Order 2010-12-21 

Served: December 17,2010 

UNITED STATES OF AMERICA 

DEPARTMENT OF TRANSPORTATION 

OFFICE OF THE SECRETARY 

WASHINGTON, D.C. 

Issued by the Department of Transportation 

on the n ^ day of December, 2010 

Joint application of 

CENTURION AIR CARGO, INC., 

SKY LEASE I, INC., AND 

ARROW AIR, INC. 

for an exemption from the provisions of 

49 U.S.C. §41105 

Docket DOT-OST-2010-0259 

ORDER GRANTING EXEMPTION 

Summary 

By this order, we exempt Centurion Air Cargo, Inc. ("Centurion"), Sky Lease I, Inc. 

("Sky Lease"), and Arrow Air, Inc. ("Arrow Air"), hereinafter the "Joint Applicants," 

from the provisions of section 41105 of Title 49 of the United States Code (the Statute), 

subject to certain conditions. 

Background 

On June 29, 2010, Arrow Air, a U.S. certificated air carrier authorized to engage in 

interstate and foreign scheduled all-cargo air transportation,' filed for Chapter 11 

bankruptcy and ceased all of its operations.^ 

' See Order 2007-7-4, Order 2006-1-1, Order 2000-8-5, Order 2005-3-31, and Notice of Action 

Taken in Docket DOT-OST-1996-1448, Docket DOT-OST-1996-1770, and Docket DOT-OST1995-229. 

^ Section 204.7 of our rules (14 CFR 204.7) provides that, if an air carrier ceases conducting 

the operations for which it was found fit, willing, and able, its authority to conduct those 

operations is automatically suspended as of the date those operations ceased. Under that rule. 

Arrow may not recommence operations nor advertise such services until its fitness to do so has 

been re-established by this office. This order does not permit Arrow Air to recommence 

operations without first being refound fit by the Department. 
Subsequently, on October 14, 2010, Centurion, Sky Lease, and Arrow jointly filed an 

application for a pendente lite exemption from section 41105 of the Statute. The parties 

state that JW Acquisition, Inc. ("JW"), a Florida corporation owned by Mr. Alfonzo Rey, 

the sole owner of Centurion and Sky Lease, submitted an offer to the Bankruptcy Court 

overseeing Arrow Air's Chapter 11 reorganization to purchase Arrow and subsequently, 

JWs offer was selected. On December 16, 2010, the Bankruptcy Court approved 

Arrow's reorganization plan and JWs acquisition. 

The Department has held that a stock acquisition resulting in common control of two or 

more air carriers having international route authority constitutes a de facto transfer 

subject to section 41105. The relief requested here would allow the Joint Applicants to 

operate under common ownership pending the Department's action on a 

contemporaneously filed de facto transfer application.^ In support of this request, the 

Joint Applicants state that, upon consiunmation of the transaction, while Centurion, Sky 

Lease, and Arrow Air, will be under common ownership, each will remain a separate 

entity and will be operated as separate companies. They further contend that grant of the 

exemption request would be consistent with the past practice of the Department. 

Arrow is authorized to engage in interstate scheduled all-cargo air transportation.'* The 

air carrier also holds foreign scheduled all-cargo certificate authority permitting it to 

serve all open-skies partners of the United States,^ as well as foreign scheduled all-cargo 

certificate authority permitting it to serve 30 additional foreign aviation partners of the 

United States.^ In addition. Arrow holds exemption authority permitting it to engage in 

foreign scheduled all-cargo air transportation between the U.S. and Venezuela and 

between the U.S. and Ecuador^ and holds a blanket route integration certificate.^ 

Centurion holds interstate charter all-cargo certificate authority,^ blanket open-skies allcargo certificate authority,'° and exemption authority to engage in foreign scheduled allcargo air transportation between the United States and Colombia," Brazil,'^ the 

Dominican Republic,'^ and Ecuador."* 

^ On October 14, 2010, concurrent with the Joint Applicants' exemption request in Docket 

DOT-OST-2010-0259, Arrow, Centurion, and Sky Lease jointly filed an application in Docket 

DOT-OST-2010-0258 for the Department's approval under 49 U.S.C. § 41105 of the de facto 

transfer of the economic authorities held by Arrow to Arrow under the ownership of Mr. Alfonso 

Rey. No answers have been filed. 

'^ See Order 2000-8-5, issued July 27,2000. 

^ See Order 2007-7-4, issued May 7, 2007. 

* See Order 2000-8-5, issued July 27, 2000; and Order 2005-3-31, issued March 8, 2005. 

'' See Notice of Action Taken, dated September 1, 2009, in Docket DOT-OST-1996-1448 and 

Docket DOT-OST-1996-1770; and Notice of Action Taken, dated July 18, 2008, in Docket DOTOST-1995-229, respectively. 

^ See Order 2006-1-1, issued January 3, 2006. 

' See Order 2001-12-12, issued December 17, 2001. 

'° See Order 2007-7-4, issued May 7, 2007. 

" See Notice of Action Taken, dated August 10,2010, in Docket DOT-OST-2004-18880. 

'^ See Notice of Action Taken, dated August 8, 2008, in Docket DOT-OST-2008-0228. 

'^ See Notice of Action Taken, dated June 25, 2009, in Docket DOT-OST-2009-0141. 
Sky Lease holds interstate scheduled all-cargo certificate authority, as well as blanket 

open skies all-cargo certificate authority permitting it to serve all open skies partners of 

the United States, ^ and exemption authority to engage in foreign scheduled all-cargo air 

transportation between the United States and Colombia.'^ 

No answers opposing the Joint Applicants' exemption request were filed. 

Decision 

We have decided to grant the Joint Applicants' request for an exemption from the 

provisions of section 41105 until we have ruled on the de facto transfer request. The 

Joint Applicants correctly noted that our grant of exemptions in cases such as this is 

contingent upon the air carriers involved, in this case Centurion, Sky Lease, and Arrow, 

remaining separate and independently operated corporations imtil a ruling has been made 

in the underlying de facto transfer case. In this case, as in previous cases,'^ we see no 

reason to withhold exemption authority pending Departmental action on the certificate 

transfer application. As long as Centurion, Sky Lease, and Arrow remain separate 

entities, should we disapprove the proposed transfer, either m whole or in part, JW could 

divest itself of Arrow. The Joint Applicants should not construe our grant of this 

exemption as a decision to approve the related de facto transfer application or any aspect 

of that application. Prior to granting any portion of that application, the Department will 

evaluate the competitive issues raised by the operations of Centurion, Sky Lease, and 

Arrow under common ownership and if appropriate, institute action to reallocate limitedentry route authority or frequencies to other unrelated air carriers. 

ACCORDINGLY, 

1. We exempt Centurion Air Cargo, Inc., Sky Lease I, Inc., and Arrow Air, Inc., from 

the provisions of section 41105 of the Statute, to the extent necessary to allow them to 

operate under the common ownership of Mr. Alfonso Rey, pending the Department's 

final action on the de facto transfer application in Docket DOT-OST-2010-0258, subject 

to the condition that, pending such final action. Centurion Air Cargo, Inc., Sky Lease I, 

Inc., and Arrow Air, Inc., continue to be maintained and operated as separate 

corporations. 

"* See Notice of Action Taken, dated September 29, 2010, in Docket DOT-OST-2010-0233 and 

Notice of Action Taken, dated September 24, 2009, in Docket DOT-OST-2002-12503. 

'^ See Order 2008-9-25, issued September 19, 2008, and Order 2008-11-4, issued November 6, 

2008, respectively. 

'* See Notice of Action Taken, dated August 31, 2009, in Docket DOT-OST-2005-20285. 

'^ See Order 89-1-60, p. 4; Order 97-9-3, p. 3; Order 97-11-8, p. 5; Order 99-4-5, p. 4; and 

Order 2001-9-16, p. 4. 
2. This authority shall be effective until 90 days after the Department issues its final 

order on the joint application of Centurion Air Cargo, Inc., Sky Lease I, Inc., and Arrow 

Air, Inc., in Docket DOT-OST-2010-0258 for approval of a transfer of route authority 

under section 41105 of the Statute. 

3. We may amend, modify, or revoke this order at any time and without hearing. 

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

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 A 

SERVICE LIST FOR 

CENTURION AIR CARGO, INC., SKY LEASE I, INC., 

AND ARROW AIR, INC. 

PIERRE MURPHY 

LAW OFFICES OF PIERRE MURPHY 

COUNSEL FOR ARROW AIR 

1200 NEW HAMPSHIRE AVE NW SUITE 800 

WASHINGTON DC 20036 

PETER LYNCH 

ASST CHIEF COUNSEL 

FOR ENFORCEMENT (AGC-300) 

FEDERAL AVIATION ADMINISTRATION 

800 INDEPENDENCE AVE SW 

WASHINGTON DC 20591 

JOHNRMIETUSJR 

WILLL\M C EVANS 

LAW OFHCES OF JOHN MIETUS LLC 

COUNSEL FOR SKY LEASE AND CENTURION 

6701 DEMOCRACY BLVD SUITE 300 

BETHESDA MD 20817-7500 

JAMES W JARVIS 

JARVIS AND ASSOCL\TES PA 

COUNSEL FOR TW ACQUISITIONS 

1430 SOUTH DIXIE HWY SUITE 306 

CORAL GABLES FL 33146 

WILLIAM J WEBER (AFS-900) 

CERTMCATION SECTION MANAGER 

FEDERAL AVL\TION ADMINISTRATION 

45005 AVIATION DRIVE SUITE 131 

DULLES VA 20166 

CLAY MORITZ 

OFHCE OF AIRLINE INFORMATION 

DOT/RSPA/BTS E-36 

1200 NEW JERSEY AVE SE 

WASHINGTON DC 20590 

BERNARD STANKUS RTS-42 

OFHCE OF AIRLINE INFORMATION 

DOT/RSPA/BTS E-36 

1200 NEW JERSEY AVE SE 

WASHINGTON DC 20590