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### RTMEN TO F K)RTA ] ' , T) , ' n > , T i U. & Department s - ; - ^ - i Lilrtnu i j j 120 0 Ne wjerse yAvenue , S E Transportatio n Washington , D C 2059 0 Offic e O fth e Secreior

yT^' l ^E ? l U Ali- : 3 3 o f Transportatio n September

14,201 1 Mr . Joh n Swase y Presiden t Exe c Air , Inc . o f

Naple s 16 0 13"'Stree t

N W Naples , F L3412 0 Dea r Mr . Swasey : Thi s lette r

i s i n referenc e t o th e amende dapplicatio n o f Exe c Air , Inc . o f

Naple s ("Exe c Air" ) filedi n Docke t DOT-OST-2007-2781 5 o n Jul y 6 , 2011 , for commute r

ai r carrie r authority . W e hav e complete dou r revie w o f

th e informatio n Exe c Ai r ha s filedi n suppor t o f it s reques t

for commute r

authority an dhav e determine dthat w e are unabl e t o continu e processin g Exe c Air' s applicatio n at thi s time . Base do n our review , it

appear s that Exe c Ai r doe s not mee t th e citizenshi p requirement s o f 4 9 U.S.C . §40102(a)(15) . Sectio n 40102(a)(15 ) require s tha t th e presiden t

an da t leas t two-third s o f

th e boar do f director s an dothe r

managin g officer s ar e citizen s o f th e Unite dStates , that a t leas t 7 5 percen t

o f th e votin g interes t

b e owne db y U.S . citizens , an dtha t th e compan y mus t

b e under th e actual contro l o f

U.S . citizens . Althoug hth e compan y i s solel y owne db y aU.S . citizen , two-third s o f Exe c Air' s managemen t

tea mar e not

citizen s o f

th e Unite dStates . Accordin g t o th e application , ExecAir' s managemen t

consist s o f

thre e individual s - Messrs . Joh n Swasey , Jeremy Vandersluis , an dDavi dBettencourt . O f th e thre e individuals , Mr . Vandersluis , Exe c Air' s Chie f Pilot , an dMr . Bettencourt , th e company' s Directo r o f Maintenance , are identifie da s citizen s o f

th e Unite dKingdo man dGuyana , respectively . Sinc e Exe c Ai r onl y ha s thre e ke y personne l an dtw o are not U.S . citizens , th e company clearl y doe s no t mee t th e citizenshi p requirement s o f th e Statute . Sinc e al l U.S . ai r

carriers , includin g ai r

taxi s operatin g unde r

1 4 CFRPart

298 , suc ha s Exe c Air , ar e require dt o b e U.S . citizens , w e als o findtha t Exe c Ai r

doe s no t qualif y t o hol dit s curren t

aj r tax i registration . Therefore , w e direc t Exe c Ai r t o tak e necessary actio n t o compl y withtji e citizenshi p requirement s o f th e Statute . I f

Exe c Ai r

doe s no t submi t evidenc e demonstratin g tha t i t meet s th e citizenshi p requirement s o f th e statut e b y Octobe r 14 , 2011 , th e Departmen t wil l issu e an orde r

revokin g th e ai r

tax i registratio n issue dt o Exe c Ai r an ddismissin g it s applicatio n fo r commute r

authority .Shoul dExe c Ai r submi t informatio n that

show s i t

meet s th e Department' s citizenshi p requirement s an dshoul dth e Department' s revie w o f thi s materia l b e satisfactory , w e wil l the n continu e t o proces s Exe c Air' s commute r application. W e d o note , however , tha t w e findExe c Air' s applicatio n t o b e materiall y deficient , tha t is , i t doe s not contai n al l o f

th e informatio n require db y sectio n 204. 3 o f ou r rules . We hav e outline dth e area s o f deficienc y i n th e attache dInformatio n Request . Whil e th e Departmen t

doe s closel y wor

k wit happlicant s throug hth e applicatio n process , i t i s no t ou r polic y t o kee p incomplet e application s ope n indefinitely . Th e informatio n require db y sectio n 204. 3 o f

ou r rule s o f applicant s fo

r commute r

o r certificat e authority i s necessary for u s t o implement

ou r statutory mandate ddeterminatio n tha t recipient s o f

commute r

o r certificate authority ar e fit, willing , an dabl e o r (1 ) hav e th e manageria l skill s an dtechnica l ability t o conduc t

th e propose doperations , (2 ) hav e acces s t o resource s sufficient t o commenc e operation s withou t posin g a n undu e ris k

t o consumers , an d(3 ) compl y withth e Statute an dregulation s impose db y Federal an dStat e agencies . Therefore , w e wil l giv e Exe c Ai r 3 0 day s fro mth e dat e it s citizenshi p informatio n i s du e t o th e Department , that is , b y Novembe r

14 , 2011 , t o submi t

th e require dfitness information . I f w e d o no t

receiv e th e require dinformatio n b y thi s date , w e inten dt o issu e an orde r dismissin g Exe c Air' s applicatio n for

commute r

authority . I n addition , pleas e remembe r that Exe c Ai r shoul dpromptl y provid e th e Departmen t with any informatio n regardin g change s i t may underg o i n area s affectin g it s fitness (i.e. , management , operatin g plan s o r financial condition , complianc e disposition , o r ownership ) whil e it s applicatio n i s unde r revie w b y th e Department . If yo u hav e an y question s regardin g thi s letter , pleas e fee l fre e t o contac t Vaness a Balgobi n o f

m y staf f at (202)-366-9721 . Sincerel y

Laur^^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-2007-2781 5 Mr . Fbli x Molin a PO I for Exe c Air, Inc .

## Informatio n Reques t Exec Air , Inc . of

Naple s Pleas e provid e th e following : 1 . A cop y o f Exec Air' s balanc e sheet , curren t t o within 3 month s of

the dat e o f thi s letter . 2 . Incom e Statement s fo

r Exec Ai r fo r the pas t thre e calenda

r o r fisca l years . 3 . A forecas t

balanc e shee

t fo r the first norma l yea r ending afte

r th e initially proposed operation s have been incorporated. ' 4 . A statemen

t identifying the person wh o ha s prepare dthe financia l statement s an

da summar y o f th e individual' s qualification s fo r preparing suchstatements . 5 . A statemen

t a s to whethe

r the balanc e shee

t an dincom e statement s wer

e preparedi n accordanc e v^t

hGenerall y AcceptedAccounting Principles . 6 . A lis t o f pre-operatin g costs , suc

ha s lega l fees , deposits , an

dFedera l Aviation Administratio n (FAA) certification fees . 7 . Third-part

y verification of

the cashtha

t Exec Ai r ha s o n deposit wit hit s financial institution(s) . 8 . A detaileddescriptio n of the plan s Exec Ai

r has , if any , t o acquir e additiona

l capita l to mee t the Department' s financia

l fitnes s requirements . 9 . A cop y of th e Pre-Applicatio n Statemen t of Inten t tha t Exec Ai r ha s filedwdt

hthe FA A fo r commute r air carrie r operations . 10 . Employmen

t histor y fo r Mr . Joh n Swase y prior to Februar

y 1,1997 . Pleas e addres s th e following : 11 . Wit hrespect to it s forecast

expenses . Exec Ai

r preparedasummar

y of it s projected "Corporat e Headquarters " expenses . Thes e projection s show Exec Air' s Chie f Pilot an dit s Director

o f Maintenanc e earning awag e o f $ 1.4 4 pe r hour . Also , th e projection show s the Director

of Operation s earning awag e o f $5.7 7 pe r hour . Thes e wage s ar

e

' Th e December

1,2007 , balanc e shee t

provide db y Exe c Ai r

di dno t break ou t curren t liabilities , tha t

is , thos e du e payabl e withi n th e nex t

1 2 months , an dlong-termdebt . Th e balanc e shee t provide db y th e applican t shoul dbreak deb t into thes e tw o categories .significantl y belo w th e Florid aminimu mwag e rat e o f $7.3 1 pe r

hour . Pleas e explain . Provid e revise dprojection s i f necessary. ^ 12.-Accordin g t o th e sam e documen t describe dabove , i t

appear s tha t

Exe c Ai r

intend s t o hir e thre e additiona l people , on e pilo t an dtw o sale s people . Pleas e stat e whe n Exe c Ai r intend s t o hir e for

thes e positions . 13 . I n Exe c Air' s lis t

o f projecte doffic e expenses , th e company indicate s tha t i t doe s not expec t t o incu r an y expense s for

utilities . Pleas e explain . 14 . I n Exe c Air' s lis t

o f projecte doffic e expenses , th e compan y indicate s that i t doe s not expec t t o incu r an y expense s for

reservation s systems . Pleas e discuss . 15 . A s mentione dabove , i t appear s tha t

Exe c Ai r

intend s t o hir e thre e additiona l employees ; however , th e compan y onl y expect s t o incu r "Trainin g an dNe w Hire " cost s o f $240 . Thi s figure seem s relativel y low . Pleas e explain . 16 . Th e expense s for

employe e taxes an dbenefit s appear t o appl y onl y t o th e thre e individual s tha t

Exe c Ai r

intend s t o hir e an dnot t o th e Chie f

Pilot , Directo r

o f Maintenance , an dDirecto r o f Operations . Pleas e explain . 17 . Accordin g t o Exe c Air' s Monthl y Cos t Analysis , th e compan y expect s t o incu r variabl e aircraf t cost s o f $40 0 pe r month . Pleas e stat e wha t i s include di n thes e variabl e cost s an ddescrib e th e underlyin g assumption s use da s abasi s for determinin g thi s amount . 18 . Som e o f

th e mathematica l calculation s o n Exe c Air' s Monthl y Cos t Analysi s appear

t o b e inaccurate . Fo r

example . Exe c Ai r

expect s t o consum e 1 4 gallon s o f fuel pe r hou r for atota l o f

3 5 hour s pe r

month , whic hwoul dresul t i n monthl y consumptio n o f 49 0 gallon s o f fiiel pe r month ; however , Exe c Ai r ha s liste d48 5 gallons . Also , Exe c Ai r show s it s tota l cos t

o f maintenanc e t o b e $74 5 pe r month , bu t

addin g th e colum n o f expense s equal s $80 3 pe r month . Further , Exe c Ai r state s tha t

it s Tota l Monthl y Cost s ar e $9,205 ; however , addin g th e figures o f th e Monthl y Cos t

colum n equals $17,178.84. ^ Pleas e verif y th e mathematica l calculation s an dprovid e arevise dexpens e forecast . 19 . In Exe c Air' s lis t

o f projecte dairport

fees , th e company indicate s tha t i t doe s not expec t t o incu r an y "GPU/statio n rental " expenses . Pleas e explain . 20 . Exe c Air] s metho dfo r determinin g an dcalculatin g th e personne l cost s identifie di n th e Monthl y Cos t

Analysi s ar e no t

clear . Pleas e explai n thes e cos t calculation s an dprovid e any necessary revisions . Also , Exe c Ai r list s som e flight

cre w an dairport

statio n

^ If Exe c Ai r i s exeitip t

fromth e Florid aminimu mwag e rate , pleas e provide dadetaile dexplanatio n o f th e basi s o f th e exemption . ^ Exe c Air' s "Summary o f Operationa l Costs, " adocumen t separat e fromth e "Monthl y Cos t Analysis " reflect s total cost s o f

$17,179 . Se e Exhibi t

6 , Pag e 3 o f

7 .personne l costs . Pleas e explai n i f thes e personne l cost s are i n additio n t o thos e identifie di n th e "Corporat e Headquarters " expenses . 21 . Exe c Air' s "Yea r

On e Incom e Statement " project s monthl y revenue s o f $9,786 , but

i n Exhibi t 6 , Pag e 4 o f

7 , Exe c Ai r

project s monthl y revenue s o f $10,089 . Pleas e explai n thi s discrepancy . 22 . Exe c Air' s "Yea r

On e Incom e Statement " project s monthl y aircraf t cost s o f $9,205 . Thi s numbe r

appear s t o b e carrie dfro mth e "Monthl y Cos t Analysis. " After

re examinin g th e mathematica l calculatio n i n th e "Monthl y Cos t Analysis " discusse d abov e i n ite mNo . 18 , pleas e provid e arevise d"Yea r On e Incom e Statement. " 23 . Exe c Air' s "Yea r

On e Incom e Statement " show s tha t th e compan y expect s t o incu r a n accountin g software expens e o f $200 , but

i n anothe r

sectio n o f

th e document , tha t

$20 0 expens e i s assigne dt o "Part s an dRotable s Inventory. " Pleas e explai n thi s discrepancy . 24 . Exe c Air' s financial projection s t o d o no t vary , tha t

is , increas e o r

decrease , from montht o month . Generally , ai r carrier s experienc e fluctuating monthl y expense s dependin g o n whe n th e compan y expect s t o incu r variou s expense s suc ha s aircraf t maintenance , employe e training , o r insuranc e payments . Likewise , ai r carrie r revenue s generall y fluctuate withchange s i n deman dperiods . Pleas e explai n wh y Exe c Ai r doe s no t expec t it s monthl y revenue s an dexpense s t o fluctuate. 25 . I n evaluatin g ane w entran t applicants ' financial fitness, th e Departmen t generall y ask s that thos e applicant s hav e resource s sufficient t o cove r al l pre-operatin g cost s an dan y negativ e workin g capita l balance , plu s aworkin g capita l reserv e equa l t o th e operatin g cost s tha t

woul db e incurre di n thre e month s o f norma l commute r

operations . Assumin g Exe c Au-' s monthl y projecte dexpense s ar e $17,179 , th e company' s tota l first year projecte dexpense s woul db e $206,148 . T o mee t th e Department' s financial fitness requirement . Exe c Ai r woul dhav e t o sho w tha t i t ha s acces s t o capita l equa l t o 3 month s o f

normalize doperation s whic hwoul db e $51,537 . Pleas e discus s Exe c Air' s plan s for satisfyin g th e Department' s capita l requirements . 26 . I n it s application , Exe c Ai r proposes t o conduc t

on e dail y roundtri p flight betwee n Naples , FL , an dMiami , FL . However , i n Exhibi t 9 t o th e application , amemorandu m t o th e FAA , Exe c Ai r

propose s t o operat e tw o dail y roundtri p flights. Pleas e explain . I f Exe c Ai r

intend s t o operat e tw o dail y roun dtri p flights. Exe c Ai r mus t provid e a revise dlis t

o f projecte doperatin g expense s t o includ e thes e additiona l flights.