& 

.T;-, V 

US.Departmwi l o f .. • . ^ l 20 0 New jersey Avenue, SE 

ThanSpOrtOtio n Washington, DC 2059 0 

Office Of the Secretary ' !'- i •' .'^L ' 

of Transportation 

September 16, 2011 

Mr. Clayton I. Gamber 

President / Director of Maintenance 

Twin Air Calypso Limited, Inc. 

700 S.W. 34*^ Street, Suite 100 

Ft. Lauderdale, FL 33315 

Re: Docket DOT-OST-2011-0143, Application of 

Twin Air Calypso Limited, Inc., for Commuter Air Carrier 

authority 

Dear Mr. Gamber: 

We have completed our initial review of the application filed in Docket DOT-OST-2011-0143 by 

Twin Air Calypso Limited, Inc. ("Twin Air Calypso") for the determination of its fitness to 

conduct scheduled passenger air transpoitation as a commuter air carrier. This review has revealed 

tlie need for additional and/or clarifying information before we can complete our review of Twin 

Air Calypso's fitness. 

The attached hiformation Request lists the areas where further information and/or clarification is 

necessary. 1 ask that you respond fully to tliis request within 30 days of the date of this letter, hi 

addition, please remember that Twin Air Calypso should promptly provide the Department with 

any information regarding changes it may undergo in areas affecting its fitness {i.e., management, 

operating plans or financial condition, compliance disposition, or ownership) while its application 

is under review by the Department. As is the Department's practice, further processing of Twin 

Air Calypso's application will be deferred pending receipt of this material. 

Thank you for your cooperation in this matter. If you have any questions, please feel free to 

contact Aleta Best of my staff at (202) 366-9721 or via email at aleta.best@dot.gov. 

Sincerely, 

LaurafynJJ. Kemo, Chief 

Ait Corner Fiiness Divisittn 
cc: Docket DOT-OST-2011-0143 

Mr. Sergio Lopez 

South Florida Flight Standards District Office 19 

2895 SW 145"'Avenue 

Miramar, FL 33027 

Mr. Kent George 

Airport Director 

Fort Lauderdale - Hollywood International Airport 

100 Aviation Boulevard 

Fort Lauderdale, FL 33315 
INFORMATION REQUEST FOR TWIN AIR CALYPSO LIMITED, INC. 

GENERAL INFORMATION 

1. Please provide proof of payment for the $670.00 commuter application fee. 

2. Part 203 of the Department's regulations requires that certain U.S. and foreign air 

carriers waive the passenger liability limits and certain carrier defenses in the Warsaw 

Convention in accordance with the provisions of Agreement 18900, dated May 13, 

1966, and provides that the acceptance of authority for, or operations by the carrier in, 

air transportation shall be considered to act as such a waiver by that carrier. Therefore 

we ask that Twin Air Calypso file a copy of its signed counterpart of Agreement 18900 

(OST Form 4523) in Docket DOT-OST-1995-236. 

3. Please provide a copy of the Preapplication Statement of Intent submitted to the Federal 

Aviation Administration ("FAA"). 

4. The OST Form 4507 dated October 13, 2010, submitted by Twin Air Calypso shows 

that the company has four aircraft. However, the affidavit of aircraft 

conformity/compliance lists Twin Air Calypso as having five aircraft certified by the 

FAA and that comply with all applicable FAA safety standards. How many aircraft 

does Twin Air Calypso currently operate in its on-demand charter operations? If in fact 

the applicant operates five aircraft, it must provide an updated and approved OST Form 

4507 that lists all five aircraft. 

5. Please provide information on the pending action from the FAA regarding a possible 

FAR Part 135.299 checki'ide violation against Twin Air Calypso's pilot Kenneth 

Kronheim, In your response, please include information regarding any civil penalties 

imposed and any steps the air carrier has undergone to prevent a similar violation from 

happening in the future. 

6. On page 43 of its application. Twin Air Calypso provided a FAR Part 135 

Organizational Chart. However, the chart does not list the total number of pilots and 

mechanics employed by the company and the citizenship of each. Therefore, please 

provide this information. 

7. On pages 9 and 30 of its application. Twin Air Calypso stated that the five aircraft it 

will use in its proposed scheduled services are owned by Aircraft Charters, LLC 

("Aircraft Charters") and Fountainhead (BAH) LLC ("Fountainhead"). Which of the 

five listed aircraft are owned by Aircraft Charters and which are owned by 

Fountainhead? 

8. hi its lO-K/A filing for the period ending December 31, 2010 ("10-K/A") (page 80 of 

the application), AvStar Aviation Group, Inc. ("AvStar Aviation") states only three of 

Twin Air Calypso's leased aircraft are flying and that the remaining five leased aircraft 

are down for refurbishing. AvStar Aviation also states that it will need to raise about 

$350,000 to complete the refurbishing of the remaining aircraft. 
a. Did A^'St.^r Aviiiiion raise the neccssiiry landing lo refurbish ihe .^ddilional 

aircraft? If so, how did it obtain those funds {e.g., bank line-of-credit)? 

b. Which aircraft are being refurbished: aircraft owned by Aircraft Charters. 

Fountainhead, AvStar Aviation, Twin Air Calypso, and/or another entity? 

c. How many, if any, of the five aircraft identified for use in Twin Air Calypso's 

proposed scheduled operations are among the aircraft to be refurbished? 

9. AvStar Aviation's 10-K/A (page 89 of the application) indicates that it currently leases 

aircraft but expects in the future it may need to make "significant capital investments to 

acquire the aircraft, ground and cargo handling equipment, and an inventory of spare 

parts necessary for the operation" of the business. How, if at all, would an acquisition 

of aircraft by AvStar Aviation affect Twin Air Calypso's proposed scheduled 

operations? 

10. Will any operational functions, training, or maintenance be contracted out to other than 

Twin Air Calypso Services, Inc.? If so, please provide percentages of types of 

contracts and providers of services. If not, please make a statement to this point. 

CORPORATE STRUCTURE AND OWNERSfflP 

1. On page 8 of its apphcation, Twin Air Calypso states that both it and Twin Air 

Calypso Services Inc. ("MRO") are held by AvStar Aviation Group. Please clarify 

the business and financial relationships between Twin Air Calypso and MRO. 

2. On page 9 of its application. Twin Air Calypso states that the aircraft it will use in its 

proposed scheduled services are owned by Aircraft Charters and Fountainliead. Is 

Mr. Kenneth Farino, the owner of Fountainhead, a U.S. citizen? 

3. AvStar Aviation's 10-K/A (page 75 of the application) stales that it acquired of all of 

the outstanding common stock in San Diego Airmotive ("SDA") in exchange for one 

million shares of AvStar Aviation's newly-created series A preferred stock. The 10-

K/A also states that these shares of preferred stock converted to 50 million shares of 

common stock, which constituted in the aggregate over 90 percent of outstanding 

shares of common stock immediately following the conversion; however, a one-for100 reverse split of common stock followed thereafter. What percentage of 

outstanding common shares is currently held by the former owners of SDA? 

4. According to AvStar Aviation's 10-Q for the period ending June 30, 2011, the 

company issued shares of common stock to Asher Enterprises and an individual for 

the conversion of convertible promissory notes issued to each. Please provide a list 

of all persons (individuals or organizations) that own or control a percent of the stock 

of AvStar Aviation, indicating the number of voting shares and the corresponding 

percentage of the total shares outstanding that are held by each, along with their 

address, citizenship, and principal business. 
a. If any siockiiolder is an organization, provide (he name, address. ci(izenship, 

and principa) business of the individuals who own or control ai least 10 percent 

of the stock of the organization. If there are several layers of ownership by 

companies {e.g., holding or parent companies), information on the slock 

ownership should be provided for each layer until the ultimate individual 

shareholders are reached. 

b. If the applicant's stock is held by someone for the benefit or account of a third 

party, give tlie name, citizenship, and principal business of that person or 

organization, 

c. If any of these persons are related by blood or mairiage or have had any 

financial interest in, or serve or have served as an officer or director of any other 

air carrier, conmion carrier, or person substantially engaged in the business of 

aeronautics or persons whose principal business (in puipose or fact) is the 

holding of stock in or control of any aviation-related entity, that relationship 

should be described. 

d. If any person or organization holds options to convert debt to equity or one type 

of stock to another type, identify the person or organization and discuss the 

circumstances under which such conversion may occur. 

5. Please identify those individuals, and the citizenship of each, that manage and oversee 

the business operations of AvStar Aviation. What level of involvement do they have, 

if any, over the operations of Twin Air Calypso? 

MANAGEMENT AND KEY TECHNICAL PERSONNEL 

1. Please provide updated resumes for Mr. Clayton I. Gamber, Mr. Arthur L. Stevenson, 

and Mr. Luciano Homa. These resumes should include the following information: 

a. For each person, please provide his (active) FAA license numbers and the 

specific aircraft types and hours for the experience listed. For example, 

Mr. Gamber's resume shows a total of "over 8000 flight hours" but does not 

break these hours out by aircraft type. 

b. For Mr. Stevenson, please include date(s) of employment at Island Air Charters 

and date(s) of employment, employer(s), and position tille(s) for "18 years 

experience as US government law enforcement contractor leading 52 overseas 

aviation and marine operations". 

c. For Mr. Homa, please include date(s) of employment for Airborne Inc. and 

Florida Coastal and update other positions' dates of employment to include 

month and year. 

OPERATING PLAN 

1. On page 12 of its application. Twin Air Calypso refers to "future expansion for 

destinations and capacity." 
a. Twin Air Calypso notes that "'additional aircraft will be available for opening 

the West Palm Beach to Abaco market." The authority requested on page 3 of 

the application involves Fort Lauderdale - Bahamas city pairs only, although 

Marsh Harbour (Abaco) is one of the Bahamian destinations. Wlial, if any, are 

Twin Air Calypso's plans to offer scheduled service from any U.S. airport in 

addition to its proposed service from Fort Lauderdale, Florida? 

b. Twin Air Calypso notes that aircraft refurbishing will enable it to offer 

scheduled freight service. Is the proposed schedule for freight services different 

in any way from die proposed scheduled passenger service? If so, please 

identify that proposed scheduled freight service, including city-pairs, frequency, 

and aircraft type. 

2. On page 11 of its application. Twin Air Calypso describes its business marketing 

philosophy regarding Cuba. What, if any, are Twin Air Calypso's plans to offer 

scheduled service from any U.S. airport to Cuba? Does the applicant intend to provide 

service to Cuba within the next 12 months? 

3. For the each of the proposed city-pair markets - (a) Fort Lauderdale, FL (FLL) and 

Treasure Cay, Bahamas (TCB), with continuing service to Marsh Harbour, Bahamas 

(MHH); (b) FLL and North Eleuthera, Bahamas (ELH); and (c) FLL and Governors 

Harbour, Bahamas (GHB) with continuing service to Rock Sound, Bahamas (RSD) ~ 

please provide the following information: 

a. Number of passengers to be carried and expected load factors. 

b. Total number of passenger revenue block hours and revenue miles expected to 

be flown and the extent of any seasonal traffic peaks. 

c. Total number of freight tons and revenue ton miles expected to be flown and 

the extent of any seasonal traffic peaks. 

d. Additional resources (aircraft, personnel, other equipment, etc.), if any, that 

Twin Cities anticipates adding to meet the increased services to be offered. 

FINANCIAL POSITION 

An applicant for commuter authority is expected to be prepared to fully prosecute its 

application at the time it is filed. With respect to financial fitness, the applicant is required 

to provide current financial data,' and three years of historic financial data, together with a 

detailed forecast of its pre-operating costs and a pro-forma forecast profit and loss 

statement reflecting all revenues and expenses the applicant expects to earn/incur during its 

first year of scheduled operations. In addition, the company must demonstrate that it has 

obtained all of the funding needed to meet our financial fitness test or, at a minimum, that it 

has a reasonable plan for doing so. Therefore, please provide the following information: 

' The balance sheei and incomt' statenietii supplied must be for a period ending no more than three months 

prior to the date of filing. 
1. Because Twin Air Calypso is a wholly owned subsidiary of AvSlar Aviation, please 

provide balance sheets and income statements, for (a) calendar year 2010 and 

(b) January I, 2011 through August 30, 2011, together with their accompanying 

explanatory footnotes, for each company. Uiiaudited / uni'eviewed documents will be 

accepted with an accompanying statement of accuracy. 

2. Provide a detailed pre-operating cost forecast. This forecast should include all costs, 

including fuel, insurance, aircraft lease deposits, aircraft refurbishing expenses, legal 

fees, etc. Sufficient detail should be provided to allow us to replicate the mathematics 

used. If Twin Air Calypso believes that none of these expenses will be incurred prior 

to its commencement of commuter flight operations, it should state in detail the 

reasons why the Department should consider this forecast reasonable. 

3. The first-year expenses set forth on page 25 does not appear to have pro-rated all 

expenses between Twin Air Calypso's current on-demand operations and its proposed 

scheduled passe;nger operations. Based on this, we are unable to determine whether 

Twin Air Calypso's first-year expense forecast is reasonable. Therefore, please 

provide a revised profit and loss statement specifically broken down by month or by 

quarter, and that, at a minimum, allocates the indirect expenses on a rational basis 

between its proposed scheduled passenger operations and its other operations, along 

with appropriate explanations. The revised first-year expense forecast should address 

the following: 

a. Separate breakouts of block hours, revenues, and expenses for (a) current 

operations, (b) charter operations - forward, (b) scheduled operations - forward, 

(c) other operations, including scheduled freight - forward, and (d) consolidated 

operations - forward. 

b. Explanatory notes for calculations, including (but not limited to): 

i. The existence of seasonal scheduled passenger revenue but consistent 

freight income. 

ii. The number of pilots employed, how they are compensated (by hour, trip, 

month up to X hours, etc.), and whether compensation will differ during 

peak months? Are there separate pay rates for scheduled and charter 

operations? For passenger and freight operations? 

iii. Any expenses associated with FAA certification efforts. If none, please 

make a statement to this point. 

4. In addition to updates provided through current balance sheet and income statement, 

please identify any transactions to sell or exchange major assets (land, aircraft, 

buildings, etc.) during the six months prior to the application or the six months 

following the application. If none, please make a statement to this point. 

5. AvStar Aviation's 10-K/A (page 86 of the application) identifies significant financial 

constraints for the firm, including a need for "significant additional cash resources to 

operate and expand our busitiess in the future". AvStar Aviation also has plans for 
I 

possible expansion through acquisitions of aiifranic and avionic dealerships (page 81 of 

the application). 

a. Given these constraints, please provide a detailed discussion of the sources of 

the funds Twin Air Calypso will use to meet the Department's financial fitness 

test. 

b. Please provide third-party verification of all lines-of-credit available to support 

Twin Air Calypso's proposed operations. This verification should include the 

total line-of-credit being made available, the amount such credit line has been 

drawn down to date, any conditions that must be met before funds will be 

advanced, the terms of repayment, and the expiration date. Further, if the lineof-credit is being supplied by an individual or organization (other than a 

recognized financial institution) copies of the personal or corporate financial 

statements of the individual or organization should also be provided, 

c. Please identify any contingent liabilities that may affect Twin Air Calypso 

Limited, Inc., Twin Air Calypso Sej'vice^ Jjic, and AvStar Aviation Group, 

including liabilities among the three firms, and describe plans to meet these 

obligations. If none, please make a statement to this point. 

Note: Until we are able to determine that the pre-operating and first-year forecasts 

provided are reasonable, we cannot determine what level of funding Twin Air Calypso will 

require to meet the Department's financial fitness standaid. 

COMPLIANCE DISPOSITION 

The information provided pursuant to this Information Request should be accompanied 

by the following certification: 

The contents of this application and the attached exhibit (s) are true and correct to 

the best of my knowledge and belief. Pursuant to Title 18 United States Code 

Section 1001, I [the individual signing the application, who shall be a principal 

owner, senior officer, or internal counsel of the applicant], in my individual 

capacity and as the authorized representative of the applicant, have not in any 

manner knowingly and willfully falsified, concealed or failed to disclose any 

material fact or made any false, fictitious, or fraudulent statement or knowingly 

used any documents which contain such statements in connection with the 

preparation, filing or prosecution of the application. I understand that an 

individual who is found to have violated the provisions of 18 U.S.C section 1001 

shall be fined or imprisoned not more than five years, or both.