Order 2011-7-5 Served: July 13, 2011

U N I T E D S

T A T E S O F A

M E R I C A D E P A R T M E N T O F T R A N S P O R T A T

I O N UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation
on the 13 th day of July, 2011

Application of

TWIN CITIES AIR SERVICE, LLC

for authority to engage in scheduled passenger operations as a commuter air carrier under 49 U.S.C. § 41738 Docket DOT-OST-2011-0032

ORDER TO SHOW CAUSE
PROPOSING ISSUANCE OF COMMU TER AIR CARRIER AUTHORITY

Summary

By this order, we tentatively find that Twin Cities Air Service, LLC (“Twin Cities”) is a citizen of the United States and is fit, w illing, and able to provide scheduled passenger operations as a commuter air carrier, subject to conditions.

Background

Section 41738 of Title 49 of the United States Code (“th e Transportation Code”) and section 298.21(d) of the Department’s Avia tion Economic Regulati ons direct us to determine whether companies proposing to provide scheduled passenger service as commuter air carriers are “fit, willing, and able to perform the service, ” and to ensure that all operations relating to this service confor m to the safety standards established by the Federal Aviation Administration (“FAA”). In making fitness findings, the Department uses a three-part test that reconciles the Ai rline Deregulation Act’s liberal entry policy with Congress’ concern for operationa l safety and consumer protec tion. The three areas of inquiry that must be addressed in order to determine an air car rier’s fitness are whether the applicant: (1) will have the managerial skills and technical ability to conduct the proposed operations, (2) will have sufficient financ ial resources to comm ence the operations proposed without posing an undue risk to cons umers or their funds, and (3) will comply with the Transportation Code and regulations imposed by Fede ral and State agencies. We
must also determine that the applicant is a U.S. citizen.

On February 22, 2011, Twin Cities filed an application in Docket DOT-OST-2011-0032 for authority to conduct schedul ed passenger operations as a commuter air carrier pursuant to section 41738 of the Transportation Code. Twin Cities accompanied its application with2

the fitness information required by section 204.3 of our regulations, some of which was filed under seal, and subsequently filed additional information at our request. 1

No answers to the application were received and no special issues regarding the applicant
have come to our attention. Under these circ umstances, we propose to decide the issue of
Twin Cities’ fitness on the basis of the written record. Upon review of the information in the application and the safety and compliance information on the carrier received from the FAA, we tentatively conclude th at Twin Cities is a U.S. citizen and is fit, willing, and able to operate its proposed commuter services, subject to conditions. However, we will give interested persons an opportuni ty to show cause why we s hould not adopt as final these tentative findings and conclusions.

FITNESS

The Company

Twin Cities was initially organized as a corpor ation under the laws of the State of Maine in
1992. 2 The company operates as an air taxi under 14 CFR Part 298 and holds a Federal Aviation Regulations (“FAR”) Part 135 operating certificate from the FAA. Twin Cities currently conducts public charter flights be tween Portland, Maine, and Yarmouth, Nova Scotia, under Part 380 of the Department’s Public Charter Rules (14 CFR Part 380). 3 Twin Cities is owned by Nathanair, Inc. (“Nathanai r”) (51 percent) and Liberty Aviation, LLC (“Liberty Aviation”) (49 percent). 4

1 Twin Cities filed a motion for confidential treatment of its financial statements and forecast, credit letter, and commercial agreements. Upon review, the Department, by letter dated April 5, 2011, granted its request in part, informed Twin Cities that certain informati on for which it requested confidentiality did not warrant such treatment, and directed the applicant to file this information in the public docket, which the applicant did on May 23, 2011. In addition, Twin Cities suppl emented its application with additional information on May 9 and May 23, 2011, again requesting confidential treatment for certain documents. By letter dated May 27, 2011, we granted confidential treatment to t hose exhibits, but directed the applicant to file summaries and, if applicable, updates of this information in the public docket, which it did on May 31, 2011. Twin Cities provided further clarification on June 23, 2011.

2 Formerly known as Twin Cities Air Service, Inc., the company was formed under the laws of the State of Maine in 1992 as a Subchapter S corporation by Roge r and Lillian Leblanc and prov ided aircraft charters. In approximately 1999, the Leblancs formed Bel Air, Inc. (“Bel Air”), a qualified subchapter S subsidiary which provided flight school and fixed base operations. Nathan Humphrey purchased Twin Cities Air Service, Inc., in July 2002 from the Leblancs, changing its name to Nathanair, Inc. (“Nathanair”). Also in July 2002, Nathan Humphrey formed Twin Cities Air Services, LLC (“Twin Cities”), a limited liability compan y, under the laws of the State of Maine, and the tangible assets of Nathanair were transferred to Twin C ities in a tax-free exchange for an interest in Twin Cities. Mr. Humphrey owns 100 percent of Nathanair and 51 percent of Twin Cities; Liberty Aviation, LLC owns the remaining 49 percent of Twin Cities. Bel Air remains a wholly owned subsidiary of Nathanair, owning a hangar in Auburn, Maine, which is rented to Twin Cities, and has no other aviation related operations.

3 Part 380 defines a U.S. public charter operator as any person who (1) undertakes to engage indirectly in air transportation operations and who uses for such transp ortation the services of a direct air carrier, (2) is a
citizen of the United States as defined in 49 U.S.C. 40102 (a), and (3) is authorized to engage in the formation of groups for transportation on Public Charters in accord ance with this part.

4 See Citizenship section of this order for detailed ownership information on Liberty Aviation, LLC.3

Managerial Competence

Twin Cities employs 15 people, and the followi ng individuals serve as the company’s key management and technical personnel:

 Nathan Humphrey – President and Director of Operations

 Dale Stewart – Chief Pilot

 Ben Mosher – Director of Maintenance

Mr. Nathan Humphrey, an Airline Transport P ilot, serves as President and Director of Operations of Twin Cities. He is the sole ow ner of Nathanair, which is one of two owners of and holds 51 percent of Twin Cities. Mr. Hu mphrey served as a pilot with Charter Fleet of Sanford, Maine (2000-2001) and Executive Jet Management (2001 -2002), prior to his purchase of Twin Cities. In addition, Mr. Hu mphrey previously held positions at Cape Air/Nantucket Airlines (1996-2000; Direct or of Pilot Training), Maine Aviation Corporation (1996; pilot, Marketing Director ), Kalitta Flying Service (1995-1996; pilot), Oxford Aviation (1992-1993; Chief Pilot, General Manager), Skyline Aviation (1990- 1992; flight instructor), Caribou Flyi ng Service (1989-1990; flight instructor, Captain/pilot), and Northeast Air (1988-1989; flight instructor).

Mr. Dale Stewart, an Airframe and Powerplant Mechanic and Airline Transport Pilot, has been employed by Twin Cities since 1994. He has also served at Twin Cities as Maintenance Director (2004-2006), General Manager (2002-2010), and Chief Pilot (2002- 2004; 2006-2010; 2011-present), as well as flight instructor (1996-present) and charter pilot (1997-present). Prior to Twin Cities’ purchase by Mr. Humphrey, Mr. Stewart held the positions of aviation maintenance techni cian (1994-1996), line service (1994-1995), and Chief Flight Instructor (2000-2002). Mr. Stewart has 7,100 total ho urs of flight time, including over 3,000 hours on Cessna 400 series and over 400 hours on Cessna 300 Series, encompassing the aircraft Twin C ities will use in its scheduled operations. He holds a B.S. in aviation technology from LeTourneau University in Longview, Texas.

Mr. Ben M. Mosher, an Airframe and Powe rplant Mechanic, has been Director of Maintenance at Twin Cities since 2005, having previously held the same position from 1995 to 2004. From 2004 to 2005, Mr. Mosher wa s the owner and operator of Eaglewings Aviation in Mechanic Falls, Maine, and was not employed by Twin Ci ties. Mr. Mosher previously served as an aircraft mechan ic at Oxford Aviation (1994-1995), Master Aviation (1993), and Bridgeport Air Service (1 991-1993) and as Lead Aircraft Mechanic at South Central Airlines (1985-1991). Mr. Mo sher has experience wi th Cessna 300 series and Cessna 401, 402, 414, 421, and 441 aircraft, en compassing the aircraft Twin Cities will use in its scheduled operations. He has held his mechanic certificate since 1985 and has an A.S. degree in Aviation Maintenanc e Technology from LeTour neau College (now LeTourneau University) in Longview, Texas.4

In view of the experience and background of th e applicant’s key personnel, we tentatively conclude that Twin Cities has the management skills and technical ability to conduct its proposed commuter service. 5

Financial Condition and Operating Proposal

If granted the commuter authority it seek s, Twin Cities plans to provide scheduled passenger service, initially ope rating six roundtrip flights w eekly between Portland, Maine (“PWM”), and Yarmouth, Nova Scotia (“YQI”) , during the summer peak months of June through August. For the remainder of the y ear, Twin Cities expect s to operate three roundtrips weekly. Service will be provided using thre e Cessna 402Cs and one Cessna 310R, each with seven seats.

Twin Cities provided forecasts of its pre-ope rating costs and first-year revenues and expenses for its proposed commuter operation s. The applicant will operate the same aircraft currently used in its air taxi operations. Twin Cities indicated that all necessary infrastructure to operate as a commuter is in place, including management and key technical personnel and maintenance facilitie s, and it expects to incur no additional expenses associated with its F AA certification efforts. Theref ore, Twin Cities expects to incur only the incremental costs associated w ith expanding its existi ng air taxi operations
to include commuter air carrier operations.

Twin Cities projects that it will incur a pproximately $2,008,273 in first-year expenses. 6 Upon review of these forecasts, we find Twin C ities’ expense projections to reasonable and estimate that Twin Cities will need approximately $503,000 to meet the Department’s
financial fitness criteria. 7

Twin Cities’ balance sheet, dated Decembe r 31, 2010, shows total current assets of $533,596 and total current liabilities of $475,02 4, giving the applicant positive working capital of $58,572. In addition, to tal members’ capital is $546,383.

In its application, Twin Cities indicates that it has sufficient funds to meet the Department’s financial requirement. In support of its financial condit ion, Twin Cities has provided copies of true and executed agreements with Northeast Trading Corporation

5 Before authorizing an air carrier to conduct air tr ansportation operations, the FAA also evaluates certain of the air carrier's key personnel with respect to the minimum qualifications for those positions as prescribed in the FARs. The FAA’s evaluation of these key personnel provides an added practical and in-person test of their skills and technical ability.

6 Initially, Twin Cities proposed to provide five weekly scheduled flights, with a total of seven weekly scheduled flights during the peak months of July and August, and its expected annual expenses were approximately $2,309,211. Subsequently, on May 9, 2011, Twin Cities supplemented its application and provided a revised operating plan along with revised projected annual expenses of approximately $2,008,273.

7 In establishing financial fitness, the Department ty pically asks an applicant to demonstrate that it has

access to financial resources sufficient to cover its pre-operating expenses and the expenses that are reasonably projected to be incurred during three months of operatio ns. In determining available resources, projected revenues are generally not included. The $503,000 listed above consists of one-quarter of Twin Cities’ estimated first-year expenses.5

showing that, as of May 9, 2011, the applican t has access to a $600,000 line of credit. In addition, the applicant provided third-party verification showi ng that, as of February 22, 2011, it had available credit of $52,000 on one line of credit in its name and a total balance of $17,000 on deposit in two accounts in its name.

In light of the foregoing, we tentatively conclude that Twin Cities will have access to
sufficient financial resources to enable it to commence it s proposed operations without posing an undue risk to consumers or their funds. 8

Compliance Disposition

Twin Cities states that there is one pending enforcement action against it. On September 24, 2009, Twin Cities was advised by the FAA that it proposed to assess a civil penalty of $21,450 against Twin Cities for alleged violations . In particular, th e FAA found that Twin Cities failed to receive a DOT-required verified negative drug test result prior to hiring an employee for a safety-sensitive function and prior to transferring another employee to a safety-sensitive function. On November 1, 2010, the FAA amended the civil penalty and revised the assessed amount to $10,725. Twin Cities began monthly payments on November 12, 2010, and is scheduled to pa y the penalty in full by October 15, 2011.

Previously, Twin Cities had received warning letters, dated November 2, 1993, and March 24, 1999, from the FAA for drug abatement program and testing issues. On October 10, 2002, Twin Cities received a lett er of correction for drug abatement program and testing. None of the three letters resulted in civil pe nalties. Twin Cities also disclosed two prior
aircraft accidents or incident s, both of which occurred over 10 years ago and prior to the purchase of Twin Cities by Nathan Humphrey.

Twin Cities states that there are no other pending investigations, enforcement actions, or formal complaints filed by the Department agai nst it, its key personnel, or persons having a substantial interest in it with respect to compliance with the Tran sportation Code or the Department’s regulations. In addition, Twin Cities states that there are no actions or outstanding judgments against it, its owners, or its key personnel, nor have there been any charges of unfair, deceptive or anti-competitiv e business practices, or of fraud, felony or antitrust violations brought ag ainst any of these parties.

Our search of the Department’s records found no significant compliance problems with Twin Cities. Further, the FAA advises us that it is working with Twin Cities in connection with the applicant's efforts to obtain commuter operating authority from that agency, and it knows of no reason why we should not find Twin Cities fit.

In light of these circumstances, we tentativ ely conclude that Twin Cities has the proper regard for the laws and regulations governing its services to ensure that its aircraft and

8 As is our practice, prior to making any authority awarded to Twin Cities effective, we will require the company to demonstrate that it continues to have the financial resources needed to meet our financial fitness

criteria.6

personnel conform to applicable safety standa rds, and that acceptable consumer relations practices will be followed.

CITIZENSHIP

Section 41102 of the Transportation Code re quires that authority to engage in air transportation be held only by citizens of the United States as defined in 49 U.S.C. 40102(a)(15). That section requires that the president and two-thirds of the Board of Directors and other managing officers be U.S. citizens, that at l east 75 percent of the outstanding voting interest be owned by U.S. c itizens, and that the air carrier must be
under the actual contro l of U.S. citizens.

As discussed earlier, Twin Cities is a Main e limited liability company, owned by Nathanair (51 percent) and Liberty Aviation (49 percent) . Nathanair is a Ma ine corporation, owned 100 percent by Nathan Humphrey, a United States citizen.

Liberty Aviation is a limited liability company fo rmed under the laws of the State of Maine in 2004 with nine initial members. Approxima tely two years ago, Tim Varney, an original member of Liberty Aviation, turned in his fi ve percent stock share, which has not been reallocated within Liberty Aviation, leaving eight current members, each of whom is a U.S. citizen. These eight members, are: (1) Joseph Bedard (5 percent), (2) Seal Bay, LLC (5 percent), 9 (3) Birddog, LLC (5 percent), 10 (4) The Loaf, LLC (5 percent), 11 (5) The Ovar Holdings, LLC (18.75 percent), 12 (6) The Horse Rider Hold ings, LLC (18.75 percent), 13 (7) The Cowboy Holdings, LLC (18.75 percent), 14 and (8) The Madness Holdings, LLC (18.75 percent). 15

Further, all of Twin Cities’ key personnel are identified as U.S. citizens and the company has supplied an affidavit attest ing that it is a citizen of the United States and under the
actual control of U.S. citizens. Our review of Twin Cities’ citizenship has uncovered no reason to suggest that control of Twin Cities rests with non-U.S. citizens.

9 Seal Bay, LLC, formed under the laws of the State of Maine, is solely owned by Mr. James G. Stanley, Jr., a U.S. citizen.

10 Birddog, LLC, formed under the laws of the State of Maine, is solely owned by Mr. David R. Burton, a

U.S. citizen.

11 The Loaf, LLC, formed under the laws of the State of Maine, is solely owned by Mr. Fred Forsley, a

U.S. citizen.

12 The Ovar Holdings, LLC was formed under the laws of the State of Maine and is solely owned by Mr. Andrew Bedard, a U.S. citizen. The company’s 18.75 percent share of Liberty Aviation is held by a bankruptcy trustee, John C. Turner , who is a United States citizen.

13 The Horse Rider Holdings, LLC, formed under the la ws of the State of Maine, is solely owned by Ms. Adriana Liberty, a U.S. citizen.

14 The Cowboy Holdings, LLC, formed under the laws of the State of Maine, is solely owned by Mr. George Liberty, a U.S. citizen.

15 The Madness Holdings, LLC, formed under the laws of the State of Maine, is solely owned by Mr. Maxwell Liberty, a U.S. citizen.7

Based on the above, we tentatively conclude th at Twin Cities is a citizen of the United States and is fit, willing, a nd able to provide air transporta tion services as a commuter air
carrier.

OBJECTIONS

We will give interested persons 7 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 3 days thereafter. 16 We expect that persons objecting to our tentative findi ngs and conclusions will s upport their obje ctions with
relevant and material facts. We will not entertain general, vague, or unsupported objections. If no substantive obj ections are filed, we will issue an order that will make final our tentative findings and conclusions with respect to Twin Cities’ fitness and commuter authority.

EFFECTIVE COMMUTER AUTHORIZATION
CONDITIONS AND LIMITATIONS

In the event that we find Twin Cities fit, willing, and able to conduct the proposed commuter service, we will issue to it a Commu ter Air Carrier Authorization. However, that authorization will not become effective until the air carrier has fulfilled all requirements for effectiveness as set forth in the Terms, Conditions, and Limitations attached to its
authorization. 17 In addition, consistent with the applicant’s proposed operations, we propose to limit any author ity issued to Twin Citi es to operations using aircraft that can be operated under FAR Part 135 (in effect, aircraft with no more than 9 seats in scheduled passenger operations). Should Twin Cities pro pose to operate larger aircraft or conduct operations that would require certificati on from the FAA under 14 CFR Part 121, our fitness findings might no longer apply. Theref ore, should Twin Cities desire to operate aircraft that would require certification from the FAA under Part 121, it must first provide the Department with at least 45 days advan ce notice of such plans and provide updated information establishing its fitness for such expansion. 18

Furthermore, we remind Twin Cities of the requirements of 49 U.S.C. 41110(e). Specifically, that section requires that, once an air carrier is found fit initially, it must

16 On July 12, 2011, Twin Cities filed an emergency exemption application in Docket DOT-OST-2011-0127 to permit it to immediately begin scheduled passenger operations as a commuter air carrier until mid-September while its current application for commuter authority is pending. It is not the Department’s policy to grant such exemptions. Ho wever, while the normal answer period for filing objections to this order would be 14 days, we have decided, based upon the specific circumstances presented here, to shorten the answer period to 7 days, with answers to objections due 3 days thereafter. As stated previously, Twin Cities will provide additional flights to the same markets it currently serves as an air taxi. Moreover, no objections were filed to the application at issue.

17 We also reserve the right to stay the effectivene ss of Twin Cities’ authority if any new information

becomes available to us that warrants such action.

18 We note that the operation of larger aircraft could require the ai r carrier to have access to additional funds and/or hire additional management personnel.8

remain fit in order to hold its authority. To be assured that commuter air carriers continue
to be fit after effec tive authority has been issued to them, we require that they supply information describing any subsequent subs tantial changes they may undergo in areas affecting fitness. In this regard, should Twin Cities propose any substantial changes in its ownership, management, or operations, it must first comply with the requirements of
section 204.5 of our rules. 19 The compliance of the company with these requirements is
essential if we are to ca rry out our responsibilities under the Transportation Code. 20

Additionally, if the air carrier is granted eff ective authority, it would be required to submit a detailed progress report, within 45 days follo wing the end of its first year of commuter flight operations, to the Air Carrier Fitnes s Division. The submission of a first-year progress report is conditi oned upon all newly authorized commuter air carriers and was adopted as policy by the Depart ment to aid in monitoring the fitness of new air carriers. The report should include a description of Tw in Cities’ current operations (number and type of aircraft, principle markets served, to tal number of full-time employees), a summary of how its operations have changed during the year, a discussi on of any changes it anticipates from its current operations during its sec ond year, current financial
statements, 21 and a listing of current senior manage ment and key technical personnel. The air carrier should also be prepared to meet with staff members of the Fitness Division to discuss its current and future operations.

ACCORDINGLY:

1. We direct all interested persons to show cau se why we should not issue an order finding that Twin Cities Air Service, LLC, is fit, willing, and able under 49 U.S.C. § 41738 to provide scheduled passenger service as a commut er air carrier using small aircraft pursuant
to Part 135 of the Fede ral Aviation Regulations.

2. We direct any interested persons having objections to the issuan ce of an order making final any of the proposed findings, conclusions, or the award of authority set forth here to

19 The air carrier may contact our Air Carrier Fitness Di vision to report proposed substantial changes in its operations, ownership, or management, and to determine what additional information, if any, will be required under section 204.5. Moreover, by notice dated July 21, 1998, the Department requested air carriers to provide a 30-day advance notification of any proposed change in ownership, restructuring, or recapitalization.

If the air carrier fails to file the information or if the information fails to demonstrate that the air carrier will continue to be fit upon implementation of the substantial change, the Department may take such action as is appropriate, including enforcement ac tion or steps to modify, suspend, or revoke the air carrier's commuter authority.

20 We also remind Twin Cities about the requirements of section 204.7 of our rules. This section provides, among other things, that (1) the commuter authority granted to a company shall be revoked if the company does not commence actual flying operations under that authority within one year of the date of the Department’s determination of its fitness; (2) if th e company commences operations for which it was found fit and subsequently ceases such operations, it may not resume commuter operations unless its fitness has been redetermined; and (3) if the co mpany does not resume operations with in one year of its cessation, its authority shall be revoked for dormancy.

21 These financial statements should include a balance sheet as of the end of the company’s first full year of actual flight operations and a 12-month income statement ending that same date.9

file them with Department of Transporta tion Dockets, 1200 New Jersey Avenue, S.E., West Building Ground Floor, Rm. W12-140, Wa shington, D.C. 20590, in Docket DOTOST-2011-0032, and serve them upon all persons listed in Attachment A no later than 7 days after the service date of this order; an swers to objections shall be filed no later than 3 days thereafter.

3. If timely and properly supported objections ar e filed, we will accord full consideration to the matters or issues raised by the objections before we take further action.

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 tenta tive findings and conclusions set out here and awarding Twin Cities Ai r Service, LLC, a Commuter Air Carrier Authorization, subject to the attached sp ecimen Terms, Conditions, and Limitations.

5. We deny the request filed in Docket DOT-OST-2011-0127 from Twin Cities Air Services, LLC for an exemption to begin sche duled passenger operations as a commuter air carrier pending the Department’s ac tion on its commuter application.

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

7. 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

### Attachment Specimen 

### Terms, Conditions, and Limitations

Twin Cities Air Service, LLC

is authorized to engage in scheduled passenge r air transportation operations as a commuter
air carrier.

This authority is subject to the following provisions:

(1) The authority to conduct scheduled passe nger operations will not become effective until six (business) days after the Departm ent has received the following documents; provided , however , that the Department may stay the ef fectiveness of this authority at any time prior to that date:

(a) A copy of the holder's Air Ca rrier Certificate and Operations Specifications authorizing such opera tions from the Federal Aviation Administration (FAA).

(b) A certificate of insurance on OS T Form 6410 evidencing liability insurance coverage meeting the requireme nts of 14 CFR 205.5(b) for all of its aircraft.

(c) A statement of any changes the holder has unde rgone in its ownership, key personnel, operating plans, financial posture, or compliance history, since the date of the Show Cause Order in this case.

(d) A revised list of pre-operatin g expenses alre ady paid and those remaining to be paid, as well as indepe ndent verification that the holder has available to it funds suffic ient to cover any remaining pre-operating expenses and to provide a working capital reserve equal to the operating costs that would be incurred in three months of operations.

(2) Pending receipt of effective authority, the holder may not accept payment of any kind (i.e., cash, check, or credit card) or issue ti ckets for scheduled passenger operations, and any advertisement or listing of flights by the holder must prominently state: "This service is subject to receipt of gover nment operating authority."

(3) The holder shall at all times conduct its operations in accordance with the requirements of 14 CFR Part 298 and any other re gulations prescribed by the Department of Transportation for the services authorized here, and with such other reasonable terms, conditions, and limitations as th e Department of Transportation may prescribe in the public

interest.

(4) The holder may not operate aircraft de signed to have a maximum passenger capacity of more than 60 seats or a maximum payload capacity of more than 18,000 pounds.2

(5) The holder’s authority is lim ited to operations conducted pursuant to Part 135 of the Federal Aviation Regulations. In the event that the holder wishes to institute operations that would require Part 121 certificatio n from the FAA, it must first be determined fit for such operations.

(6) The holder's authority under this certificate is effective only to the extent that such operations are also authorized by the Federal Aviation Admi nistration (FAA), and comply with all U.S. Government requirements concerni ng security, including, but not limited to 49

CFR Part 1544. 

(7) The holder shall at all times remain a "Citizen of the United States" as required by 49 U.S.C. 40102(a)(15).

(8) The holder shall maintain in effect li ability insurance cover age as required under 14
CFR Part 205. Failure to maintain such in surance coverage will render this authority ineffective, and this or other failure to comply w ith the provisions of Subtitle VII of Title 49 of the United States Code or the Department's re gulations shall be sufficient grounds to revoke this authority.

(9) In the event that the holder receives effective scheduled pa ssenger authority, the following additional conditions will apply:

(a) The holder may reduce or terminat e service at any point or between any two points, subject to compliance with the provisions of 49 U.S.C. 41734 and all orders and regulations issued by the Department of Transportation
under that section.

(b) The holder may not provide schedul ed passenger air transportation to or from Dallas (Love Field), Texas, except within the limits set forth in section 29 of the International Air Transpor tation Competition Act of 1979, as amended by section 337 of the De partment of Transportation and Related Agencies Appropriations Act, 1998.

(10) Should the holder propose any substantia l changes in its ownership, management, or operations (as that term is defined in 14 CFR 204.2(l)), it must first comply with the requirements of 14 CFR 204.5.

(11) In the event that th e holder does not commence actu al flying operations as a commuter air carrier under this authority with in one year of the date of the Department's determination of its fitness, its commuter authori ty shall be revoked for dormancy. Further, in the event that the holder commences but subsequently ceases all scheduled passenger operations, the authority granted here shall be suspended under the terms of 14 CFR 204.7

 To assure compliance with all applicable U.S. Governmen t requirements concerning security, the holder shall, before commencing any new service (including charter flights) to or from a foreign airport, contact its Principal Security Inspector (PSI) to advise the PSI of its plans and to find out whether the Transportation Security Administration has determined that security is adequate to allow such airport(s) to be served.3

and the holder may neither recommence nor advertis e such operations unle ss its fitne ss to do so has been redetermined by the Department. Moreover, if th e holder does not resume such operations within one year of its cessation, its commuter aut hority shall be revoked for dormancy.Attachment A

SERVICE LIST FOR TWIN CITIES AIR SERVICE, LLC

MR EDWARD P. FABERMAN
WILEY REIN LLP
1776 K STREET NW
WASHINGTON DC 20006 MR BERNARD STANKUS RTS-42
OFFICE OF AIRLINE INFORMATION
DOT/RSPA/BTS E-36
1200 NEW JERSEY AVE SE
WASHINGTON DC 20590

MS KATRINA A. SKOWRON
WILEY REIN LLP
1776 K STREET NW
WASHINGTON DC 20006 MR WILLIAM J WEBER
CERTIFICATION MANAGER
FAA AFS-900
45005 AVIATION DRIVE SUITE 131
DULLES VA 20166

MR NATHAN HUMPHREY
PRESIDENT TWIN CITIES AIR SERVICE, LLC
81 AIRPORT DRIVE
AUBURN ME 04210 MR PETER LYNCH
ASST CHIEF COUNSEL FOR ENFORCEMENT
FAA/AGC-300
800 INDEPENDENCE AVE SW
WASHINGTON DC 20591

MR GARY READIO
AVIATION SAFETY INSPECTOR
FAA PORTLAND FSDO-65
PORTLAND ME 04102 MS ANNE SUISSA
OFFICE OF AIRLINE INFORMATION
DOT/RSPA/BTS E-36
1200 NEW JERSEY AVE SE
WASHINGTON DC 20590

FAA FLIGHT STANDARDS DISTRICT OFFICE
412 YELLOWBIRD ROAD
PORTLAND ME 04102 MANAGER
PORTLAND INTERNATIONAL JETPORT
1001 WESTBROOK STREET
PORTLAND ME 04102

MANAGER
YARMOUTH INTERNATIONAL AIRPORT
PO BOX 386
YARMOUTH NOVA SCOTIA
CANADA B5A 4B3