Order 2011

- 11

- 11
Served: November 9 , 2011

Issued by the Department of Transportation
on the 9 th day of November , 20 1 1

Fitness Determination of

ORANGE AIR, LLC

for certificate s of public convenience and necessity
under 49 U.S.C. § 41102 to engage in interstate and foreign charter air transportation of persons, property

, and mail Docket s DOT

- OST

- 20 1 1

- 0073
and
DOT

- OST

- 2011

- 0074

ORDER TO SHOW CAUSE
PROPOSING ISSUANCE OF CERTIFICATE S Summary

By this order, we tentatively conclude that O range Air, LLC (“ Orange Air ”)

, is a citizen of the United States and is fit, willing, and able to provide interstate and foreign charter air transportation of persons, property, and mail

, using one large aircraft

, and should be issued certificate s of public convenience and necessity authorizing such operations, subject to conditions.

Background

Section 41102 of Title 49 of the United States Code (the “ Transportation Code”) directs us to determine that applicants for certificate authority to provide interstate and foreign charter air transportation of persons, property and mail are “fit, willing, and able” to perform such transportation and to ensure that all operations relating to this au thority conform to the provisions of the Transportation Code and the regulations and requirements of the Department. In making fitness findings, the Department uses a
three

- part test that reconciles the Airline Deregulation Act’s liberal entry policy with Congress’ concern for operational safety and consumer protection. The three areas of inquiry that must be addressed in order to determine a company’s fitness are whether the applicant (1) will have the managerial skills and technical ability to conduct t he proposed operations ; (2) will have access to resources sufficient to commence operations without posing an undue risk to consumers or their funds ; and (3) will comply with the Transportation Code and regulations imposed by Federal and State agencies. W e must also find that the applicant is a U.S. citizen.

On April 1, 2011, Orange Air filed applications in Dockets DOT

- OST

- 2011

- 0073 and DOT

- OST

- 2011

- 0074

, requesting certificates issued under 49 U.S.C. § 41102 authorizing it to engage in interstate and foreign charter air transportation of persons, property

, and mail. Orange Air accompanied its UNITED STATES OF AMERICA
DEPARTMENT OF TRANSPORTATION
OFFICE OF THE SECRETARY WASHINGTON, D.C.

U N I T E D S

T A T E S O F A

M E R I C A D E P A R T M E N T O F T R A N S P O R T A T

I O N2

applications with information required by section 204.3 of our regulations for an examination of its fitness to hold such authority. 1 Orange Air filed additional information supplementing its applications
on June 23 and August 18, 2011

.

We have received no answers to the applications and no special issues regarding the applicant have come to our attention. Under these circumstances, we propose to decide the issue of Orange Air’s
fitness on the basis of the written record. As discussed b elow, we tentatively conclude that Orange Air is a U.S. citizen and is fit, willing, and able to operate its proposed air service, subject to conditions. However, we will give interested persons an opportunity to show cause why we should not adopt as fina l these tentative findings and conclusions.

FITNESS

The Applicant

Orange Air , a non

- operating corporation organized under the laws of the State of Delaware in 20 11 , is wholly owned by Orange Air Holdings, LLC (“Holdings”) , which in turn is owned by RWF Capital, LLC (“RWF”) (58 percent interest), Mr. Fred erick W. (“Chip”) Credno, III (40 percent interest)

, 2 and JO Holdings, LLC (2 percent interest). The applicant intends to commence operations using a single leased MD

- 83 aircraft, offering this aircraft for government contract flights and for public and private charters.

Managerial Competence

Holdings is controlled by a Board of M anagers comprised entirely of U.S. citizens. The Board is chaired by Mr. Jeff rey Oshinsky, and includes as its members Messr s. Hugo Reiter, Jor ge Wolf, and
Alberto Franco.

Mr. Jeff Oshinsky , a member of the Florida and New York Bar Association, has over 21 years of experience in business, commercial, and securities law having practiced most recently at his own firm, Jeffrey M. Oshinsky, P.A. (2011

- Present) . Before this, Mr. Oshinsky practiced law at Stearns Weaver Miller Weissler Alhadoff & Sitterson, P.A. (2005

- 2011), White & Case LLP (2001

- 2005), Revelex.com (2000

- 2001), Greenberg Traurig, P.A. (1994

- 2000), and Proskauer Rose Goetz & Mendelsohn, P.C. (1990

- 1994). He earned a Juris Doctorate from Brooklyn Law School in 1990, and a Bachelor of
Science degree in Business Administration in 1987.

Mr. H ugo Reiter possesses over 20 years of commercial aviation experience having served as President and Founder of AirTrust Capital Corporation, an aircraft leasing corporation (1999

- Present), and Aeroholdings Group, Inc.

, and Interavia Holding Limited, Inc., both of wh ich are aviatio n consultancy firms (1991

- 1999). Additionally, he co

- founded and served as Executive Vice President of American Software Technology Corp., which developed software for the insurance industry (1982

- 1990). He

1 Contemporaneously with its application s of April 1, 2011 , O range Air filed a motion for confidential treatment under

14 CFR § 302.12 to withhold from public disclosure certain information filed in support of its application. Specifically, Orange Air requested confidential treatment be afforded to the Federal Aviation Administration certificate numbers of its key personnel and to sensitive financial data relating to the company. By this order, we grant the applicant’s request for

confidential treatment. See the CONFIDENTIAL TREATMENT section of this order for a more detailed discussion.

2 RWF loaned Mr. Chip Credno the capital necessary for him to acquire 40 percent of Holdings.3

began his career as a real estat e developer and designed and constructed commercial real estate projects (1980

- 1988). Additionally, h e earned a Bachelor of Science degree in Architecture in 1980.

Mr. Jorge Wolf possesses eight years of aviation experience having served as Executive V ice President and Chief Financial Officer for AirTrust Capital Corp. (2002

- Present). Before that, he co

- founded and served as Chief Operating Officer and Chief Financial Officer for Breakstone Homes, Inc., a luxury home builder in southern Florida (1998

- 2 002). After earning a Juris Doctorate from the University of Miami in 1991, he started practicing corporate and real estate law and rose to become Managing Partner at Rosenthal, Rasco, Stock, Denberg & Wolf, P.A. (1992

- 2002). Additionally, he earned a Ba chelor of Arts degree from the University of Michigan in 1987

.

Mr. Alberto Franco has over 26 years of experience in business, securities trading, and portfolio management. He currently serves as V ice President of Corporate Development at Air T rust Capital Corp. (2009

- Present). Prior to this , he served as a Partner at Quantek Asset Management , LLC (2006

- 2009), and Head Portfolio Manager at Bulltick Financial Services, LLC (2004

- 2008). Additionally, he
founded and served as Portfolio Manager at Franco Asset Management, LP (2002

- 2004). Mr. Franco held the position s of Principal Owner and Head Portfolio Manager at HWF Partners (1998

- 2002), Senior Managing Director at Bankers Trust (1995

- 1998), Head of Emerging Markets Trading at Smith Barney (199 4

- 1995), Head of Trading at Vescorp Partners (1993

- 1994), Manager of the Emerging Markets Trading Group at Bear Stearns, and began his career in securities as a T rader at Salomon Brothers (1986

- 1991). From 1982 until 1986, he worked as a Coffee Exporter f or his f amily’s business in Lima, Peru. Mr. Franco earned a Bachelor of Arts in Administrative Science from Yale University in
1982.

The following table identifies Orange Air ’ s officers and other key management and technical personnel,
each of whom i s a U.S. citizen

.

Name Position Citizenship

Mr. Fred erick W. Credno, Jr. President and Chief Executive Officer U.S.

Mr. Karl Rothman Chief Financial Officer U.S.

Mr. Fred erick W. (“Chip”) Credno, III Vice President and Director of Safety U.S.

Mr. Paul W.J. Hook Director of Operations U.S. and U.K. Mr. Kurt Lugar Director of Quality Assurance and Chief Inspector U.S.

Captain Joseph Schoofs Chief Pilot U.S. Mr. Brooke Mayger Director of Maintenance U.S. Mr. Roger Carbon Director of In

- Flight U.S. Ms. Kimberly Hunter Director of Administration and

Human Resources U.S.

Mr. Fred erick W. Credno, Jr. , an Air line Transport Pilot with over 18,000 total flight hours logged, has
served as President and Chief Executive Officer since co

- founding Orange Air. Prior to that, he served
as President and Chief Executive Officer for : Capital Airways, LLC (2009

- 2011) ; Capital Jet, LLC (2009

- 2011) ; Capital Aviation, Inc. (1997

- 2011) ; S kyLink Air & Logistic Support (USA) (1998

- 2005) ; United Jet Internatio nal, Inc. (1992

- 1997) ; and Jet Management Group, Inc. (1985

- 1989) . Additionally

,4

he served as an Aviation C onsul tant for US Jet (1991

- 1992). He gained experience in aviation operation s and management

, having served as Captain and First Officer for Easter n Airlines, Inc

. (1989

- 1991 ) ; Director of Operations for Syracuse Tank and Manufacturing Company, Inc. (1975

- 1985) ; Director of Operations/Chief Pilot for D.W. Winkelman Co. , Inc. (1973

- 1975) ; Captain for SAIR Aviation (1971

- 1973), and Captain and First Of ficer for Flight Service, Inc. (1969

- 1971). He also served as a Flight Instructor and Instrument Flight Instructor a t Mid

- State Flight School at Midd le

Tennessee State University (1968

- 1969). He received his education from Middle Tennessee State University and University College

- Syracuse University.

Mr. Karl Rothman, a Certified Public Accountant, currently serv es as Orange Air’s Chief Financial
Officer in the capacity of an independent contractor (2011

- Present) . In addi tion to his duties at Orange Air, Mr. Rothman also currently serves as a Controller, Project Manager, and Treasurer for a variety of clients (2004

- Present)

. Prior to that, he served as a Manager at Kroll, Inc. (2007

- 2008) ; Navigant Consulting, Inc. (2004

- 2007) ; Gibbons and Gibbons, PC (2001

- 2004) ; and Akin, Gump, Stra uss, Hauer, and Feld, LLP (2000

- 2001). Additionally, he served as Controller at Elite Funding Corporation (1998

- 2000), and was employed by the Marketing V entures Group (1996

- 1998), and George town University Medical Center (1990

- 1996). He holds a Bachelor ’ s degree in Arts from the University of Virginia and is a professional member of the American Institute of Certified Public Accountants and the Virginia Society of Certified Public Accountants.

Mr. Fred erick W. (“Chip”) Credno, III has served as Orange Air’s Vice President and Director of Safety since the company was formed. Before that, he served as V ice President and Senior Program M anager at Capital Aviation, Inc., a Virginia

- based air charter and aviation services company (1997

- 2011). He graduated with a Bachelor ’s degree in B usiness Administration from LeMoyne College in 1993. He also earned Master Certificates in Commercial Contract Management and Government Contract Management in 2006 from Villanova University

.

Mr. Paul W. J. Hook, a n Airline Transport Pilot with over 9,000 total flight hours logged, assumed the position of Orange Air’s Director of Operations in February 2011. Prior to that, he served in the same capacity for Capi tal Airways, LLC (2008

- February 2011 ), Jet Domain, Inc. (2007

- 2008)

, Enterprise Aviation, Inc. (2005

- 2007)

, and Centur y Aviation/LynxxJet, Inc. (2001

- 2005). Additionally , he served as Chief Pilot/Director of Flight Operations for Trans

- Gulf Corporation (2000

- 2001) ; Basic Capital Management, Inc. (1999

- 2000) ; Marbyia Investments, Ltd (1992

- 1999), a Saudi Arabia

- based Part 125
operator; and American Air Ambulance/Allied Aviation (1987

- 1992). He also served a s Vice President, Director of Operations, and Chief Pilot for Aero Med International, Inc. (1985

- 1987). Mr. Hook gained
extensive aviation experience

, having served as Chief Pilot for Care Flight Unlimited (1983

- 1985 ); Training Captain for Dallah Avco (1979

- 1983) ; Chief Pilot for Northrop Wilcox, Inc. (1978

- 1979) ; Pilot/Manager for E. Brooksbank, Ltd. (1973

- 1977) ; and Air T raffic Controller for Thruxton Airport in Andover, U.K. (1970

- 1973). He also served as a Research Technician at the U.K. Atomic Energy Authority (1967

- 1970). He was educated at Oxford University (1964

- 1968).

Mr. Kurt Lugar , an Airframe and Powerplant Mechanic, assumed his current position as Orange Air’s Chief Inspector/Director of Quality Assurance in 2011. Before joining the applicant , Mr. Lugar served

as Chief Inspector/Director of Maintenanc e at Capital Airways, LLC (2 008

- 2011). Previously , he
served as a self

- employed Technical Representative / Contractor (2006

- 2008). He developed a broad
base of maintenance skills

, having served as a Manager of Maintenance Control and Planning and5

Director of Quality Assurance at Bost on

- Maine Airways d/b/a PanAm Clipper (2005

- 2006), a Line
Maintenance Mana ger at Southeast Airlines (2003

- 2004), and a Regional Maintenance Manager at Spirit
Airlines (1991

- 2002). In addition, Mr. Lugar served as an Airframe and Powerplant Line Station
Mechanic for Express One, Carnival, Kiwi, Allegro, and JetTrain

, (1994

- 1999), as well as for Jettall Holdings Corp. (1990

- 1991) , and Westates Airlines (1989

- 1991). H e also served as a Mechanic Helper
for American Ai r Freight (1987

- 1988). Prior to that , Mr. Lugar served as an Enlisted Club Staff for the Naval Air Station in Dallas, Texas (1985

- 1986)

, and a Warehouseman for Arrendando and Martinez Fast Freight (1983

- 1985).

Captain Joseph Schoofs, an Air line Tr ansport Pilot with nearly 13,000 total flight hours logged, assumed his current position as Orange Air’s Chief Pilot in July 2011. He has over 25 years of aviation experience having piloted for several major air carriers. Before joining Orange Air, he se rved as Director of Training and Flight Standards, as well as Pilot, Instructor, and Check Airman for F a lcon Air Express (“Falcon”) (2009

- 2011). Captain Schoofs developed skills in multiple areas of flight operations and training, having served as Director of Operations, Check Airman, Captain, and Pilot Manager for Nigerian

- based Arik Air (2008); Cont r act Ground and Simulator Instructor for Boeing

- affiliate, Alteon (2006

- 2008); Owner, Captain, C heck Airman, Instructor, and Ex aminer for Global Air Consulting, Inc. (2006

- P resent); Director of Operations and Chief Pilot for Paramount Jet (2006

- 2008); Pilot, Instructor, and Check Airman for Falcon (2005

- 2008); Cont r act Ground and Simulator Instructor and Examiner for Aero Services, Inc. (2004

- 2007); Director of T raining , Ground and Simulator Instructor , and Line Pilot for Southeast Airlines (2002

- 2004); Simulator and Ground Instructor for Pan Am Internat ional Flight Academy (2001

- 2002); Lin e Captain for US Airways (1999

- 2001); Executive Vice President for
Universal Pilot Application Service (1998

- 1999); Director of Training for Ryan International Airlines (1997

- 1998); Pilot, Instructor, and Manager of Tra ining for Comair Airlines (1996

- 1997); and General Manager of TranStar International Airline (1995

- 1996). He also served as a Graduate Assistant for the Center for Leadership a t the University of Tampa (1993

- 1995). Before that, he was employed as a Line Pilot for WestAir Airlines (1988

- 1993), a Pilot for Scenic Air Tours (1987

- 1988), and Owner and Builder for Southeast Home Builders (1983

- 1987). Captain Schoofs started his c areer as an Independent Flig ht Instructo r in Atlanta, Georgia (1979

- 1983) , and earned a Bachelor’s degree in Business Management from Liberty University in 1993.

Mr. Brooke Mayger, an Airframe and Powerplant Mechanic, has served as Orange Air’s Director of
Maintenance since March 2011 . P rior to that, he served as Vice President of Technical Operations for AirBorne Asset Management (2006

- 2011), Spirit Airlines (1999

- 2006), Laker Airways (1998

- 1999), and SunJet International Airlines (1993

- 1998). In addition, he served as Chief Flight Engi neer/Director of Quality Control for Key Airlines (1985

- 1993), and as a n Aircraft Mechanic for Northeastern Airways (1983

- 1985). He attended Cayuga College and Embry Riddle Aeronautical University.

Mr. Roger Carbon has served as Orange Air’s Director of In

- Flight since March, 2011. Before joining the applicant, he served as a Flight Attendant for Capital Airways (2009

- 2011)

, Sky King, Inc. (2005

- 2009) and Vanguard Airlines (1999

- 2002) . Additionally, he served as a Personal Assistant to Mr. Tom Schwartz (2002

- 2003). Mr. Carbon also held the position of Substitute Teacher and Caregiver in Burlington and Topeka, Kansas (1995

- 2005)

, and prior to that, owned Blue Moon Deli (1990

- 1995). He
earned a Bachelor of Arts in B usiness Administration from Pittsburg State University in 1990.6

Ms. Kimberly Hunter has served as Director of Administration and Human Resources since Orange Air was founded. Before that, she served as Director of Administration at Capital Aviation, In c. (2006

- 2011), Human Resources/Payroll Manager at SkyLink USA (2004

- 2005), and Accounting Manager at Andretta Associates (2003

- 2004). Ms. Hunter was self

- employed as an Accounts Receivable/Billing Professional (1997

- 2003), and served as a Payroll/Benefit s Specialist at Mutual of New York (1984

- 1997).

In light of these facts, we tentatively conclude that Orange Air has the management skills and technical ability to conduct its proposed interstate and foreign charter air t ransportation operations

. 3

Operating P lan and Financial P osition

If granted the certificate authorit y it seeks, Orange Air intends to begin passenger charter operations using one leased MD

- 83 series aircraft configured for 169 passengers

. The applicant intends to operate these flights under Aircraft, Crew, Maintenance, and Insurance (“ACMI”) contracts, with charterers contractually responsible for certain operating cost s , such as fuel, associated with the air transportation provided.

In evaluating a new entrant applicant’ s financial fitness, the Department generally ask s that the applicant
have available to it resources sufficient to cover all pre

- operating costs and any negative working capital balance, plus a working capital reserve equal to the ope rating costs that would be incurred in three months of normal operations. 4

Orange Air provided forecast s of its pre

- operating costs, as we ll as projected first

- year revenues and expenses associated with its proposed operations. Based on these forecasts, the applicant’s

pre

- operating expenses are expected to total approximately $ 1.4 4 million plus $100,000 in equipment

costs , with first

- year expenses totaling approximately $ 5.9 4 million. We have reviewed the applicant’s projected expenses and believe them to be reasonable. Therefore, to meet our fitness test, we estimate that Orange Air will need access to approximately $ 3.02 million. 5

In support of its ability to finance its proposed charter operations, the members of RWF , Messrs. Reiter,

Wo lf, and Franco, have each committed to advance up to $1.10 million to Orange Air

, or collectively $3.30 million

. Additionally , M essrs

. Reiter

, Wolf

, and Franco provided third

- party verification showing that each has over $1.1 million on deposit in their own names . Also, the company’s most recent balance sheet indicates that, as of March 31, 2011, it had current assets of $10,575 and current liabilities of $1,250, giving the company a positive working capital balance of $9,325.

3 Before authorizing an air carrier to conduct air transportation operations, the FAA also evaluates the applicant’ s key personnel with respect to the minimum qualifications for those positions as prescribed in the Federal Aviation Regulations. The FAA’s evaluation of these key personnel provides an added practical and in

- person test of the skills and technical abilit y of these individuals. In July 2011, the FAA advised us that Orange Air’s key technical personnel are acceptable to that agency in their respective positions.

4 Because projected expenses during the first several months of operations frequently do not include all of the costs that will be incurred during a “normal” period of operations, it is our practice to base our three

- month standard on one quarter of the first year’s operating cost forecast. In calculating available resources, projected revenu es may not be used.

5 The $ 3. 02 million noted here is one

- quarter of the applicant’s forecast of approximately $5.94 million in first year expenses equaling $1.48 million, plus $1.44 million in pre

- operating expenses and $100,000 in equipment costs noted separately by the applicant.7

In light of the above, we tentatively conclude that Orange Air will have access to sufficient financial resources to enable it to commence its proposed operations without posing an undue risk to consumers
or their funds

. 6

Compliance Disposition

The applicant states that there are no actions or outstanding judgments against it, its owners, or its key personnel nor have there been any charges of unfair, deceptive or anti

- competitive business practices, or of fraud, felony or antitrust violations brough t against any of these parties in the past ten years. The applicant also states that there are no pending investigations, enforcement actions, or formal complaints filed by the Department against it, its key personnel, or persons having a substantial inte rest in it with respect to compliance with the Transportation Code or the Department’s regulations.

A review of our records and other information available to us has uncovered no information which would reflect negatively on Orange Air or any of its key p ersonnel. In addition, according to the Federal
Aviation Administration (“ FAA ”) , the applicant has conducted its operations satisfactorily and th e agency knows of no reason why the air carrier should not be granted the authority it is seeking. Moreover, Orange Air notes that neither it nor any of its key personnel have been involved in an accident or incident in the year preceding its application or at any time in the past which remains under investigation by the FAA, the National Transportation Safety Bo ard

, or the company itself.

In light of these circumstances, we tentatively find that Orange Air has the proper regard for the laws and regulations governing its services to ensure that its aircraft and personnel conform to applicable safety standards and that acceptable consumer relations practices will be followed.

CITIZENSHIP

Section 4110 2 of the Transportation Code requires that certificate authority to engage in air transportation be held only by citizens of the United States as defined in 49 U.S.C. § 40102(a)(15). The
Statute also requires that the president and two

- thirds of the Board of Directors and other managing
officers be U.S. citizens

, that at least 75 percent of the outstanding voting interest be owned by U.S.
citizens , and that the air carrier must be under the actual control of U.S. citizens.

As noted earlier, Orange Air is organized under the laws of the State of Delaware and is wholly owned by Holdings, which

, in turn

, is owned by RWF, Mr. Fred W. Credno, III, and JO Holdings, LLC, all
U.S. citizen s

. RWF is a Delaware limited liability company wholly owned in equal part s by Messrs. Hugo Reiter, Alberto Franco, and Jorge Wolf, all of whom are US citizens. JO Holdings, LLC is a Florida limited liability company wholly owned by Mr. Jeffrey Oshinsky, a U.S. citizen. In addition, t he applicant has submitted an affidavit att esting that it is a citizen of the United States within the meaning
of the Statute , that all managers and key technical personnel are U.S. citizens, and that it is owned and

6 As is our practice, prior to making any authority awarded to Orange Air effective, we will require the company to

demonstrate that it continues to have access to the financial resources needed to meet our financial test

, including updated

third

- party verification from Messrs. Reiter, Wolf, and Franco showing that each continue to have sufficient capital in their

names to commit and make available to Orange Air.8

controlled by U.S. citizens. Finally, there is no other information before us tha t would lead us to
conclude that Orange Air is not controlled by U.S. c itizens

.

I n view of the foregoing, we tentatively conclude that Orange Air is a U.S. c itizen and that it is fit, willing, and able to provide air transportation services as a U.S. certificated air carrier, subject to
conditions.

PUBLIC CONVENIENCE AND NECESSITY

No finding of consistency with the public convenience and necessity is required for the award of authority for interstate charter air transportation of persons, property

, and mail under section 41102, although such a finding is required for authority to en gage in foreign charter air transportation.

We tentatively find that the foreign charter air transportation proposed by Orange Air is consistent with the public convenience and necessity. By Order 78

- 7

- 106, which instituted the Former Large Irregular

Air Service Investigation , the Civil Aeronautics Board found that there was a continuing demand and need for additional charter air carriers. These findings remain valid and apply to the authority sought by Orange Air. Therefore, if Orange Air meets the fit ness requirements of the Transportation Code, it will receive certificates authorizing it to engage in interstate and foreign charter air transportation of persons, property

, and mail under section 41102. 7

REQUEST FOR CONFIDENTIAL TREATMENT

On April 1, 2011, Orange Air filed a motion under section 302.12 (“Rule 12”) of the Department’s regulations requesting confidential treatment of Exhibit A, which contains the FAA certificate numbers of Orange Air’s key personnel, and Exhibit B, which contains t wo unr edacted pages from Orange Air’s application that show revenue forecasts for its first full year of operations and its forecast operating results, which includes sensitive salary and revenue assumptions.

In support of its request for confidential treatm ent, the applicant states that the documents Orange Air requests to withhold from public disclosure are (1) commercial or financial; (2) obtained from a person outside the government; and (3) privileged or confidential. Additionally, Orange Air claims the release of such information would cause material competitive harm to Orange Air by revealing confidential information about the applicant’s cost structure and its methods of doing business. The applicant further states that the documents that it requests to be withheld from public disclosure are the kinds of information that are typically afforded confidential treatment in commercial contexts.

Rule 12 instructs us to evaluate requests for confidential treatment in accordance with the standards of
disclos ure found in the Freedom of Information Act (5 U.S.C. section 552). Information may be withheld from disclosure under 5 U.S.C. 552(b)(4) if it is (1) commercial or financial, (2) obtained from a person outside of government, and (3) privileged or confiden tial ( Gulf and Western Industries, Inc. v.
United States , 615 F.2d 527,529 (D.C. Cir 1979)).

7 Pursuant to 49 U.S.C. § 41307, issuance of foreign authorit y to the applicant is subject to Presidential review.9

The information sought to be withheld from disclosure clearly meets the first two requirements. The only question, therefore, is whether the information is privi leged or confidential

-- 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 posit ion 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).] Furthermore, to be privileged or confidential, the information must not be of the type that is usually released to the public. [ Gulf & Western Industries,

Inc. v. U.S ., supra, 615 F.2d at 530.]

We have decided to grant in its entirety Orange Air’s motion to withhold from public disclosure Exhibit
A and Exhibit B . With respect to Exhibit A, we have found that the FAA certificate numbers are generally linked to social security numbers and the release of such personally identifiable information is potentially harmful to an applicant’s key personnel

. Concerning Exhibit B, we agree that the release of such material would allow Orange Air’s competitors and others to readily calculate the underlying economic terms of its operations and Orange Air’s competitors could then use this information to
undermine its relati onship with its clients by offering more attractive terms. Further, the Department
does not need an applicant’s revenue projections in order to make a fitness determination

, therefore we

see no harm in affording confidential treatment to such data

. The i nformation for which Orange Air seeks confidential treatment is similar to that for which we have granted confidential treatment in the past, and we see no reason not to do so here.

OBJECTIONS

We will give interested persons 14 days following the service date of this order to show cause why the tentative findings and conclusions set forth here should not be made final; answers to objections will be due within 7 days thereafter. We expect such persons to direct their objections, if any, to the application and points at issue and to support such objections with detailed economic analyses. If an oral evidentiary hearing or discovery procedures are requested, the objector should state in detail why such a hearing or discovery is considered necessary, and wha t material issues of decisional fact the objector would expect to establish through a hearing or discovery that cannot be established in written pleadings. The objector should consider whether discovery procedures alone would be sufficient to resolve mate rial issues of decisional fact. If so, the type of procedure should be specified ( See Part 302, Rules 19 and 20); if not, the reasons why not should be explained. We will not entertain general, vague, or unsupported objections. If no substantive objecti ons are filed, we will issue order s that will make final our tentative findings and conclusions with respect to Orange Air ’ s fitness and certificate authority.

CERTIFICATE CONDITIONS AND LIMITATIONS

If Orange Air is found fit and issued the certificate s it seeks, its authority will not become effective until the air carrier has fulfilled all of the requirements for effectiveness as set forth in the terms and
conditions attached to its certificate s . Among other things, this includes (1) our receipt of ev idence of Orange Air ’ s authority from the FAA authorizing such operations ; (2) evidence of liability insurance coverage that meets the requirements of section 205.5(b) of our rules ; (3) a statement of changes it may have undergone since its fitness was exa mined; and (4) evidence that Orange Air continues to have adequate financial resources available to it.10

We also wish to remind Orange Air of the requirements of 49 U.S.C. § 41110(e). Specifically, that section requires that, once an air carrier is found fit initially, it must remain fit in order to hold its authority. To be assured that certificated air carriers continue to be fit after effective authority has been
issued t o them, we require that they supply information describing any subsequent substantial changes they may undergo in areas affecting fitness. Therefore, if Orange Air is issued effective certificate authority and subsequently proposes substantial c hanges in its o wnership, management, or operations, it must first comply with the requirements of section 204.5 of our rules. 8

Moreover, as discussed in the FITNESS section of this order, our finding of fitness for Orange Air is based on the operating plans descr ibed in its application, namely, performing passenger charter air transportation using one large aircraft. 9 Were the applicant to propose to expand its operations to include additional large aircraft, our fitness findings, particularly involving the adequ acy of Orange
Air ’ s management and financial resources, might no longer apply. Therefore, should Orange Air desire to operate additional large aircraft, it must first provide the Department with at least 45

- days advance notice of such plans and provide updated information establishing it fitness for such expansion. The compliance of the company with this requirement is essential if we are to carry out our responsibilities under section 41110(e). 10

Finally, if Orange Air is granted effective authority, i t would be required to submit a detailed progress report, within 45 days following the end of the first year of certificated flight operations, to the Air Carrier Fitness Division. The submission of a first year progress report is conditioned upon all new ly certificated air carriers and was adopted as policy by the Department to aid in monitoring the fitness of new air carriers. The report should include a description of the air carrier’s current operations (number and type of aircraft, principle markets served, total number of full

- time employees), a summary of how its operations have changed during the year, a discussion of any changes it anticipates from its current operations during its second year, current financial statements, 11 and a listing of curre nt senior management and key technical personnel. The air carrier should also be prepared to meet with staff members of the Fitness Division to discuss its current and future operations.

8 The air carrier may contact our Air Carrier Fitness Division to report proposed substantial changes in its operations, ownership, or management, and to determine what additional information, if any, will be required under section 204.5. In addition, by notice dated July 21, 1998, the Department requested air carriers to provide a 30

- day advance notification of any proposed change in ownership, restructuring, or recapitalization. If the air carrier f ails to file this updated information or if the information fails to demonstrate that the air carrier will continue to be fit upon implementation of the substantial chan ge, the Department may take such action as is appropriate, including enforcement action or steps to modify, suspend, or revoke the air carrier's certificate authority.

9 A “large” aircraft is defined as any aircraft with an original design capacity of more than 60 passenger seats or 18,000 pounds payload.
10 We also remind Orange Air about the requirements of section 204.7 of our rules. This section provides, among other things, that (1) the certificate authority granted to a company shall be revoked if the company does not commence actual

fl ight operations under that authority within one y ear of the date of the Department's determination of its fitness; (2) if the company commences operations for which it was found fit and subsequently ceases such operations, it may not resume certificated operations unless its fitness has been redetermined ; and (3) if the company does not resume operations within one year of its cessation, its authority shall be revoked for dormancy.

11 These financial statements should include a balance sheet as of the end of the company’s first full year of actual certificated flight operations and a 12

- month income statement ending that same date.11

ACCORDINGLY,

1. We direct all interested persons to show cause why we should not issue order s making final our tentative findings and conclusions stated above and award certificate s to Orange Air , LLC , authorizing it to engage in interstate and foreign charter air transportation of persons, property and mail, using one large aircraft, subject to the attached specimen Terms, Conditions, and Limitations.

2. We direct any interested persons having objections to the issuance of order s making final any of the proposed findings, conclusions, or award of authority set forth here to file them with Department of Transportation Dockets, 12 00 New Jersey Avenue, S E

, Room W12

- 140

, Washington, D.C. 20590, in
Docket s DOT

- OST

- 20 1 1

- 00 73 and DOT

- OST

- 2011

- 0074 and serve them upon all persons listed in
Attachment A no later tha n 14 days after the service date of this order; answers to objections shall be
filed no later than 7 business days thereafter.

3. We direct that should Orange Air, LLC want to operate more than one large aircraft, it must first provide the Department wi th at least 45 days’ notice and demonstrate its fitness for such operations.

4

. If timely and properly supported objections are filed, we will accord full consideration to the matters or issues raised by the objections before we take further action. 12

5

. In the event that no objections are filed, we will consider all further procedural steps to be waived and we will enter an order making final our tentative findings and conclusions.

6. We grant in its entirety the M otion for C onfidential T reatment filed by Orange Air, LLC on April 1,

2011.

7

. We will serve a copy of this order on the persons listed in Attachment A.

8

. We will publish a summary of this order in the Federal Register.

By:

SUSAN L . KURLAND Assistant Secretary
for Aviation and International Affairs

An electronic version of this document is available on the World Wide Web at: http://www.regulations.gov

12 Since we have provided for the filing of objections to this order, we will not entertain petitions for reconsideration.

### Attachment 

### SPECIMEN Terms, Conditions, and Limitations

ORANGE AIR , LLC

is authorized to engage in interstate charter air transportation of persons, property and mail between any point in any State, territory, or possession of the United States or the District of Columbia, and any other point in any of those entities.

This authority is subject to the following provisions:

(1) The authority to operate under this certif icate will not become effective until six (business) days after the Department has received the following documents; provided

, however

, that the Department may stay the effectiveness of this authority at any time prior to that date:

(a) A copy of the hold er's Air Carrier Certificate and Operations Specifications authorizing such operations from the Federal Aviation Administration (FAA).

(b) A certificate of insurance on OST Form 6410 evidencing liability insurance coverage meeting the requirements of 14 CFR 205.5(b) for all of its aircraft.

(c) A statement of any changes the holder has undergone in its ownership, key personnel, operating plans, financial posture, or compliance history, since the date of the
Show Cause Order in this case.

(d) A revised l ist of pre

- operating expenses already paid and those remaining to be paid, as well as independent verification that the holder has available to it funds sufficient to cover any remaining pre

- operating expenses and to provide a working capital reserve equal to the operating costs that would be incurred in three months of operations.

(2) Pending receipt of effective authority, the holder may not accept payment of any kind (i.e., cash, check, or credit card), issue tickets for the operations proposed under th is certificate, or enter into contracts with charter operators, and any advertisement by the holder must prominently state: "This service is subject to receipt of government operating authority."

(3) The holder shall at all times conduct its operations i n accordance with the regulations prescribed by the Department of Transportation for the services authorized by this certificate, and with such other reasonable terms, conditions, and limitations as the Department of Transportation may prescribe in the pub lic interest.

(4) The holder's authority under this certificate is effective only to the extent that such operations are also authorized by the Federal Aviation Administration (FAA), and comply with2

all U.S. Government requirements concerning security , in cluding, but not limited to 49 CFR Part

1544

. **∗**

(5) The holder shall at all times remain a "Citizen of the United States" as required by 49 U.S.C. 40102(a)(15).

(6) The holder shall maintain in effect liability insurance coverage as required under 14

CFR Part 205. Failure to maintain such insurance coverage will render a certificate ineffective, and this or other failure to comply with the provisions of Subtitle VII of Title 49 of the United States Code or the Department's regulations shall be sufficient grounds to revoke this certificate.

(7) The holder is not authorized to engage in air transportation operations between points within the State of Alaska.

(8) Should the holder propose any substantial chang e in its ownership, management, or operations (as defined in 14 CFR 204.2(l)), it must first comply with the requirements of 14 CFR

204.5.

(9) In the event that the holder does not commence actual flying operations under this certificate within one year of the date of the Department's determination of its fitness, its authority shall be revoked for dormancy, unless the holder is conducting operations under another type of certificate authority. Further, in the event that the holder commences operations for which it was found "fit, willing, and able" and subsequently ceases all such operations, its authority under all certificates held shall be suspended under the terms of 14 CFR 204.7 and the holder may neither recommence nor advertise such operations unles s its fitness to do so has been redetermined by the Department. Moreover, if the holder does not resume operations within one year of its cessation, its authority shall be revoked for dormancy.

**∗** To assure compliance with all applicable U.S. Government requirements concerning security, the holder shall, before commencing any new service (including charter flights) to or from a foreign airport, contact its Principal Security Inspector (PSI) to advise the PSI of its plans and to find out whethe r the Transportation Security Administration has determined that security is adequate to allow such airport(s) to be served.

### Attachment 

### SPECIMEN Terms, Conditions, and Limitations

ORANGE AIR, LLC

is authorized to engage in foreign charter air transportation of persons, property

, and mail:

Between any place in the United States and any place outside thereof.

This authority is subject to the following provisions:

(1) The authority to operate under this certificate will not become effective until six (business) days after the Department has received the following documents; provided

, however

, that the Department may stay the effectiveness of this authority at any time prior to that date:

(a) A copy of the holder's Air Carrier Certificate and Operations Specifications authorizing such operations from the Federal Aviation Administration (FAA).

(b) A certificate of in surance on OST Form 6410 evidencing liability insurance coverage meeting the requirements of 14 CFR 205.5(b) for all of its aircraft.

(c) A statement of any changes the holder has undergone in its ownership, key personnel, operating plans, financial postu re, or compliance history, since the date of the
Show Cause Order in this case.

(d) A revised list of pre

- operating expenses already paid and those remaining to be paid, as well as independent verification that the holder has available to it funds suffici ent to cover any remaining pre

- operating expenses and to provide a working capital reserve equal to the operating costs that would be incurred in three months of operations.

(2) Pending receipt of effective authority, the holder may not accept payment of any kind (i.e., cash, check, or credit card), or enter into contracts for the operations proposed under this certificate, and any advertisement by the holder must prominently state: "This service is subject to receipt of government operating authority."

(3) The holder shall at all times conduct its operations in accordance with the regulations prescribed by the Department of Transportation for the services authorized by this certificate, and with such other reasonable terms, conditions, and limitations as the Department of Transportation may prescribe in the public interest.

( 4 ) The holder shall at all times conduct its operations in accordance with all treaties and agreements between the United States and other countries, and the exercise of the privileg es granted by this certificate is subject to compliance with such treaties and agreements and with any orders of the Department of Transportation issued under them or for the purpose of requiring compliance with them.2

(5 ) The exercise of the authority gra nted here is subject to the holder's first obtaining from the appropriate foreign governments such operating rights as may be necessary.

( 6 ) The holder's authority under this certificate is effective only to the extent that such operations are also authorized by the Federal Aviation Administration (FAA), and comply with all U.S. Government requirements concerning security , including, but not li mited to 49 CFR Part

1544

. **∗**

( 7

) The holder shall at all times remain a "Citizen of the United States" as required by 49 U.S.C. 40102(a)(15).

( 8 ) The holder shall maintain in effect liability insurance coverage as required under 14
CFR Part 205. Failure to maintain such insurance coverage will render a certificate ineffective, and this or other failure to comply with the provisions of Subtitle VII of Title 49 of the United States Code or the Department's regulations shall be sufficient grounds to revoke t his certificate.

( 9 ) Should the holder propose any substantial change in its ownership, management, or operations (as defined in 14 CFR 204.2(l)), it must first comply with the requirements of 14 CFR

204.5.

(1 0 ) In the event that the holder does not comm ence actual flying operations under this certificate within one year of the date of the Department's determination of its fitness, its authority shall be revoked for dormancy, unless the holder is conducting operations under another type of certificate aut hority. Further, in the event that the holder commences operations for which it was found "fit, willing, and able" and subsequently ceases all such operations, its authority under all certificates held shall be suspended under the terms of 14 CFR 204.7 an d the holder may neither recommence nor advertise such operations unless its fitness to do so has been redetermined by the Department. Moreover, if the holder does not resume operations within one year of its cessation, its authority shall be revoked for dormancy.

**∗** To assure compliance with all applicable U.S. Government requirements concerning security, the holder shall, before commencing an y new service (including charter flights) to or from a foreign airport, contact its Principal Security Inspector (PSI) to advise the PSI of its plans and to find out whether the Transportation Security Administration has determined that security is adequat e to allow such airport(s) to be served.Attachment A

SERVICE LIST FOR ORANGE AIR
, LLC

MR JOHN R MIETUS

LAW OFFICE OF JOHN MIETUS LLC
6701 DEMOCRACY BLVD

BETHESDA MD 20817

- 7500 MR WILLIAM J WEBER
CERTIFICATION SECTION MANAGER
FAA AFS

- 900
45005 AVIATION DRIVE SUITE 131

DULLES VA 20166

MR ROBERT E TALMADGE

PRINCIP AL OPERATIONS INSPECTOR

FEDERAL AVIATION ADM INISTRATION

MIAMI CMO 29
2895 SOUTHWEST 145 TH AVENUE
MIRAMAR FL 33027 MR PETER LYNCH AGC

- 300

ASST CHIEF COUNSEL FOR ENFORCEMENT

FEDERAL AVIATION ADMINISTRATION
800 INDEPENDENCE AVE SW
WASHINGTON DC 20591

MS ANNE SUISSA RTS

- 42

OFFICE OF AIRLINE INFORMATION

DOT/RITA/BTS E

- 34
1200 NEW JERSEY AVE SE
WASHINGTON DC 20590