Order 2012

- 11

- 24

Served: November 20

, 2012

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 20 th day of November

, 2012

Fitness Determination of

TWIN AIR CALYPSO LIMITED, INC.

f or authority to engage in scheduled passenger operations as

a commuter air carrier under 49 U.S.C. § 41738 Docket DOT

- OST

- 201 1

- 0143

ORDER D ISMISS ING APPLICATION

Summary

By this order, we d ismiss the application of Twin Air Calypso Limited, Inc. (“Twin Air Calypso”)

, for authority to engage in scheduled passenger opera tions as a commuter air carrier.

Our review of the record in this case indicates that Twin Air Calypso has failed to establish tha t it possesses the managerial competency to oversee its current and proposed operations, and that it has proper regard for the laws and regulations governing its services.

Statutory Standar d

Section 41110(e) of Title 49 of the United States Code (the “Transportation Code”) provides that the requirement that air carriers be “fit” to perform air transportation services is a continuing one and that an air carrier’s authority shall be amended, modified, suspended, or revoked if it fails to
remain fit, will ing, and able to provide the air transportation authorized by its economic authority, which includes failure to comply with the regulations governing its operations. Additionally, section 302.210 of our regulations (14 CFR § 302.210) provides for dismissal of an application if it is materially deficient.

The Application

On July 20, 2011, Twin Air Calypso filed an application in Docket DOT

- OST

- 2011

- 0143 for authority to conduct scheduled passenger operations as a commuter air carrier pursuant to section

41 738 of the Transportation Code. Twin Air Calypso accompanied its application with the fitness information required by section 204.3 of our r egulations, and subsequently filed
additional information at our request. 1

1 Twin Air Calypso updated the record with additional information on October 20, 2011

, and December 18, 2011.2

No a nswers opposing Twin Air Calypso’s application were filed

. However, as discussed below, the information provided by the applicant and other sources does not demonstrate that it meet s our fitness requirements. Th ere fo re

, we d ismiss Twin Air Calypso ’ s a ppl ica t i on for comm uter authority.

Background

Twin Air Calypso

, based in Fort Lauderdale, Florida

, is a wholly owned subsidiary of AvStar Aviation Group, Inc. (“AvStar Aviation”), a Colorado corporation which acquired the air carrier

in 2010. 2 The company , until recently, held an air carrier certificate issued by the Federal Aviation Administration (“FAA”) that authorized it to engage in on

- demand operations pursuant

to 14 CFR Part 135

, 3 and conducted on

- demand operations as an air taxi under 14 CFR Part

298. 4 It operated a fleet of three Cessna 402C aircraft and two Piper PA31s between points in

Florida and the Bahamas. Mr . Clayton Gamber serves as the air carrier’s President and Director

of Maintenance , and the President and Chief Executive Officer of Av S tar Aviation

.

Areas of Concern

By letter dated October 13, 2011, the Dep artment requested information from Twin Air Calypso based on the results of an investigation initiated by the FAA on the company’s holding out of scheduled service exceeding that allowed under the exemption authority conferred by 14 CFR

Part 298. In that letter , the Departmen t informed the company that p ursuant to section 298.2

an d 298.3, before Twin Air Calypso may lawfully hold out and/or operate five or more roundtrips according to a published schedule in any market , it must first be found fit as a

com muter air carrier under 49 U.S.C . § 41783 , and that its failure to do so violated 49 U.S.C. §§

41101 and 41783 and 14 CFR Part 298. The Department also noted its concern about Twin Air Calypso’s apparent misconduct given that in 2005, Twin Tow n Leasing Comp any d/b/a Twin
Air, a related company, was the subject of a consent order for operating unauthorized commuter
operations. 5

2 Founded in 1978 as the aircraft operating arm of Red Aircraft Services in Fort Lauderdale, Florida, Twin Town Leasing Company d/b/a Twin Air initially leased airc raft to government units and avionics sup pliers. Twin Air transported personnel, equipment, and freight for its customers and by the 1980s, it had increased its operations to the Bahamas, particularly Eleuthera, beginning with high priority freight servic e and moving towards predominantly passenger service. In 2004, Twin Air began to supply service for another operator, Calypso Air (“Calypso”), whose primary market was the Abaco islands. In 2005, Twin Air absorbed Calypso and became Twin Air Calypso

Li mi ted, Inc

. 3 On August 7, 2012, the FAA issued an emergency order of revocation of Twin Air Calypso’s Air Carrier Certificate and required that the company immediately surrender its Air Carrier Certificate. The FAA’s

determination was based on Twin Air Ca lypso’s lack of qualifications to hold an Air Carrier certificate. More specifically, the FAA stated that the company had engaged in 5 or more scheduled flights between a given market in 2011 without the requisite 14 CFR Part 135 authority and without mee ting the requirements for manuals or pilot training required to operate flights in commuter service. The FAA also noted that Twin Air Calypso continued to openly advertise and provide its schedule of 5 or more scheduled flights per week to the general pub lic when it neither had the authority to conduct commuter flights, nor had in place the safety measures required of a Part 135

commuter operator.

4 On November 7 , 2012, the Department cancelled Twin Air Calypso’s air taxi registration

. 5 See Order 2005

- 3

- 38.3

As a result of its investigation, o n February 24, 2012, the Department took enforcement action against Twin Air Calypso for conducting unauthorized scheduled fli ghts as a commuter air

carrier in violation of 49 U.S.C. §§ 41101, 41712, and 41738

, and 14 CFR Part 298

. 6 The resulting consent order assesse d Twin Air Calypso a civil penalty of $70,0 00 , a portion of which

was payable in seven separate monthly installments , with the remaining due and payable immediately if the company violated the order’s cease and desist or payment provisions.

Because Twin Air Calypso failed to make both its first $5,000 payment due on March 26,
2012, and the second $5,000 payment due on April 23, 2012, in direct violation of the

consent order , the Department, o n May 15, 2012, refer red Twin Air Caly pso to the proper authorities for full payment collection ($70,000) and request ed that this matter be expedited

because of the seriousness of the violations cited in the order, the company's recidivism, and

its continued flaunting of federal statutes and Department regulations.

TENTATIVE DECISION

After careful review of the record and based on the totality of the circumstances, it is the Department’s conclusion based on the facts stated above

, that Twin Air Calypso’s application for authority to engage in scheduled passenger operations as a commuter air carrier under 49 U.S.C.
§ 41738 should be d ismiss ed

. Twin Air Calypso has failed to establish that it possess es the managerial compentence to oversee its proposed operations, has the p roper regard for the laws

and regulations governing its services to ensure that acceptable consumer relations practices will

be followed , and that it has adequate financial resources.

Regarding an air carrier’s management and compliance disposition, the D epartment has long held that violations that have occurred under an executive’s leadership can support a finding that
he or she lacks an adequate compliance disposition. 7 Moreover, “a carrier’s key personnel are responsible for conducting its operations i n a way so as to ensure that reasonably expected compliance problems do not occur.” 8

In this case, as Twin Air Calypso’s p resident , Mr. Clayton Gamber is ultimately responsible for ensuring the air carrier has the managerial competency to conduct its operations and the proper regard for the laws and regulations governing its services. Under Mr. Gamber’s direction, the air

carrier has shown an apparent disregard for passenger safety, federal statutes

, and g overnment regulations

. For instance, Twin Ai r Calypso continued to advertise and engage in scheduled operations with neither the appropriate economic authority from the Department nor operating authority from the FAA

, despite repeated requests and orders issued by both agencies for the company to cease and desist its unlawful operations. In fact, the FAA, i n its emergency revocation order, stated that Twin Air Calypso’s “ failure to comply with its operations specifications on multiple flights, which were adverti sed to the public, raises serious concern with regard to Twin Air Calypso’s judgement and attitude towards regulatory compliance

. ”

6 See Order 2012

- 2

- 20.

7 ATX, Inc., Fitness Investigation , Docket 48780, Opinion and Order on Review, issued April 5, 1994, at 7.

8 Id. , citing Yute Air Alaska , Order 89

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- 48.4

Concerning Twin Air Calypso’s financial fitness, the air carrier’s application indi cated that as of September 30, 2011 it had negative working capital of approxima tely $31,744, while in the 9 months ended September 30, 2011

, it had earned net income of $49,075 on approximately
$1.21 million in operating revenues. Its parent company, Av S tar Aviation ’s balance sheet dated

June 30, 2011, also showed a negative working capital balance of $863,102 and its consolidated statement of operations for the 6 months ended June 30, 2011 indicated net income of $939.00. Additionally, Twin Air Calypso ’s delinquency in paying the $70,000 civ il penalty assessed against it leads us to further conclude the presence of serious financial problems

.

Conclusion

Under these circumstances, we find that Twin Air ’s application is materially deficient. It no longer holds any type of authority from the FAA or the Department to operate as an air carrier

. Therefore, we dismiss Tw in Air Calypo’s application for authority to engage in scheduled passenger operations as a commuter air carrier

.

ACCORDINGLY, Acting under authority assigned by the Department in its Regulations, 14

CFR 385.12:

1. We dismiss the application submitted in Docket DOT

- OST

- 2011

- 0143 by Twin Air Calypso
Limited, Inc. for commuter authority.

2

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

Persons entitled to petition the Department for review of this order under the Department’s Regulations, 14 CFR 385.30, may file their petitions within 10 days of the service date of this

order.

This order shall become eff ective and become the final action of the Department of Transportation upon expiration of the above period unless within such period a petition for review is filed or the Department gives notice that it will review this order on its own motion.

By :

TODD M. HOMAN

Director Office of Aviation Analysis

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

SERVICE LIST FOR TWIN AIR CALYPSO LIMITED,

INC

.

MR. CLAYTON GAMBER

PRESIDENT / DIRECTOR OF

MAINTENANCE
TWIN AIR CALYPSO LIMITED, INC.

700 SW 34 TH STREET, SUITE 100

FORT LAUDERDALE, FL 33315 OFFICE OF AIRLINE INFORMATION

DOT/RSPA/BTS E

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1200 NEW JERSEY AVE SE

WASHINGTON DC 20590 MR. RYAN LANDERS

ATTORNEY

FAA SOUTHERN REGION

POST OFFICE BOX 20636
ATLANTA, GA 30320

MR. SERGIO LOPEZ

SOUTH FLORIDA FLIGHT

STANDARDS DISTRICT OFFICE 19

2895 SW 145 th AVENUE
MIRAMAR, FL 33027 CERTIFICATION SECTION

MANAGER

FAA AFS

- 900

45005 AVIATION DRIVE SUITE 131

DULLES VA 20166

MR. KENT GEORGE

AIRPORT DIRECTOR

FORT LAUDERDALE

- HOLLYWOOD

INTERNATIONAL AIRPORT

100 AVIATION BOULEVARD
FORT LAUDERDALE, FL 33315 MR PETER LYNCH AGC

- 300

FAA ASST CHIEF COUNSEL

FOR ENFORCEMENT

800 INDEPENDENCE AVE SW

WASHINGTON DC 20591