U.S. Department of 

Transportation 

Office of the Secretary 

of Transportation 

April 7, 2011 

Mr. Edward P. Faberman 

Wiley Rein LLP 

1776 K Street NW 

Washington, DC 20006 

Dear Mr. Faberman: 

1200 New Jersey 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 of the 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 

our review of Twin 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 of the 

date of this 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 or financial 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 

pending receipt of this material. 

Thank you for your cooperation in this matter. If you have any questions, please feel free 

to contact Aleta Best of my staff at (202.) 366 - 9721 or via email at aleta.best@dot.gov. 

Sincerely, 

~R=O.Chief Air Carrier Fitness Division 

Office of Aviation Anal ysis 
Enclosure 

cc: Dockets DOT-OST-2011-0032 

Mr. Nathan Humphrey 

President 

Twin Cities Air Service, LLC 

81 Airport Drive 

Auburn, ME 04210 

Mr. Gary Readio 

Aviation Safety Inspector 

FAA Portland FSDO-65 

Portland, ME 04102 

Ms. Katrina A. Skowron 

Wiley Rein LLP 

1776 K Street NW 

Washington, DC 20006 

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INFORMATION REQUEST FOR TWIN CITIES AIR SERVICE, LLC. 

GENERAL INFORMATION 

1. Please submit a copy of Twin Cities' most recently approved OST Form 4507 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 later notes it will use the three Cessna 402C aircraft 

and the Cessna 310R aircraft. Please clarify which aircraft will be used in Twin Cities' 

future operations (charter, scheduled, or other). 

3. Will any operational functions, training, or maintenance be contracted out? If so, please 

provide percentages of types of contracts and providers of services. If not, please make 

a statement to this point. 

4. Exhibit TC-3 ("Affidavit of Safety Compliance") indicates that all of the 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 whether each aircraft is owned or leased. 

This list should also be dated. 

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 of letters of intent with lessor. 

CORPORATE STRUCTURE AND OWNERSHIP 

1. Exhibit TC-l notes that Bel-Air Services ("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 Statements for 200912008) states that Twin Cities holds a Note Receivable 

from Nathanair and another from Bel-Air, and Twin Cities is contingently liable for 

debts of Bel-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, when did it cease operating, and what are the plans for 

its future operations. including any products or services provided to or by Twin Cities? 
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3. Exhibit TC-8 indicates that 51 percent of Twin Cities is owned by Nathanair and 49 

percent of Twin Cities is owned by Liberty Aviation, LLC ("Liberty Aviation") which 

is a holding company with eight members, all of which are limited liability companies. 

a. Please indicate each member's share of Liberty Aviation, the listed owner's 

share of that member, and any blood/marriage relationships between owners. 

b. Have any of the owners of the 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 member of Liberty Aviation)? Is this trustee 

a U.S. Citizen and does the trustee have any interest in another aviation or 

aerospace business? 

d. One member (Seal Bay, LLC) of Liberty Aviation has James Stanley, CEO of 

Liberty Group, listed as its owner. Is there any business relationship between 

Liberty Group and Liberty Aviation? If yes, please explain. 

4. Please provide copies of the LLC agreements for Twin Cities, Liberty Aviation, and the 

eight member LLCs of Liberty Aviation. 

MANAGEMENT AND KEY TECHNICAL PERSONNEL 

1. Exhibit TC-ll includes the resumes for Mr. Nathan Humphrey, Mr. Dale Stewart, and 

Mr. Ben Mosher. Please provide updated resumes 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 Chief Pilot, yet his resume shows a single flight time total with 

several different ratings. 

b. Mr. Humplll'ey's resume indicates 23 years of aviation experience but provides 

detail from 1996 to present. Please document the additional years of 

experience. 

c. Mr. Stewart is listed as "Chief Pilot" in the organizational chart, but his resume 

does not show his title(s) for his time (1994-present) at Twin Cities. Please 

provide an updated resume listing each of his positions with Twin Cities and the 

respective date(s) of service. 

2. Mr. Humphrey serves as both the Director of Operations ("DO") (who reports to the 

President) and the President. 

a. Please clarify the responsibilities of each position and state what percentage of 

Mr. Humpln'ey's time will be spent in each role. 

b. Has the FAA approved of this reporting arrangement? 
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FINANCIAL POSITION AND OPERATING PLAN 

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 of historic 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/incur during its 

first year of scheduled operations. In addition, the company must demonstrate that it has 

obtained all of the funding needed to meet our financial fitness test or, at a minimum, that it 

has a reasonable plan for doing so. Therefore, please provide the 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. 

The most recent information submitted by Twin Cities in Exbibit TC-12 is only through 

December 31, 2009. The updated documents should be consistent with those submitted 

for all prior years; however, unaudited / unreviewed documents will be accepted with a 

statement of accuracy. 

2. An updated forecast for the time period from the application (February 22, 2011) 

through twelve months of proposed operations (May 2012), with accompanying 

explanatory footnotes, which clearly addresses the following: 

a. Separate breakouts of block hours, revenues, and expenses for (a) CUITent 

operations, (b) charter operations - forward, (b) scheduled operations - forward, 

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

forward. 

b. Explanatory notes for calculations, including (but not limited to): 

1. The lack of certain expenses in particular months. For example, no 

expenses are shown for "Equipment Rental" or "workers comp" for the 

months of September 2011 through December 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? Are there separate pay rates for scheduled and charter operations? 

111. Any expenses associated with FAA certification efforts. If none, please 

make a statement to this point. 

IV. The forecast shows an expense termed "Construction LOC." Which of the 

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 of filing. 
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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? If none, please make a statement to 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. If none, please make a statement to this point. 

5. For the proposed city-pair market - Portland, Maine (PWM) - Yarmouth, Nova Scotia, 

Canada (YQI) - please provide the following information: 

a. Number of passengers to be carried and expected load factors. 

b. Total number of revenue block hours and revenue miles expected to be flown 

and the extent of any seasonal traffic peaks. 

c. Additional resources (aircraft, personnel, other equipment, etc.), if any, that 

Twin Cities 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 loan payment, (e) interest rate, (f) collateral or other assets used to secure debt, 

(g) term of debt, and (h) any other relevant information. 

7. Exhibit TC-14B is an undated commercial loan security agreement with Northeast 

Trading Corporation. 

a. Please provide a dated and executed copy of this agreement. 

b. If this agreement is one of the 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 of debt, and (g) any other 

relevant information. 

8. Exhibit TC-14C is an undated commercial line of credit agreement and promissory note 

with Northeast Trading Corporation. 

a. Please provide a dated and executed copy of this agreement. 

b. If this agreement is one of the three debts specified in Exhibit TC-14A. please 

indicate which. If not, please identify the (a) initial loan amount, (b) 
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outstanding loan amount, (c) monthly loan payment, (d) interest rate, (e) 

collateral or other assets used to secure debt, (f) term of debt, 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 must be met before funds will be advanced, the telms of repayment, 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 of the individual or organization should also be provided. 

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 meet the Department's financial fitness standard. 

COMPLIANCE DISPOSITION 

The information provided pursuant to this Information Request should be accompanied 

by the following certification: 

The contents of this 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 a principal 

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 be fined or imprisoned not more than five years, or both.