# Q

US.Departmeitfo f Transportatio n Offic e o f th e Seci etar

y ofTransportatio q Septembe r

1 6 ,201 1 Christia n Mr

. Shau n R Presiden t Star Mariana s Air , Inc

. P. O Bo x 52046 1 TinianM P 9695 2 Re : Docke t Applicatio n o f for Commute : Dea r Mr

. Christian : DO T OST-2010-023 5 Star Mariana s Air , Inc

. Authority 

### '.-^iMENTO F -•'^ORWIO M : T0?ERAT!C': 3 120 0 Ne w JerseyAvenue , S E Washington , D C 2059 0

- I i

Th e Departmen t

i s i n th e proces s o f

determinin g th e fitnes s o f Sta r Mariana s Air, Inc

. ("Star") , t o conduc t

schedule dpassenge r

ai r transportatio n a s acommute r ai r carrier

. A s par t o f thi s process , th e Departmen t mus t determin e tha t

th e compan y i s unde r

th e actua l contro l o f

U S

. citizens

. In determinin g actua l control , th e Departmen t look s at th e totality o f the j circumstance s o f

a n ai r carrier' s financia l an doperationa l structure , amon g othe r things , t o se e whethe r

unde r thos e circumstance s aforeig n entity ha s asubstantia l ability t o influenc e th e activitie s o f th e ai r carrier

. Star state dtha t

9 0 percen t

o f it s revenu e i s dependen t upo n flight s operate do n behal f o f Tinia n Dynasty Hote l an dCasin o ("TDHC") , which , accordin g t o DO T records , i s ultimatel y owne dan dcontrolle db y aHon g Kon g entity. ' Base do n thi s information , th e Departmen t

ijequeste dtha t

Star provid e evidenc e o f

aformal agreemen t

betwee n i t

an d TDHC , outlinin g th e term s o f th e relationship , includin g an y provision s tha t protec t Star' s viabilijt

y shoul dTDH C seve r

it s relationship

. Contractua l arrangement s ar e a n essentia l part

o f acompany' s busines s strategy , an dwhe n foreig n entitie s ar e involved , suc h agreement s mus t

b e negotiate dat

arm' s length t o avoi dth e possibilit y o f foreig n control

. Th e purpos e o f

th e Department' s reques t i s t o ensur e that

TDH C doe s not

hav e th e ability t o exercis e contro l ove r Sta r an dit s operation s give n th e ai r carrier' s financial dependenc y e n TDHC' s continue dbusiness

. I n respons e informe dth e plac e a n un|du e t o th e Department' s request
. Star , b y lette r date dSeptembe r

6 , 2011 , Departmen t

tha t it s polic y ha s bee n "no t t o ente r int o contract s tha t

coul d burde n o n th e company and/o r threate n ou r

ability t o maintai n

' Se e Orde r th e Northern Limited , aBriti Hon g Kon g citize n

007-12-1 1 a t

1

. TDH C i s acompan y incorporate dunde r th e law s o f

th e Commonwealth o f ^(Iariana s Island s tha t

i s ultimatel y owne dan dcontrolle dby Tinian Dynasty Holding s h Virgi n Islan dentity , whos e ownershi p in turn , i s majorit y hel dby Mr

. Michae l Kwan , aindependen t operationa l contro l o f

ou r flights. " I n tha t

letter

. Sta

r als o note s that

ther e i s n o requiremen t

se t ou t i n ou r regulation s that

woul drequir e it

t o hav e aformal contrac t with it s customers
. Th e Departmen t

maintain s that

withou t a n agreemen t

i n plac e describin g th e right s an d obligation s eac h party ha s t o th e othe r an ddetailin g th e protection s i n plac e tha t woul d preven t TDH C fro mexertin g influenc e o r contro l ove r

Sta r an dit s operations , w e ar e unabl e t o determin e whethe r Sta r i s unde r th e actua l contro l o f

U.S

. citizens an di n complianc e with 4 9 US C § 40102(a)(15). ^ I n thi s regard , w e inten dt o issu e an orde r denyin g Staij' s commute r applicatio n an dproposin g t o revok e it s ai r tax i registratio n for failur e t o coijnpl

y with th e citizenshi p requirement s o f th e Statute

. Shoul dStar

provid e evidenc e o f

aformal agreemen t

betwee n i t

an dTDH C that satisfactoril y show s that

actua l contro l lie s with Sta r withi n 3 0 day s fro mth e dat e o f thi s letter , th e departmen t

wil l mov e forwardan dcontinu e t o proces s it s commute r application

. W e not e tha t an y further

submission s t o th e recor di n thi s cas e shoul db e accompanie db y th e followin g certification : Th e content s o f

thi s applicatio n an dth e attache dexhibi t (s ) ar e tru e an dcorrec t

t o th e bes t o f my knowledg e an dbelief

. Pursuan t

t o Titl e 1 8 Unite dState s Cod e Sectio n 1001 , I [th e individua l signin g th e application , wh o shal l b e aprincipa l owner , senio r

officer , o r

interna l counse l o f

th e applicant] , i n my individua l capacity an da s th e authorize drepresentativ e o f th e applicant , hav e no t

i n an y manne r knowingl y an dwillfull y falsified , conceale do r faile dt o disclos e an y materia l fac t

o r mad e an y false , fictitious , o r fraudulen t

statemen t

o r knowingl y use dan y document s whic h contai n suc h statement s i n connectio n with th e preparation , filin g o r

prosecutio n o f

th e application. I understan dthat a n individua l wh o i s foun dt o hav e violate dth e provision s o f 1 8 U.S. C sectio n 100 1 shal l b e fine do r

imprisone dno t

mor e tha n five years , o r

both

. Than k yo u ffe r your cooperatio n i n thi s matter
. If yo u hav e an y question s regardin g thi s lette r o r th e requeste dinformation , pleas e fee l fre e t o contac t Katy O'Tool e o f

my staf f a t (202)366-9721

. Sincerely ,
.auraljj h J

. Rem o Chief , Ai r Carrie r Fitnes s Divisio n Offic e o f Aviatio n Analysi s

cc : Docke t

DOT-OST-2010-023 5

^ Se e Orde r

2004-5-10 , issue dMa

y 13 , 2004 , a

t 18-26

.Mr

. Thoma s Breh m

FA A Honolul u FSD O 13 5 Nakol o Plac e Honolulu , H I 9681 9