D I c K s T E I N s HAp I R 0 LLP 

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November 17, 2011 

BY FEDERAL EXPRESS AND EMAIL 

Lauralyn Remo 

Office of the Assistant Secretary for Aviation 

and International Affairs 

U.S. Department of Transportation 

1200 New Jersey A venue, SE 

Room W96-495 

Washington, DC 20590 

Re: VIH Cougar Helicopters, Inc. 

Dear Ms. Remo: 

' _,.. __ ' 1 -

CONFIDENTIAL AND PROPRIETARYDO NOT DISCLOSE OUTSIDE OF 

GOVERNMENT 

We are writing to follow-up our November 8, 2011 meeting with you and your colleagues at the 

Department of Transportation ("Department"), and in response to the Department's October 6, 

2011 letter, which requested that VIH Cougar Helicopters, Inc. ("VIH Cougar") take certain 

actions to address the Department's concerns relating to U.S. citizenship requirements under 

49 U.S.C. 40 l 02(a)(l5). 

As discussed below, we respectfully disagree with the Department's tentative conclusion, as 

stated in its October 6, 201 I letter, that VIH Cougar is not under the actual control of U.S. 

citizens. As we previously demonstrated in our August 10, 2009 and September 30, 2010 letters 

to the Department, VIH Cougar's U.S. operations have at all relevant times been conducted 

under the auspices and supervision of its U.S.-citizen officers and managers. 

1 VIH Cougar alone 

is responsible for overseeing its day-to-day operations and business affairs and is free from 

undue influence or leverage by any foreign citizen, entity or company. Nevertheless, in the spirit 

of cooperation and to address the Department's concerns, VIH Cougar intends to restructure the 

Company to reduce (and possibly eliminate) the ownership interest of Mr. Kenneth Norie 

(through his company VIH Helicopters USA, Inc.) in VIH Cougar. 

With regard to the Department's October 6, 2011 letter, for citizenship purposes, the statutory 

definition in 49 U.S.C. 401 02(a)(l5) requires that a corporation must be under the actual control 

of citizens of the United States, and at least 75 percent owned or controlled by persons that are 

1 This letter and all information provided by VIH Cougar relating to this matter contain 

information that is proprietary and confidential and exempt from disclosure to any third party 

under the Freedom of Information, 5 U.S.C § 552, and any other disclosure statute or regulation. 

To the extent this or any related submission of VIH Cougar becomes part of an administrative 

proceeding, VIH Cougar objects to public disclosure pursuant to 14 C.F.R. §302. I 2. 
Lauralyn Remo 

November 17, 2011 

Page 2 

citizens of the United States. The Department has acknowledged that it should not interfere with 

the legitimate needs of U.S. carriers to attract strategic investors from foreign markets and that 

its administrative interpretations should not run contrary to the statute. 2 However, the 

Department concludes that based on past and current associations between VIH Cougar and 

foreign affiliates, including VIH Group, "we cannot find that U.S. citizens maintain day-to-day 

control of VIH Cougar and its operations or that VIH Cougar is independent from VIH Group." 

As you know, VIH Cougar is majority-owned by William Steeper (76 percent), a U.S. citizen, 

with the minority ownership by Mr. Norie (24 percent), a Canadian citizen (through his company 

VIH Helicopters USA, Inc.). 

As we discussed at the meeting, VIH Cougar employs about 80 employees, who are all U.S. 

citizens with the exception of one person. That individual, Bill McDonald, is the only foreign 

citizen currently employed by VIH Cougar. The other relationships cited in the Department's 

letter are insignificant, such as persons identified as registered agents for VIH Cougar and other 

entities. The Department's conclusion is based, in large part, on Mr. Steeper's role as counsel to 

Mr. Norie and/or VIH Group in Canada. However, an attorney-client relationship does not make 

Mr. Steeper an employee of the entities he may represent, and the Department has not cited any 

precedent indicating that an attorney-client relationship violates the economic authority 

requirements. There is no co-management of VIH Cougar's business by outside entities and 

VIH Cougar maintains day-to-day control over its own operations. As Mr. Steeper demonstrated 

at the meeting, he has thorough operational knowledge of(and control over) VIH Cougar's 

operations. An air carrier operating in the United States under the day-to-day control of U.S. 

citizens satisfies the Department's economic authority requirements. 3 

With respect to the second and third issues raised in the Department's October 6, 20 ll JetterVIH Cougar's alleged reliance on VIH Group for assets and personnel, and the contractual 

relationships between the two companies - we likewise disagree that these factors support the 

Department's conclusion concerning the independence ofVIH Cougar. The primary concern of 

2 SeeActualControlofU.S.AirCarriers, 71 Fed. Reg. 7II06-01,2006WL3531614(Dec.8, 

2006) (notice of withdrawal of proposed rulcmaking). The notice explains that given the 

economic realities oftoday's aviation markets, robust partnerships between domestic and foreign 

air carriers (including foreign investments) are to be encouraged, are not indicative of an undue 

control relationship, and should not run afoul of the Department's economic authority rules. 

3 See DHL Airways, 2004 DOT Av. LEXIS 404 (May 13, 2004). This conclusion is true even if 

the carrier partners, or otherwise works closely in conjunction with, a foreign carrier on matters 

of mutual strategic and business interest where, as here, the relationship is maintained at arms 

length and typical of the commercial arrangements commonly found in today' s aviation industry. 

ld. at *67 ('"[T}he existence of a close working relationship between a U.S. airline and a foreign 

airline does not show that the foreign airline can exercise substantial influence over the U.S. 

airline for citizenship purposes.''). 
Lauralyn Remo 

November 17, 20 I 1 

Page 3 

the Department appears to be the leasing of aircraft from VIH Group to VIH Cougar. However, 

as we demonstrated at the meeting, this leasing arrangement is done on an independent, arm's 

length basis and the Department has not identified any facts to the contrary. Nevertheless, in 

order to address the Department's concerns, VIH Cougar is evaluating alternative arrangements 

to reduce its reliance on aircraft leased from VIH Group, by leasing aircraft from other entities 

not affiliated with VIH Group or Mr. Norie.4 We are also reviewing the terms of the existing 

leases and will modify them, as necessary, to ensure that undue influence cannot be exercised 

over VIH Cougar through the leases from the foreign lessors (VIH Group/Mr. Norie). 

VIH Cougar respectfully disagrees with the Department's tentative conclusion that it is not under 

the actual control of U.S. citizens. The record clearly shows that VIH Cougar alone manages its 

business affairs and day-to-day operations, and abides by all applicable aviation requirements 

and regulations. There is no basis to conclude that VIH Cougar is under the influence of any 

foreign person or entity and certainly none that would warrant an enforcement action against the 

Company. Nevertheless, as discussed above, to address the Department's concerns, VIH Cougar 

intends to restructure the Company to reduce (and possibly eliminate) Mr. Norie's ownership 

interest in and business relations with VIH Cougar. In addition, we confirm Mr. Steeper's advice 

to you that VIH Cougar (in conjunction with VIH Group/Mr. Norie) is pursuing major 

transactions with two U.S. companies both of whom are Department licensed helicopter 

operators. Both transactions include the possible investment in VIH Cougar and the acquisition 

of helicopters leased by VIH Cougar, thereby fundamentally changing Mr. Norie's investment in 

the business and its helicopters on a going forward basis. Confidentiality agreements have been 

signed in both cases. Dual deal processes are being run and negotiations are currently in the due 

diligence stage. VIH Cougar anticipates signing firm letters of intent and term sheets in the near 

future with one or both of the parties. We will keep you apprised of our efforts in this regard and 

when permitted by the third parties to the transactions, to disclose further particulars to you. 

We trust that the foregoing efforts by VIH Cougar demonstrate its good faith efforts to address 

the Department's concerns in a proactive and responsible manner. We look forward to 

continuing our dialogue with the Department. 

Thank you for your cooperation. 

4 As a general matter, VIH Cougar employs its own pilots and is not dependent on VIH Group 

tor the provision of pilots or flight crews. As discussed at our meeting, the occasional 

contracting for pilots between entities is customary in the helicopter industry, given a general 

shortage of qualified pilots, and VIH Cougar has occasionally contracted for pilots to or from 

VIH Group or other entities. 

LlSMDll-J(;QO!o5v I 
Lauralyn Remo 

;..J'ovember 17, 20 I I 

Page 4 

D vid M. Nadler 

Joseph R. Berger 

Counsel to VJH Cougar Helicopters, Inc. 

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