Order 2014

- 9

- 11

Served: September 17, 2014

UNITED STATES OF AMERICA
DEPARTMENT OF TRANSPORTATION
OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 17 th day of September , 20 14

Application of

CARIBBEAN SUN AIRLINES, INC.

d/b/a WORLD ATLANTIC AIRWAYS
d/b/a WAA

for a certificate of public convenience and necessity

pursuant to 49 U.S.C. § 41102 to engage in interstate charter air transportation of persons, property

, and

mail Docket DOT

- OST

- 20 14

- 0152

ORDER ISSUING CERTIFICATE

Summary

By this order, we (1) find that Caribbean Sun Airlines, Inc. d/b/a World Atlantic Airways d/b/a WAA (“CSA”)

, is a citizen of the United States and is f it, willing, and able to provide interstate charter air transportation of persons, property

, and mail ; (2) issue it a certificate of public convenience and necessity authorizing such operations, subject to conditions ; and
(3) grant the company’s request to operate one additional large aircraft, 1 increasing its fleet of

aircraft from five to six large aircraft. 2

Background

Section 41102 of Title 49 of the United States Code (“the Transportation Code”) directs us to

determine whether companies proposing to engage in interstate charter air transportation are “fit, willing, and able” to perform such service, and to comply with the Transportation Code and the regulations and requirements of the Department. In making fitness findings, th e 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 n air c arrier’s fitness are whether the applicant: (1) will have the managerial skills and technical ability to conduct the

1 Section 298.2 (h) of our rules defines “large aircraft” as any aircraft originally designed to have a maximum capacity of more than 60 passenger seats or a maximum payload of more than 18,000 pounds.

2 On September 2, 2014, CSA requested authority to op erate six large aircraft and provided current financials to support its request. We have decided to grant the company’s request concurrently with the approval of the interstate charter application herein since the financial projections submitted for the i nterstate charter operations

include the use of the sixth aircraft.

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 Nproposed operations, (2) will have access to sufficient financial resources to commence the operations proposed without posing an undue ris k to consumers, and (3) will comply with the Transportation Code and regulations imposed by Federal and state agencies. We must also determine that the applicant is a U.S. citizen.

On September 2, 2014, CSA filed an application in Docket DOT

- OST

- 2014

- 0152 requesting authorization under 49 U.S.C. § 41102 to engage in interstate charter air transportation of persons, property, and mail

. 3 Subsequently, o n September 12, 2014, CSA accompanied its application with a motion pursuant to Rule 11 of the Department’s Procedural Regulations ( 14 CFR § 302.11 ) requesting to shorten the answer period on its application to September 15,

2014

. 4 On September 15 , 20 14 , after polling interested parties, CSA advised the Department that there were no objections to shortening the answer period on its application from the polled parties. The Department grant ed CSA’s request , shortening the answer period in this

case to noon on September 17, 2014. 5

N o answers opposing CSA’s application were filed and no special issues regarding the applicant have come to our attention. Under these circumstances, we propose to decide the issue of the applicant’s fitness on the basis of the written record . A s discussed in this order, our review of the application and supporting material CSA provided indicates that the air

carrier is fit, willing, and able to operate its proposed interstate charter service

. Moreover, we note that CSA’s existing foreign charter operations, which are substantially similar in scope to its proposed interstate charter operations

, have been conducted satisfactorily under its current ownership and management. In light of this , we have decided that neither an oral evidentiary hearing nor a show cause p roceeding is necessary for us to make a decision in this case. Therefore, in accordance with section 302.2 10 ( a ) of our regulations (14 CFR § 302. 210 ( a )), we will proceed directly to final approval of CSA’s certificate for interstate charter authority

.

FITNESS

The Company

CSA was incorporated under the laws of the State of Delaware in 2000. On September 30, 2010, t he air carrier was issued effective certificate authority to engage in foreign charter passenger air transportation using large aircraft. 6 CSA also holds a Federal Aviation Regulations (“FAR”) Part 121 operating certificate from the Federal Aviation Administration (“FAA”) . The air carrier currently operates a fleet of three MD

- 83s and one MD

- 82 on behalf of various charter customers primari ly between Miami, Florida, where the air carrier maintains its headquarters, and various Caribbean destinations

.

3 The applicant supplemented its application with additional information on September 12 and 17 , 2014

, together with a Motion requesting confidential treatment of certain information it was providing.

4 Pursuant to section 302.204 of the Department’s regulations (14 CFR § 302.204) , answers to CSA application were due 21 days after the filing of the subject application, i.e. September 23, 2014.

5 See Notice Shortening Answer Period

, dated September 16, 2014

, in Docket DOT

- OST

- 20 14

- 0 152

. 6 See Order 2010

- 9

- 34, issued September 30, 2010. The Department, by letter dated September 8, 2014, recently found CSA fit to operate a fifth large aircraft.Managerial Competence

CSA’s Board of Directors consists of Messrs. Tomas E. Romero, Florentino L. Gonzalez, and John R. Rupert , each of whom is a U.S. citizen

. In addition, b elow is a list of CSA’s other key management personnel. The Department has previously reviewed the qualifications and experience of all of the individuals listed below , including CSA’s Board, with the exception

of M essrs. Pedro Ruiz, Joseph Patrick

, and John Barnes. 7

President and Chief Executive Officer (“CEO”) Mr. Tomas E. Romero Vice President/Director of Operations Mr. John R. Rupert

Director of Maintenance Mr. Pedro Ruiz Director of Safety Mr. Joseph Patrick

Chief Pilot Captain Tom Van Halm 8

Director of Quality Control Mr. John R. Barnes Vice President of Technical Operations Mr. Ray Bradley

The Department reviewed Mr. Romero’s employment background in connection with the air carrier’s resumption of service in 2010 and in conjunction with Mr. Romero assum ing the role

of President and CEO of Caribbean Sun in July 2012

.

Mr. Pedro Ruiz ha s serve d as the company’s Director of Maintenance since 2011. Prior to

this

, he served as Maintenance Manager of Falcon Air (2010

- 2011). Mr. Ruiz was previously employed by Commercial Jet as a DC

- 10, MD

- 11, 767, 737

- 400 Flight Line Supervisor (2009

- 2010) ; by Falcon Air as a Director of Maintenance (2009

- 2009) ; by Commodore as a Manager of Flight Line (2002

- 2009) ; by Arrow Air in various positions of increasing responsibilities

, including Manager L

- 1011 Flight Line , Supervisor of Flight Line Maintenance, Leadman of Flight L ine Maintenance ; and Airframe and Powerplant Mechanic (1990

- 2002) ; a nd by Greenwich Air Services as an Airframe and Powerplant Mechanic (1984

- 1990)

.

Mr. Joseph Patrick serves as the company’s Director of Safety. Prior to being promoted to his current position, he served as CSA’s Dispatch Manager , working extensively with company manuals and safety/audit processes (2009

- 2013). Mr. Patrick was previously employed as Manager of Flight Control and Dispatcher at Falcon Air Express (1998

- 2009). He also served at BWIA West Indies Airways as Operations Supervisor (1998

- 2006) an d at Fine Airlines as Flight Operations Supervisor (1998

- 2000).

Mr. John R. Barnes, an Airframe and Powerplant Mechanic, serves as the company’s Director of Quality Control (2012

- present). Prior to being promoted , Mr. Barnes was CSA’s Supervisor of Quali ty Control ( 2010

- 2012)

. He was previously employed as a Hangar Maintenance Inspector for Commercial Jet (MRO) (2009

- 2010) and Miami Air ( 2008

- 2009)

. Mr. Barnes has also held various aviation

- maintenance positions, including Line Maintenance Inspection Le ad for Miami Tech ( 2008 ), Quality Control M anager for Arrow Air ( 1991

- 2008 ), Foreman of Flight L ine M aintenance and Overhaul S upervisor for Greenwich

7 See Order 2009

- 12

- 8

, dated December 15, 2009 ; and Order 2010

- 9

- 34

, dated September 30, 2010.

8 Captain Van Halm holds Dutch and U.S. citizenship.Air Services (1989

- 1991), Engine Overhaul Center Inspector and Overhaul Mechanic for

Batch Air (1982

- 1989)

, and Maintenance Flight L ine Mechanic for Airtech Service (1981

- 1982). He also served in the United States Navy as a Naval Flightline Mechanic (1976

- 1981).

In view of the experience and background of the ap plicant's key personnel, we conclude that

CSA h as demonstrated that it possesses the managerial skills and technical ability to conduct its proposed interstate charter operations. 9

Operating Proposal and Financial Condition

As previously stated , CSA currently operates a fleet of three MD

- 83s and one MD

- 82 on behalf of various charter customers primarily between points in the U.S. and the Caribbean

and has recently add ed a fifth aircraft to its Operations Specifications

. If granted the authority it seeks, CSA expects to add an additional large aircraf t to its fleet, increasing its total fleet size to six large aircraft.

CSA provided pre

- operating and first

- year expense forecasts for its proposed operations using one large aircraft . Specifically, the company anticipates that it will incur pre

- operati ng

expenses of $50,000 and first

- year operating expense s totaling about $4.24 million.

The company also provided historic and current financial statements. For calendar year 2013, the company lost $1.29 million on operating revenues of $30.64 million. For the five months ended May 31, 2014, CSA reported net income of $240,032 on revenues of $ 21.44 million

. The company’s balance sheet at May 31, 2014, shows that it has current assets of $ 4.08 million and current liabilities of $ 7.37 million, g iving it negative working capital of approximately $ 3.29 million

.

In establishing financial fitness, the Department typically asks that the company have

available to it financial resources sufficient to cover all pre

- operating costs and any negative

wor king capital balance, plus a working capital reserve equal to the operating costs that would be incurred in three months of normal certificated operations. 10 We have examined CSA’s estimated expenses and find them to be reasonable. Based on our review of the forecasted expenses and the negative working capital of CSA, we calculate that the company will need access to approximately $4. 4 million to meet our financial fitness criteria.

In support of its financial fitness, CSA provided third

- pa rty verification of funding available to it for use in its current foreign and proposed interstate charter operations . More specifically, CSA submitted evidence that it obtained a $5.0 million line

- of

- credit from BLC

9 Before authorizing an air carrier to conduct air transportation operations, the FAA also evaluates certain of

the air carrier' 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 their skills and technical abil ity.

10 Because projected operations during one of more of the first three months of anticipated actual air transportation services frequently do not include all costs of operations that will be incurred during a normal period of operations, it has been o ur practice to base our three

- month standard on one quarter of the first year’s operating cost forecast. In calculating available resources, projected revenues may not be used.Development, LLC which can be used tow ards, among other things, expenses related to the air carrier’s expanded operations. Based on th e information submitted , these sources will provide CSA with a level of funding that satisfies the financial fitness criteria identified

above.

We conclude, therefore, that CSA will have sufficient financial resources available to it to

enable it to commenc e its propo sed operations without posing an undue risk to consumers or

their funds.

Compliance Disposition

C SA states that there are no actio ns 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 brought against any of these parties. CSA

al so states that there are no pending enforcement actions, or formal complaints filed by the Department against it, its key personnel, or persons having a substantial interest in it with respect to compliance with the Transportation Code or the Department’s regulations.
Moreover, CSA has experienced no accidents and only one incident since being found fit and initiating operations in 2010

. Furthermore, according to the FAA, CSA has demonstrated a satisfactory compliance disposition and th e agency knows of no reason why the air carrier should not be granted the authority it is seeking

.

In light of these circumstances, we tentat ively find that CSA 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 41102 of the Transportation Code requires that 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). That section requires that the president and two

- thirds of the Board of Directors and other managi ng officers be U.S. citizens, that at leas t 75 percent of the voting

interest be owned by U.S. citizens , and that the air carrier must be under the actual control of

U.S. citizens.

As previously s tated, CSA is incorporated in the State of Delaware. The air carrier is wholly owned by Mr. Tomas Romero, a U.S. citizen , who also serves as the air carrier’s President

and CEO . In addition, all of the applicant’s key personnel , including its B oard of D irectors,

are citizens of the United States

.

Based on the above, we con clude that CSA is a citizen of the United States and is fit, willing, and able to provide the interstate passenger charter service it proposes as a U.S. certificated

air carrier.REQUEST FOR CONFIDENTIAL TREATMENT

On September 12, 2014, CSA filed a motion for confidential treatment under

14 CFR § 302.12 (“Rule 12”) of our rules to withhold from public disclosure the contents of

Confidential Exhibit

- B, information pertaining to the air carriers funding commitments from

financial institution and trade creditors. CSA states that release of that information could harm its competitive position.

Rule 12 instructs us to evaluate requests for confidential treatment by the standards of disclosure 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 confidential ( Gulf and Western Industries, Inc. v. United States , 615F.2d 527, 529 (D.C. Cir. 1979)).

There is no question that the information for which the Applicants seek confidential treatment is financial or commercial in nature and that it was obtained from a person outside the government. The remaining question is wheth er the information is privileged or confidential

-

- whether “disclosure of the information is likely to have either of the following effects: (1) impair the Government’s ability to obtain necessary information; or (2) cause substantial harm to the competitiv e position from whom the information was obtained” ( National Parks

and Conservation Association v. Morton , 498 F.2d 765,770 (D.C. Cir.1974)). Further, to be privileged or confidential, the information must not be of the type that is usually released to

th e public ( Gulf and Western Industries, Inc. v. United States, 615F.2d 527,530 (D.C. Cir. 1979)).

We have reviewed the material submitted and have decided to grant confidential treatment to the information for which such treatment is sought. The informat ion contained in Exhibit B is no longer required by the Department to determine CSA’s ability to meet our financial fitness test. The air carrier recently supplemented its application with a redacted copy of a $5.0 million line

- of

- credit from BLC Developm ent, LLC (Exhibit C), which is sufficient to support the air carrier’s position that it has financial resources available to it to conduct its proposed interstate charter operations

. Therefore, we will provide confidential treatment, as provided under con fidential seal, to Exhibit B.

CERTIFICATE CONDITIONS AND LIMITATIONS

While we are making the interstate charter certificate authority issued here effectively immediately, CSA’s ability to conduct operations under this certificate remains subject to

recei pt of the appropriate approvals from the FAA, as well as obtaining the appropriate insurance for its operations.

Our findings stated above are based on the operating plan described in CSA ’ s appli cation namely, utilizing one additional large aircraft

, bringing its total fleet size to six large aircraft

. These findings might no longer apply if the company were to substantially change the scope of its operations through the introduction of additional aircraft. Therefore, once the applicant’s certificate become effective, should CSA propose to acquire additional aircraftand expand the air carrier’s operation s to more than six large aircraft

, it must notify the Department in writing at least 45 days in advance and demonstrate its fitness for such operatio ns prior to implementing service with those additional aircraft.

Furthermore, we remind CSA of the requirements of 49 U.S.C. § 41110(e). Specifically, that section requires that, once a n 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 to them, we require that they supply information describing any

s ubsequent substantial changes they may undergo in areas affecting fitness. 11 The compliance of the company with this requirement is essent ial if we are to carry out our responsibilities

under 49 U.S.C. § 41110(e). 12

Finally, to aid the Department in monitoring the fitness of new carriers, we require that all newly certificated carriers submit a detailed progress report, within 45 days following the end of the first year of certificated operations, to the Air Carrier F itness Division. The report should include a description of the air carrier’s current operations (number and type of aircraft, principal markets served, total number of full

- time and part

- time employees), a summary of how these operations have changed dur ing the year, a discussion of any changes it anticipates from its current operations during its second year, current financial statements, 13

and a listing of current 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.

ACCORDINGLY:

1. We find that Caribbean Sun Airlines, Inc . d/b/a World Atlantic Airways d/b/a WAA is fit, willing, and able to engage in interstate charter air t ransportation of persons, property

, and mail, subject to limitations.

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

- day

advan ce notification of any proposed change in ownership, restructuring, or recapitalization. If the air carrier

fails to file the information or if the information fails to demonstrate that the air carrier will continue to be fit upon implementation of the su bstantial change, the Department may take such action as is appropriate, including enforcement action or steps to modify, suspend, or revoke the air carrier's charter authority.

12 We also remind CSA of 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 flying operations under that authority within one year 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

redetermine d; and (3) if the company does not resume operations within one year of its cessation, its authority shall be revoked for dormancy.

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

- month income statement ending that same date.2. We issue certificate of public convenienc e and necessity to Caribbean Sun Airlines, Inc

. d/b/a World Atlantic Airways d/b/a WAA to engage in interstate c harter air transportation of persons, property, and mail subject to the Terms, Conditions, and Limitations attached.

3. We grant the request of Caribbean Sun Airlines, Inc . d/b/a World Atlantic Airways d/b/a

WAA to add one additional large aircraft to i ts fleet , increasing the number of large aircraft it is authorized to operate to six large aircraft.

4. We direct that should Caribbean Sun Airlines, Inc

. d/b/a World Atlantic Airways d/b/a

WAA wish to operate more than six large aircraft

, it must first provide the Department with at

least 45

- days’ notice and demonstrate its fitness for such operations

.

5

. We grant the motion for confidential treatment filed by Caribbean Sun Airlines, Inc . d/b/a World Atlantic Airways d/b/a WAA on September 12, 2014

.

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

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

## Certificate of Public Convenience and Necessity for

Inters tate Charter Air Transportation

This Certifies That

CARIBBEAN SUN AIRLINES , INC.

d/b/a WORLD ATLANTIC AIRWAYS

d/b/a WAA

is authorized, subject to the provisions of Subtitle VII of Title 49 of United States Code, the orders, rules, and regulations issued thereunder, and the attached Terms, Conditions, and Limitations, to engage in interstate charter air transportation of persons, property, and mail.

This Certificate is not transferable without the approval of the Department of Transportation.

By Direction of the Secretary

Issued by Order 2014

- 9

- 11 Susan L. Kurland

On September 17 , 2014 Assistant Secretary for Effective on September 17, 2014 Av iation and International AffairsAttachment



### Terms, Conditions, and Limitations

CARIBBEAN SUN AIRLINES

d/b/a WORLD ATLANTIC AIRLINES

d/b/a WAA

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 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 l imitations as the Department of Transportation may prescribe in the public interest.

(2) 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 limited to 49 CFR

Part 1544. ∗ ∗

(3) The holder shall at all times remain a "Citizen of the United States" as required by

49 U.S.C. 40102(a)(15).

(4) 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

t he United States Code or the Department's regulations shall be sufficient grounds to revoke this certificate.

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

(6) Should the holder pro pose 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.

∗ ∗ 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 whether the Transportation Security Administration has determined that security is adequate to allow such airport(s) to be served.2

(7) In the event that the holder commences operations for which it was found "fit, willing

, and able" and subsequently ceases all such operation , 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 unless its fitness to do so has been re determined by the Department. Moreover, if the holder does not resume operations within one year of its cessation, its authority shall be revoked for dormancy.Attachment A

SERVICE LIST FOR CARIBBEAN SUN AIRLINES, INC.

MR JOHN R MIETUS JR LAW OFFICE OF JOHN MIETUS, LLC

6701 DEMOCRACY BLVD SUITE 300

BETHESDA MD 20817

- 7500 MR MICHAEL W SANFORD

POI FOR CARIBBEAN SUN AIRLINES

FEDERAL AVIATION ADMINISTRATION

PETER LYNCH AGC

- 300

ASST CHIEF COUNSEL

FOR ENFORCEMENT

800 INDEPENDENCE AVE SW

WASHINGTON DC 20591 MARK MAZOR AFS

- 900

MANAGER CSET

FAA SUITE 203B

45005 AVIATION DRIVE

DULLES VA 20166

- 7537

OFFICE OF AIRLINE INFORMATION

DOT/RITA/BTS E

- 34

1200 NEW JERSEY AVE SE

WASHINGTON DC 20590