Sovereign Air, Inc. 105 Main St., PO Box 240 Belcourt, ND 58316


## u.s. Department of transportation Office of the Secretary of Transportation 1200 New Jersey Ave., S.E. Washington, D.C. 20590

Re: Response to DOT Letter dated 3/3/10 by Damon Walker regarding Docket DOT-OST-2008-0285, Application of Sovereign Air, Inc., for Commuter Air Carrier Authority Date: April 2, 2010 Dear Mr. Walker: Please find the responses of Sovereign Air to the subject letter in the same format. 1. Sovereign Air (SAI) leases one aircraft, a Cessna 172, that is currently subleased to Easy Air, Inc. of Minnesota. In the past, SAI has utilized the aircraft minimally under its Part 135 On Demand certificate. SAI is in negotiations with USAC Aviation, LLC of New Jersey, to purchase an air carrier, Southtrac Air Charter, LLC of Florida. The purchase of Southtrac will occur shortly after the funding process is completed. Southtrac has minimal operations using a Beech Baron, N60291, under its Part 135 multi-engine air carrier certificate. 2. SAI has operated under a Part 135 On Demand single pilot certificate. Sovereign's local FSDO is in Fargo, ND, POI Richard Kabinuck. Sovereign Air is purchasing 100% of Southtrac, which is in the process of upgradingto 10 or more passenger authoritv. Southrac's FSDO office is Tampa, POI David Bear. Further FAA authority for SAI to conduct the proposed operations will be processed through the Tampa FSDO. 3. SAlleases a Cessna 172. SAI will not purchase any aircraft in the near future, but will lease any aircraft needed. However, Native American loan guarantees may be available to Sovereign that would make the purchase of aircraft easier
. SAI plans to lease the Beech Baron for scheduled service between St. Cloud, MN and MSP for the initial scheduled service route, two times daily, five days per week. Starting with a smaller plane will facilitate the set-up of interline agreements, reservation system, security, safety audits and general operations. SAI will add a King Air within three months of operation to service this route and plan to later provide service to Grand Rapids, MN. Should SAI be awarded an EAS contract requiring a different aircraft, the aircraft(s) will be leased at that time as needed. Financing will be through loans and/or sale of SAI equity. Sovereign Air- previously posted a general letter of intent-by Nvisionandwas hopeful that the funding would be in place by now. We now have serious concerns over the legitimacy of the proposed Nvision funding. Sovereign Air has, however, made significant progress toward securing a Letter of Intent from another unrelated source, the- details of which are - not finalizedat this time. We expect to provide the Department more information regarding this potential source of funding within the next two weeks. 4. The Director of Operations will be Stacey Schwab. The Chief Pilot will be John Beck. The Director of Maintenance will be Wendell Stephens. Their resumes are attached. None ofthese gentlemen have anything to report regarding section 

### 204.3 (I), (m), 

### (0), (p) or (q). All are U.S. citizens. 

### 5. Sovereign Air posted this information to this docket earlier this year. There is nothing new to report on this. 

### 6. See attached. 

### 7. See attached. SAI projects 

### 2036 revenue block hours during the first year, carrying 

### 30910 passengers (half from St. Cloud and half from MSP). This based on previous passenger records as communicated by the local community, reduced slightly. Estimated revenues are 

### $1,648,374, with 

### $8721 ofthat being counter-to-counter letters and light parcel. These figures are determined on a cash basis. Load factors are estimated at approximately 

### 57%. 8. At this time, SAI cannot provide evidence of any significant cash holdings or lines-of-credit. We hope to provide something substantial concerning another Letter of Intent for adequate funding within the next couple weeks. 

### 9. We should have this early next week and will upload it to the docket by the end of next week. 

### 10. Jon Payne has prepared the financial statements for Sovereign Air. He has a Masters degree in ProfessionalAccountancy from Indiana University, but does not holdaCPA license. He has served in an accounting role for about four years with two small start-up companies and worked under minimal supervision by a CPA, external to one company, for more than two years. Sovereign Air's financial statements have not been audited. The latest financial statements are attached.

## Stacy Schwab

Permanent Address 2 Quincy ct
. Bedminster , NJ 07921 

### Ratings: Telephone Contacts Home ( 908 ) 326 - 318 1 Cell ( 908 ) 468 - 9059 Airline Transport P i lot: Airp l ane Mu lt iengine Land Type Ratings: A320 SIC onIY , HS-125 , CE-500, BE 1 900 Co mm e rc i a l P il ot : Airp l ane S in g l e Eng i ne La n d FAA M ed i ca l Certif icate: C l ass I 

### Flight Time: Total M u l t i engine Actua l Instrument Night 

### E

_mployment History: 8/08

- P rese n t South trac A ir 2 802 Co n st i tuti on Way Wa ll , NJ 0 7727 4/ 07

- Prese nt Jet b l u e A i rways Forrest H i l l s , NY
5 / 04-4 / 07 S h ort H ill s Aviation

1 A i rport Rd M orristow n , N J 0 7 0 52



### 3 / 02 -4 / 04 M or ristow n Avi at i on

9 Airport Rd
. Morristow n , NJ 07052 3 / 00 - 2 1 02 Trans World A irl ines 1 14SSNatu ral Bri dge Rd. Bri d geto n, M O 63044 2 / 9 7

- 3 / 00 Co mm utAi r /U S A ir E xp ress 518 Ruga r St

. Plattsburg h, NY 1 29 01 1 0 , 265 7,5 79 603 1 , 445 T urboprop

Jet Jet PIC PIC 2 , 542 4, 822 1,772 5 , 321

Director of Operations: FA R 1 35 Oversee ope rat i ona l con trol of f l i ghts , reco rds and train i ng of pi l ots
. First Qfficer: FA R 1 2 1 passenger a i r transport throughout North Ameri ca and the Caribbean. Captain: FAR 91 and 1 35 passenger air transport throughout North America
. M anagement Duties : Sche d ul i ng i nitia l and recu r re n t t ra i ni n g ; trackin g a n d sc h edu li ng c h eck rides , gro u nd sc h oo l an d m e d i ca l s ; sc h e d u l ing crews and a irc raft fo r f l ig h ts ; assuri n g co m pl i a n ce wi th f l ight and duty t i me and rest requirements ; keeping 135 pi l ot records ; coordinating w ith the DOM; exercis i ng operationa l control ; ma i ntaining current operational fl i ght data ; keep i ng crew m e m ber f i l es and reco rds ; estab li sh i ng po l ic i es . Captain : FA R 91 a nd 1 35- passenger air transport throughout No rth America , Caribbean and Lat i n America. Pilot: FAR 121- passenger air transport throughout North A m erica and Ca ri b b ean. Captain , BE 1 900: FAR 121- passe n ge r a i r t ra n spo rt throug h ou t Eastern Un ite d States .

### Formal Education: 8 / 90 - 5 / 91 Central Missouri State U
. M.S. Aviation Safety

Warrensburg , MO 64093 9/85 - 8 / 90 Thomas Ed i son State College B.S. Aeronautical Science

Trenton , NJ 08608

### John W
. Beck 28 02 Const i tut i on Way Wa l l , NJ 07 7 1 9 US Cit i zen 

### January 2010 908-5 1 2-9039 E m a i l:jo hn @usac

. co m
Current Expertise

• Preside n t and Chief Pi l ot • Certification , Manua l s , Software • Pi l ot - Haw ker, Ci tation, F l acon • Exce l l ent FAA Re l ationship
• Co m pany I nst ructor • Local to NY & NJ Met ro Area Ratings and Cert i ficates ( Ce rtificate Number 27 1 5888) 

## o A i rl in e T rans p o rt P il ot Certif icate 0 F li ght In st ru ctor 

## o A irp l a n e M u l t i -E n g in e La nd 0 A i rp l ane Si n g l e a n d Mu l t i -Eng in e 

### o C o mm ercia l S i ng l e-E ngin e 0 I nstrum e n t A irp l a n e 

### o A irp l ane Sing l e Engine Land 0 Advanced Grou n d Instru ctor 

### o Comme rcia l He li copter 0 Type Ratings - CE500, HS123 , DA50 Flight Experience (Flight Hours) 7 , 132 Actual I nst rument T i me : 5, 847 Si mu l ate d In st rument T i m e : 1 , 535 Sing l e-Eng i ne T im e : 5 8 9 M u l t i -E n g in e T i m e : Educat ion Tota l Ti me: C ross Country : Nigh t Fl i g ht T i me: Tu rb ine : 766 2 90 1 , 931 5 ,740
19 76 BS Nuc l ear Eng i neering - North Caro l ina State University 19 80 MS Nuclear Eng i neeri ng - Nort h Caro l ina State Univers i ty 19 82 Ph
. D
. E l ectrica l Enginee rin g & Computer Sc i ence - Duke Un ivers i ty 1 986 P rogram Management - Defense System Management Co ll ege 1 992 I S09000 Lead Assessor - I ntematio n a l Standards Orga n izati on Technical Expert i se 

### o P rogra m M a n age m en t 0 Software D eve l o pm ent 

### o Syste m E ngi neeri n g 0 Bus i n ess M a n age m e n t 

### o C u sto m Avi ati o n S oftware 0 I S09 000 , Sarba n es Ox l ey 

### o Av i at i o n M a nu als and Pa rt 1 35 Certif i cati o n

Work Experience Date Role

2006- 20 08 1997 -2 0 04 1 9 82-1 99 7 1 97 6- 1 9 82 Southtrac A i r Charter - Pres i dent and Chief P i lot, BE58 Captain

USAC Airways 69 1 - Pres i dent and Chief P i lot , C41 4A Capta i n USAC Av i ati on , President - A i rli ne Transport P il ot

~ Director of O pe rat i o n s, C h i ef Pil ot , Co m pa ny I nstru ctor M e regrass , Di recto r of Ope rat i ons , Fa l co n 900 B P i l ot, I n stru cto r AT&T Labo ratori es - E n g i n eering M an age r AT&T Bel l La bo rato ri es - R esea rc h a nd D evelo pm en t Engin ee r Du ke Un i vers ity M e di ca l C enter - R esearch Associate , Rad io l ogy 2007 -Presen t 2 00 7 -Present 1994-P resen t

Z : \P ilots\as p\d ata I U SAC A irways 69 1 l l c \Pilot Re cords l John B eck \O l. 2 - R e s ume · Av iat i on - 20 1 O

. doc

## Wendell Kye Stephens 1003 Ballinger Road Lutz, FL 33548 813-294-7777 Title: Director of Maintenance at American Aviation, Inc. 

### Education: 1983-1988

1981-1983


### Employment:
1998-Present

1992-1998

1990-1993

1989-1990

1989

1985

- 1988

1984


### Flight Time: Embry

-Riddle Aeronautical Universiry-Daytona Beach, FL

Bachelor of Science in Aviation Technology flight and maintenance option FAA commercial, multi, and instrument pilots license obtained Associate in Aviation Maintenance Technology FAA airframe and powerplant license obtained Grade point average: 3.58 of a possible 4.00. Class ranking top 5% Hillsborouql: Hiql: School-Tampa, FL Three years training as an auto mechanic

American Aviation, Inc.

- Brooksville, FL Director of Maintenance and Chief Inspector, including returning aircraft to service (Fall 1998) Maintaining, Repairing, and Overseeing the operation of a Class III Repair Station TZ4R562M Supervising 15 maintenance personnel, 4 avionics personnel, 3 parts personnel, and 1 records inspector. American Aviation, Inc.

- Brooksville, FL Aircraft mechanics, commercial pilot, aircraft sales Repairing, inspecting, and flying aircraft 12,500 Ibs and under Performing annual inspections, time life item replacement, and routine maintenance requirements on small aircraft 12,500 Ibs and under Daytona Beach Aviation, Inc.

- Daytona Beach, FL Shift supervisor and maintenance inspector Maintained the following aircraft for Embry

- Riddle Aeronautical University: Mooney M20], Cessna 172, and Cessna T303 Crusader Line qualified for Continental, Delta, and American Airlines Completed aircraft and records familiarization courses for the following: 737, 727, Saab 360 and MD80 aircraft
B &..5 Aircr# Leasin8-Tampa, FL Chief Pilot in charge of operations, scheduling, and maintenance Embry-Riddle Aeronautical Universiry-Daytona Beach, FL Worked part-time, while attending school, as a lab instructor Instructed students on engine troubleshooting and installation Self Employed-Daytona Beach, FL Part-time aircraft maintenance and repair General Electric Company, Inc
. -Daytona Beach, FL Work full-time, while attending class, using an automated storage and retrieval line. Responsible for inventory, storage, and retrieval of parts for their aircraft and tank simulatorsTotal Time 5330 hours PIC 4636 hours Multi-Engine 3658 hours Instrument 1318 hours 

### Personal: AWARDS

FAA Pilot Proficiency Award, 1990 National Deans List 1983-1989 Embry-Riddle Aeronautical University Deans List 1981-1983 Hillsborough High School INTERESTS Sport Flying, Snow and Water Skiing, Scuba Diving, Racquetball 

### References: Furnished on request

### Sovereign Air, IDe 4 / 2 / 2010 Remaining General Start-up Expenses Personnel lATA Codes Insurance Update Airline Tariff Publishing Co. (ATPC) Offic i al Airline Guide (OAG) Computers - two Laptops Travel Landing fee deposit - MSP 5000 5500 5000 200 350 1600 500 3000 Total Start-up Expenses Acquire Air Carrier Certificate Working Capital and Financial Strenght Requirement $21,150 $180,000 

### a Pre-Operational Expenses $201,150 Adve rt i sing, signage, and station expenses will be handled by the local community for the first year . Sovere ign Air w il l use its own reservation system in i t i ally by the owners , including security and the passenger n o-fly list
. Sovere i gn Air owne rs will supervise the local community station init i ally. T rained part-t i me employees will work the stations. Development and handling of interl i ne passenger and baggage agreements will be done by the company owners . Owners w i l l do the fl i ght following in i tially. The company safety audits w i l be deve l oped through the f i rst 3 months by the CEO, DO and Chief Pilot
. The safety audit for Maintenance w i ll be done by the CEO and the D i rector of Maintenance.

# Sovereign Air , Inc. 1 2 Month Cash Flow S TC

-MSP YEAR1 12 month Pre Startup Jun- 1 0 Jul-1 0 Aug-1 0 S ep-1 0 Oct-lO Nov-10 Dec-1 0 Jan-ll Feb-ll Mar-ll Apr-11 May-ll Totals Initial Cash on Hand Funding 500,000 Sales - Passengers 9,369 9,369 14 ,414 157,500 157,500 157,500 189,000 189,000 189,000 189,000 189,000 189,000 1,63 9 ,653 Sales

- Cargo 43 86 86 945 945 945 945 945 945 945 945 945 8,721 Cash Receipts 500 , 000 9 ,412 9 ,456 14 , 501 158 ,445 158 ,445 158 ,445 189 , 945 189 , 945 189 , 945 189 , 945 189 , 945 189,945 1,648 , 374
CAS H EXPENSES DIRECT Crew Salarie s 2 , 312 2 ,3 12 2 , 3 12 12, 1 90 12 , 190 12, 1 90 12 , 190 12 , 190 12 , 190 12,190 12 , 190 12 , 190 116 , 643 Flight Following 31 3 1 31 163 163 163 163 163 16 3 163 163 163 1,555 Maintenance Parts & Labor 1 , 282 1 , 282 1,282 7,818 7 , 818 7 , 818 7 , 818 7,8 1 8 7 , 81 8 7,818 7,818 7 , 81 8 74 , 205 Fuel 2,805 2,805 2 , 805 48,352 48 , 352 48 , 352 48 , 352 48,352 48,352 48,352 48,352 48,352 443 , 586 Huilinsurnace 667 667 667 1,617 1,617 1,617 1,617 1,617 1,617 1,617 1,617 1,617 16,550 Liability Insurnace 167 167 167 167 167 167 167 167 167 167 167 167 2,000 Aircraft Lease 2,500 2,500 2 , 500 12 , 000 12 , 000 12,000 12 , 000 12,000 12 , 000 12,000 12,000 12 , 000 11 5 ,5 00 Total Direct Costs 7 7 0 , 039 INDIRECT Ground Handling 2,102 2 , 102 2 , 102 12 , 190 12 , 190 12 , 190 1 2, 190 12 , 190 12 , 190 12 ,1 90 12 , 190 1 2 , 190 11 6 , 012 Hub Landing Fee s 2 ,102 2 ,102 2 , 102 12 , 1 90 12 , 190 12 , 190 12,190 12 , 190 1 2, 190 12, 1 90 12 , 190 12, 190 116 , 012 Station Salarie s/Operations 2 , 000 2, 000 2 ,000 7 , 917 7 , 917 7,917 7 , 917 7 , 917 7,917 7,917 7,917 7,917 7 7 , 250 Other Landing Fees 841 841 841 4, 876 4 , 876 4 , 876 4 ,876 4,876 4 , 876 4 , 876 4 , 876 4, 876 4 6,405 Station Rent 2 , 000 2 , 000 2,000 2 , 000 2 , 000 2, 000 2,000 2 , 000 2,000 18 , 000 Hangar Res
. fees, de-ice, lost bags, etc . Crew Training 42 42 42 208 208 208 208 208 208 208 208 208 2 , 000 Marketing/Promotion 167 167 167 500 General & Admin Overhead 417 417 417 14,58 3 14 , 583 14,583 14,583 14 , 583 14 , 583 14 , 583 14 , 583 14 , 5 8 3 132,500 Capital Purchases - Plane Start-up Co sts 201 , 150 Total Indirect Co sts 508 , 679

TOTAL CASH EXPENSES 201 , 150 17 ,432 17 ,432 17 ,432 13 6, 269 136,269 136 , 269 136 , 269 136 , 269 136 , 269 136 , 269 136 , 269 136 , 269 1 ,479,868 Depreciation Interest Expense 3,333 3,333 3,333 3,333 3,333 3,333 3,333 3,333 3,333 3, 3 33 3,333 3 , 333 40 , 000 Estimated Taxes 43,403 43 ,403 Reserve Accounts 7,818 7 , 818 7 , 818 7,818 7 , 818 7 , 818 7 , 818 7 , 818 7 , 818 7 , 818 7 , 818 7 , 818 93,812 C ash Position , (End of Month) 298 , 850 279 , 679 260,552 246 ,470 257 ,495 268 , 520 279 , 545 322,070 364 , 595 407 , 120 449 , 645 492 , 170 491,292 491,292 Est Pre-Tax Profit 128 , 5 06 Pre-Tax Profit % of REV 7
. 8 % Est Af ter-Tax Profit 85,104 After-Tax Profit % of REV 5.2% (Includes start-up costs)

# 2009 Income Statement

Sovereign Air, Inc. 105 Main 

### St., BOX 

### 240 Belcourt, NO 

### 58316 Revenues Consulting

Travel Agency 

### $80.00 $6,666.15 $6,746.15 Cost of Goods Sold

Travel Agency Cessna 

### 172 Operations 

### $6,414.15 $408.57 Expenses Insurances

Rent Travel Expenses Phone/Mobile Bank Fees and Charges Contractor Expenses Office Supplies Postage Website Company Car 

### $2,569
. 22 $1,500.00 $1,439.51 $1,366.67 $1,184.54 $840.00 $1,921.00 $324.00 $260.00 $32.50

Net Income 

### -$11,514.01

## Balance Sheet as of December 31, 2009 Sovereign Air, Inc. 105 Main St. , BOX 240 Belco u rt , NO 583 1 6 Assets Current Assets Cash in bank Accounts receivable Inventory Prepaid expenses Tax Asset Other current assets Total CurrentAssets Fixed Assets Machinery & equipment Furniture & fixtures Leasehold i mprovements Land & buildings Other fixed assets (LESS accurn . Depr. on all fixed assets) Total Fixed Assets (net of depreciation) Other Assets Intangible - Air Carrier Certif i cate Deposits Goodwi l l Other Total Other Assets TOTAL Assets Liabilities and Equity Current Liabilities Accounts payable Interest payable Taxes payable Notes , short-term (due within 12 months) Current part , long-term debt Other current liabi l ities Total Current Liabilities Long-term DebtBank loans payable Notes payable to stockholders LESS : Short-term portion Loans from shareho l ders Accrued Rent Accrued Aircraft Lease Payments Accrued Wages Accrual for Taxes on Accrued Wages Other long term debt Total Long-term Debt Total liabilities Owners' Equity Capita l Stock ( 1M shares issue and outstanding , par value $0

. 001 per share) Retained earnings Additional Accumu l ated Deficit Total Owners' Equity Total Liabilities & Equity Year Ending 12 / 31/2008 Year Ending

1 2 / 31/2009

$100.00 $100

. 00 $0

. 00 $100

. 00 $0

. 00 $0

. 00 $0.00 $0

. 00 $25 , 834
. 34 $29 , 864
. 25 $0

. 00 $0

. 00 $25,934.34 $30 , 064
. 25
. $0

. 00 $0.00 $1 , 400
. 00 $1,400

. 00 $0

. 00 $0

. 00 $0

. 00 $0.00 $0

. 00 $0.00 $0

. 00 $0.00 $1,400

. 00 $1,400

. 00 $250 , 000
. 00 $0

. 00 $0

. 00 $0

. 00 $0

. 00 $0.00 $0

. 00 $0

. 00 $250 , 000
. 00 $0.00 $277 , 334
. 34 $31,464

. 25

$2 , 300
. 00 $0

. 00 $0

. 00 $6 , 000.00 $0.00 $3 , 220
. 00 $6,479.26 $0.00 $0.00 $6 , 000
. 00 $0

. 00 : $0

. 00 $11 , 520.00 $12,479

. 26 $0

. 00 $9 , 684.00 -$6 , 000
. 00 $101 , 122
. 66 $6 , 000
. 00 $2 , 800
. 00 $439 , 34 1 .41 $87 , 983
. 00 $0

. 00 $0

. 00

$8 , 184
. 00 -$6 , 000.00 $114,426

. 76 $6 , 000.00 $7 , 600
. 00 $333 , 641
. 89 $83,410.47 $0.00 $640 , 931
. 07 $547 , 263
. 12 $652,451

. 07 $559 , 742.38

- $73 , 812.41 -$301 , 304
. 32 $1 , 000
. 00 -$62 , 298.40 -$466 , 979
. 73 -$375 , 116
. 73 -$528 , 278
. 13 $277 , 334
. 34 $31 , 464.25

### AFFIDAVIT OF SAFETY COMPLIANCE



# STATE OF

------~~ ~ ---- - - - ----- 

# COUNTY OF

----~- = ~------------
Jon Payne, being first duly sworn, deposes and says: 1. That he/she is duly elected, qualified, and serving as CFO of Sovereign Air Inc. and that he is authorized to and does make this affidavit for it.
2. That all aircraft owned and leased by Sovereign Air, Inc. have been certified by the Federal Aviation Administration and currently comply with all applicable F ederal Aviation Administration safety standards under Parts 135, as well as the noise standards of Part 36, of the Federal Aviation Regulations.

~ · dayof ~f1 \( 

## , 2010. Subscribed and sworn to before me this (Seal) $', ~\:;. ¥y~;:~,,, DAVID H
. ZAMARRIPA



### f ~X {< ' % Nota ry P ubl i c . State of Texas 

### ; , . :; ; . ~ .. l M y Comm iss i o n E xp i re s


### ~ .. , . ; ! , f ,~ I ~ ~ ~ ~"" Ma rc h 31 1 2 0 1 3 

# c ~

_
. •.. 

# _--
---..... 

# ---~ [signature of Notary Public]
.The contents of this application and the attached exhibits are true and correct to the best of my

knowledge and be l ief. Pursuant to Title 18 United States Code Sect i on 1001 , I, in my individual capacity and as the authorized representative of the applicant , have not in any manner knowingly and willfully falsified, concealed or fa i led to disc l ose any mate rial 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 applicat i on . I understand that an i ndividual who is found to have violated the provisions of 18 USC Section 1001 sha l l be fined or imprisoned not more than five years, or both.



### Sovereign Air, Inc.