u.s. Department of 

Transportation 

Office of the Secretary 

of Transportation 

October 26,2010 

Ms, Margi Holmstrom 

Vice President-Administration 

Carlsbad-Palomar Airlines, Inc, 

d/b/a California Pacific Airlines 

5670 EI Camino Real, Suite D 

Carlsbad, CA 92008 

Dear Ms, Holmstrom: 

1200 New Jersey Avenue, SE 

Washington, DC 20590 

Re: Dockets DOT-OST-201O-0126 and DOT-OST2010-0125, Ruling on Motion of Carlsbad-Palomar 

Airlines, Inc, d/b/a California Pacific Airlines for 

Confidential Treatment of Documents 

We are cUlTently reviewing the certificate applications of Carlsbad-Palomar Airlines, Inc, 

d/b/a California Pacific Airlines ("CP Air") in Dockets DOT-OST-201O-0126 and DOTOST-201O-0125, The purpose of this letter is to notify you of our intended ruling on your 

request for confidential treatment of documents filed in support of the referenced 

application, And to request additional information needed to fully prosecute CP Air's 

applications, 

CP Air's motion, filed August 26, 2010, requests that the following material be considered 

for confidential treatment under 14 CFR 302,12 (Rule 12): 

Exhibit 3 - Complied Balance Sheets 

Exhibit 4 - Forecast Balance Sheets 

Exhibit 6 - Revised hlcome Statement Forecast 

Exhibit 7 - Gross and Net Proceeds of Offering and Private Placement 

Memorandum 

Exhibit 8 - Third-party verification of Cash Deposits 

In SUppOlt of your request for confidential treatment of the noted documents, you stated that 

these documents include sensitive commercial and/or fmancial information the public 

disclosure of which could adversely affect CP Air's commercial and financial interest 

Rule 12 instructs us to evaluate requests for confidential treatment in accordance with the 

standards of disclosure found in the Freedom of Infoffilation Act (5 U,S,c' section 552), 

By this standard, information may be withheld from disclosure under 5 lLS,c' 552(b)(4) if 

if is ( J ) commercial or financiaL (1) obtained froln a person outside rhe govenlinent, and (.1 I 
" ( StOles, 615 F2d 

The information identified above clearly meets the first two requirements. The remaining 

question is whether the information is privileged or confidential, that is, whether 

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

Govemment'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 Consenlatiol1 Association v. Morton, 498 F.2d 765, 770 (D.C. Cir. 1974)] 

Furthermore, 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)] 

Absent extenuating circumstances, it is not the Department's practice to withhold from 

public disclosure information regarding an applicant's current and/or historical financial 

statements, pre-operating and first-year expense forecasts, proposed operating plans and 

related statistics, or third-party verification of funds and/or an applicant's funding plans. 

The Department will generally grant confidential treatment to information pertaining to a 

company's forecast revenues. Therefore, we will grant confidential treatment to the 

revenue and income line items, and the average ticket price and flight times contained in 

Exhibit 6 of CP Air's first-year operating expense forecast and supporting statistics. In 

addition, we will grant confidential treatment to the Private Placement Memorandum in 

Exhibit 7. We have previously granted CP Air confidential treatment of this material and 

we see no reason not to continue to grant CP Air's request to withhold this material from 

public disclosure. The remaining material requested confidential treatment in Exhibit 6, 

and Exhibits 3, 4, and 8 are denied confidential treatment. In doing so, we find that the 

applicant has not shown that substantial harm to its competitive position would result from 

public disclosure of the given information and such information is not the type that is 

normally released to the public. However, CP Air may censor any personal addresses or 

any account numbers contained in the information denied confidential treatment or in any 

future supplemental filings that containing personal addresses or account numbers. 

Under Rule 12, the Department's ruling on a motion for confidential treatment will not take 

effect if, within five (5) business days after issuance, the person requesting confidential 

treatment files a petition for reconsideration of that decision, or files a statement that he or 

she in good faith intends to seek judicial review of the decision. If CP Air elects to petition 

the Department as to this confidentiality determination, we expect that it will provide a 

statement explaining how the items fall within the exceptions under the Freedom of 

Information Act and is not otherwise required to be filed publicly by all applicants for 

certificates of public convenience and necessity. Responses shall be due within five 

calendar days of the filing of such a petition. 

If CP Air elects not to file a petition, we direct that it file the information noted above in the 

public docket in this proceeding within five business days of the date of this letter. In the 

meantime, as is the Depatiment's practice, further processing of your application will be 

deferred pending receipt of this material. 
A~; a separate mMko-r, fI:.'vic\ved the :mppJemcnLd ;jjfonrwtion provided by 

on September 22, and October] 2, 20 J 0_ In those filings CP i\ir indentified Messrs. Chuck 

Hansen, Femando Iriarte Woodside, and John G. Ross as new key personnel of the 

company_ However, the compliance information required by section 204.30), (m), (0), (p), 

and (q) of our rules (copy attached) was not provided for these individuals. In addition the 

citizenship of Mr. Ross was not identified. Therefore, in order to complete the processing 

of your application, we ask that you please provide the compliance information for Messrs. 

Hansen, Woodside, and Ross, and identify the citizenship of Mr. Ross within 14 days of the 

date of this letter. 

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

to contact Damon Walker at (202) 366-7785 or bye-mail at Damon.Walker@dot.gov. 

Sincerely, 

Damon D. Walker 

Transportation Industry Analyst 

Air Carrier Fitness Division 

cc: Docket DOT-OST-2010-0126 
PART 104~-DATA TO SUPPORT FITNESS DETERl\lINATIONS 

Subpart A--General Provisions 

Sec. 

204. I Purpose. 

204.2 Definitions. 

Subpart B--Filing Requirements 

204.3 Applicants for new certificate or commuter air carrier authority. 

204.4 Carriers proposing to provide essential air service. 

204.5 Certificated and conunuter air carriers undergoing or proposing to undergo substantial change in operations, ownership, or management. 

204.6 Certificated and commuter air carriers proposing a change in operations, ownership, or management which is not substantial. 

204.7 Revocation for dormancy. 

SUBPART A--GENERAL PROVISIONS 

Sec, 204.1 Purpose. 

This part sets forth the fitness data that must be submitted by applicants for certificate authority, by applicants for authority to provide 

service as a commuter air carrier to an eligible place, by caniers proposing to provide essential air transportation, and by certificated air carriers 

and commuter air carriers proposing a substantial change in operations, ownership, or management. This part also contains the procedures and 

filing requirements applicable to carriers that hold dormant authOlity. 

Sec. 204.2 Definitions. 

As used in this part: 

(a) All-cargo air canier or section 41103 carrier means an air carrier holding an all-cargo air transportation certificate issued under section 

41103 of the Statute authorizing the transportation by aircraft in interstate air transportation of only property or only mail, or both. 

(b) Certificate authority means authority to provide air transportation granted by the Department of Transportation or Civil Aeronautics 

Board in the form of a certificate of public convenience and necessity under section 41102 of the Statute or an all-cargo air transportation 

certificate to perform all-cargo air transportation under section 41103 of the Statute. Certificated carriers are those that hold certificate authority. 

(c) Citizen of the United States means: 

(I) An individual who is a citizen of the United States; 

(2) A partnership each of whose partners is an individual who is a citizen of the United States; or 

(3) A corporation or association organized under the laws of the United States or a State, the District of Columbia, or a territory or 

possession of the United States, of which the president and at least two-thirds of the board of directors and other managing officers are citizens of 

the United States, and in which at least 75 percent of the voting interest is owned or controlled by persons that are citizens of the United States. 

(d) Commuter air carrier means an air carrier holding or seeking authority under part 298 of this Chapter that carries passengers on at least 

five round trips per week on at least one route between two or more points according to its published flight 

schedules that specify the times, days of the week. and places between which those flights are performed. 

(e) Eligible place means a place in the United States that: 

(I) Was an eligible point under section 419 of the Federal Aviation Act of 1958 as in effect before October I, 1988; 

(2) Received scheduled air transportation at any time between January I, 1990, and November 4, 1990; and 

(3) Is not listed in Department of Transportation Orders 89-9-37 and 89-12-52 as a place ineligible for compensation under Subchapter 

II of Chapter 417 of the Statute. 

(f) Essential air service is that air transportation which the Department has found to be essential under Subchapter II of Chapter 417 of the 

Statute. 

(g) Fit means fit, willing, and able to perform the air transportation in question properly and to conform to the provisions of the Statute and 

the rules, regulations and requirements issued under the Statute. 

(h) Interstate air transportation means the transportation of passengers or property by aircraft as a common carrier for compensation, or the 

transportation of mail by aircraft--

(I) Between a place in--

(i) A State, territory, or possession of the United States and a place in the District of Columbia or another State, territory, or possession 

of the United States; 

(ii) Hawaii and another place in Hawaii through the airspace over a place outside Hawaii; 

(iii) The District of Columbia and another place in the District of Columbia; or 

(iv) A territory or possession of the United States and another place in the same territory or possession; and 

(2) When any part of the transportation is by aircraft. 

(i) Key personnel include the directors, president, chief executive officer, chief operating officer, all vice presidents, the directors or 

supervisors of operations, maintenance, and fmance, and the chief pilot of the applicant or air carrier, as well as any part-time or full-time 

advisors or consultants to the management of the applicant or air carrier. 

0) NomUllized operations are those which are relatively free of start-up costs and temporary barriers to full-scale operations posed by the 

callier's limited experience. 

(k) Relevant corporations are the applicant or air carrier, any subsidiary thereof, any predecessor thereof (i.e., any air carrier in which any 

directors, principal officers or persons having a substantial interest have or once had a substantial interest). and any company (including a sole 

proprietorship or partnership) which has a significant financial or managelial influence on the applicant or air carrier. The latter includes: 

(I) Any company (including a sole proprietorship or partnershifl) holding more than 50 percent of the outstanding voting stock of the 

applicant or air cal1'ier: and 
12) Any compiHl)' (including a sole proprietorship or parinership) holding between 20 percent and 50 percent of the outstanding voting 

s\o.~L or the ilpplicanl or air cartier and which has signiJlcant influence over the applicant or air carrier as indicated, for example, by 25 percent 

representation on the board of directors, pal1icipation in policy-making processes, substantial inter-company transactions, or managerial 

persOimel with common responsibilities in both companies. 

(I) Substantial change ill operations. ownership. or monagemellt includes, but is not limited to, the following events: 

(I) Changes in operations from charter to scheduled service, cargo to passenger service, shoJ1-haul to long-haul service, or (for a 

ceJ1ificated air canier) small-aircraft to large-aircraft operations; 

(2) The filing of a petition for reorganization or a plan of reorganization under Chapter II of the federal bankruptcy laws; 

(3) The acquisition by a new shareholder or the accumulation by an existing shareholder of beneficial control of 10 percent or more of 

the outstanding voting stock in the corporation; and 

(4) A change in the president, chief executive officer or chief operating officer, and/or a change in at least half of the other key 

personnel within any l2-month period or since its latest fitness review, whichever is the more recent period. 

(m) Substantial interest means beneficial control of 10 percent or more of the outstanding voting stock. 

SUBPART B--FILING REQUIREMENTS 

Sec. 204.3 Applicants for new certificate or commuter air carrier authority. 

An applicant for a type of ceJ1ificate authority it does not currently hold or for commuter air canier authority shall file the data set forth 

in paragraphs (a) through (v) of this section, In addition, the Department may require an applicant to provide additional data if nec~sary to 

reach an informed judgment about its fitness. If the applicant has previously formally filed any of the required data with the Department or 

with another Federal agency and they are available to the Department, and those data continue to reflect the current state of the canier's fitness, 

the applicant may instead identify the data and provide a citation for the date(s) and place(s) of filing. Prior to filing any data, the applicant 

may contact the Air Canier Fitness Division to asCeJ1ain what data required by this section are already available to the Department and need 

not be included in the filing. 

Note: If the applicant intends to use as evidence data it has previously filed pursuant to part 241 reporting requirements and those data contain 

errors, the applicant must first file corrected reports in accordance with Sec. 241.22(g). 

(a) The name, address, and telephone number of the applicant. 

(b) The form of the applicant's organization. 

(c) The State law(s) under which the applicant is organized. 

(d) If the applicant is a corporation, a statement provided by the Office of the Secretary of State, or other agent of the State in which the 

applicant is incorporated, certifying that the applicant corporation is in good standing. 

(e) A sworn affidavit stating that the applicant is a citizen of the United States. 

(f) The identity of the key personnel who would be employed by the applicant, including: 

(I) Their names and addresses; 

(2) The experience, expeJ1ise, and responsibilities of each; 

(3) The number of shares of the applicant's voting stock held by each and the percentage of the total number of such shares issued and 

outstanding, and the citizenship and principal business of any person for whose account, if other than the holder, such interest is held; 

(4) The citizenship of each; and 

(5) A description of the officerships, directorships, shares of stock (if 10 percent or more of total voting stock outstanding), and other 

interests each holds or has held in any air canier, foreign air canier, common canier, person substantially engaged in the business of aeronautics 

or persons whose principal business (in purpose or fact) is the holding of stock in or control of any air canier, common canier or person 

substantially engaged in the business of aeronautics. 

(g) A list of all persons having a substantial interest in the applicant. Such list shall include: 

(l) Each person's name,address and citizenship; 

(2) The number of shares of the applicant's voting stock held by each such person and the corresponding percentage of the total number 

of such shares issued and outstanding, and the citizenship and principal business of any person for whose account, if other than the holder, such 

interest is held; 

(3) If any two or more persons holding a substantial interest in the applicant are related by blood or maniage, such relationship(s) shall 

be included in the list; and 

(4) If any person or subsidiary of a person having a substantial interest in the applicant is or has ever been 

(i) An air canier, a foreign air canier, a common canier, or 

(ii) Substantially engaged in the business of aeronautics, or 

(iii) An officer or director of any such entity, 61" 

(iv) A holder of 10 percent or more of total outstanding voting stock of any such entity, the list shall describe such 

relationship(s). 

(h) A list of the applicant's subsidiaries, if any, including a description of each subsidiary's principal business and relationship to the 

applicant. 

(i) A list of the applicant's shares of stock in, or control of, any air canier, foreign air canier, common canier, or person substantially 

engaged in the business of aeronautics. .. 

(j) To the extent any relevant corporation has been engaged in any business prior to the filing of the application, each applicant shall 

provide: 

(I) Copies of the 10K Annual Reports filed in the past 3 years by any relevant corporation required to file such reports with the 

Securities and Exchange Commission, and 

(2) Copies ofrecentiy filed IOQ Quarterly Reports, as necessary, in order to show the financial condition and results of operations of 

the enterprise current to within 3 months of the date of the filing of the application, 

(k) If 10K Reports are not filed with the Securities and Exchange Cm,nmission, the following, for the 3 most recent calendar or fiscal years, 

reflecting the fmaneial condition and results of operations of the enterprise current to within 3 months of the date of the filing of the application: 

(1) The Balance Sheet of each relevant corporation; 
(2) The In("oHlc' StatcTlll'JIt nf Cl( h J ~'l.,:', ;lJ!t cl>ll:'(X;11 ion: 

(:;) /-\11 foutnot('s apu1ic,-1l;/, tCI tIj(' flt1~lll':'i;d '.L'Jf'rn":!lL" indwJing: 

(i) A statel11ent as to whether the dUcLlments were prepared in '-Iccordance \\'ilh Gcn(r~dly .-\I:n~ptt'J Accounting Ptinciples, and 

(ii) A description of the significant accounting policies of each relevant corporation, sud! as for depreciation, amortization of 

intangibles, overhauls, uneamed revenues, and cost capitalization; 

(4) A statement of significant events occuning subsequent to the most recent Balance Sheet dale for each relevant corporation; and 

(5) A statement identifying the person who has prepared the financial statements, his or her accounting qualifications, and any 

affiliation he or she has with the applicant 

(l) A list of all actions and outstanding judgments for more than $5,000 against any relevant corporation, key personnel employed (or to be 

employed) by any relevant corporation, or person having a substantial interest in any relevant corporation, including the amount of each 

judgment, the palty to whom it is payable, and how long it has been outstanding, 

(m) The number of actions and outstanding judgments of less than $5,000 against each relevant corporation, key personnel employed (or to 

be employed) by any relevant corporation, or person having a substantial interest in any relevant corporation, and the total amount owed by each 

on such judgments. 

(n) A description of the applicant's fleet of aircraft, including: 

(l) The number of each type of aircraft owned, leased and to be pm-chased or leased; 

(2) Applicant's plans, including financing plans, for the purchase or lease of additional aircraft; and 

(3) A sworn affidavit stating that each aircraft owned or leased has been certified by the FAA and currently complies with all FAA 

safety standards, 

(0) A description of the current status of all pending investigations, enforcement actions, and formal complaints filed by the Department, 

including the FAA, involving the applicant or any relevant corporation, any personnel employed (or to be employed) by any relevant corporation 

or person having a substantial interest in any relevant corporation, regarding compliance with the Statute or orders, rules, regulations, or 

requirements issued pursuant to the Statute, and any corrective actions taken, (If an applicant has a compliance history that warrants it, additional 

information may be required.) 

(p) A description of all charges of unfair or deceptive or anticompetitive business practices, or of fraud, felony or antitrust violation, brought 

against any relevant corporation or person having a substantial interest in any relevant corporation, or member of the key personnel employed (or 

to be employed) by any relevant corporation in the past 10 years, Such descriptions shall include the disposition or current status of each such 

proceeding, 

(q) A description of any aircraft accidents or incidents (as defmed in the National Transportation Safety Board Regulations, 49 CFR 8302) 

experienced by the applicant, its personnel, or any relevant corporation, which occurred either during the year preceding the date of application or 

at any time in the past and which remain under investigation by the FAA, the NTSB, or by the company itself, including: 

(I) The date of the occurrence; 

(2) The type of flight; 

(3) The number of passengers and crew on board and an enumeration of any injuries or fatalities; 

(4) A description of any damage to the aircraft; 

(5) The FAA and NTSB file numbers and the status of the investigations, including any enforcement actions initiated against the carrier 

or any of its personnel; and 

(6) Positive actions taken to prevent recurrence, (If an applicant's history of accidents or incidents warrants it, additional information 

may be required.) 

(r) A brief narrative history of the applicant 

(s) A descliption of all Federal, State and foreign authority under which the applicant has conducted or is conducting transportation 

operations, and the identity of the local FAA office and personnel responsible for processing an application for any additional FAA authority 

needed to conduct the proposed operations, 

(t) A description of the service to be operated if the application is granted, including: 

(I) A forecast Balance Sheet for the first normal year ending after the initially proposed operations have been incorporated, along with 

the assumptions underlying the accounts and amounts shown; and 

(2) A forecast Income Statement, broken down by quarters, for the first year ending after the initially proposed operations are 

normalized, and an itemization of all pre-operating and start-up costs associated with the initiation of the proposed service, Such Income 

Statement shall include estimated revenue block hours (or airborne hours, for charter operators) and revenue miles by type of aircraft, number of 

passengers and number of tons of mail and cargo to be carried, transport revenues and an estimate of the traffic which wonld be generated in each 

market receiving the proposed service, Such statements shall also include a statement as to whether the statements were prepared on the accrual 

or cash basis, an explanation of how the estimated costs and revenues were developed, a description of the manner in which costs and revenues 

are allocated, how the underlying traffic forecasts were made, and what load factor has been assumed for the average and peak month, Preoperating and start-up costs should include, but are not limited to, the following: Obtaining necessary government approval; establishing stations; 

introductory advertising; aircraft, equipment and space facility deposits and rent; training; and salaries earned prior to start-up, 

(u) A signed counterpart of Agreement 18900 (OST Form 4523) as required by part 203 of this chapteL 

(v) The following certification, which shall accompany the application and all subsequent written submissions filed by the applicant in, 

connection with its application: 

Pursuant to title 18 United States Code section 100 r, I [the individual signing the application, who shall be a principal owner, senior officer, 

or internal counsel of 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 covered up 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 fonnd to have violated the provisions of 18 U,S,C section 1001 shall be fined nor more than $10,000 or imprisoned not 

more than five years, or both,