Order 2011-10-9

Served: October 18, 2011 

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 18th day of October, 2011

Fitness Determination of

FRIENDSHIP AIRWAYS, INC.

 d/b/a YELLOW AIR TAXI

for authority to resume scheduled passenger operations as a 

commuter air carrier under section 49 U.S.C. § 41738

Docket DOT-OST-2005-21533

ORDER TO SHOW CAUSE

Summary

By this order, we propose to (1) revoke the Commuter Air Carrier Authorization issued to 

Friendship Airways, Inc. (“YAT”) d/b/a Yellow Air Taxi and (2) deny its application to resume 

commuter operations pursuant to 49 U.S.C. § 40109(f) and 14 CFR Part 298, for its failure to 

remain fit, willing, and able to provide scheduled passenger air transportation as a U.S. 

commuter air carrier. Our review of the record in this case indicates that YAT has failed to 

establish that it possesses the managerial competence to oversee its proposed operation, has 

proper 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.

Statutory Standard

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, willing, and able to provide the air transportation authorized by its economic 

authority, which includes failure to comply with the regulations governing its operations.

The Application

On April 10, 2010, YAT filed an application in Docket DOT-OST-2005-21533 for authority to 

resume scheduled passenger operations as a commuter air carrier which authority, as described in 

detail below, was revoked by the Federal Aviation Administration (“FAA”) in October 2008. 

The air carrier accompanied its application with most of the fitness information required by 

section 204.3 of our regulations.1

 

1 YAT supplemented its application with additional information, most recently on December 20, 2010. 

UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION
2

No answers opposing YAT’s application were filed. However, as discussed below, the 

information provided by the applicant does not demonstrate that it continues to meet our fitness 

requirements. Therefore, we propose to deny YAT’s application to resume scheduled passenger 

service and revoke its commuter authority. We will give interested persons an opportunity to 

show cause why we should not adopt as final our tentative conclusion that YAT is not fit, 

willing, and able to resume operations as a commuter air carrier.

Background

YAT, based in Ft. Lauderdale, Florida, was incorporated under the laws of the State of Florida in 

2003 and is solely owned by Mr. Christopher B. Behnam, a U.S. citizen. Mr. Behnam is also 

YAT’s President, Chief Executive Officer (“CEO”), and Director of Operations. The company,

until recently, held an air carrier certificate issued by the FAA that authorized it to engage in

on-demand operations pursuant to 14 CFR Part 135.2

By Order 2006-5-5, dated May 8, 2006, the Department found YAT fit to conduct scheduled 

passenger service as a commuter air carrier. In October 2008, after finding among other things, 

that YAT’s then-Chief Pilot was unqualified to conduct Operating Experience (“OE”) 

observations of its pilots, the FAA revoked YAT’s safety authority to engage in commuter 

operations, but allowed it to engage in on-demand operations. As a result, YAT began operating 

solely as an on-demand air taxi. The Department, by letter dated October 1, 2009, notified YAT

of our intent to revoke its commuter air carrier authorization under section 204.7 of our rules for 

reason of dormancy.

3 On October 9, 2009, YAT submitted a request for an extension of the 

Department’s dormancy provisions. In support of its request, the air carrier stated that additional 

time was needed to enable it to complete the necessary requirements to return to scheduled 

operations. 

By letter dated October 13, 2009, the Department granted YAT’s request for a 90-day extension, 

that is, until January 10, 2010, to allow the air carrier to prepare documentation in support of its 

plan to resume commuter operations. On January 7, 2010, YAT filed a request for a second 

90-day extension, citing delays in gaining FAA approval of certain training manuals. By letter 

dated January 13, 2010, the Department granted YAT’s request for an extension until 

April 10, 2010, and reminded YAT of its need to provide updated fitness information pursuant to 

section 204.7. 

On April 10, 2010, YAT filed the aforementioned application to resume scheduled passenger 

operations as a commuter air carrier. In its application, YAT filed a motion requesting 

confidential treatment of certain financial data under 14 CFR 302.12 ("Rule 12”) of our 

Procedural Regulations. Specifically, YAT requested that the Department withhold from public 

 

2 The Department was informed by the FAA that YAT ceased its on-demand air taxi operations as of May 16, 

2011. Subsequently, YAT’s Chief Pilot and Director of Maintenance resigned from the air carrier on May 17, and 

June 1, 2011, respectively. YAT surrendered its Air Carrier Certificate to the FAA on August 15, 2011. The 

Department canceled YAT’s air taxi registration on October 18, 2011.

3 Section 204.7 of our rules (14 CFR 204.7) states that if an air carriers ceases conducting operations for which it 

was found fit, it may not resume air transportation operations until its fitness to do so has been redetermined by the 

Department. Any such redetermination of fitness must be accomplished within one year of the date of cessation; 

otherwise the air carrier’s economic authority would be subject to the revocation for dormancy provisions, which in 

YAT’s case was October 10, 2009.
3

disclosure proof that YAT had the required funding to meet the Department’s financial fitness 

test. However, the air carrier did not provide the confidential financial fitness data, an omission 

which was brought to YAT’s attention via email on April 15 and again on July 6, 2010.

By letter dated April 23, 2010, the Department requested additional information from YAT. 

Specifically, we requested a current balance sheet and income statement, aircraft lease 

documentation, updated resumes for several of YAT’s key personnel, and clarification of YAT’s 

planned schedule and cost forecast. 

On June 10, 2010, the Department sent a reminder letter to YAT. On June 14, 2010, YAT 

submitted its response to the Department’s request for additional information.

On July 29, 2010, YAT filed the confidential information it had referenced in its application to 

resume commuter operations. Specifically, YAT requested that we withhold from public 

disclosure the details of a letter from a third-party institution providing a line-of-credit to the air 

carrier on the grounds it was sensitive commercial information. By letter dated August 16, 2010, 

the Department granted confidential treatment to the interest rate for the line-of-credit but 

required all other information in the letter to be filed in the public docket. In the same letter, we

also stated that, because the line-of-credit was being supplied by an organization other than a 

recognized financial institution,YAT must provide the corporate financial statements for the

line-of-credit provider, Charter America, Inc. We also requested further documentation of the 

line-of-credit’s particular terms and conditions of repayment.

On September 14, 2010, YAT provided the corporate financial statements for Charter America, 

Inc., along with detailed information about the terms and conditions of the line-of-credit, and 

concurrently filed a motion requesting confidential treatment of this information under Rule 12. 

By letter dated November 5, 2010, the Department denied confidential treatment to Charter 

America’s corporate financial statement, and partially granted confidential treatment to the terms 

and conditions of the line-of-credit. The Department granted confidentiality to the interest rate 

while all other information was required to be filed in the public docket.4

AREAS OF CONCERN

As previously mentioned, in October 2008, YAT’s authority to perform commuter operations 

was rescinded by the FAA as a result of its then-Chief Pilot not being qualified to conduct OE 

observations of its pilots and not having the required OE training program in place. According 

to YAT, its Director of Operations “has complete authority and responsibility for the safe 

conduct and compliance to the FAA regulations of all flight personnel and for flight operations 

which shall include... certify and maintain as required, all flight department personnel training 

and qualification records; schedule additional training when required”

5 and the Chief Pilot holds 

 

4 YAT submitted the information for which confidential treatment was denied in the public docket on 

November 12, 2010.

5 See Docket DOT-OST-2005-21533, Application of Friendship Airways, Inc. d/b/a Yellow Air Taxi, Exhibit 

YAT-202, p. 3.
4

responsibility to “assist in maintaining the training program for Flight Department personnel that 

complies with FAA regulations and Manual Requirements.”6

On October 5, 2010, the FAA was notified that YAT’s liability insurance coverage was canceled 

because of nonpayment of premiums. Subsequent to cancellation, the air carrier had continued 

to operate without the requisite liability insurance coverage, a violation of 14 CFR 205.3 and 

14 CFR 298.37. Upon being notified of the lapse, the FAA advised YAT that its FAA safety 

authority was invalid during the time its insurance coverage was canceled and directed that YAT 

restore and certify coverage within fifteen days from October 5, 2010. YAT timely complied.

The cancellation of YAT’s liability insurance rendered ineffective its Departmental economic 

authority. Accordingly, on November 15, 2010, the Department took enforcement action against 

YAT for violating 49 U.S.C. §§ 41101 and 41712 by engaging in air transportation without 

effective economic authority during the period in which its liability insurance had lapsed.

7 The 

resulting consent order assessed YAT a $30,000 civil penalty, a portion of which was payable in

three separate installments. The air carrier was late in paying all three installments. 

On December 21, 2010, the Department initiated an investigation of YAT’s website advertising 

practices, concerning alleged violations of 14 CFR 399.84, the Department’s full fare advertising 

rules, and the related statutory requirement, 49 U.S.C. § 41712, which prohibits unfair and 

deceptive practices and unfair methods of competition. This case is currently pending. 

The Department also received 13 complaints from passengers arising from numerous flight 

cancellations between August 2010 and June 2011, in which YAT failed to provide refunds in a 

timely manner to ticket purchasers who used credit cards as required by 14 CFR Part 374, and to 

those who paid with cash, as required by Departmental enforcement policy.8 After the 

Department intervened, YAT ultimately processed many of the refunds that were due.

Previously, YAT was the subject of Consent Order 2005-5-4, in which the air carrier was found 

to have conducted scheduled air transportation without appropriate economic authority. YAT 

was also assessed a $30,000 civil penalty in that case.

TENTATIVE DECISION 

After careful review of the record and based on the totality of the circumstances, it is the 

Department’s tentative conclusion that YAT’s commuter air carrier authorization should be 

revoked and its application to resume commuter operations should be denied. YAT has failed to 

establish that it possesses the managerial competence to oversee its proposed operations, has the 

 

6 See Docket DOT-OST-2005-21533, Application of Friendship Airways, Inc. d/b/a Yellow Air Taxi, Exhibit 

YAT-202, p. 4.

7 See Order 2010-11-14, issued November 15, 2010. Our rules require that air carriers must maintain accident 

liability insurance. An air carrier’s economic authority becomes invalid once an air carrier’s insurance coverage is 

canceled. Additionally, operating without insurance is also considered by the Department to be an unfair and 

deceptive practice and an unfair method of competition.

8 Failure to provide timely refunds to customers is considered by the Department to be an unfair and deceptive 

practice and an unfair method of competition
5

proper 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 Department has long 

held that violations that have occurred under an executive’s leadership can support a finding that 

the air carrier lacks an adequate compliance disposition under his or her control.

9 Moreover, “a 

carrier’s key personnel are responsible for conducting its operations in a way so as to ensure that 

reasonably expected compliance problems do not occur.”10 In this case, as YAT’s President and 

CEO, Mr. Christopher Behnam is ultimately responsible for ensuring the air carrier has the 

managerial competency to conduct its current and proposed operations and the proper regard for 

the laws and regulations governing its services. 

Under Mr. Behnam’s direction, however, a pattern of non-compliance has emerged at the air 

carrier. For example, YAT’s commuter operations were rescinded by the FAA in October 2008

because its then-Chief Pilot was not qualified to conduct OE observations of its pilots, and YAT 

did not have a required OE training program in place. In this case, both the Chief Pilot and the 

Director of Operations failed to uphold their responsibilities regarding both stated company 

objectives and FAA regulations. However, oversight of the qualifications of YAT’s chief pilot is 

clearly in the purview of Mr. Behnam in his capacity as Director of Operations. The Chief Pilot 

was replaced, but Mr. Behnam remains as Director of Operations. 

Furthermore, under Mr. Behnam’s direction as President and CEO, YAT’s liability insurance 

lapsed in August 2010 and the air carrier continued to transport passengers in spite of this lapse, 

violating the Department’s liability insurance coverage rules as stated in 14 CFR Parts 205 and 

298, and the related statutory requirements of the Transportation Code, 49 U.S.C §§ 41101 and 

41712. Additionally, under his supervision, the air carrier has repeatedly failed to provide timely 

refunds as prescribed by regulations and Departmental policy. 

We also note that Mr. Behnam, while serving as President and CEO and Director of Operations 

for YAT, is also a pilot for United Airlines. YAT states in an amendment to its application that 

“as a senior pilot for United Airlines, Mr. Behnam is able to work at a reduced schedule. As 

Director of Operations for YAT, Mr. Behnam is in constant communications with the YAT 

management team via cell phone and email, when out of town.”11 However, the FAA inspectors 

assigned to YAT report that Mr. Behnam is only available on a part-time basis. While YAT 

states that Mr. Behnam provides his expertise via phone or email, given the many variables that 

can affect an airline’s daily operation, long distance management of an airline’s operation is suboptimal. Additionally, the FAA inspectors have noted that, due to Mr. Behnam’s absences, 

operational decisions have, by default, been made by YAT’s General Manager, Ms. Elizabeth 

Behnam, who does not hold any FAA authority as a Director of Operations. We view these

practices as contributing to YAT’s poor managerial competence and compliance disposition.

Moreover, the high number of consumer complaints in less than a year against YAT for failing to 

provide timely refunds after numerous flight cancellations is of great concern, especially when 

 

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

10 Id., citing Yute Air Alaska, Order 89-11-48. 

11 See Docket DOT-OST-2005-21533; Information Request Response of Friendship Airways, Inc. d/b/a Yellow 

Air Taxi, June 14, 2010.
6

Departmental intervention appeared to have been the impetus for YAT finally taking action. The 

recurrence of the complaints leads us to conclude that YAT’s leadership has failed to fix what 

appears to be a systemic problem and also points to a disregard for the Transportation Code and 

consumer protection laws.

Concerning YAT’s financial fitness, the air carrier’s application indicated that as September 30, 

2010, it had negative working capital of approximately $203,546, while in the 9 months ended 

September 30, 2010, it had earned net income of $46,892 on approximately $1.29 million in 

operating revenues. While YAT submitted a letter from a third-party institution willing to 

provide a line-of-credit to the air carrier in the amount of $400,000, we note that this letter was a 

tentative commitment, subject to the completion of standard loan documentation. Additionally, 

YAT’s delinquency in paying the civil penalty assessed against it for operating flights while its 

liability insurance had lapsed and the numerous delays in providing timely customer refunds 

indicate the presence of serious financial problems. 

Lack of oversight of pilot records, a lapse in payment of insurance premiums, and operating 

flights without insurance, together with a high level of consumer complaints suggest a failure of 

YAT’s management to maintain an adequate compliance disposition at the air carrier. YAT’s 

delay in paying its civil penalty is a further indication of an ongoing pattern of faulty managerial 

oversight. It also calls into question the air carrier’s financial fitness. Furthermore, regarding 

YAT’s managerial competency and compliance disposition, the FAA inspectors assigned to the 

air carrier have also expressed serious concerns with YAT’s maintenance posture, further calling 

into question the company’s ability to perform compliant on-demand and scheduled operations. 

While YAT’s application to resume its commuter air carrier authorization is pending and 

therefore its commuter authorization expiration period due to dormancy has been stayed, we note 

that YAT had operated as an air taxi since October 2008, and it is under this authority that it 

allowed its insurance to lapse and subsequently violated the Transportation Code and several 

consumer protection laws of the Department. 

Under these circumstances, we tentatively conclude that YAT does not possess the managerial 

competence necessary to oversee its current and proposed operations, and does not have the 

proper regard for the laws and regulations governing its services to ensure that acceptable 

consumer relations practices will be followed. Therefore, we propose to revoke YAT’s 

commuter authority and dismiss its application to resume scheduled passenger operations. 

OBJECTIONS

We will give interested persons 14 days following the service date of this order to show cause 

why the tentative findings and conclusions set forth here should not be made final; answers to 

objections will be due within 7 days thereafter. We expect such persons to direct their 

objections, if any, to the application and points at issue and to support such objections with 

detailed economic analyses. If an oral evidentiary hearing or discovery procedures are 

requested, the objector should state in detail why such a hearing or discovery is considered 

necessary, and what material issues of decisional fact the objector would expect to establish 

through a hearing or discovery that cannot be established in written pleadings. The objector 

should consider whether discovery procedures alone would be sufficient to resolve material 

issues of decisional fact. If so, the type of procedure should be specified (See Part 302, Rules 19 
7

and 20); if not, the reasons why not should be explained. We will not entertain general, vague, 

or unsupported objections. If no substantive objections are filed, we will issue an order that will 

make final our tentative findings and conclusions with respect to YAT’s fitness and certification.

ACCORDINGLY,

1. We direct all interested persons to show cause why we should not issue an order making 

final the tentative findings and conclusions stated above and revoke the commuter authorization 

of Friendship Airways, Inc. d/b/a Yellow Air Taxi and deny its application for resumption of 

commuter authority, pursuant to 49 U.S.C. § 40109(f) and 14 CFR Part 298.

2. We direct any interested persons having objections to the issuance of an order making 

final any of the proposed findings and conclusions set forth here to file them with Department of 

Transportation Dockets, 1200 New Jersey Avenue, SE, Washington, D.C. 20590, in Docket 

DOT-OST-2005-21533 and serve them upon all persons listed in Attachment A no later than 14

days after the service date of this order; answers to objections shall be filed no later than 7 days 

thereafter.

3. If timely and properly supported objections are filed, we will accord full consideration to 

the matters or issues raised by the objections before we take further action.12

4. In the event that no objections are filed, we will consider all further procedural steps to be 

waived and we will enter an order making final our tentative findings and conclusions.

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

6. We will publish a summary of this order in the Federal Register.

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

 

12 Since we have provided for the filing of objections to this order, we will not entertain petitions for 

reconsideration.
Attachment A

SERVICE LIST FOR

FRIENDSHIP AIRWAYS INC.

d/b/a YELLOW AIR TAXI

MR CHRISTOPHER BEHNAM

FRIENDSHIP AIRWAYS INC

2680 NE 24 ST 

POMPANO BEACH FL 33064

MS ANNE SUISSA

OFFICE OF AIRLINE INFORMATION

DOT/RSPA/BTS E-36

1200 NEW JERSEY AVE SE

WASHINGTON DC 20590

 

 REGIONAL COUNSEL

 FAA

 SOUTHERN REGION

 POST OFFICE BOX 20636

 ATLANTA GA 30320

 

 

 MR JERRY PROENZA

 POI FOR FRIENDSHIP AIRWAYS INC

2895 SW 145TH AVENUE

SUITE 120

MIRAMAR FL 33027

 

 MR PETE SNEAD

 PMI FOR FRIENDSHIP AIRWAYS INC

2895 SW 145TH AVENUE

SUITE 120

MIRAMAR FL 33027

 

 MR WILLIAM J WEBER

 CERTIFICATION SECTION 

 MANAGER

 FAA AFS-900

 45005 AVIATION DRIVE SUITE 131

 DULLES VA 20166

MR PETER LYNCH AGC-300

FAA ASST CHIEF COUNSEL

FOR ENFORCEMENT

800 INDEPENDENCE AVE SW 

WASHINGTON DC 20591