& .T;-, V US.Departmwi l o f . . • . ^ l 20 0 Ne w jerse yAvenue , S E ThanSpOrtOtio n Washington , D C 2059 0 Offic e O f th e Secretar y' !' - i • ' .'^L ' o f Transportatio n Septembe r

16 , 201 1 Mr . Clayto n I . Gambe r Presiden t / Directo r o f Maintenanc e Twi n Ai r Calyps o Limited , Inc . 70 0 S.W . 34*

^ Street , Suit e 10 0 Ft . Lauderdale , F L 3331 5 Re : Docke t DOT-OST-2011-0143 , Applicatio n o f Twi n Ai r Calyps o Limited , Inc. , fo r Commute r

Ai r Carrie r authority Dea r Mr . Gamber : W e hav e complete dou r

initia l revie w o f

th e applicatio n file di n Docke t DOT-OST-2011-014 3 b y Twi n Ai r Calyps o Limited , Inc . ("Twi n Ai r Calypso" ) fo

r th e determinatio n o f

it s fitnes s t o conduc t schedule dpassenge r

ai r transpoitatio n a s acommute r ai r carrier . Thi s revie w ha s reveale d tli e nee dfor

additiona l and/o r

clarifyin g informatio n befor e w e can complet e ou r revie w o f

Twi n Ai r Calypso' s fitness . Th e attache dhiformatio n Reques t list s th e area s wher e further informatio n and/o r

clarificatio n i s necessary . 1 as k

tha t yo u respon dfully t o tlii s reques t withi n 3 0 day s o f

th e dat e o f

thi s letter , h i addition , pleas e remembe r that Twi n Ai r

Calyps o shoul dpromptl y provid e th e Departmen t wit h any informatio n regardin g change s i t ma y underg o i n area s affectin g it s fitnes s {i.e. , management , operatin g plan s o r

financia l condition , complianc e disposition , o r ownership ) whil e it s applicatio n i s unde r revie w b y th e Department . A s i s th e Department' s practice , further processin g o f

Twi n Ai r Calypso' s applicatio n wil l b e deferre dpendin g receip t o f thi s material . Than k yo u for you r cooperatio n i n thi s matter . I f yo u hav e an y questions , pleas e fee l fre e t o contac t Alet aBes t

o f my staf f a t (202 ) 366-972 1 o r

vi aemai l a

t aleta.best@dot.gov . Sincerely , LaurafynJJ . Kemo , Chie f Ai t Corne r Fiines s Divisittncc : Docke t DOT-OST-2011-014 3 Mr . Sergi o Lope z South Florid aFligh t

Standard s Distric t

Offic e 1 9 289 5 S W 145"'Avenu e Miramar , F L 3302 7 Mr . Ken t Georg e Airport Directo r For t Lauderdal e - Hollywoo dInternationa l Airpor t 10 0 Aviatio n Boulevar d For t Lauderdale , F L 3331 5INFORMATIO N REQUES T FO RTWI N AI RCALYPS O LIMITED , INC .

GENERA L INFORMATIO N 1 . Pleas e provid e proo f

o f paymen t for th e $670.0 0 commute r

applicatio n fee . 2 . Par t 20 3 o f th e Department' s regulation s require s tha t certai n U.S . an dforeig n ai r carrier s waiv e th e passenge r liability limit s an dcertai n carrie r defense s i n th e Warsa w Conventio n i

n accordanc e wit

h th e provision s o f

Agreemen t

18900 , date dMa

y 13 , 1966 , an dprovide s tha

t th e acceptanc e o f

authorit y for , o r

operation s b y th e carrie r in , ai r transportatio n shal l b e considere dt o ac t a s suc h awaive r

b y that carrier . Therefor e w e as k that Twi n Ai r

Calyps o fil e acop y o f

it s signe dcounterpart

of Agreemen t

1890 0 (OS T For m4523 ) i n Docke t DOT-OST-1995-236 . 3 . Pleas e provid e acop y o f th e Preapplicatio n Statemen t o f Inten t submitte dt o th e Federal Aviatio n Administratio n ("FAA") . 4 . Th e OS T For

m450 7 date dOctobe r

13 , 2010 , submitte db y Twi n Ai r Calyps o show s that th e company ha s four aircraft . However , th e affidavi t o f aircraf t conformity/complianc e list s Twi n Ai r Calyps o a s havin g fiv e aircraf t certifie db y th e FA A an dthat

compl y with al l applicabl e FA A safet y standards . Ho w man y aircraf t doe s Twi n Ai r

Calyps o currentl y operat e i n it s on-deman dcharte r operations ? I

f i n fac t th e applican t

operate s fiv e aircraft , i

t mus t provid e a

n update dan dapprove dOS T Form 450 7 that list s al l fiv e aircraft . 5 . Pleas e provid e informatio n o n th e pendin g actio n fro mth e FAA regardin g apossibl e FA RPar t 135.29 9 checki'id e violatio n agains t Twi n Ai r

Calypso' s pilo t

Kenneth Kronheim , I

n you r response , pleas e includ e informatio n regardin g an y civi l penaltie s impose dan dan y step s th e ai r carrie r ha s undergon e t o preven t asimilar violatio n from happenin g i n th e future . 6 . O n pag e 4 3 o f

it s application . Twi n Ai r Calyps o provide daFA RPart 13 5 Organizationa l Chart . However , th e chart doe s no t lis t th e tota l numbe r

o f pilot s an d mechanic s employe db y th e compan y an dth e citizenshi p o f each . Therefore , pleas e provid e thi s information . 7 . O n page s 9 an d3 0 o f it s application . Twi n Ai r Calyps o state dtha

t th e fiv e aircraf

t i t wil l us e i n it s propose dschedule dservice s ar e owne db y Aircraf t Charters , LL C ("Aircraf t Charters" ) an dFountainhea d(BAH ) LL C ("Fountainhead") . Whic h o f th e fiv e liste daircraf

t ar e owne db y Aircraf t Charter s an dwhic h ar e owne db y Fountainhead ? 8 . h i it s lO-K/

A filin g fo r

th e perio dendin g Decembe r 31 , 201 0 ("10-K/A" ) (pag e 8 0 o f th e application) , AvStar

Aviatio n Group , Inc . ("AvStar Aviation" ) state s onl y thre e o f Twi n Ai r Calypso' s lease daircraf

t are flyin g an dtha

t th e remainin g fiv e lease daircraf t ar e dow n for

refurbishing . AvStar

Aviatio n als o state s tha t i t wil l nee dt o rais e abou t $350,00 0 t o complet e th e refurbishin g o f th e remainin g aircraft .a . Di dA^'St.^ r Aviiiiio n rais e th e neccssiir y landin g l o refurbis h ih e .^ddiliona l aircraft ? I

f so , ho w di di

t obtai n thos e fund s {e.g. , bank line-of-credit) ? b . Whic h aircraf

t ar e bein g refurbished : aircraf t owne db

y Aircraf t Charters . Fountainhead , AvStar

Aviation , Twi n Ai r

Calypso , and/o r

anothe r entity ? c . Ho w many , i

f any , o f th e fiv e aircraf

t identifie dfo

r us e i n Twi n Ai r

Calypso' s propose dschedule doperation s are amon g th e aircraf t t o b e refurbished ? 9 . AvStar

Aviation' s 10-K/

A (pag e 8 9 of

th e application ) indicate s tha t i t currentl y lease s aircraf t bu t expect s i n th e future i

t ma y nee dt o mak e "significan t capita l investment s t o acquir e th e aircraft , groun dan dcarg o handlin g equipment , an da n inventory o f

spar e part s necessary for

th e operation " o f

th e business . How , i

f a t all , woul da

n acquisitio n o f aircraf t b y AvStar

Aviatio n affec t

Twi n Ai r

Calypso' s propose dschedule d operations ? 10 . Wil l any operationa l functions , training , o r maintenanc e b e contracte dou t t o othe r tha n Twi n Ai r

Calyps o Services , Inc. ? I f so , pleas e provid e percentage s o f type s o f contract s an dprovider s o f services . I

f not , pleas e make astatemen t t o thi s point . CORPORAT E STRUCTUR E AND OWNERSffl P 1 . O n pag e 8 o f

it s apphcation , Twi n Ai r Calyps o state s tha

t bot h i t an dTwi n Ai r Calyps o Service s Inc . ("MRO" ) ar e hel db y AvStar Aviatio n Group . Pleas e clarif y th e busines s an dfinancia l relationship s betwee n Twi n Ai r Calyps o an dMRO . 2 . O n pag e 9 o f

it s application . Twi n Ai r Calyps o state s tha

t th e aircraf

t i t wil l us e i n it s propose dschedule dservice s ar e owne db y Aircraf t Charter s an dFountainliead . I s Mr . Kenneth Farino , th e owne r o f Fountainhead , aU.S . citizen ? 3 . AvStar

Aviation' s 10-K/

A (pag e 7 5 of

th e application ) stale s tha t i t acquire dof

al l o f th e outstandin g commo n stoc k i n San Dieg o Airmotiv e ("SDA" ) i n exchang e for

on e millio n share s of

AvStar Aviation' s newly-create dserie s A preferre dstock . Th e 10

- K/ A als o state s that

thes e share s o f

preferre dstoc k

converte dt o 5 0 millio n share s o f commo n stock , whic h constitute di n th e aggregat e ove r

9 0 percen t

o f outstandin g share s o f commo n stoc k

immediatel y followin g th e conversion ; however , aone-for

100 revers e spli t

of commo n stoc k

followe dthereafter . What percentag e of outstandin g commo n share s i s currentl y hel db y th e forme r owner s o f

SDA ? 4 . Accordin g t o AvStar Aviation' s 10- Q fo

r th e perio dendin g Jun e 30 , 2011 , th e company issue dshare s o f commo n stoc k

t o Ashe r Enterprise s an da

n individua l for th e conversio n o f

convertibl e promissor y note s issue dt o each . Pleas e provid e alis t o f al l person s (individual s o r organizations ) tha

t ow n o r contro l apercen t

of th e stoc k o f AvStar Aviation , indicatin g th e numbe r o f votin g share s an dth e correspondin g percentag e of

th e tota l share s outstandin g that ar e hel db y each , alon g with thei r address , citizenship , andprincipa l business .a . I f any siockiiolde r

i s a n organization , provid e (h e name , address . ci(izenship , andprincipa ) busines s o f th e individual s wh o ow n o r contro l a i leas t 1 0 percen t of th e stoc k

o f th e organization . I

f ther e ar e severa l layer s o f ownershi p b y companie s {e.g. , holdin g o r paren t companies) , informatio n o n th e sloc k ownershi p shoul db e provide dfo r eac h laye r

unti l th e ultimat e individua l shareholder s ar e reached . b . I f th e applicant' s stoc k

i s hel db y someon e for

th e benefi t

o r accoun t of athir d party , giv e tli e name , citizenship , an dprincipa l busines s o f that perso n o r organization , c . I f an y o f thes e person s ar e relate db y bloo do r mairiag e o r

hav e ha dany financial interes t

in , o r serv e o r hav e serve da s a

n officer o r directo r o f any othe r ai r carrier , conmio n carrier , o r perso n substantiall y engage di n th e busines s of aeronautic s o r

person s whos e principa l busines s (i n puipos e o r fact ) i s th e holdin g o f

stoc k i n o r contro l o f

any aviation-relate dentity , that relationshi p shoul db e described . d . I f any perso n o r

organizatio n hold s options t o convert deb t t o equit y o r

on e typ e o f stoc k t o anothe r

type , identif

y th e perso n o r

organizatio n anddiscus s th e circumstance s unde r

whic h suc h conversio n ma y occur . 5 . Pleas e identif

y thos e individuals , an dth e citizenshi p o f each , that

manag e an doverse e th e busines s operation s of AvStar Aviation . Wha t

leve l of involvemen t

d o the y have , i f any , ove r th e operation s of

Twi n Ai r

Calypso ? MANAGEMEN T AND KE Y TECHNICA L PERSONNE L 1 . Pleas e provid e update dresume s fo r Mr . Clayto n I . Gamber , Mr . Arthu r L . Stevenson , an dMr . Lucian o Homa . Thes e resume s shoul dinclud e th e followin g information : a . Fo r eac h person , pleas e provid e hi s (active ) FA A licens e number s an dth e specifi c aircraf

t type s an dhour s for

th e experienc e listed . Fo r example , Mr . Gamber' s resum e show s atota l o f "ove r 800 0 flight

hours " bu t

doe s no t break thes e hour s ou t

b y aircraf

t type . b . Fo r Mr . Stevenson , pleas e includ e date(s ) of employmen t

a t Islan dAi r

Charter s an ddate(s ) of

employment , employer(s) , an dpositio n tille(s ) for "1 8 year s experienc e a s U S governmen t la w enforcemen t

contracto r

leadin g 5 2 oversea s aviatio n an dmarin e operations" . c . Fo r Mr . Homa , pleas e includ e date(s ) o f employmen t

fo r Airborn e Inc . an d Florid aCoasta l an dupdate othe r positions ' date s of

employmen t

t o includ e month an dyear . OPERATIN G PLA N 1 . O n pag e 1 2 of

it s application. Twi n Ai r Calyps o refer s t o "future expansio n for destination s an dcapacity. "a . Twi n Ai r Calyps o note s tha

t "'additional aircraf

t wil l b e availabl e fo

r openin g th e Wes t Pal mBeac h t o Abac o market. " Th e authority requeste do n pag e 3 o f th e applicatio n involve s For t Lauderdal e - Bahama s city pair s only , althoug h Mars h Harbou r

(Abaco ) i s on e o f

th e Bahamian destinations . Wlial , i f any , are Twi n Ai r Calypso' s plan s t o offe r schedule dservic e fromany U.S . airport i n additio n t o it s propose dservic e fro mFor t Lauderdale , Florida ? b . Twi n Ai r

Calyps o note s tha

t aircraf t refurbishin g wil l enabl e i t t o offe r schedule dfreight

service . I s th e propose dschedul e fo r freight service s different i n any wa

y fro mdi e propose dschedule dpassenge r service ? I

f so , pleas e identif y that propose dschedule dfreight service , includin g city-pairs , frequency , an daircraf

t type . 2 . O n pag e 1 1 o f

it s application . Twi n Ai r Calyps o describe s it s busines s marketin g philosoph y regardin g Cuba . What , if any , ar e Twi n Ai r

Calypso' s plan s t o offe r schedule dservic e froman y U.S . airport t o Cuba ? Doe s th e applican t inten dt o provid e servic e t o Cub awithi n th e nex t 1 2 months ? 3 . For th e eac h o f

th e propose dcity-pai r

market s - (a ) Fort

Lauderdale , F L (FLL ) an d Treasur e Cay , Bahama s (TCB) , wit h continuin g servic e t o Mars h Harbour , Bahama s (MHH) ; (b ) FL L an dNort h Eleuthera , Bahama s (ELH) ; an d(c ) FL L an dGovernor s Harbour , Bahama s (GHB ) with continuin g servic e t o Roc k Sound , Bahama s (RSD ) ~ pleas e provid e th e followin g information : a . Numbe r

o f passenger s t o b e carrie dan dexpecte dloadfactors . b . Tota l numbe r

of passenge r

revenu e bloc k

hour s an drevenu e mile s expecte dt o b e flow n an dth e exten t

o f an y seasona l traffi c peaks . c . Total numbe r

o f freight ton s an drevenu e to n mile s expecte dt o b e flown an d th e exten t of an y seasona l traffi c peaks . d . Additiona l resource s (aircraft , personnel , othe r equipment , etc.) , i

f any , tha t Twi n Citie s anticipate s addin g t o mee t th e increase dservice s t o b e offered . FINANCIA L POSITIO N A n applican t

fo r commute r

authority i s expecte dt o b e prepare dt o fully prosecut e it s applicatio n a

t th e tim e i t

i s filed . With respec t

t o financial fitness , th e applican t i s require d t o provid e curren t

financia l data, ' an dthre e year s o f histori c financial data , togethe r wit h a detaile dforecas t

of it s pre-operatin g cost s an dapro-form aforecas t profi t an dlos s statemen t reflectin g al l revenue s an dexpense s th e applican t expect s t o earn/incu r

durin g it s firs t yea r o f schedule doperations . I n addition , th e company mus t demonstrat e tha

t i t ha s obtaine dal l o f

th e fundin g neede dt o mee t ou r financial fitnes s tes t

or , a t aminimum , that

i t ha s areasonabl e plan for

doin g so . Therefore , pleas e provid e th e followin g information :

' Th e balanc e sheei andincomt ' statenieti i supplie dmus t b e fo r aperio dendin g no more tha n thre e month s prio r t o th e dat e o f

filing .1 . Becaus e Twi n Ai r Calyps o i s awholl y owne dsubsidiary of AvSlar Aviation , pleas e provid e balanc e sheet s an dincom e statements , fo r (a ) calendar

yea r 201 0 and (b ) Januar y I , 201 1 throug h Augus t 30 , 2011 , togethe r

with thei r

accompanyin g explanatory footnotes , fo r eac h company . Uiiaudite d/ uni'eviewe ddocument s wil l b e accepte dwit

h a n accompanyin g statemen t of accuracy . 2 . Provid e adetaile dpre-operatin g cos t forecast . Thi s forecas t

shoul dinclud e al l costs , includin g fuel , insurance , aircraf t leas e deposits , aircraf

t refurbishin g expenses , legal fees , etc . Sufficien t

detai l shoul db e provide dt o allo w u s t o replicat e th e mathematic s used . I f Twi n Ai r

Calyps o believe s tha t

non e o f thes e expense s wil l b e incurre dprior t o it s commencemen t

of commute r

fligh t operations , i

t shoul dstat e i

n detai l th e reason s wh y th e Departmen t shoul dconside r

thi s forecas t

reasonable . 3 . Th e first-year

expense s se t

fort h o n pag e 2 5 doe s no t

appear t o hav e pro-rate dal l expense s betwee n Twi n Ai r Calypso' s curren t

on-deman doperation s an dit s propose d schedule dpasse;nge

r operations . Base do n this , w e ar e unabl e t o determin e whethe r Twi n Ai r Calypso' s first-yea

r expens e forecas t

i s reasonable . Therefore , pleas e provid e arevise dprofi t

an dlos s statemen t

specificall y broke n dow n b y mont h o r b y quarter , an dthat , a

t aminimum , allocate s th e indirec t expense s o n arationa l basi s betwee n it s propose dschedule dpassenge r operation s an dit s othe r operations , alon g with appropriat e explanations . Th e revise dfirst-yea r expens e forecas t

shoul daddres s th e following : a . Separat e breakout s of bloc k hours , revenues , an dexpense s for (a ) curren t operations , (b ) charte r

operation s - forward , (b ) schedule doperation s - forward , (c ) othe r operations , includin g schedule dfreight - forward , and(d ) consolidate d operation s - forward . b . Explanator y note s for calculations , includin g (bu t no t limite dto) : i . Th e existenc e o f

seasona l schedule dpassenge r revenu e bu t

consisten t freight income . ii . Th e numbe r

o f pilot s employed , ho w the y ar e compensate d(b y hour , trip , month u p t o X hours , etc.) , an dwhethe r compensatio n wil l differ durin g peak months ? Ar e ther e separat e pa y rate s for schedule dan dcharte r operations ? Fo r

passenge r

an dfreigh t

operations ? iii . An y expense s associate dwit h FA A certificatio n efforts . I f none , pleas e mak e astatemen t

t o thi s point . 4 . I n additio n t o update s provide dthroug h curren t balanc e shee t

an dincom e statement , pleas e identif

y an y transaction s t o sel l o r exchang e majo r

asset s (land , aircraft , buildings , etc. ) durin g th e si x months prior t o th e applicatio n o r

th e si x month s followin g th e application . I f none , pleas e mak e astatemen t t o this point . 5 . AvStar

Aviation' s 10-K/

A (pag e 8 6 o f

th e application ) identifie s significan t financial constraint s for

th e firm , includin g anee dfor "significan t

additiona l cas h resource s t o operat e an dexpan dour

busities s i

n th e future" . AvStar

Aviatio n als o ha s plan s forI

possibl e expansio n throug h acquisition s of aiifrani c andavioni c dealership s (pag e 8 1 of th e application) . a . Give n thes e constraints , pleas e provid e adetaile ddiscussio n of th e source s o f th e fund s Twi n Ai r

Calyps o wil l us e t o mee t th e Department' s financial fitnes s test . b . Pleas e provid e third-part y verificatio n o f al l lines-of-credi t

availabl e t o support Twi n Ai r Calypso' s propose doperations . Thi s verificatio n shoul dinclud e th e tota l line-of-credi t

bein g mad e available , th e amoun t suc h credi t

lin e ha s bee n draw n dow n t o date , any condition s that mus t b e me t before fund s wil l b e advanced , th e term s of

repayment , an dth e expiratio n date . Further , if th e line

of-credi t i s bein g supplie db y a n individua l o r

organizatio n (othe r

than a recognize dfinancial institution ) copie s o f th e persona l o r

corporat e financial statement s o f

th e individua l o r

organizatio n shoul dals o b e provided , c . Pleas e identif

y an y contingen t

liabilitie s that

may affec t

Twi n Ai r

Calyps o Limited , Inc. , Twi n Ai r Calyps o Sej'vice ^ Jjic , an dAvSta r Aviatio n Group , includin g liabilitie s amon g th e thre e firms , an ddescrib e plan s t o mee t thes e obligations . I

f none , pleas e mak e astatemen t t o this point . Note : Unti l w e ar e abl e t o determin e tha t th e pre-operatin g an dfirst-yea r forecast s provide dar e reasonable , w e canno t determin e wha t

leve l o f fundin g Twi n Ai r

Calyps o wil l requir e t o mee t

th e Department' s financial fitnes s standaid . COMPLIANC E DISPOSITIO N Th e informatio n provide dpursuan t t o this Informatio n Reques t shoul db e accompanie d b y th e followin g certification : Th e content s o f

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

t o th e bes t o f m y 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 m y individua l capacity an da s th e authorize drepresentativ e o f th e applicant , hav e no t i n any 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 wit h th e preparation , filin g o r

prosecutio n o f

th e application . I understan dtha t 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 fiv e years , o r

both .