U.S.Departmentof Transportation OfficeoftheSecretary ofTransportation
April 7, 2011 Mr. Edward P. Faberman WileyReinLLP 1776 K Street NW Washington, DC 20006

DearMr. Faberman: 1200 NewJersey Avenue, SE Washington, DC 20590

Re: Docket DOT-OST-20ll-0032,Application of Twin Cities Air Service, LLC, for Commuter Air CatTier authority

We have completed our initial review ofthe application filed in Docket DOT-OST-20ll0032 by Twin Cities Air Service, LLC ("Twin Cities") for the determination of its fitness to conduct scheduled passenger air transportation as a commuter air carrier. This review has revealed the need for additional and/or clarifying information before we can complete ourreview ofTwin Cities' fitness. The attached Information Request lists the areas where further and/or clarification information is necessary. I ask that you respond fully to this request within 30 days ofthe date ofthis letter. In addition, please remember that Twin Cities should promptly provide the Department with any information regarding changes it may undergo in areas affecting its fitness (i.e., management, operating plans orfinancial condition, compliance disposition, or ownership) while its application is under review by the Department. As is the Department's practice, fUlther processing of Twin Cities' application will be deferred pendingreceipt ofthis material. Thank you for your cooperation in this matter. Ifyou have any questions, please feel free to contactAleta Best ofmy staffat (202.) 366

- 9721 orvia email at aleta.best@dot.gov. Sincerely,

# ~R=O.Chief Air Carrier Fitness Division Office ofAviationAnalysisEnclosure

cc: Dockets DOT-OST-2011-0032 Mr. NathanHumphrey President TwinCities AirService, LLC 81 AirportDrive Auburn, ME 04210 Mr. GaryReadio Aviation Safety Inspector FAAPortland FSDO-65 Portland, ME 04102 Ms. Katrina A. Skowron WileyReinLLP 1776 K Street NW Washington, DC 20006 2INFORMATIONREQUESTFORTWIN CITIES AIRSERVICE,LLC.

GENERALINFORMATION 1. Please submit a copy ofTwin Cities' most recently approved OST Form4507 for its air taxi operations. 2. Exhibit TC-2 lists three Cessna 402C aircraft and one Cessna 310R aircraft. The Application notes that Twin Cities will use the same Cessna 402C aircraft for the proposed scheduled operations and laternotes it will use the three Cessna 402C aircraft and the Cessna 310R aircraft. Please clarify which aircraft will beused inTwin Cities' future operations (charter, scheduled, orother). 3. Will any operational functions, training, or maintenancebecontracted out? Ifso, please provide percentages oftypes ofcontracts and providers ofservices. Ifnot, please make a statementto this point. 4. Exhibit TC-3 ("Affidavit ofSafety Compliance") indicates that all ofthe aircraft to be operated will be either owned or leased. With respect to these aircraft, address the following: a. Please update Exhibit TC-2 to indicate whethereach aircraft is owned orleased. This list should alsobedated. b. Please identify the lessor for each leased aircraft and the creditor, if any, for each owned aircraft. c. If Twin Cities anticipates leasing additional aircraft during the forecasted period, please include copies ofletters ofintentwith lessor.

CORPORATESTRUCTUREAND OWNERSHIP 1. ExhibitTC-l notes thatBel-AirServices ("Bel-Air") was a wholly-owned subsidiary of Twin Cities in 1999. Exhibit TC-12 

### (Notes to the Financial Statements for 200912008) states that Twin Cities is an "unconsolidated spin-off subsidiary" of Nathanair, Inc. ("Nathanair") with a fixed term. Further, Exhibit TC-12 

### (Notes to the Financial Statementsfor 200912008) states that Twin Cities holds a Note Receivable from Nathanair and another from Bel-Air, and Twin Cities is contingently liable for debts ofBel-Air. Please clarify the business and financial relationships between Bel-Air, Nathanair, and Twin Cities. 2. The Application states that Bel-Air is "a business name that is no longer used in any Twin Cities' operations and is not currently an operating company. In which liners) of business(es) did Bel-Air operate, whendid it cease operating, and what are the plans for its future operations. including any products orservices providedto orbyTwinCities?2

3. Exhibit TC-8 indicates that 51 percent of Twin Cities is owned by Nathanair and 49 percent ofTwin Cities is owned by Liberty Aviation, LLC ("Liberty Aviation") which is aholding companywith eight members, all ofwhich are limitedliability companies. a. Please indicate each member's share of Liberty Aviation, the listed owner's shareofthat member, and anyblood/marriagerelationships between owners. b. Have any ofthe owners ofthe Liberty Aviatio'n's member LLCs been involved in any other aviation or aerospace bnsiness prior to the date of Twin Cities' Application? c. Who is the Bankruptcy Trustee who holds Andrew Bedard's ownership interest in Ovar Holdings, LLC (which is a memberofLibertyAviation)? Is this trustee a U.S. Citizen and does the trustee have any interest in another aviation or aerospacebusiness? d. One member (Seal Bay, LLC) ofLiberty Aviation has James Stanley, CEO of Liberty Group, listed as its owner. Is there any business relationship between Liberty Group and LibertyAviation? Ifyes, please explain. 4. Pleaseprovide copies ofthe LLC agreements for Twin Cities, Liberty Aviation, and the eightmemberLLCs ofLibertyAviation.

MANAGEMENTAND KEY TECHNICALPERSONNEL 1. Exhibit TC-ll includes the resumes for Mr. Nathan Humphrey, Mr. Dale Stewart, and Mr. BenMosher. Pleaseprovide updatedresumes which address the following points: 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. Stewart is the ChiefPilot, yet his resume shows a single flight time total with several different ratings. b. Mr. Humplll'ey's resume indicates 23 years ofaviation experience but provides detail from 1996 to present. Please document the additional years of experience. c. Mr. Stewart is listed as "ChiefPilot" in the organizational chart, buthis resume does not show his title(s) for his time (1994-present) at Twin Cities. Please provide an updated resume listing each ofhis positions with Twin Cities and the respective date(s) ofservice. 2. Mr. Humphrey serves as both the Director of Operations ("DO") (who reports to the President) andthePresident. a. Please clarify the responsibilities ofeach position and state what percentage of Mr. Humpln'ey's time will be spent in eachrole. b. Has the FAA approved ofthis reporting arrangement?3



### FINANCIALPOSITIONAND OPERATINGPLAN 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 CLllTent financial data, I and three years ofhistoric 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 applicailt expects to earn/incurduring its first year of scheduled operations. In addition, the company must demonstrate that it has obtained all ofthe funding needed to meet ourfinancial fitness test or, at aminimum, that it has areasonableplan for doing so. Therefore, pleaseprovidethe following information: 1. Balance sheets and income statements, for (a) calendar year 2010 and (b) January 1, 2011 through March 31, 2011, together with their accompanying explanatory footnotes. Themost recent information submitted byTwin Cities inExbibitTC-12 is onlythrough December 31, 2009. The updated documents shouldbe consistent with those submitted for all prior years; however, unaudited / unreviewed documents will be accepted with a statement ofaccuracy. 2. An updated forecast for the time period from the application (February 22, 2011) through twelve months of proposed operations (May 2012), with accompanying explanatoryfootnotes, whichclearly addresses the following: a. Separate breakouts of block hours, revenues, and expenses for (a) CUITent operations, (b) charteroperations

- forward, (b) scheduled operations

- forward, (c) other operations (if any) forward, and (d) consolidated operations

- forward. b. Explanatorynotes for calculations, including (but not limitedto): 1. The lack of certain expenses in particular months. For example, no expenses are shown for "Equipment Rental" or "workers comp" for the months ofSeptember2011 throughDecember 2011. 11. How many pilots are employed and how are they compensated (by hour, trip, month up to X hours, etc.)? Will compensation differ during peak months? Arethere separatepayrates for scheduled and charteroperations? 111. Any expenses associated with FAA certification efforts. If none, please make a statementto this point. IV. The forecast shows an expense termed "Construction LOC." Which ofthe identified debts (TC-14A, TC-14B, TC-14C) represents this expense? v. The forecast shows an expense termed "Aircraft". Are these operating expenses or loan / lease payments? If the latter, which of the identified debts (TC-14A, TC-14B, TC-14C) represents this expense? For which aircraft are these expenses accrued?

I The balance sheet and income statement supplied must be for a period ending no more than three months prior to the date offiling.4

VI. Clearly indicate the expenses associated with payment of all outstanding debt, including the identified debts (TC-14A, TC-14B, TC-14C). Vll. TC-15A shows monthly payments due through October 2011; please indicate these payments on the forecast. 3. 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? Ifnone, please make a statementto this point. 4. In addition to updates provided through current balance sheet and income statement, please identify any contingent liabilities that may affect Twin Cities, Liberty Aviation, Nathanair, or Bel-Air, including liabilities among the four firms, and describe plans to meet these obligations. Ifnone, please make a statement to this point. 5. For the proposed city-pair market

- Portland, Maine (PWM)

- Yarmouth, Nova Scotia, Canada (YQI)

- pleaseprovide the following information: a. Number ofpassengers to be carried and expected loadfactors. b. Total number ofrevenue block hours and revenue miles expected to be flown and the extentofany seasonal trafficpeaks. c. Additional resources (aircraft, personnel, other equipment, etc.), if any, that TwinCities anticipates adding to meet the increased services to be offered? 6. Exhibit TC-14A identifies an outstanding loan balance across two commercial lines of credit and a term loan with an SBA guarantee. For each of these three debts, please provide signed and executed copies of these loan agreements which include this information: (a) lender, (b) initial loan amount, (c) outstanding loan amount, (d) monthly loanpayment, (e) interestrate, (f) collateral orother assets used to secure debt, (g) term ofdebt, and (h) any otherrelevant information. 7. Exhibit TC-14B is an undated commercial loan security agreement with Northeast Trading Corporation. a. Pleaseprovide a dated and executed copyofthis agreement. b. Ifthis agreement is one ofthe three debts specified in Exhibit TC-14A, please indicate which. If not, please identify the (a) initial loan amount, (b) ontstanding loan amonnt, (c) monthly loan payment, (d) interest rate, (e) collateral or other assets used to secure debt, (f) term ofdebt, and (g) any other relevant information. 8. ExhibitTC-14C is an undated commercial line ofcredit agreement and promissory note with NortheastTrading Corporation. a. Pleaseprovide a dated and executedcopy ofthis agreement. b. If this agreement is one ofthe three debts specified in Exhibit TC-14A. please indicate which. If not, please identify the (a) initial loan amount, (b)5 outstanding loan amount, (c) monthly loan payment, (d) interest rate, (e) collateral or other assets used to secure debt, (f) term ofdebt, and (g) any other relevant information. c. How does the "Payment Schedule" in this document affect the one year forecast? 9. Please provide third-party verification of all lines of credit available to support Twin Cities' 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 mustbe metbeforefunds will be advanced, the telms ofrepayment, and the expiration date. Further, 

### if the line-of-credit is being supplied by an individual or organization (other than a recognized financial institution) copies of the personal or corporate financial statements ofthe individual ororganization should also beprovided. 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 Cities will require to meetthe Department's financial fitness standard. COMPLIANCEDISPOSITION

The information provided pursuant to this Information Request should be accompanied bythe following certification: The contents ofthis 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 aprincipal owner, senior officer, or internal counsel oj 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 befined or imprisonednot morethanfive years, orboth.