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June 15, 2012

ViaE-mail susan.kurland@dot.gov ViaFacsimile (202) 493-2251

Honorable Susan L. Kurland Assistant SecretaryforAviation and International Affairs U.S. Department ofTransportation Docket Operations (M-30, Room Wl2-140) West Building Ground Floor 1200NewJersey Avenue, SE Washington, DC 20590

Re: VIH Cougar Helicopters, Inc. Docket DOT-OST-2012-0022

DearSecretary Kurland:

We write inresponse to the June 8, 2012 letter**s~bmitted** by Petroleum Helicopters, Inc. ("PHI"). PHI's letter is the latest in a long line ofattempts, both inthe'years before and during these proceedings, to eliminate a lawful competitorthfough an abuse oftheregulatory process.
' . :,**~** :

., '' ' ' ' As we have statedfrom the outset, the purpose ofDepartment's Show Cause proceedings is remedial and intended only to direct the carrier to take corrective actiontodemonstratethat 

### itis under the control ofU.S. citizens. See e.g.,Air-EvacAirAmbulance Inc. Concerning US Citizenship, Order 96-6-13, at 1-2 (June 7, 1996) (allowing various responses to a show cause order and withdrawing a show cause order proposing revocation ofair taxi authority where the company finally provided subsequent information showingthatrestructuring brought it into compliance with the. applicable citizenship**regu~~tions);** see; also,Application ofVirgin America, Inc., Final Order, [)ocketNo. OST-2005-23307,at 1 (May 18,2007)(allowingVirgin America to substantially revise its operations pursuant**to;requ~sts** bythe Department after

# a show cause order, and finding that the company now complied with the U.S. Citizen requirements and thus its applicationfor a certificate would be approved).

Los Angeles 

### I New York 

### I Orange County 

### I SiliconValley 

### I Stamford 

### I Washington, DC

### DICKSTEINSHAPI ROLLP Honorable Susan L. Kurland June 15, 2012 Page2

In light ofthese considerations, the concern raised inthe Department's March 12, 2012 Show Cause Order has focused onthe relationship between Messrs. Steeper and Norie. As the Department is aware, VIH Cougarhas adduced evidence demonstrating that Mr. Steeper, a U.S. citizen, is not under any foreign control but owns and operates VIH Cougar under his own direction. To date, we have seen no evidence (as opposed to speculation, innuendo, and unfounded credibility concerns) ofan undue control relationship. Indeed, PHI's June 8 letter is
more ofthe same, as itcontinues to assert onlyjuvenile adhominem attacks on Mr. Steeper and suspicions that lack even a scintilla ofevidence to backup the allegations. Despite the benefit of havingYIH Cougar's detailed positions in its Response and Objectionsto theBhow-GauseOFoor-- and Reply, PHI has provided no factual rebuttal ofany kind, thus confirming that there is no evidence to support its claims.
Nevertheless, inthe interests ofbringing this matter to a close, VIH Cougarhas voluntarily undertaken actions that will fully address the Department's concerns regarding Mr. Steeper and, thus, render these proceedings moot. Inthis regard, our May 7, 2012 letter advised that VIH Cougar has sold its VFRbusiness to a U.S. air carrier owned and operated by unrelated U.S. citizens who are not affiliated with VIRAG, its affiliates, subsidiaries, or principals, including Mr. Norie. Likewise, our June 1, 2012letter advised that withrespect to the company's IFR operations

- its remaining business line

- VIH Cougar had entered into a Letter ofIntent with an unrelated and unaffiliated U.S. purchaser that will result in the separation ofMr. Steeper from the company. As we advised, under the proposed arrangement, in full accordance with the Department's statutory citizenship requirements, 

### Mr. Steeper will sell his 76% super-majority interest inthe company, while Mr. Norie will retain a passive 24% minority interest, the purchaser will elect a newboard ofofficers and directors upon closing, and Mr. Steeper will resign. Clearly frustrated with this proposal (because it will not result in eliminating VIH Cougar as a competitor), PHI has taken the extremepositionthat "civil penalties" and "disgorgement" are required at thisjuncture. Not only does PHI's assertion reveal its true motivation- to disrupt VIH Cougar's good faith restructuring efforts by any means possible- it is utterly without merit. At all relevant times, VIH Cougarhas operated lawfully with an exemplary safety record pursuantto 49 U.S.C. 

### §40109(±) and 14 C.F.R. Part 298. The Show Cause Order is only a "tentative" decision that obviously has no legal effect inthe absence ofa final order. If, and only if, a final order is issued, and VIH Cougar continues to operate, could VIH Cougar be in any actual violation ofDepartment regulations suchthatpenalties could become applicable. Further, the Department has advised inthis case that even ifits tentative decision to revoke VIH Cougar's air taxi authority is made final, itwill not become effective until 90 days after the order is served. As such, VIH Cougar cannot be in violation of49 U.S.C. 

### §41101, or any otherprovision, until that time at the earliest.

### DICKSTEINSHAPI 

### ROLLP Honorable Susan L. Kurland June 15, 2012 Page 3

Forthe foregoing reasons, the Department should reject PHI's June 8, 2012letter as a transparent attemptto convertthe show cause process into an enforcementproceeding solely for PHI's financial gain. As we stated in our June 1, 2012letter, we will advise the Department
once the pending restructuring regarding the company's IFR operations has been completed. In the meantime, please do not hesitate to contact me with any questions or concerns. Sincerely,

# \)~ '(\).

# 'D~ /A€S
David M. Nadler (202) 420-2281 direct dial nadlerd@dicksteinshapiro.com

cc: Jonathan Blank, Esq. K&L Gates