Order 2014-11-1

Served: November 4, 2014

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 4th day of November, 2014

Notice of

AJET HOLDINGS, LLC

of intent to resume operations under 14 CFR 204.7

Docket DOT-OST-2014-0006

 

In the matter of the revocation of the certificate 

authority issued to

RYAN INTERNATIONAL AIRLINES, INC.

pursuant to the provisions of 14 CFR 204.7

ORDER ON REVIEW

Summary

By this order, the Department is granting a petition for review filed by American West Jet, LLC

(“AWJ”), of Order 2014-2-8. Upon review of the record, we find that the action taken by Order 

2014-2-8 is appropriate and, therefore, we will deny AWJ’s request for a stay of enforcement of 

such order.

1

Background

By Order 2014-2-8, the Department denied and dismissed the waiver from dormancy and notice 

to resume operations, respectively, filed by Ajet Holdings, LLC (“Ajet”),

2 on behalf of Ryan 

International Airlines, Inc. (“Ryan Air”); and revoked the interstate certificate authority issued to 

Ryan Air for reason of dormancy.

3

 

 1 AWJ also filed an application for a waiver and extension of revocation for dormancy pursuant to section 204.7 

of our rules, which we are also denying by this order. 2 On March 6, 2012, Ryan Air filed for Chapter 11 bankruptcy. Subsequent to its bankruptcy filing, Ryan Air 

was purchased by Ajet in February 2013. On October 21, 2013, one of Ajet’s primary creditors initiated an 

involuntary Chapter 7 bankruptcy proceeding against Ajet. When Ajet’s principles failed to respond or object to the 

involuntary bankruptcy proceeding, a Chapter 7 trustee was appointed. 3 Ryan Air also holds foreign certificate authority from the Department. Revocation of Ryan Air’s foreign 

certificate is subject to Presidential review under 49 U.S.C. §41307.
2

On February 21, 2014, AWJ filed a petition for review of Order 2014-2-8,

4 and a request for 

waiver and extension of the dormancy provisions under section 204.7. AWJ states that shortly 

after the Department issued and served its order revoking Ryan Air’s certificates for dormancy, 

the bankruptcy court selected AWJ as the purchaser of Ryan Air.5 AWJ accompanied its petition 

with some information required by section 204.5, which requires an air carrier undergoing or 

proposing to undergo, among other things, a change in ownership, to submit information 

supporting its continued fitness to operate under its existing authority in light of the substantial 

change. 

In support of its petition, AWJ contends that the Department’s order contained erroneous 

findings of fact, because it failed to take into account the pending sale of Ryan Air to a viable 

buyer. Further, AWJ claims that a “prejudicial procedural error occurred,”6 since information 

demonstrating Ryan Air’s fitness under AWJ’s ownership could have been submitted prior to the 

issuance of Order 2014-2-8. AWJ claims that its failure to file the necessary fitness information 

was a direct result of the Department’s advice that information pertaining to Ryan Air’s fitness 

under its new ownership should be provided only after a bidder was nominated and approved by 

the bankruptcy court. In addition, AWJ asserts that since Ryan Air has been involved in two 

bankruptcy proceedings, the Department’s dormancy provision should have been tolled and that 

the Department was prohibited under Section 362 of Title 11 of the U.S. Bankruptcy Code (the 

automatic stay) from taking action to revoke Ryan Air’s certificate authority. 

On May 27, 2014, in a separate action, the FAA revoked Ryan Air’s Air Carrier Certificate after 

finding, among other things, that the air carrier failed to maintain the required facilities, 

personnel, and assets necessary to conduct safe operations.

Decision

After reviewing all of the information AWJ submitted, we have decided to grant AWJ’s petition 

for review, and upon review, affirm our decision in Order 2014-2-8. 

Section 41110(e) of Title 49 of the United States Code requires that once an air carrier is found 

fit initially, it must remain fit in order to hold its authority. At the time Order 2014-2-8 was 

issued, despite repeated attempts by the Department to obtain the necessary fitness information

from Ryan Air, the Department had not received any information that would demonstrate Ryan 

Air’s continued fitness to operate as a U.S. certificated air carrier.7

 Thus, without any 

 4 On March 26, 2014, AWJ supplemented its filing with one additional piece of information and on April 17, 

2014, AWJ filed a revised copy of its petition for review.

5 The bankruptcy court also selected a backup bidder, 13C Aviation, LLC (“13 C Aviation”), to purchase Ryan 

Air in the event that AWJ could not complete its acquisition. Although we received notification from the Chapter 7 

trustee on April 22, 2014, that AWJ failed to close on the purchase of Ryan, 13C Aviation has not formally 

requested a waiver from dormancy or sought a review of Order 2014-2-8. 6 See Petition of Ajet Holdings, LLC for review of staff action and application for waiver and extension of 

revocation for dormancy pursuant to 14 CFR 204.7, received February 21, 2014, at 6. 7 By letter dated January 16, 2013, we advised Ryan Air that its authority was suspended pursuant to section 

204.7 and that it could not resume air transportation operations until the Department had redetermined its fitness to 

do so. We also reminded the air carrier that pursuant to section 204.7, its authority would be revoked if they air 

carrier had not demonstrated its fitness to resume operations within one year of the date that it ceased operations. 

By letter dated December 20, 2013, we again reminded Ryan Air of the pending revocation of its authority and 
3

information on Ryan Air’s operations, ownership, or management, the Department, in carrying 

out its responsibilities under section 41110(e), moved to revoke Ryan Air’s certificate authority

pursuant to section 204.7.

8

 

Regarding AWJ’s assertion that its failure to provide fitness information supporting its ability to 

operate Ryan Air prior to the issuance of Order 2014-2-8 was due to the Department’s erroneous 

guidance, we disagree. At the time of AWJ’s January 15, 2014, inquiry to the Department, the 

company was one of several potential bidders for Ryan Air’s assets and it was unclear whether 

AWJ or a competing bidder would ultimately be selected by the bankruptcy court as the 

successful bidder. It is administratively impractical for the Department to conduct fitness 

reviews of every potential buyer from among a group of competing potential bidders. Thus, the 

Department’s advice to AWJ in response to its January 15, 2014, inquiry was valid.

We do not agree with AWJ’s contention that a finding of material fact is now erroneous due to 

AWJ’s prospective ownership of Ryan Air and its perceived ability to operate Ryan Air. The 

information AWJ provided is incomplete and insufficient in demonstrating Ryan Air’s fitness to 

resume operations under AWJ’s ownership.9 Among other things, AWJ’s failed to provide a 

first-year operating forecast covering its first full year of operations or a forecast Balance Sheet 

for the first normal year ending after the initially proposed operations have been incorporated; a 

pre-operating expense forecast detailing the remaining expenditures prior to the resumption of 

operations; or current and historical Balance Sheets and Income Statements for each relevant 

corporation.10 These documents are critical in determining the fitness of Ryan Air under AWJ’s 

ownership and its ability to resume operations. Without such information we are unable to make 

an informed decision regarding Ryan Air’s fitness under AWJ’s ownership or its fitness to 

resume operations. What is clear from the filing is that Ryan Air under AWJ’s ownership would 

bear little, if any, resemblance to the Ryan Air that we last found fit. The Department’s policy 

requires that an air carrier that proposes a substantial change in ownership and management be 

subject to the same standards and procedures for receiving air carrier authority as any other new 

applicant, particularly when there has been a lapse in continuity of operations for one year or 

more. Under these circumstances, where the air carrier has not conducted operations for an 

extended period and its management and operations have substantially changed since our last 

 

further advised the air carrier that we intended to revoke its authority if it had not provided information 

demonstrating its fitness to resume operations or otherwise requested and demonstrated “good cause” for a waiver 

from section 204.7 prior to January 16, 2014. Moreover, we noted that any waiver request would have to include 

updated information demonstrating the air carrier’s fitness and evidencing that the air carrier has completed nearly 

all the steps necessary to resume operations. 8 Section 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 that those operations 

ceased. It further provides that, once this authority has been suspended, the air carrier may not recommence 

scheduled passenger operations nor advertise such service until its fitness to do so has been re-established by the 

Department. If an air carrier wishes to resume such operations, it must file a notice of its intent to do so, 

accompanied by data supporting the air carrier’s continuing fitness as set forth in section 204.3 of our rules. 

However, after one year of dormancy, the air carrier is deemed no longer fit to provide the air transportation for 

which it was found fit and its authority to provide such air transportation shall be revoked. 

9 Section 204.7 requires applicants proposing to resume operations provide the fitness information enumerated in 

section 204.3. Our review of the information AWJ provided reveals that the applicant’s responses were insufficient 

in addressing paragraphs (e), (f), (g), (j), (l), (m), (n), (t) and (u) of section 204.3 of the Department’s regulations. 10 See 14 C.F.R. § 204.2(k).
4

fitness finding, we can no longer rely on our prior findings of fitness. Furthermore, AWJ has 

provided no evidence of harm that it will suffer as a result of the revocation, since as noted in 

Order 2014-2-8, Ryan Air is free to file a new application at such time as it is able to 

demonstrate its fitness. 

Likewise, we find AWJ’s claim regarding the Bankruptcy Code’s automatic stay to be without 

merit. Contrary to AWJ’s contention, Ryan Air’s bankruptcies do not toll the Department’s oneyear dormancy provision. The Department’s revocation action falls squarely within the 

automatic stay’s police and regulatory power exception. Under these circumstances, we find no 

reason to overturn the staff action revoking Ryan Air’s certificates, denying its request for a 

waiver from dormancy, and denying the air carrier’s notice to resume operations. 

Finally, we note that following AWJ’s filing of the subject application, the Federal Aviation 

Administration (“FAA”) revoked Ryan Air’s Air Carrier Certificate on May 27, 2014. 

Therefore, it appears that AWJ’s application is now moot considering that the Department’s 

approval of any application to resume operations is predicated on the air carrier applicant having 

the necessary FAA issued safety authority to permit the immediate resumption of operations.

ACCORDINGLY, 

1. We affirm the staff action taken in Order 2014-2-8 revoking the certificate authority issued to 

Ryan International Airlines, Inc., denying the application for a waiver from section 204.7, and 

dismissing the Notice of Intent to Resume Operations filed by AJet Holdings, LLC, on behalf of 

Ryan International Airlines, Inc., in Docket DOT-OST-2014-0006.

2. We grant the petition for review filed by American West Jet, LLC, of Order 2014-2-8 and on 

review deny the relief requested.

3. 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

RYAN INTERNATIONAL AIRLINES, INC.

PETER LYNCH AGC-300

ASST CHIEF COUNSEL FOR 

ENFORCEMENT

FEDERAL AVIATION ADMINISTRATION

800 INDEPENDENCE AVE SW

WASHINGTON DC 20591

MARIANNE SEGUIN

JENNIFER RODES

OFFICE OF AIRLINE INFORMATION

DOT/OST/RITA/BTS RTS-42

1200 NEW JERSEY AVE SE

WASHINGTON DC 20590

LENARD E SCHWARTZER

JASON A IMES

SCHWARTZER & MCPHERSON LAW FIRM

COUNSEL FOR YVETTE WEINSTEIN 

 TRUSTEE FOR AJET HOLDINGS LLC

2850 SOUTH JONES BLVD SUITE 1

LAS VEGAS NEVADA 89146

MARK MAZOR 

MANAGER 

CERTIFICATION & EVALUATION PROGRAM 

OFFICE 

FAA AFS-900 

45005 AVIATION DRIVE 

DULLES VA 20166 

GERARDO MARTINEZ

FEDERAL AVIATION ADMINISTRATION