Order 201 5

- 1

- 7

Served: January 7, 2015

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 7 th day of January, 2015

Application s of

GULF & CARIBBEAN CARGO, INC.

d/b/a GULF & CARIBBEAN AIR

d/b/a IFL GROUP

for removal of fleet restrictions pursuant to 49 U.S.C. § 41109(b) Docket s DOT

- OST

- 1996

- 1023

DOT

- OST

- 1996

- 1071

ORDER

Summary

By this order, we remove the condition that limits the number of large aircraft 1 th at Gulf & Caribbean Cargo, Inc. d/b/a Gulf & Caribbean Air d/b/a IFL Group (“G&CC”) may operate.

Background

On May 5 , 201 4

, G &CC filed application s in Docket s DOT

- OST

- 1996

- 1023 and DOT

- OST

- 1996

- 1071 requesting that the Department remove the condition that imposes fleet restrictions on the air

carrier

. In support of its request, G&CC asserts that the removal of this restriction will allow the

company to meet the demands of its ad hoc contracts and have flexibility to expand its long

- term
contract business

. G&CC also maintains that it continues to remain fit, willing and able and that its past operations have been conducted satisfactor ily

.

No answers to the application were received.

FITNESS

The Company

Headquartered in Waterford, Michigan , G&CC was incorporated in the State of Florida in 199 6 . The

air carrier began operations in April 1992 as a commercial operator under Part 125 of the Federal

Aviation Regulation s ( “ FAR ” ) and received authority to operate under 14 CFR Part 121 and

1 Section 298.2(h) of our rules defines “large aircraft” as any aircraft originally designed to have a maximum capacity of more than 60 passenger seats or a maximum payload of more than 18,000 pounds.

U N I T E D S

T A T E S O F A

M E R I C A D E P A R T M E N T O F T R A N S P O R T A T

I O N2

14 CFR Part 298 in 1995

. In 1998, the company received effective certificate 2 authority to engage in interstate and foreign all

- cargo air transportation using small aircraft. 3 In 2005, G&CC received authority to operate up to five large aircraft in all

- cargo operations 4 and subsequently requested and received authority to increase its fleet to nine large aircraft. 5

G& CC has undergone a slight change in ownership. The air carrier is no longer wholly owned by Shadrack, LLC (“Shadrack”). Instead, G&CC is now owned directly by the owners of Shadrack , all of

whom are U.S. c itizens, in equal proportion to their shares in S hadrack. 6 The following table lists the ownership and distribution of shares of G&CC after the Agreement and Plan of Recapitalization.

Owners Voting

- Class A Non

- Voting

- Class B

Shares Percentage Shares Percentage
Alan C. Ross Irrevocable Trust,

dated 12/30/02 38.0278 38.0278 342.2502 38.0278

Alan C. Ross Living Trust,

dated 4/1/94 20.9061 20.9061 188.1549 20.9061

Helen Ross Living Trust, dated

4/1/94 20.9061 20.9061 188.1549 20.9061

Michael N. Church Living Trust, dated 3/27/01 10 10 90 10

Stella Church Living Trust,

dated 3/27/01 10 10.00 90 10

David Ross 0.08 0.08 0.72 0.08 Stacy Ross 0.08 0.08 0.72 0.08

Total 100 100 900 100

With respect to the air carrier’s key management and technical personnel, the Department has previously reviewed the qualifications and experience of the individuals listed below with t he exception

of Messrs

. Jeremy R. Clark and James W. Barnett

, and Ms. Sandra M. Miracle.

Mr. Alan C. Ross

- Chief Executive Officer ( “ CEO ” )

Mr. Michael N. Church

- President Mr. Michael A. Cary

- Director of Operations

Mr. William D. Brooks

- Director of Maintenance Mr. Jeremy R. Clark

- Chief Pilot

Mr. James W. Barnett

- Chief Inspector

Ms. Sandra M. Miracle

- Director of Safety

2 See Order 98

- 12

- 15, issued December 11, 1998.

3 Section 298.2 of our rules defines “small aircraft” as any ai rcraft originally designed to have a maximum passenger capacity of 60 seats or less or a maximum payload of 18,000 pounds or less.

4 See Order 2006

- 1

- 15, issued January 19, 2006.

5 By letter dated November 6, 2014, the Department found G&CC fit to operate an additi on a l large aircraft, bringing its fleet of large aircraft to 9.

6 In December 2013, G&CC and Shadrack entered into an Agreement and Plan of Recapitalization, and G&CC amended and restated its Articles of Incorporation, pursuant to wh ich G&CC issued two classes of common stock, Class A voting

shares and Class B non

- voting shares. G&CC’s Class A and Class B shares were distributed directly to the owners of Shadrack in equal proportion to their shares in Shadrack.3

Mr. Jeremy Clark

, an Airline Transport Pilot, has served as the company’s Chief Pilot since March 2006. Prior to being promoted to Chief Pilot, he held several other positions of increasing responsibility at G&CC since 2002 , including Director of Training, Check Airman PC, Flight

Instructor

, and Pil ot

- in

- Command

. Mr. Clark was previously employed in G&CC’s affiliate company IFL Group, Inc. (“IFL”), as a Commercial Pilot and Company Instructor (1998

- 2002). He also served as Line Crew personnel at Skyway Aviation from (1993

- 1998).

Mr. James W. Barn ett , an Airframe and Powerplant Mechanic, serves as the company’s Chief Inspector (2010

- present) . Prior to being promoted to his current position , he served as G&CC ’s Assistant Chief Inspector (2009

- 20 10 ). From 1989 to 2009 , Mr. Barnett worked for G&CC’s affiliate company, IFL

, in various capacities

, including Maintenance Supervisor, Mechanic/RII Inspector, and Maintenance Apprentice.

Ms. Sandra M. Miracle serves as the Director of Safety for G&CC (2010

- present)

. Ms. Miracle was previously employed as the Flight Operations M anager for IFL (1999

- 2010)

.

G&CC currently conducts its cargo operations utilizing three Boeing 727

, five Convair 5800 (large aircraft), and seven Convair 580 (small aircraft). The air ca rrier’s financial statement s for calendar years 2012 and 2013 show that G&CC earned $ 390,792 and $ 861,309 on operating revenues of $ 53.81 million and $62.15 million

, respectively . For the seven months ended o n July 31

, 2014, G&CC

earned $2.64 million on operating revenues of $33.66 million. G&CC ’s balance sheet for the seven

months ended on July 31, 2014

, shows that it has current assets of $14.62 million and current liabilities of $18.02 million

, giving it negative working capital of $3.40 million. Th e air carrier’s July 31, 2014

, balance sheet a lso shows total shareholder ’ s equity of $6.73 million. G&CC provided third

- party verification of an existing $15.0 million line

- of

- credit from Comerica Bank available to it and its affiliated company, IFL

, to support its operations

. 7

G& CC states that there are no actions or outstanding judgments against it, its owners, or its key personnel, nor have there been any charges of unfair, deceptive or anti

- competitive business practices, or of fraud, felony or antitrust violations brought agai nst any of these parties. G&CC also states that there are no pending enforcement actions, or formal complaints filed by the Department against it, its key personnel, or persons having a substantial interest in it with respect to compliance with the Transp ortation Code or the Department’s regulations. Our review of records indicated that, G&CC has

been involved in no accidents and two incidents in the past five years. 8 The air carrier has two open

enforcement actions related to its airworthiness certifica tion, with civil penalties totaling to $84,450. 9

Further, FAA has advised us that it has no pressing issues that would adversely affect the Department’s decision in granting G&CC’s request to remove its aircraft restriction.

DECISION

The Department has reviewed the information submitted by G&CC and finds it appropriate to remove

the aircraft limitation. At the time G&CC was initially fou n d fit , the Department restricted the number

7 G& CC provided third

- party verification from Comerica Bank that states as of February 18, 2014, the entire $15 million

line

- of

- credit has not been drawn down.

8 On June 20, 2014, one of G&CC ’s Boeing 727

- 200 aircraft experienced inflight engine vibration fr om suspected foreign object damage ; n o injuries were reported. On June 26, 2014, one of the air carrier’ s Boeing 727

- 200 aircraft incurred substantial damage upon departing the terminal without the removal of ladder ; n o injuries were recorded

. 9 See FAA report 2014GL230015 and 2014GL230020 with civil penalty of $68,200 and $16,250 respectively.4

of aircraft the company could operate based on the fin ancial resources available to G&CC

. Further

, the Department’s practice was to monitor new entrants more closely f or the first five years of operations and limit fleet growth in order to give the air carrier’s key management and technical personnel experience in overseeing scheduled operations. This fleet restriction stemmed from recommendations

from the FAA 90 Day Safety Review of September 1996. G&CC has been in operation well beyond 5 years, having commenc ed its certificated operations in 1998. Moreover, our review of the information the air carrier provided reveals that G&CC remains a U.S. citizen, and is fit, willing and able to conduct operation under its certificate. Further FAA, has also advised us t hat it does not object to the removal

of G&CC’s aircraft fleet restrictions.

In consideration of the above, the Department finds it appropriate to approve G&CC’s request. We

remind G&CC , however, that although the Department is no longer requiring the air carrier to seek economic approval to operate additional aircraft, the air carrier is still subject to FAA safety approval before adding aircraft to its Operations Specifications

.

ACCORDINGLY,

1. We amend Order 2006

- 1

- 15, issued January 19, 2006 to remove restrictions limiting the number of large aircraft that Gulf & Caribbean Cargo, Inc. d/b/a Gulf & Caribbean Air d/b/a IFL Group is authorized to operate.

2

. We will serve a copy of this order on all persons listed in Appendix 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.govAttachment A

SERVICE LIST FOR GULF & CARIBBEAN CARGO, INC.

d/b/a GULF AND CARIBBEAN AIR

d/b/a IFL GROUP

MR ROBERT P SILVERBERG

COUNSEL FOR GULF & CARIBBEAN

CARGO INC

SILVERBERG GOLDMAN & BIKOFF

1101 30TH STREET NW STE 120

WASHINGTON DC 20007 MR MARK MAZOR

CERTIFICATION SECTION MANAGER

FAA AFS

- 900

45005 AVIATION DRIVE SUITE 131

DULLES VA 20166

OFFICE OF AIRLINE INFORMATION

DOT/RITA/BTS E

- 34

1200 NEW JERSEY AVE SE

WASHINGTON DC 20590 MR PETER LYNCH AGC

- 300

ASST CHIEF COUNSEL FOR ENFORCEMENT

FEDERAL AVIATION ADMINISTRATION

800 INDEPENDENCE AVE SW

WASHINGTON DC 20591

MR RUSS EL MEGARGLE

POI FOR GULF & CARI BBEAN CARGO INC