U.S. Department of Transportation Office ofthe Secretary OfTransportation



### September 19, 2012

Mr. Robert E. Cohn Mr. Patrick R. 

### Rizzi Counsel for Rhoades Aviation, Inc. d/b/a Transair Hogan Lovells US LLP 555 ThirteenthStreet, N.W. Washington, DC 20004

Re: DocketDOT-OST-2011-0216

DearMessrs. Cohn and Rizzi: i**{~** \ I 

### :>.: 

## 21 1200 New JerseyAve., S.E. Washington, DC 20590



### By letter dated August 23, 2012, the Department issued its ruling on the request of Rhoades Aviation, Inc. d/b/a Transair ("Rhoades"), for confidential treatment ofvarious documents filed in supportofits applicationfor certificate authority.

Under Rule 12, a Departmentruling on motions for confidential treatment will not take effect if, within five business days after issuance, the person requesting confidential treatment files a petition for reconsideration ofthat decision, or files a statement that he or she in good faith intends to seekjudicialreview ofthe decision. Rhoades filed such apetition for reconsideration ofour ruling onAugust 29, 2012. This petition was limited to our ruling on the confidentiality of certain information contained in Exhibit RDS-7, Page 1, and Exhibit RDS-7, Page 3, regarding projected net income as well as revenue and cost analysis statements for Rhoades' Boeing 737 aircraft. Specifically, Rhoades asks the Departmentto reconsider its ruling with respectto the "Liabilities & 

### Equity" section of Exhibit RDS-7, Page 1. Rhoades states that public disclosure of this information could allow its projected net income to be determined by subtra,cting certain line items from this section. Rhoades also points out that we granted confidential treatment to projected net income figures in Exhibit RDS-7, Page 2. In our ruling on August 23, 2012, we noted that "the Department typically grants confidential treatment to an applicant's projected

revenues

...The same standard applies to an applicant'sprojected future income." Thus, we agree with Rhoades that the information contained in the "Liabilities 

### & Equity" section of Exhibit RDS-7, Page 1, warrants confidential treatment. It

### is thus granted.

In addition, Rhoades states that Exhibit RDS-7, Page 3, was mislabeled in their original request for confidential treatment onJuly 24, 2012. In its petition for reconsideration, Rhoades asks the Departmentto grant confidential treatment to a corrected version ofExhibit RDS-7, Page 3, that it concurrentlyre-submitted to the Department. As noted above, the Department typically grants confidential treatment to an applicant's projected revenue statements. This includes revenue analysis statements for particular aircraft. However, this treatment does not extend to cost2

analysis statements for particular aircraft. It is not the Department's practice to withhold such information from public disclosure when determining that applicant's financial fitness. Thus, confidential treatment ofthe corrected version ofExhibit RDS-7, Page 3, is partially granted, solely to the rows indicating projected revenues: confidentiality is granted only from the "737 Projected Daily Cargo Revenue" row through the "Total Projected Revenue from 737" row. Confidential treatment is denied for the rows indicating "Costper Flight Miles for 12 months," "ProjectedRelated Costfor 737," and "LandingFees."
Upon reconsideration of our August 23, 2012, ruling, we have decided to partially grant Rhoades' request with respect to the information noted in its August 29, 2012, petition for reconsideration.

On August 31, 2012, Rhoades responded to a Department request for additional information regarding their application for certificate authority. In connection with that response, Rhoades filed a separate motion for confidential treatment under 14 CFR 302.12 (Rule 12) of our Procedural Regulations for certain information the company was providing. Rhoades specifically requested that the Department withhold a description of "two confidential and proprietary inter-company transactions that relate to the amount payable to Trans Executive Airlines of Hawaii, Inc." Rhoades states in its motion that "public disclosure could cause substantialharmto Rhoades by divulging internal affiliated company transactions thatwould not otherwisebepublicly available."

Rule 12 instructs us to evaluaterequests for confidential treatment bythe standards ofdisclosure found inthe Freedom ofInformation Act (5 U.S.C. § 552). Information may be withheld from disclosure under 5 U.S.C. § 552(b)(4) ifit is (1) commercial or financial, (2) obtained from a person outside ofgovernment, and (3) privileged or confidential 

### (Gulfand Western Industries, Inc. v. UnitedStates, 615 F.2d 527, 529 (D.C. Cir. 1979)).

There is no question that the information for which Rhoades seeks confidential treatment is financial or commercial in nature and that it was obtained from a person outside the government. The remaining question is whether the information is privileged or confidential-whether "disclosure ofthe information is likely to have either ofthe following effects: (1) impair the Government's ability to obtain necessary information; or (2) cause substantial harm to the competitive 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 notbe ofthe type that is usually released to the public 

### (Gulf and Western Industries, Inc. v. UnitedStates, 615 F.2d 527, 530 (D.C. Cir. 1979)).

Wehave reviewedthe material submitted andhave decided to grantconfidential treatmentto the information for which such treatment is sought. The Department has granted confidential treatmentto similarinformationinthe past and we see no reason notto do so here.

Under Rule 12, the information identified above for which confidential treatment is not granted will be released to any personrequesting it unless, within 5 (business) days from the date ofthe receipt ofthis letter, the applicant files with this office a petition for reconsideration or a written statement in good faith ofits intent to seekjudicial review ofthis decision. Please inform us if Rhoades wishes to pursue either option. Ifreconsideration orjudicial review ofthis decision is

### 3

not sought, Rhoades should immediately resubmit the redacted exhibits and those for which confidentialityhas beendeniedto the appropriate docket for placement onthepublicrecord.

In the meantime, as is the Department's practice, further processing ofyour application will be deferred pending receipt ofthis material. Thank you for your cooperation in this matter. Ifyou have any questions regarding this letter, please feel free to contact Reese Davidson ofmy staffat (202) 366-8161 orviae-mail at Reese.Davidson@dot.gov.

Laur y 

### J. Remo Chief, ir CarrierFitness Division Office ofAviationAnalysis

cc: DocketDOT-OST-2011-0216

Ms. MaryBallard POI for Rhoades Aviation; Inc. FAAIndianapolis FSD0-11 1201 ColumbiaRoad, Suite 101 Plainfield, IN 46168

Mr. TeimourRiahi ChiefExecutive Officer Rhoades Aviation, Inc. d/b/aTransair 100 IolanaPlace Honolulu, HI 96819