## BEFORE THE

U.S. DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Application of



## AERODYNAMICS INCORPORATED

for a Certificate of Public Convenience

and Necessity pursuant to 49 USC§ 41102

to engage in Scheduled Interstate Air

Transportation of Persons, Property and Mail Docket DOT-OST-2014-0114



## SUPPLEMENT NO. 4 TO

APPLICATION OF AERODYNAMICS INCORPORATED

FOR A CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY

Communications with respect to this document should be addressed to:

November 3, 2014 Aaron A

. Goerlich

Jason E. Maddux

Garofalo Goerlich Hainbach PC

1200 New Hampshire Avenue, N.W.

Suite 590

Washington, D.C. 20036-6802

202-776-3974

agoerlich@ggh-airlaw.com

jmaddux@ggh-airlaw.com



## Counsel for Aerodynamics Incorporated

## Application of BEFORE THE

U.S. DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

AERODYNAMICS INCORPORATED Docket DOT -OST -2014-0114

for a Certificate of Public Convenience

and Necessity pursuant to 49 USC § 41102

to engage in Scheduled Interstate Air

Transportation of Persons, Property and Mail

SUPPLEMENT NO. 4 TO

APPLICATION OF AERODYNAMICS INCORPORATED

FOR A CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY

Aerodynamics Incorporated (ADI) hereby supplements its application dated June 25,

2014. This fourth supplement provides updated information regarding the route to be served

by ADI upon its inauguration of scheduled service at the Youngstown-Warren Regional

Airport (YNG), including a detailed cost projection for the first year of service. In addition,

this supplement provides information on a new $1 million financial resource available to AD I.

YNG-ORD



## The primary purpose of ADI's initial pattern of scheduled service is to link YNG with

a major carrier's hub, providing passengers convenient access to the broad domestic and

international air transportation system. When ADI's application was filed in June, ADI

anticipated that hub would be Detroit, Michigan (DTW). In the ensuing months, however, it



## has become apparent that a link between YNG and Chicago O'Hare International Airport

(ORD) is a superior alternative. This is due in significant part to an inability to utilize the

Delta Airlines terminal at DTW, meaning ADI passengers would have tore-clear security at

## DTW when making connections to or from the airport's hub carrier. This complication will

not exist at ORD-which, coincidentally, is home to two major carrier hubs, providing

broader competitive alternatives for YNG passengers.

Appended to this supplement is a detailed cost projection for the first year of YNGORD service. For the Department's convenience, the projection is formatted identically to

ADI's previously submitted YNG-DTW projection. The increased distance between YNG

and ORD, versus YNG-DTW, results in a 35o/o 

## increase in block hours and, therefore,

increased fuel expense. 1 

## That increase, however, is largely offset by certain economies of

scale AD I has achieved over the past four months.

In Attachment N to ADI's June 25 application, ADI noted that it expected to expand

its fleet from three to five EMB-145 regional jets in the near future. All five of these aircraft

were previously operated by a single U.S. regional airline, and three of them are leased

directly from that carrier or its parent. In the course of the most recent lease negotiations,

whereby ADI's fleet was expanded to five aircraft, ADI was able to negotiate participation in

cooperative arrangements with the regional-carrier lessor that reduce AD I' s costs significantly

in several areas. This includes aircraft lease costs, aircraft reserve and maintenance costs,

crew training costs, and insurance expense. The attached projection reflects these reductions

as they apply in the context of the YNG-ORD route. In addition, because AD I' s turnaround

times at ORD will be far shorter than at DTW-the inefficiencies involved in using an

inconvenient terminal at DTW are now moot-ADI does not need to allocate as many

crewmembers to the flights as was previously the case, resulting in reductions in crew

- salary

and related crew expenses for the YNG-ORD route.

The projected fuel expense increase is closer to 80%, due to the combined effects of

increased block hours (including conservative assumptions regarding taxi times at ORD),

greater fuel consumption while climbing to the higher cruise altitudes used for longer stage

lengths, and higher fuel prices at ORD.

## The net effect is an increase of $91

, 014, or 2

. 2%, in projected YNG-ORD first year

expenses versus the YNG-DTW projection. And, as noted, service to ORD will provide YNG

passengers more numerous and more convenient connecting opportunities than at DTW.

Financial Resources



## Appended to this supplement is an October 31 firm commitment from Five Points

Bank, a Nebraska-based financial institution

, to provide ADI a $1,000,000 line of credit for a

term of one year. This resource is in addition to, not in replacement of, ADI's other financial

resources described in its application and previous supplements

.

The amount of this additional line of credit more than offsets the loss experienced by

ADI during the second quarter of 2014. In the latter regard

, ADI wishes to point out that its

financial results for the first and fourth calendar quarters are generally superior to the second

and third quarters. That is because the fourth and frrst quarters coincide with the colleg i ate

basketball season, and ADI, whose regional jet aircraft are ideally sized for transporting

basketball teams and their related personnel and equipment, operates numerous charters for

NCAA basketball programs. ADI has a large number of these flights under contract for the

2014-15 season which begins this month.

A final word about financial resources: As shown in ADI's application and previous

supplements

, ADI is assured a 5% profit margin on its YNG service under a $1.2 million

revenue guarantee provided by the Youngstown Parties. To ADI's knowledge, no previous

certificate applicant has presented the Department evidence of a guaranteed profit on its initial

scheduled route. Such assurance is unheard of in the context of certificate applications, which

ordinarily involve a significant commercial risk on the part of the applicant. By virtue of the

revenue guarantee, ADI's initial pattern of s cheduled service will be essentially risk-free.



# * * 

# *

## WHEREFORE, ADI renews its request that the Department issue to Aerodynamics

Incorporated a certificate of public convenience and necessity to engage in scheduled

interstate air transportation of persons, property and mail. ADI also renews its request that the

Department complete its processes in this matter as expeditiously as possible.

Respectfully submitted,

# ~d.~vL_

# bG:r;i~ Jason E. Madduxch /

Garofalo Goerlich Hainbach PC

Counsel for Aerodynamics Incorporated



## November 3, 2014YOUNGSTOWN(YNG)OPERATIONSPROJECTIONTOORO111HOURS11PR£.QPS1DEaMaolt1-..-1AEIRUARY1MAROt1-.1MAY1JUNO1JULY1Slm-R1-CiCfOilR::;rNOVEMIIER1--tOTAlS15lii+rii·SIEstimltedflla'ltHOUnoAddedAit;htHours:•__Ill...,II!...:..-WI!I!III;7II)l!ll.2567a930)I!II334Alr<nft-Caoto!GoodsSoldLContJ'octed-CNw-CrewSalaries2eaPIC2eaSIC2eaFACrewTal<esandBenefitsCrewPerDiemFlightAttendant·PartTime--AirCRftleaseExpenseA;rcraftFuelExpenseAircraftHandlinoatOROYNGDelcinrboo""'AirPortRon!atYNGOROGallevSuoollesDetallandO.anlnoAlraaftHunUabllkvPremiumsSu-ResetVation$12.00CAMPMaintenanceMalntenonoeEnllineRe.se!W$lTota1CareC-oteckReservesMonthtvFlatRateParuProoram•AlloaruLandlnt:GearReserves1:1RatioUfeUmitedPartsUPReserves1:1RattoAPUReserves1:1RatloHourlyScheduled/UnscheduledRosetve•$$I515IS$$$$$$iu$$$$IS15$Anllual275000I522917522917I52291765000155417$5417IS541719%$5242IS5242I$5242$32500s152708$2708150ISIS4500$4500$$15$$20000'5$20000$200001$101315$128492$128492IS927$$38999$38999$700$IS19,700I523505IS12000$$12000IS12000IS22$1944IS1944$15000$1250$1250$1,250$86000716771677167IS$19,556$211461$125.00$125.00L1_us.ooI$750I5750L1_750LJ250$$22088s22,088$5000Lj_$_5000$5000$185$$16345$16345$2500$2500$2500IS78$_$_6,575$6575$25IS$209$220975$$6.626$6,626$1..-·1&.-229172917$22917I522917s22917IS22917IS22917s2917$22917's22917$29791754175417s5417$5U7$5417IS5411Is5411Is5417$5417$5417$7041752425242$5,242IS5242s5242$5,242Is5,242Iss,242Is5,242$5242$6814227082708$2708I527082708$2708Is27081$27081$2708$2708'$3250045004500s4500I54500$4500Is4.500$4.500I$4500$4500_$_4500$_54000sIs$Is$I$I$_i_20000's20000s20000I5200001520000$20.000Is20000Is20000$20000$20000_$_240000128492$1284925128492I5128492$128492IS128492$128492I$128492$128492$128492i38,999$38,999s38,999$38999$38999$38,999$38999$38999$38,999$38999$46798821785$6,8532213$$IssIS5704$12168$9192812000$1200012000$12000I512000$12000s12000IS12000$12000s12000$1440001944$19441944$1944$1944I51944$944$1944$1944$1944$23.,R412501250$1,25051250IS1,250IS1,250'51,250Is1250Is1,250$250$16,250716771677167I57167$7167I57167$7167i57167$7167$7167$93167!.892I5247!10$26ms21.1961$31068$33.275I535.4112$37654IS397!;01$4769$363068125.001_$_125.00Lt125-00125.00ISUS.OOIS125.00I5125.00IS12S.OOIS125.00I5125.00s1625750I5750IS750IS750IS750IS750IS750s750IS750IS750s975022088$22,088$22,088$22088$22,088$22,088$22,088$22088$22,088$22088$265,0505,000i5000$5.0005000$5000$5000$5000s5000$50005000$6000016345$16345I516345$16345s1634516345$16345$16345$1634516345$19613725002500IS25002.500$2500$2500s2500s2500$25002.500s300006,5756575$6575$6.575IS65756.5756575$6,575s6,5756575$7890322092209$22092209IS2209$22092209$2209522092209s265056,626$6,626s6,626$6,626s6626$6626$6626$6,626$6,626$6626$79,515-;IS-.r•--I1$____----.a!:iiOJIf...IsU!D11Sp1SnplS&•IIlUIIGIS!L1!!1S&PlS»ell&nlll•UIIll__f!!U____--lf!Li40135-..lnaEx...,..,..0.0%II$IAirv.rtOrr:tftJirKOIM{IontIIsu2059liii44JiW!lii#IS!UI!Jtp¥11umlttlmli11,!lJis1£+1S#ill$welluelsJW!I!!!2J!21tlfQlg1fstlmat.odblod<hourspndiatedonlOroundllfpfll&loUpo<-botweenY-ownondO>IaiDO'HareAirport(ORD)2Estlmotedfli&lltholnon10r<MI<IIrlpftlchbpo<-betweenYounpii>Wnanda._JNctAppllcoble4Notapplicable5Thetalalftilhtholnpr-ajo<Wdloreadlmonthareusedtocalaolotedinedoperotl"'COSbInINsprojtctlon67Notappilable8Pnljectodrevonuofromtidc<t..les_Estimatedfireswlll...,.te$100H<h-induslveof-.andt....LoodfadonuslnCdemanddatafromvarioussources.9TheYou..,._..Parties'-pnMcledAm>dynamlcsa.........,..,.,-.eassurin1AlllaSl'profitmarcln.10ProjededandotherandllaryfeeJ.11Cllwsalaryestlmoledn..-GtcrewmeborstooporatetheproJectedshcedule.12AtunUmemalntenanoetechnldanIsplonnedtobebasedwiththealr<nftInYou..,._..toemurethebestdlspatd!relalbllnyand..,timepo<f""""""'1314n-..-proj«todto-annualrecu,....tni'*'C,LOFTewnt>,tnwland-oa:omodatlonsroqulredlorthetntrl"'ewnts.15&chfiWYiaowmomberlspold$SOperdaylormulandother._.....ondillydays.16Notapplicable17Thblsthe..-!llyaln:roftlease._,seandftxedoosts-edwlthtllei'JiG.I>asedalrcroft.lBFuellnr-lspro)ectedtolndudoftlahtpllnnedluolbumforeadlfllchtsecmenttimesthenumborotftllhtsqmentslortllemonltlattheprojectodiVOBiepur<haseprkepe<l>llon.19ThehordlrwcasuareproJectedbasedonQUOtotionsro<ellledfromservedolrporuandincludeanlabortosoMa!pa,_rsandbaaaseplusundor-wln&seM<es,e•cludl..,luol.20Alr<rafldoidiW-Isproj«todontile-lorocuteddeldeenniStimestileapecteda>Stpo<ewntlormont11sofOctoberthrOI.WhApril.21Airportrentlndudostldcetcounterspace,ptespaceandallotherairportrentcha'lesasestimated.2223Alnnftdeonln&anddetalliflllslorw.ldyandmonthlydeepcleanlfl(and-washesandInteriordeepdeanlfl(.24AWaafthl.itandlllbllltypremiumsarecalwlatedatcurrentratestimesprojt'ctedusaee.2526TheJew-senandNlvfptionWrtexpenseIsprojt!d:edtwedonroutingandcurrentcorporatecosts.27CAMPMalnlenln<eeosbo,.,lorthea>mpoteriledalrual\malnlena.-.,...,.mpaidonanOMUIIseM<etoathirdparty.28Profe<Ud....,.'-""'po<thellrtraftlease•rcementttmestileprojc<ted,...-ofhoursftowneadlmonth.291'nljectodCChed<._.....,.nsebasedontlleroqulrodmonthlyruorvepaldtothew-.30ProjecWdPirtsre:seNeexpensebasedontherequiredmonthfyresei'W!p1kttotheLessor.311'nljectodlandlfl(____""therequR<Imonthly-poldtothelessoo32Profe<UdUleUrnlled'-(W')reoerw...,.....,bncdmtherequiredmonthlyresonepoldtotheLessor.33APUresefWeJCperueba5edontherequiredmonthlypaidtothelessor.34molntenonoeexpensesanllclpatodandnotc:owredbythe,•.....,01pensesoriUitlmemechanic.35ThenoiiiiOantidpatedAOI__,......,_.,thernarbtlnc_ls......,...bytheY-nPartleslndudlfllln-klnd-.36Theb..o--kforthededlcotedptojoctrnanacersupervlsl..,thisrouteandopentlon.J7TIMs._...aMnthe-ateGenerai&Admlnlstra!M!COII>astoelotAidwtth!Nsrwte.NatethallnackllllontotheGaA,.........eallocatlon,AOihasallocatodspeclflc:COII>suchasBose_...,asMparatollneltom_......

# FIVE POINTS BANK

MBveERFDIC



### ----------P

. O. Box909 • Kearney

, NE68848-0909 • 308-234-6171----------

October 

### 31, 2014

Scott A. Beale

Chief Executive Officer

Aerodynamics r ncorporated

25700 Science Park Drive Suite 210

Beachwood, OH 

### 44122

Dear Mr. Beale:

Thank you for signing the Commitment for Commercia l F i nancing this same date.

I will begin the process of preparing the documents associated with this lend i ng and deposit relationship

early next week with the goal of having everything in place within the next 10 business days, 

### if not sooner.

I will be tn touch early next week.

I look forward to working with you

.



### Sincerely,

Tim Mannle i n

Senior Vice President

Five Points Bank

## FIRM COMMITMENT FOR COMMERCIAL FINANCING

Submitted to: Aerodynamics Incorporated

Submitted by: Five Points Bank (Lender)



## Borrower:

Amount:

Purposeffype:

Term:

Interest Rate:

Fee(s):

Collateral:

Repayment: Firm Commitment for

Commercial Financing

Provided by 

## Five Points Bank

Aerodynamics Incorporated

$1,000,000

Operating Line of Credit

One Year

Fixed rate of 2.35o/o (Five Points Bank twelve month CD rate plus 2.0%)

.50% ($5,000) due at closing plus all legal and filing fees

Assignment of deposit account to be established with Five Points Bank

Monthly interest payments with all principal and interest payments due at

maturity.



## Financial Reporting: Accountant prepared quarterly compiled financial reports on Aviation

Capital Partners, LLC and Subsidiary to be provided within 30 days of

each calendar quarter.



## General Provisions: Bank shall be provided with sufficient legal documentation on

Aerodynamics Incorporated and Affiliates (Articles of Incorporations

, ByLaws, Borrowing Resolutions, Tax ID#'s, and evidence of Corporate

Good Standings)

This commitment is subject to the bank being provided with whatever other documentation or

information may be reasonably deemed necessary by bank in order to completely and

comprehensively monitor and document this credit.

This commitment will expire if not accepted in writing before 

## November 10,2014. By affixing

of the signature below, I acknowledge acceptance and understanding of the terms and conditions

of the commitment outlined.

A CREDIT AGREEMENT MUST BE IN WRITING TO BE ENFORCEABLE UNDER NEBRASKA LAW

. TO PROTECT YOU AND US

FROM ANY MISUNDERSTANDINGS OR DISAPPOINTMENTS, ANY CONTRACT

, PROMISE, UNDERTAKING, OR OFFER TO

FOREBEAR REPAYMENT OF MONEY OR TO MAKE ANY OTHER FINANCIAL ACCOMMODATIONS IN CONNECTION WITH THIS

LOAN OF MONEY OR GRANT OR EXTENSION OF CREDIT, OR ANY AMENDMENT OF, CANCELLATION OF, WAIVER OF, OR

SUBSTITUTION FOR ANY OR ALL OF THE TERMS OR PROVISIONS OF ANY INSTRUMENT OR DOCUMENT EXECUTED IN

CONNECTION WITH THIS LOAN OF MONEY OR GRANT OR E XTENSION OF CREDIT MUST BE IN WRITING TO BE EFFECTIVE

.

## CERTIFICATION

Pursuant to title 18 United States Code section 1001, I, Scott A. Beale, in my individual

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

manner knowingly and willfully falsified, concealed or covered up 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 nor more than $10,000 or imprisoned not more than five years, or

both.

/"Sc ott A. Beale, Chief Executive Officer

Aerodynamics Incorporated

Dated: November 3, 2014

## CERTIFICATE OF SERVICE

I hereby certify that a copy of the foregoing supplement, including all attachments, has been

provided by email on November 3, 2014, to each of the following persons:

FAA Flight Standards District Office

- Atlanta

Attn: Bruce Clamp, POI

107 Charles Grant Parkway, Suite 301

Hapeville, Georgia 30354



## alton. c/amp@faa.gov

Dan Dickten, A.A.E.

Executive Director of Aviation

Youngstown- Warren Regional Airport

1453 Youngstown-Kingsville Road NE

Vienna, Ohio 444 73



## ddickten@yngairport. com

RosemarieS. Andolino, Commissioner

Chicago Department of Aviation

121 North LaSalle Street

Chicago, Illinois 60602



## rosemarie. andolino@cityofchicago. org

Michael Koester