Order 2011

- 9

- 14 Served: September 19, 2011

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

Issued by the Department of Transportation

o n the 19 th day of September , 201 1

Application o f

ALASKA CENTRAL EXPRESS, INC.

for re issuance of its certificate of public convenience and necessity under 49 U.S.C. § 41102 Docket DOT

- OST

- 1996

- 1657

ORDER ISSUING EFFECTIVE CERTIFICATE

Summary

By t his order, we (1) make effective the authority of Alaska Central Express Inc

. (“ ACE ”)

, to engage in interstate scheduled air transportation of persons, property and mail u sing small

aircraft 1

, and (2) reissue the air carrier’s certificate to reflect its effective date of Se ptember 6,

2011

.

Background

By Order 2011

- 2

- 12, issued February 18, 2011, the Department found ACE fit to conduct interstate scheduled passenger air transportation using small aircraft and reissued its certificate removing the condition limiting its passenger operations to charter service only

.

However, the authority granted by this certificate was not to become effective until six (business) days after the Department received (1) a copy o f ACE ’s Air Carrier Certificate and Operations Specifications from the Federal Aviation Administration (“FAA”) authorizing it to engage in such operations, (2) a certificate of insurance evidencing liability insurance coverage meeting the requirements of P art 205 of our rules, (3) updated fitness informati on describing any changes

ACE may have undergone subsequent to the show cause order in this proceeding, and (4) a revised list of pre

- operating expenses already paid and those remaining to be paid, as well as evidence that ACE continued to have sufficient funding to meet our financial fitness criteria.

On August 25, 2011, ACE filed the necessary information to make its authority effective

, including updated financial fitness information in Docket DOT

- OST

- 1996

- 1657. Specifically, the air carrier provided a list of pre

- operating expenses remaining to be paid ( $ 51,450 ) and a revised first

- year expense forecast estimating approximately $ 2.59 million to be incurred

.

1 Small aircraft is defined as any aircraft originally designed to have a maximum passenger capacity of less than 60 seats or a payload capacity of no more than 18,000 pounds

.2

We reviewed the update d forecasts provided by ACE and find them to be reasonable. Based on our review of this information, we calculate that ACE needs $ 699,794 to meet our financial

fitness test. 2 In support of its ability to fund its proposed operations, ACE provide d statemen ts
from Wells Fargo and Northrim Bank showing that

, as of July 31, 2011, it ha d access to $ 418,536 and $ 628,870, respectively.

Upon review of the information provided by ACE, we determined that the air carrier had fulfilled its requirements as set forth in Order 2011

- 2

- 12. Accordingly, the authority granted to ACE

became effective on September 6, 2011. By this order, we reissue to ACE its certificate of public convenience and necessity to reflect its effective date.

REQUEST FOR CONFIDENTIAL TREATMENT

On August 25, 2011 , ACE filed a motion for confidential treatment under section 302.12 of our rules (“Rule 12”) for certain information in connection with its request for effective authority. The information submitted included a copy of the applicant’s r evenue and net income projections

contained in its revised pro forma current and forecast Profit and Loss Statement s (Attachment s 3 and 4 ). In support of its request, ACE noted that a grant of confidential treatment would be consistent with the Department ’s previous decisions related to an applicant’s revenue and net

income forecasts , and that public disclosure of this highly sensitive financial information would

cause substantial harm to ACE

.

Rule 12 instructs us to evaluate requests for confidential tr eatment by the standards of disclosure found in the Freedom of Information Act (5 U.S.C. Section 552). Information may be withheld from disclosure under 5 U.S.C. 552(b)(4) if it is (1) commercial or financial, (2) obtained from a person outside of governm ent, and (3) privileged or confidential ( Gulf and Western Industries,

Inc. v. United States , 615 F.2d 527, 529 (D.C. Cir. 1979)).

There is no question that the information for which ACE 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 of the information is likely to have either of the following effects: (1) impair the Governmen t’s ability to obtain necessary information; or (2) 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)). Further, to be privileged or confidential, the information must not be of the type that is usually released to the public ( Gulf and Western Industries, Inc. v. United States , 615 F.2d 527, 530 (D.C. Cir. 1979)).

As ACE notes, the Department previously granted confidential treatment to the air carrier’s

revenue and net income projections contained in its pro forma Profit and Loss Statement. 3 We have reviewed the updated information and find that our basis for granting the air carrier’s

2 The $ 699,794 noted here is comprised of the applicant’s forecast of approximately $ 51,450 in pre

- operating expenses remaining to be paid, plus $ 648,344 , which is one

- quarter of its estimated $ 2.59 million in first

- year

expenses

. 3 See Order 2011

- 2

- 4

, at 5

- 6.3

previous request to withhold the document s from public disclosure continues to apply. Therefore, we will grant ACE’s request for confidential treatment of Attachment s 3 and 4 filed

on August 25, 2011.

ACCORDINGLY

, Acting under authority assigned by the Department in it s Regulations

14 CFR 385.12(a)(2):

1

. We reissue the certificate of public convenience and necessity issued to Alaska Central Express, Inc., by Order 2011

- 2

- 12 to reflect the effective date of its authority to engage in interstate scheduled air transportation using small aircraft

.

2

. We direct Alaska Central Express, Inc., to submit to the Air Carrier Fitness Division a first year progress report within 45 days following the end of its first year of actual interstate scheduled passenger flight operations using small aircraft

. 4

3

. We direct that, s hould Alaska Central Express, Inc., propose to operate large large aircraft

, it must first notify the D epartment in writing 45 days prior to t he proposed operation and demonstrate its fitness to conduct such operations before their commencement. 5

4

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

.

Persons entitled to petition the Department for review of this order, under 14 CFR 385.30 may file their petitions within 10 days of the service date of this order.

The action confirmed in this order was effective when taken and the filing of a petition for

review shall not alter its effectiveness.

By:

TODD M. HOMAN

Director Office of Aviation Analysis

An electronic version of this document is available on the World Wide Web at: http://www.regulations.gov

4 The report should include a descript ion of the air carrier’s current operations (number and type of aircraft, principal markets served, total number of full

- time and part

- time employees), a summary of how these operations have changed during the year, a discussion of any changes it anticipat es from its current operations during its second year, current financial statements, and a listing of current senior management and key technical personnel. The air carrier should also be prepared to meet with staff members of the Fitness Division to disc uss its current and future operations.

5 This notice should be submitted to the Air Carrier Fitness Division. The air carrier may contact the Air Carrier Fitness Division prior to submitting its notice to determine what fitness information must be provid ed.

# Certificate of Public Convenience and Necessity

fo r Interstate Air Transportation

(as reissued)

This Certifies That



## Alaska Central Express, Inc.

is authorized, subject to the provisions of Subtitle VII of Title 49 of United States Code, the orders, rules, and regulations issued thereunder, and the attached Terms, Conditions, and Limi tations, to engage in interstate air transportation of persons, pr operty, and mail.

This Certificate is not transferable without the approval of the Department of Transportation.

By Direction of the Secretary

Issued by Order 201 1

- 9

- 14 Todd M. Homan

On September 19

, 201 1 Director Effective on September 6, 2011 Office of Aviation Analysis2



### Attachment

 As reissued by Order 20 11

- 9

- 1 4



### Terms, Conditions, and Limitations

ALASKA CENTRAL EXPRESS, INC.

is authorized to engage in interstate air transportation of persons, property, and mail between any point in any State, territory, or possession of the United States or the District of Columbia, and any other point in any of those entities.

This authority is subject to the following provisions:

( 1 ) The holder shall at all times conduct it s operations in accordance with the regulations prescribed by the Department of Transportation for the services authorized by this certificate, and with such other reasonable terms, conditions, and limitations as the Department of Transportation may prescr ibe in the public interest.

( 2 ) The holder's authority under this certificate is effective only to the extent that such operations are also authorized by the FAA, and comply with all U.S. Government requirements concerning security, including, but not limited to 49 CFR Part 1544. **

( 3 ) The holder shall at all times remain a "Citizen of the United States" as required by

49 U.S.C. 40102(a)(15).

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

(5) The holder shall maintain in effect liability insurance coverage as required under

14 CFR Part 205. Failure to maintain such insurance coverage will render a certificate ineffective, and this or other failure to comply with the provisions of Subtitle VII of Title 49 of the United States Code or the Department's regulations shall b e sufficient grounds to revoke this certificate.

 This certificate is being reissued to reflect its effective date and to reflect the removal of the condition that limites the air carrier to interstate charter passenger transportation.

.
** To assure compliance with all applicable U.S. Government 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 Transp ortation Security Administration has determined that security is adequate to allow such airport(s)

to be served.3

( 6 ) The holder is authorized to conduct charter flights in interstate and/or foreign air

transporta t ion in accordance with the provisions of 14 CFR Part 212.

( 7 ) Should the holder propose any substantial changes in its ownership, management, or operations (as defined in 14 CFR Part 204.2(l)), it must first comply with the requirements of

14 CFR Part 204.5.

(8) The holder may not provide scheduled passenger air transportation to or from Dallas (Love

Fiel d), Texas, except within the limits set forth in section 29 of the International Air Transportation Competition Act of 1979, as amended or as modified by any future legislation addressing access restrictions to or from Love Field.

( 9 ) The holder may not enter into any form of agreement or arrangement with Mr. Neil Bergt, any member of his family, excluding Mr. Michael A. Bergt, or any entity owned or controlled by Mr. Neil Bergt or a member of his family

, excluding Mr. Michael A. Bergt, without obtaining prior approval from the Department.

( 10 ) In the event that the holder does not commence actual flying operations under this certificate within one year of the date of the Department's determination of its fitness, its authority shall be revoked for dormancy, unless the holder is conducting operat ions under another type of certificate authority. Further, in the event that the holder commences operations for which it was found "fit, willing, and able" and subsequently ceases all such operations, its authority under all certificates held shall be su spended under the terms of 14 CFR Part 204.7 and the holder may neither recommence nor advertise such operations unless its fitness to do so has been redetermined by the Department. Moreover, if the holder does not resume operations within one year of its cessation, its authority shall be revoked for dormancy.Attachment A

SERVICE LIST FOR ALASKA CENTRAL EXPRESS,

INC.

MR ROBERT P SILVERBERG ESQ

ATTORNEY FOR ALASKA CENTRAL

EXPRESS INC

SILVERBERG GOLDMAN & BIKOFF LLP

1101 30 TH STREET NW

SUITE 120

WASHINGTON DC 20007 M S MARIANNE SEGUIN

RTS

- 42

OFFICE OF AIRLINE INFORMATION

DOT/RSPA/BTS E

- 36

1200 NEW JERSEY AVE SE

WASHINGTON DC 20590 REGIONAL COUNSEL AAL

- 7

ALASKA N REGI ON

FEDERAL AVIATION

ADMINISTRATION

222 WEST 7 TH AVENUE SUITE 14

ANCHORAGE ALASKA 99 513

MR MICHAEL BERGT

PRESIDENT ALASKA CENTRAL EXPRESS

INC

5901 LOCKHEED AVENUE

ANCHORAGE ALASKA 99502 MR BERNARD STANKUS

RTS

- 42

OFFICE OF AIRLINE INFORMATION

DOT/RSPA/BTS E

- 36

1200 NEW JERSEY AVE SE

WASHINGTON DC 20590 MR WILLIAM J WEBER

CERTIFICATION SECTION

MANAGER

FAA AFS

- 900

45005 AVIATION DRIVE SUITE 131

DULLES VA 20166

M S DEE RICE

FEDERAL AVIATION ADMINISTRATION

222 WEST 36 TH AVENUE

SUITE 101

ANCHORAGE ALASKA 99503