Q 

US.Departmeitfof 

Transportation 

Office of the Seci etary 

ofTransportatioq 

September 16 ,2011 

Mr. Shaun R Christian 

President 

Star Marianas Air, Inc. 

P.O Box 520461 

TinianMP 96952 

Re: Docket 

Application of 

for Commute: 

Dear Mr. Christian: 

DOT OST-2010-0235 

Star Marianas Air, Inc. 

Authority 

'.-^iMENTOF 

-•'^ORWIOM 

:T 0?ERAT!C':3 1200 New Jersey Avenue, SE 

Washington, DC 20590 

- I 

i 

The Department is in the process of determining the fitness of Star Marianas Air, Inc. 

("Star"), to conduct scheduled passenger air transportation as a commuter air carrier. As 

part of this process, the Department must determine that the company is under the actual 

control of U S. citizens. In determining actual control, the Department looks at the 

totality of thej circumstances of an air carrier's financial and operational structure, among 

other things, to see whether under those circumstances a foreign entity has a substantial 

ability to influence the activities of the air carrier. 

Star stated that 90 percent of its revenue is dependent upon flights operated on behalf of 

Tinian Dynasty Hotel and Casino ("TDHC"), which, according to DOT records, is 

ultimately owned and controlled by a Hong Kong entity.' Based on this information, the 

Department ijequested that Star provide evidence of a formal agreement between it and 

TDHC, outlining the terms of the relationship, including any provisions that protect 

Star's viabilijty should TDHC sever its relationship. Contractual arrangements are an 

essential part of a company's business strategy, and when foreign entities are involved, 

such agreements must be negotiated at arm's length to avoid the possibility of foreign 

control. The purpose of the Department's request is to ensure that TDHC does not have 

the ability to exercise control over Star and its operations given the air carrier's financial 

dependency en TDHC's continued business. 

In response 

informed the 

place an un|due 

to the Department's request. Star, by letter dated September 6, 2011, 

Department that its policy has been "not to enter into contracts that could 

burden on the company and/or threaten our ability to maintain 

' See Order 

the Northern 

Limited, a Briti 

Hong Kong citizen 

007-12-11 at 1. TDHC is a company incorporated under the laws of the Commonwealth of 

^(Iarianas Islands that is ultimately owned and controlled by Tinian Dynasty Holdings 

h Virgin Island entity, whose ownership in turn, is majority held by Mr. Michael Kwan, a 
independent operational control of our flights." In that letter. Star also notes that there is 

no requirement set out in our regulations that would require it to have a formal contract 

with its customers. 

The Department maintains that without an agreement in place describing the rights and 

obligations each party has to the other and detailing the protections in place that would 

prevent TDHC from exerting influence or control over Star and its operations, we are 

unable to determine whether Star is under the actual control of U.S. citizens and in 

compliance with 49 USC § 40102(a)(15).^ In this regard, we intend to issue an order 

denying Staij's commuter application and proposing to revoke its air taxi registration for 

failure to coijnply with the citizenship requirements of the Statute. 

Should Star provide evidence of a formal agreement between it and TDHC that 

satisfactorily shows that actual control lies with Star within 30 days from the date of this 

letter, the department will move forward and continue to process its commuter 

application. We note that any further submissions to the record in this case should be 

accompanied by the following certification: 

The contents of this application and the attached exhibit (s) are true and correct to 

the best of my knowledge and belief. Pursuant to Title 18 United States Code 

Section 1001, I [the individual signing the application, who shall be a principal 

owner, senior officer, or internal counsel of the applicant], in my individual 

capacity and as the authorized representative of the applicant, have not in any 

manner knowingly and willfully falsified, concealed or failed to disclose any 

material fact or made any false, fictitious, or fraudulent statement or knowingly 

used any documents which contain such statements in connection with the 

preparation, filing or prosecution of the application. I understand that an 

individual who is found to have violated the provisions of 18 U.S.C section 1001 

shall be fined or imprisoned not more than five years, or both. 

Thank you ffer your cooperation in this matter. If you have any questions regarding this 

letter or the requested information, please feel free to contact Katy O'Toole of my staff at 

(202)366-9721. 

Sincerely, 

.auraljjh J. Remo 

Chief, Air Carrier Fitness Division 

Office of Aviation Analysis 

cc: Docket DOT-OST-2010-0235 

^ See Order 2004-5-10, issued May 13, 2004, at 18-26. 
Mr. Thomas Brehm 

FAA 

Honolulu FSDO 

135 Nakolo Place 

Honolulu, HI 96819