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BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

Application of

RHOADES AVIATION, INC.

d/b/a TRANSAIR

for a certificate of public convenience and necessity

to engage in interstate charter air transportation of

persons, property and mail under 49 U.S.C. § 41102

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Docket DOT-OST-2011-0216

MOTION OF RHOADES AVIATION, INC. D/B/A TRANSAIR

FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 12

Communications with respect to this document should be addressed to:

Teimour Riahi

Chief Executive Officer

RHOADES AVIATION, INC.

d/b/a TRANSAIR

100 Iolana Place

Honolulu, HI 96819

+1 808 833 5557 (telephone)

+1 808 833 5288 (facsimile)

teimour@transairhawaii.com

Robert E. Cohn

Patrick R. Rizzi

HOGAN LOVELLS US LLP

Columbia Square

555 Thirteenth Street, NW

Washington, DC 20004

+1 202 637 4999 (direct dial)

+1 202 637 5910 (facsimile)

robert.cohn@hoganlovells.com

Counsel for

RHOADES AVIATION, INC.

d/b/a TRANSAIR

July 24, 2012
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BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

Application of

RHOADES AVIATION, INC.

d/b/a TRANSAIR

for a certificate of public convenience and necessity

to engage in interstate charter air transportation of

persons, property and mail under 49 U.S.C. § 41102

)

)

)

)

)

)

)

)

)

)

Docket DOT-OST-2011-0216

July 24, 2012

MOTION OF RHOADES AVIATION, INC. D/B/A TRANSAIR

FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 12

Rhoades Aviation, Inc. d/b/a Transair (“Rhoades” or the “Applicant”) hereby files

this Motion pursuant to 14 C.F.R. § 302.12 to withhold from public disclosure confidential

exhibits contained in its Supplement and Amendment filed on July 24, 2012 in the abovecaptioned proceeding. Confidential copies of the relevant exhibit pages are being

submitted contemporaneously herewith in a sealed envelope marked “Confidential

Treatment Requested Under § 302.12.”

Specifically, Rhoades is requesting confidential treatment of the following

information:

1. Exhibit RDS-7: Forecast Balance Sheet and Profit and Loss Statement.

Rhoades requests confidential treatment of forecast revenues and net income

from its forecast statement of revenues and expenses and the entirety of

Schedule (A), which specifies first year revenue and operating result forecasts

for its proposed large cargo aircraft services.
Motion of Rhoades Aviation, Inc. d/b/a Transair

Page 2

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2. Exhibit RDS-3, page 1. Rhoades requests confidential treatment of the FAA

Certificate Numbers of Key Personnel, which the Department routinely protects

from public disclosure.

The revenue forecast information that is the subject of this Motion consists of

projected revenues and net income, markets to be served, rates to be charged, and other

operational details and anticipated results such as projected poundage per flight in

connection with the Applicant’s proposed large aircraft cargo operations. The public

release of this commercial, sensitive information pertaining to the Applicant’s future

operating plans and financial projections would cause Rhoades substantial competitive

harm.

Under Rule 12, the Department evaluates requests for confidential treatment in

accordance with the standards of disclosure set forth in the Freedom of Information Act

(FOIA) (5 U.S.C. § 552). Under FOIA Exemption 4, business information may be withheld

from disclosure if it is “(1) commercial or financial, (2) obtained from a person outside the

government, and (3) privileged or confidential.” Gulf & Western Industries, Inc. v. U.S.,

615 F.2d 527, 529 (D.C. Cir. 1979). The confidential information submitted by Rhoades

clearly meets the first two requirements.

The only question, therefore, is whether the information is privileged or confidential,

which, as defined by the relevant case law, means “whether disclosure of the information

is likely to have either of the following effects: (1) to impair the government’s ability to

obtain necessary information in the future; or (2) to cause substantial harm to the

competitive position of the person from whom the information was obtained.” National

Parks and Conservation Association v. Morton, 498 F.2d 765, 770 (D.C. Cir. 1974).

Rhoades submits that disclosure of the information for which it seeks confidential

treatment would not only impair the Department’s ability to obtain such information in the
Motion of Rhoades Aviation, Inc. d/b/a Transair

Page 3

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future, but would also cause substantial harm to the Applicant’s competitive position.

Rhoades is a privately-held corporation that will be operating in an intensely competitive

market. The type of detailed commercially sensitive information at issue here is not

otherwise required to be publicly disclosed. Access by competitors or other third-parties

to the information contained in these confidential exhibits would adversely impact the

Applicant’s proposed operations and competitive position within the State of Hawaii. The

need to protect this competitive information from disclosure is especially compelling given

the discrete, concentrated intra-Hawaii markets in which Rhoades proposes to operate,

where there are very few competitors.

The Department has ruled in various fitness proceedings that similar types of

financial and projected operational information for which Rhoades seeks confidential

treatment are entitled to such treatment. The same considerations and findings apply with

equal, if not greater, force to the confidential fitness data submitted by Rhoades, and the

Department should grant the confidential treatment requested in this case.

The Department routinely grants confidential treatment to information such as

revenue forecasts (and related statistics), forecast operating results, and details of

expense calculations, which could provide commercially sensitive information to

competitors, provided that the applicant has supplied the public record with comparable

expense forecasts. See, e.g., Letter from Vanessa R. Balgobin, Acting Chief, Air Carrier

Fitness Division, to John R. Mietus, Jr., Counsel for Dynamic Airways, LLC, dated July 29,

2010 (Docket DOT-OST-2010-0058); Letter from William M. Bertram, Chief, Air Carrier

Fitness Division, to James W. Tello, Counsel for Platinum Airlines, Inc., dated

September 27, 2005 (Docket DOT-OST-2005-21286). Similarly, the Department has

granted confidential treatment to the city-pairs/markets fitness determination applicants

propose to serve based on competitive concerns. See, e.g., Letter from
Motion of Rhoades Aviation, Inc. d/b/a Transair

Page 4

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William M. Bertram, Chief, Air Carrier Fitness Division, to Mark W. Atwood, Counsel for

Skybus Airlines, LLC, dated July 8, 2005 (Docket DOT-OST-2005-20072) (finding that

disclosure of specific city pairs “could negatively affect the applicant’s competitive posture

by allowing its competitors to focus service and price incentives on the selected cities

even before [the applicant] has the authority to commence such operations”). Accordingly,

the Applicant has redacted from the public version of Exhibit RDS-7 the projected

revenues and net income from its B-737 cargo services, as identified in its Forecast

Statement of Revenue and Expense (while maintaining the quarterly expense forecast

data associated with these operations), and has omitted Schedule (A) from Exhibit RDS-7,

which specifies markets, proposed rates, projected traffic information, projected

income/revenues, and details of expense calculations associated with the all-cargo

services that are the subject of its certificate application. Including such data in the public

record would harm the Applicant by making commercially sensitive information available

to its competitors, which would be especially detrimental to Rhoades prior to holding

authority to commence its proposed enhanced operations as a certificated air carrier.

Rhoades is also seeking confidential treatment of FAA certificate numbers of its

key personnel, listed in Exhibit RDS-3, page 1. The Department has granted confidential

treatment to such information in the past and should do so in this case. See., e.g., Letter

from William M. Bertram, Chief, Air Carrier Fitness Division, to Edward P. Faberman,

Counsel for Compass Airlines, Inc., dated September 1, 2006 (Docket DOT-OST-2006-

24295).
Motion of Rhoades Aviation, Inc. d/b/a Transair

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WHEREFORE, the Applicant hereby requests that the Department afford

confidential treatment pursuant to Rule 12 of its Rules of Practice to the sensitive

information described herein.

Respectfully submitted,

__________________________________

Robert E. Cohn

HOGAN LOVELLS US LLP

Columbia Square

555 Thirteenth Street, NW

Washington, DC 20004

Counsel for

RHOADES AVIATION, INC.

d/b/a TRANSAIR
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CERTIFICATE OF SERVICE

I hereby certify that a copy of the foregoing Motion of Rhoades Aviation, Inc. d/b/a

Transair for Confidential Treatment Under Rule 12 has been served this 24th day of July,

2012, upon the following person:

Mary Ballard

Principal Operations Inspector

Indianapolis Flight Standards District Office, FSDO-11

1201 Columbia Road, Suite 101

Plainfield, IN 46168

_____________________________

Jonathan Echmalian