service Press Release

EXHIBIT S-1 FAA Part 121 Air Carrier Authority

EXHIBIT T-1 Memorandum of Understanding, January 14, 2010

EXHIBIT T-2 Memorandum of Understanding, February 17, 2010

EXHIBIT T-3 Financial Information

EXHIBIT U Executed OST Form 4523

EXHIBIT V Executed 18 U.S.C. § 1001 Certification

13133443.5

# FA EXHIBIT D

# FA EXHIBIT E

# FA EXHIBIT F/GOWNERS

Name Ownership Interest (of

1000 outstanding shares) Address Citizenship Involvement in

Other

Aeronautics

Businesses

Joaquin L. Flores, Jr.* † 868/1000 261B J.C. Fejeran St. Barrigada, Guam 96921 US None

Francisco C. San

Nicolas* 1/1000 261B J.C. Fejeran St. Barrigada, Guam 96921 US None

Filipinas E.

Torres* 1/1000 147 Chalan Islan Saipan

Pacific Latte Estates Yigo, Guam 96929 US None

The Estate of

Norbert J. Flores † 130/1000 261B J.C. Fejeran St. Barrigada, Guam 96921 US None

* Denotes a director. Aviation Services, Ltd. has 3 total directors.

† Joaquin L. Flores, Jr. and Norbert J. Flores were brothers. No other familial relationships exist among the owners.

OFFICERS/KEY PERSONNEL

Name Title Contact Information Citizenship Involvement in

Other

Aeronautics

Businesses Joaquin Flores

Jr. President and

CEO freedom@ite.net (671)

898-0273 US None

Filipinas E.

Torres Treasurer (671) 472-8009 US None

Francisco C.

San Nicolas Secretary (671) 647-8359 US None

James Gazley VP of

Maintenance

P121/135 jgazley@freedomairguam.

com (671) 688-6513 US None

James Jamison VP of Flight Operations jjamison@freedomairgua

m.com (671) 688-6513 US None

Alfred Dilks Chief Pilot

P135 (671) 647-8359 US None

Richard C.

Brown Director of Safety (671) 647-8359 US None

Cardiff

Walker Chief Pilot

P121 (671) 647-8359 US None

Charles Unten Chief Inspector (671) 647-8359 US NoneExperience :

All of the above identified officers, direct ors and key personnel, have been working for Aviation Services, Ltd. in these same positio ns under its current Part 121 Air Carrier Authority (attached as Exhibit S-1). Owner s Flores, San Nicolas and Torres have been with the company since its inception in 1974. Resumes for other key employees and pilot qualifications are on th e following pages.

# FA EXHIBIT H

# FA EXHIBIT K-1

# FA EXHIBIT K-2

# FA EXHIBIT K-5

# FA EXHIBIT N-1

# FA EXHIBIT N-3

# FA EXHIBIT R

# FA EXHIBIT S-1

# FA EXHIBIT T-1

# FA EXHIBIT T-2

# FA EXHIBIT T-3PROYECTO GUAMQty./PersonnelPeriod/Time D/M/HREa. Total NOTEInitial training 3 2,500.00$ 7,500.00$As quoted by SWATravel 3 1,600.00$ 4,800.00$Hotel 31660.00$ 2,880.00$Per diem 31650.00$ 2,400.00$New mechanic recruitment 1 1,000.00$ 1,000.00$Subject Matter Expert (SME)(airfare to Guam)Salary 1 10 3,500.00$ 35,000.00$From day 1 thru first flight (start up)Hotel in Guam 1 1 700.00$ 700.00$FA provides housing for one monthAudit training facilityTravel 1 1,600.00$ 1,600.00$Hotel 1660.00$ 360.00$Per diem 1650.00$ 300.00$Station MX trainingTravel 1 1,600.00$ 1,600.00$Hotel 16125.00$ 750.00$Per diem 1650.00$ 300.00$Total Maintenance59,190.00$Qty./PersonnelPeriod/Time D/M/HREa. Total NOTEPersonnel - PilotInitial training Simulator A/C tng 16 7,880.00$ 126,080.00$Aircraft Training - Pan Am flight academy MiamiTravel 16 1,600.00$ 25,600.00$Hotel 163060.00$ 28,800.00$Per diem 163060.00$ 28,800.00$Note: Higher Power $7380/pilot $13,000/crewEmergency Ground/Drill 16 375.00$ 6,000.00$Pan AmBasic Indoctrination 16Done in Guam.Hazmat, Security, etc.Done in Guam.New Pilot Recruitment - SME 1 1,000.00$ 1,000.00$Air FareStart up Costs (Estimate)OPERATIONSMAINTENANCEPROYECTO GUAMSalary - SME 1 10 3,500.00$ 35,000.00$From day 1 thru first flight (start up)Hotel in Guam 1 1 700.00$ 700.00$Salary - Pilot 16 3 3,500.00$ 168,000.00$Salary will adjust when operations beginHotel in Guam 16 1 700.00$ 11,200.00$FA provides housing for one monthTotal Personnel-Pilot431,180.00$Personnel - Flight AttendantInitial training - Outsource 25 4,500.00$ 112,500.00$Emergency Training - Pan Am Flight AcademyTravel 25 1,600.00$ 40,000.00$Hotel 25360.00$ 4,500.00$Aircraft Ground/Drill 251100.00$ 2,500.00$Part of Basic Indoc (8 hrs) possible additional feeBasic Indoctrination 25 1,200.00$ 30,000.00$Pan Am Rate to be decide if FA can do itHazmat, Security, etc. 251100.00$ 2,500.00$Done in Guam.New Flight Attendant recruitment - SME1 1,000.00$ 1,000.00$Air FareSalary - SME 1 10 2,500.00$ 25,000.00$From day 1 thru first flight (start up)Hotel in Guam 1 1 700.00$ 700.00$Salary - Flight Attendant 25 2 2,000.00$ 100,000.00$Salary will adjust when operations beginHotel in Guam 25 1 700.00$ 17,500.00$FA provides housing for one month for off-island hirePer Diem 25 1 50.00$ 38,750.00$Total Personnel-Flight Attendant 374,950.00$Personnel - OtherNew Dispatcher recruitment - SMEPossible Pilot and Dispatch SME =1Salary - Dispatcher 3 1 2,000.00$ 6,000.00$Applicable only fo Flag OperationsHotel in Guam 3 1 700.00$ 2,100.00$Local hire may be possibleSalary - Flight Follower 3141,500.00$ 2,032.26$Director of Training 1 6 2,500.00$ 15,000.00$Personnel - Other25,132.26$Total Operations831,262.26$Aircraft Costs315,000.00$40,000.00$10,000.00$Misc.20,000.00$385,000.00$Two aircraft770,000.00$Qty./PersonnelPeriod/Time D/M/HREa. Total NOTEThe total cost to have an aircraft positioned and in configuration and condition to perform under thetransaction, excluding regulatory expenses and personnel training and certification (per aircraft).OTHERAircraft lease and depositsFerry to GuamAircraft acceptance inspectionTotal aircraftPROYECTO GUAMPersonnelTechnical Publications75,000.00$Conservation to outside personnelSalary 3 4 2,500.00$ 30,000.00$Existing FA employees for 4 monthsMaintenance Control 1 4 2,500.00$ 10,000.00$Counter 3 1 1,500.00$ 4,500.00$Reservations 271,500.00$ 21,000.00$Need Decision See note belowStation Training1 week each station based on Samoa ?????Manual Revision8700.00$ 5,600.00$$100/ hr SME $75/hr manuals 60 hoursManagement Fee 1 9 12,000.00$ 108,000.00$Additional ComputersOutsource Consultant 1 $20/ hour UNKTotal Other Personnel254,100.00$Ferry/proving Flight 2 man crew250,000.00$50 hours required, ferry flight countsLOI CheckAirman Training73,300.00$ 3,300.00$Proving flight useage to be decided Pan AM quote/dayCheck Airman training143,750.00$ 3,750.00$Travel to Guam not included Pan AM quoteDitching and Evacuation Demo 20,000.00$ 20,000.00$Performed until satisfactoryTable Top Exercise 1,000.00$ 1,000.00$Pure guessTSA Security for eticketing 1,000.00$ 1,000.00$Linked to reservations system - Must be computerizedWeight and Balance information 5,000.00$ 5,000.00$Linked to Check In/reservations systemTotal Ferry/proving Flight284,050.00$Reservation OptionsJoin Travelport or Amadeus full time 50,000.00$ 175,000.00$Initial Fee and computers $2/ticketReservation system and ticketing30,000.00$Interline/code shareSoftware maintanance45,000.00$Total Reservation Options250,000.00$Technical Publications75,000.00$Conservation to outside personnelSalary 3 4 2,500.00$ 30,000.00$Existing FA employees for 4 monthsAdditional Computers10,000.00$Technical Publications Total115,000.00$Total Other903,150.00$Total Start up Cost (Estimate) 2,563,602.26$Feb-14ItemAmountDC Lawyer Deposit 10,000.00$Manuals Deposit 10,000.00$Computer Software Upgrades 1,000.00$Office Equipment 3,000.00$Total: 24,000.00$Mar-14Fee6,000.00$DC Lawyers Deposit 10,000.00$Manuals Deposit 10,000.00$Local hires x2 (writers) 4,000.00$Computers, office equipment 3,500.00$Total: 33,500.00$Estimated Spending ScheduleApr-14Fee6,000.00$Manuals deposit 10,000.00$Hire Ops SME 5,200.00$Hire MX SME 5,200.00$Hire flight attendant SME 4,200.00$FAA visit in Honolulu 7,500.00$Office equipment for SME's 5,000.00$Total: 43,100.00$May-14Fee6,000.00$Salary - SME's 9,500.00$Salary - staff 4,000.00$Total: 19,500.00$Jun-14Fee6,000.00$Salaries - all 13,500.00$MX training facility audit 2,260.00$MX training 8,320.00$Total: 30,080.00$Jul-14Fee 6,000.00$Salaries - all 13,500.00$Total: 19,500.00$Aug-14Fee 6,000.00$Salaries - all 13,500.00$Total: 19,500.00$Sep-14Fee 6,000.00$Salaries 13,500.00$Total: 19,500.00$Oct-14Fee 6,000.00$Salaries 13,500.00$Total: 19,500.00$Nov-24Fee 6,000.00$Salaries 13,500.00$Total: 19,500.00$Feb 24,000.00$Mar 33,500.00$Apr 43,100.00$May 19,500.00$Jun 8,320.00$Jul 19,500.00$Aug 19,500.00$Sep 13,500.00$Oct 13,500.00$Nov 19,500.00$TOTAL 213,920.00$Amount Spent05000100001500020000250003000035000400004500050000Feb Mar Apr May Jun Jul Aug Sep Oct NovAmountSpentAIRCRAFT COSTSInsurance 25,000.00$Maintenance 200,000.00$Storing 12,000.00$Licensing 2,000.00$Repairing 15,000.00$Total aircraft 254,000.00$Two aircraft 508,000.00$546.00$1,800.00$430.00$"The estimated monthly cost of leasing, insuring,maintaining, storing, licensing and repairing theaircraft (in exces of reserves)".NOTE"The total estimated cost per flight hour (itemized)for operating the aircraft". (Aircraft Operating Cost)_Operating Cost per Block Hour ($)Flight Crew CostFuel CostGround HandlingInflight and Catering480.00$1,190.00$191.00$365.00$34.00$377.00$5,413.00$Sales costs 200.28$ 3.70%Admin costs 70.37$ 1.30%Cost (Sales + Admin.) / Block Hr. 270.65$Total sales +admin 541.30$Total Operation Cost / Block Hour 5,954.30$Landing / ParkingInsAircraft RentTotal Operating Cost perBlock/hr.Direct Main. - AirframeDirect Main. - EnginesAircraft lease and deposits 300,000.00$Ferry to Guam 40,000.00$Aircraft acceptance inspection 10,000.00$Misc. 20,000.00$Professional fees80,000.00$Proving flights250,000.00$Total Administrative700,000.00$Operations personnel 401,000.00$Maintenance personnel 56,000.00$Total Personnel (initial) 457,000.00$Administrative and Personnel Cost"The total estimated cost to locate, hireand train personnel to operate, maintainand manage the aircraft prior to firstrevenue service".NOTEPersonnel (initial)Administrative"The total estimated cost to ready theaircraft for commercial passengerrevenue services on Freedom's operatingcertificate, including proving runs andprofessional fees ("AdministrativeCosts").Flight crew cost 47,000.00$Maintenance personnel 25,000.00$Management 12,000.00$Total Personnel (monthly) 84,000.00$1,241,000.00$Total Administrative andPersonnel costsPersonnel (monthly)

# FA EXHIBIT U

# FA EXHIBIT V