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BEFORE THE

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Application of

PEOPLE EXPRESS AIRLINES, INC.

for a certificate of public convenience and

necessity to engage in interstate scheduled

air transportation of persons, property, and

mail under 49 U.S.C. § 41102

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Docket DOT-OST-2012-0042

MOTION OF

PEOPLE EXPRESS AIRLINES, INC.

FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 12

Communications with respect to this document should be addressed to:

Michael Morisi

President and Chief Operating Officer

PEOPLE EXPRESS AIRLINES, INC.

902 Bland Boulevard

Newport News, VA 23602

Phone: (757) 969-6880

Fax: (757) 969-6894

Mike.Morisi@flypex.com

Robert E. Cohn

Patrick R. Rizzi

HOGAN LOVELLS US LLP

Columbia Square

555 Thirteenth Street, NW

Washington, DC 20004

+1 202 637 4999/5659 (direct dial)

+1 202 637 5910 (facsimile)

robert.cohn@hoganlovells.com

patrick.rizzi@hoganlovells.com

Counsel for

PEOPLE EXPRESS AIRLINES, INC.

April 27, 2012
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BEFORE THE

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Application of

PEOPLE EXPRESS AIRLINES, INC.

for a certificate of public convenience and

necessity to engage in interstate scheduled

air transportation of persons, property, and

mail under 49 U.S.C. § 41102

)

)

)

)

)

)

)

)

)

)

Docket DOT-OST-2012-0042

April 27, 2012

MOTION OF

PEOPLE EXPRESS AIRLINES, INC.

FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 12

People Express Airlines, Inc. (“People Express”) hereby files this Motion

pursuant to 14 C.F.R. § 302.12 to withhold from public disclosure confidential

exhibits contained in its response to the Department’s Information Request dated

April 19, 2012, concurrently filed in the above-captioned proceeding. Confidential

copies of the relevant exhibits are being submitted contemporaneously herewith in a

sealed envelope marked “Confidential Treatment Requested Under § 302.12.”

People Express hereby requests confidential treatment of the following

commercial, competitively sensitive and financial information pertaining to People

Express’s business and financing arrangements, the public release of which would

cause People Express substantial competitive harm:

1. Confidential Exhibit PEX-IR-6: Engagement letter between People Express

and WR Hambrecht + Co. (“Hambrecht engagement letter”).
Motion of People Express Airlines, Inc.

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2. Confidential Exhibit PEX-IR-7: Boeing 737-400 “Lease Proposal and

Acceptance” (“737 Term Sheet”).

3. Confidential Exhibit PEX-IR-8: Stock Subscription Agreement.

4. Confidential Exhibit PEX-IR-9: Stockholders’ Agreement.

5. Confidential Exhibit PEX-IR-10: Stock Journal.

Under Rule 12, the Department evaluates requests for confidential treatment

in accordance with the standards of disclosure set forth in the Freedom of

Information Act (FOIA) (5 U.S.C. § 552). Under FOIA Exemption 4, business

information may be withheld from disclosure if it is “(1) commercial or financial,

(2) obtained from a person outside the government, and (3) privileged or

confidential.” Gulf & Western Industries, Inc. v. U.S., 615 F.2d 527, 529 (D.C. Cir.

1979). The confidential information submitted by People Express clearly meets the

first two requirements.

The only question, therefore, is whether the information is privileged or

confidential, which, as defined by the relevant case law, means “whether disclosure

of the information is likely to have either of the following effects: (1) to impair the

government’s ability to obtain necessary information in the future; or (2) to cause

substantial harm to the competitive position of the person from whom the

information was obtained.” National Parks and Conservation Association v. Morton,

498 F.2d 765, 770 (D.C. Cir. 1974).

People Express submits that disclosure of the information for which it seeks

confidential treatment would not only impair the Department’s ability to obtain such
Motion of People Express Airlines, Inc.

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information in the future, but would also cause substantial harm to People Express’s

competitive position. People Express is a new privately-held corporation that is

raising capital and negotiating aircraft leases for the near-term launch of a start-up

airline that will operate in an intensely competitive environment. The type of

detailed business, financial and commercially sensitive information at issue here is

not otherwise required to be publicly disclosed. Access by competitors, aircraft

suppliers, or other third-parties to the information contained in these confidential

exhibits would adversely impact People Express’s commercial negotiating position,

future plans, relationships with current and future stockholders, and competitive

posture as a start-up airline.

Specifically, the Hambrecht engagement letter, which is marked “Private and

Confidential” and subject to confidentiality terms, was reached based on exclusive

discussions between People Express (a privately-held corporation) and a financial

services firm addressing People Express’s unique business plan, competitive

strategy, and financing needs, under a confidential compensation arrangement.

Public release of the confidential engagement letter would harm People Express’s

competitive position and severely undermine its capitalization activities.

The 737 Term Sheet contains confidential financial terms and other

commercially sensitive details in relation to the proposed aircraft lease that would

not normally be publicly disclosed. People Express is in the midst of negotiating

aircraft acquisitions with other aircraft lessors and owners, and access to the terms

of the 737 Term Sheet by such persons would significantly impair People Express’s

negotiating position. In addition, if the 737 Term Sheet were publicly available,
Motion of People Express Airlines, Inc.

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airline competitors would be able to glean commercially sensitive details about

People Express’s operating costs before the carrier is even launched, which would

cause People Express competitive harm.

The Stock Subscription Agreement, Stockholders’ Agreement, and Stock

Journal also clearly warrant protection from public disclosure. The Department has

consistently recognized this type of information to be confidential and proprietary.

The Stock Subscription Agreement and Stockholders’ Agreement provide details of

financial criteria and conditions for a private placement of stock that People Express

has shared only with carefully selected private investors and not the general public.

The Stock Journal provides the names of current stockholders and the number of

shares purchased by each. Since no investor holds or beneficially controls

10 percent or more of the outstanding voting stock, their names are not required to

be disclosed under 14 C.F.R. § 204.3(g). In fact, public disclosure of this

information would provide no public benefit but would result in serious competitive

harm to People Express and would severely impair its relationship with its existing

and prospective stockholders.

Granting confidential treatment to Confidential Exhibits PEX-IR-6 through

PEX-IR-10 would be consistent with Department precedent. The Department has

ruled in various fitness proceedings that similar types of commercial, financial, and

capitalization information for which People Express seeks confidential treatment is

entitled to such treatment. See, e.g., Letter from Vanessa R. Balgobin, Acting

Chief, Air Carrier Fitness Division, to Margi Holstrom, Carlsbad-Palomar Airlines,

Inc., dated July 12, 2010 (Docket DOT-OST-2010-0126); Letter from
Motion of People Express Airlines, Inc.

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John V. Coleman, Director, Office of Aviation Analysis, to Jonathan B. Hill, Counsel

for New Air Corporation, dated June 15, 1999 (Docket DOT-OST-1999-5616); Letter

from Patricia L. Thomas, Chief, Air Carrier Fitness Division, to William A. Kutzke,

SkyLink Aviation, Inc., dated August 11, 2004 (Docket DOT-OST-2004-

17171/17172); Letter from William Bertram, Chief, Air Carrier Fitness Division, to

Edward W. Sauer, Counsel for Atlantic Express, Inc., dated January 28, 2005

(Docket DOT-OST-2004-19617). The same considerations and findings apply with

equal, if not greater, force to the confidential exhibits submitted by People Express,

and the Department should grant the confidential treatment requested in this case.

WHEREFORE, People Express Airlines, Inc. hereby requests that the

Department afford confidential treatment pursuant to Rule 12 of its Rules of Practice

to the exhibits described herein.

Respectfully submitted,

____________________________

Robert E. Cohn

Patrick R. Rizzi

HOGAN LOVELLS US LLP

Columbia Square

555 Thirteenth Street, NW

Washington, DC 20004

202 637 4999/5659

Counsel for

PEOPLE EXPRESS AIRLINES, INC.
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CERTIFICATE OF SERVICE

I hereby certify that I have on this 27th day of April, 2012, served a copy of

the foregoing Motion of People Express Airlines, Inc. for a Confidential Treatment

Pursuant to Rule 12 upon:

Mr. Nicholas Scarpinato, Jr.

Manager, Washington FSDO

Federal Aviation Administration

13873 Park Center Road

Suite 475

Herndon, VA 20171

________________________________

Jonathan Echmalian