U.S. Department of Transportation Office ofthe Secretary OfTransportation

August 23, 2012
Mr. Robert E. Cohn Mr. Patrick R. Rizzi

# Counsel for Rhoades Aviation, Inc. d/b/a Transair Hogan Lovells US LLP 555 Thirteenth Street, N.W. Washington, DC 20004
DearMessrs. Cohn and Rizzi: 1200 NewJersey Ave., S.E. Washington, DC 20590

On July 24, 2012, Rhoades Aviation, Inc. d/b/a Transair ("Rhoades") filed an application in Docket DOT-OST-2011-0216 requesting that the Department find it fit to conduct operations as a certificated air carrier. In connection withthat filing, Rhoades filed a motion for confidential treatment under 14 CFR 302.12 (Rule 12) ofour Procedural Regulations for certaininformation the company was providing. The purpose ofthis letter is to notify you ofour intended ruling on that motion.
In its motion, Rhoades requested that theDepartmentwithhold the following information:
1. FAACertificate Numbers ofKeyPersonnel ("ExhibitRDS-3, Page 1") 2. Forecastconsolidated statement ofassets & liabilities ("ExhibitRDS-7, Page 1") 3. Forecastconsolidated statementofrevenues & expenses ("ExhibitRDS-7, Page 2") 4. Forecastrevenue and cost analysis for 737 aircraft ofTrans Executive Airlines ofHawaii d/b/a/Transair ("ExhibitRDS-7, Page 3") · Rhoades states in its motion that the "public release of this commercial, sensitive information pertaining to the applicant's future operating plans and financial projections would cause Rhoades substantial competitive harm." Rhoades further notes that it is a "privately-held corporation that will be operating in an intensively competitive market" and that "the type of detailed commercially sensitive information at issue here is not otherwise required to be publicly disclosed."
Rule 12 instructs us to evaluate requests for confidential treatment by the standards ofdisclosure found in the Freedom ofInformation Act (5 U.S.C. Section 552). Information may be withheld from disclosure under 5 U.S.C. 552(b)(4) ifit is (1) commercial or financial, (2) obtained from a person outside of government, and (3) privileged or confidential (Gu(f" and Westem Industries. Inc. v. United States, 615 F.2d 527,529 (D.C. Cir. 1979)).
There is no question that the information for which Rhoades 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-whether2

"disclosure of the information is likely to have either of the following effects: (1) impair the Government's ability to obtain necessary information; or (2) cause substantial harm to the competitive position 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 ofthe type that is usually released to the public (Gulfand Western Industries, Inc. v. UnitedStates, 615 F.2d 527, 530 (D.C. Cir. 1979)).
We have reviewed the material submitted and have decided to grant confidential treatment to some, butnot all, ofthe informationfor which suchtreatment is sought. With respect to Exhibit RDS-3, Page 1, the Department has granted confidential treatment to similar information in the past and we see no reason not to do so here. Therefore, Exhibit RDS-3, Page 1is granted confidential treatment. Regarding Exhibit RDS-7, Page 1 and Exhibit RDS-7, Page 2, theDepartmenttypically grants confidential treatmentto an applicant's projected
revenues. We find that release of this information could cause substantial harm to the competitive position of the applicant. The same standard applies to an applicant's projected future income. However, this treatment does not extend to an applicant's projected balance sheet, which includes its projected assets. It is not the Department's practice to withhold such information from public disclosure when determining that applicant's financial fitness. Thus, confidential treatment of Rhoades' statement of projected assets (Exhibit RDS-7, Page 1) is denied. Confidential treatment ofRhoades' statement ofprojected income (ExhibitRDS-7, Page 2) is partially granted, solely to the rows indicating projected revenues and net income: "Revenues" and "NetIncome."

As mentioned above, the Department typically grants confidential treatment to an applicant's projected revenue statements including revenue and cost analysis statements for particular aircraft. Thus, we grant confidential treatment to Exhibit RDS-7, Page 3. However, please note that the Boeing 737 revenue and cost analysis submitted to us in Exhibit RDS-7, Page 3 is labeled as "Trans Executive Airlines ofHawaii d/b/a Transair." Thus, the confidential treatment that we are granting strictly pertains to the Boeing 737 revenue and cost analysis for Trans ExecutiveAirlines. Itdoes not applyto Rhoades, the applicant at issue. Rhoades remains free to file updated information pertaining to its initial fitness determination with the Department if it wishes to do so.
Under Rule 12, the information identified above for which confidential treatment is not granted will be released to any person requesting it unless, within 5 (business) days from the date ofthe receipt ofthis letter, the applicant files with this office apetition for reconsideration or a written statement in good faith ofits intent to seekjudicial review ofthis decision. Please inform us if Rhoades wishes to pursue either option. Ifreconsideration orjudicial review ofthis decision is not sought, Rhoades should immediately resubmit the redacted exhibits and those for which confidentialityhas beendeniedto the appropriate docketfor placementonthepublicrecord.3

In the meantime, as is the Department's practice, further processing of your application will be deferred pending receipt ofthis material. Thank you for your cooperation in this matter. Ifyou have any questions regarding this letter, please feel free to contactReese Davidson ofmy staffat (202) 366-8161 orvia e-mail atReese.Davidson@dot.gov.

Lauralyn

.Remo Chief, Air CarrierFitness Division Office ofAviationAnalysis

cc: DocketDOT-OST-2011-0216

Ms. MaryBallard POIfor Rhoades Aviation, Inc. FAAIndianapolis FSD0-11 1201 ColumbiaRoad, Suite 101 Plainfield, IN 46168

Mr. TeimourRiahi ChiefExecutive Officer Rhoades Aviation, Inc. d/b/aTransair 100 IolanaPlace Honolulu, HI 96819