# e

U. & Departmen t o f Transportatio n Offic e o f th e Secretar

y o f Transportatio n DLPIOFTBANSPOBWIO N 120 0 Ne w JerseyAvenue , S E Washington , D C 2059 0

January 5 , 201 0 Ms
. Eilee n M
. Gleime r Mr
. Geral dF
. Murph y Crowel l & Morin g LL P 100 1 Pennsylvani a"Avenue , N W Washington , D C 20004-259 5
Re : Docke t

DOT-OST-2009-011 6 Applicatio n o f

Ke y Lim e Ai r

Corporatio n fo r Sectio n 4173 8 Commute r Ai r Carrie r Authorizatio n Dea r Ms
. Gleime r

an dMr
. Murphy : W e hav e reviewe dth e supplementa l informatio n file do n behal f o f Ke y Lim e Ai r

Corporatio n ("Ke y Lime" ) i n Docke t

DOT-OST-2009-011 6 o n Octobe r 23 , 2009 , for

th e determinatio n of

it s fitnes s t o engag e i n schedule dpassenge r ai r transportatio n a s acommute r ai r carrier
. Thi s revie w ha s reveale dthat Ke y Lim e ha s no t

ye t responde dfully t o th e Department' s Jun e 29 , 2009 , Reques t

for Additiona l Information
. In it s supplementa l filing , Ke y Lim e explain s that th e remainin g item s wil l b e supplie dt o th e Departmen t i n a n additiona l supplementa l filin g i n th e Docket
. T o ou r

knowledge , n o suc h filin g ha s bee n submitte dt o Docke t DOT-OST-2009

- 0116
. Th e attache dInformatio n Reques t list s th e area s wher e further and/o r clarifyin g informatio n i s stil l neede di n orde r

for u s t o fully prosecut e Ke y Lime' s application
. I as k that yo u pleas e respon dfull y t o thi s reques t withi n 3 0 day s o f

th e dat e o f

thi s letter
. Th e original plu s 6 copie s o f you r respons e mus t

b e file di n Docke t

DOT-OST-2009-0116
. A s i s th e Department' s practice , further processin g o f

Ke y Lime' s applicatio n wil l b e deferre d pendin g receip t

o f thi s material
. In addition , pleas e remembe r that Ke y Lim e shoul dpromptl y provid e th e Departmen t

wit h any informatio n regardin g change s it ma y underg o i n area s affectin g it s fitnes s (i.e. , management , operatin g plan s o r financial condition , complianc e disposition , o r

ownership ) whil e it s applicatio n i s unde r revie w b y th e Department
.Than k

yo u for your cooperatio n i n thi s matter . I f yo u hav e an y question s regardin g thi s lette r o r th e requeste dinformation , pleas e fee l fre e t o contac t Scott Faul k o f my staf f a t 202-366-9967
. Sincerely ,

Lauifal ^ J
. Rem o Chief , Ai r Carrie r Fitnes s Division Offic e o f Aviatio n Analysi s Enclosur e
cc : Docke t

DOT-OST-2009-011 6 Clif f Honeycutt Presiden t Ke y Lim e Ah

- Corporatio n 1325 2 E
. Contro l Towe r

Roa d Englewood , C O 8011 2 Christophe r

Lan g PO I for Ke y Lim e Ai r

Corporatio n FA A Denve r

FSDO-0 3 2680 5 Eas t

68th Ave
. Denver , C O 8024 9INFORMATIO N REQUES T Ke y Lim e Ai r

Corporatio n GENERA L INFORMATIO N 1
. Th e applicatio n submitte do n behal f o f Ke y Lim e state s that

th e ai r carrie r i s i n th e proces s o f

obtainin g aPart

12 1 certificat e fro mth e FAA
. Pleas e provid e th e Departmen t with astatu s update o n an y progres s th e air carrie r ha s mad e i n obtainin g thi s certification
. MANAGEMEN T AN D KE Y TECHNICA L PERSONNE L 1
. Pleas e provid e aresum e for Mr
. Danie l J
. Bauer
. Th e resum e shoul dinclud e Mr
. Bauer' s full name , citizenship , curren t address , an dtelephon e numbers , togethe r wit h adetaile d listin g o f al l previou s employmen t (bot h aviatio n an dnon-aviation ) an deducatio n an d training
. Th e employmen t listin g shoul dinclud e th e nam e o f employer , locatio n (city , state) , typ e o f

business , position(s ) held , descriptio n o f responsibilities, an ddate s employed
. Further , i

f th e employe r

hel dan y aviatio n authority , th e typ e o f authority hel d shoul db e noted
. FINANCIA L POSITIO N 1
. Pleas e provid e acop y o f Ke y Lime' s curren t

(withi n 3 months ) balanc e shee t an dincom e statement , a s wel l a s balanc e sheet s an dincom e statement s for calendar year s 2006 , 2007 , an d2008
. Th e financial document s shoul db e accompanie db y explanatory footnotes
. I n addition , th e financial document s shoul dinclud e astatemen t a s t o wh o prepare dthem , hi s o r he r qualification s an drelationship , if any , t o th e applicant , an dwhethe r the y wer e prepare di n accordanc e wit h Generall y Accepte dAccountin g Principles
. I f an annua l audit , review , o r

compilatio n b y a

n independen t

CP A i s performed , th e nam e an daddres s of th e firm , an dtyp e o f

service s provide dshoul db e listed
. 2
. Pleas e provid e third-party verificatio n of al l lines-of-credi t

availabl e t o support

Ke y Lime' s propose doperations
. Thi s verificatio n shoul dinclud e th e tota l line-of-credi t bein g mad e available , th e amoun t suc h credi t

lin e ha s bee n draw n dow n t o date , an y condition s that

mus t b e me t before fund s wil l b e advanced , th e term s o f repayment , an d th e expiratio n date
. Further , i f th e line-of-credi t

i s bein g supplie db y a

n individua l o r organizatio n (othe r

tha n arecognize dfinancial institution) , copie s o f th e persona l o r corporat e financial statement s o f th e individua l o r

organizatio n shoul dals o b e provided
. 3
. Pleas e provid e third-party verificatio n o f al l cas h deposit s availabl e t o support Ke y Lime' s propose doperations
. 4
. Pleas e provid e adetaile dpre-operatin g cos t forecast
. Thi s forecas t

shoul dinclud e al l cost s directl y associate dwit h Ke y Lime' s mov e fro mPart 13 5 authority t o Part 12 1 authority , includin g aircraf t leas e expense , training , fuel , salaries , gate s an dhangar space , insurance , preparatio n o f FA A manuals , FA A provin g nms , etc . Sufficient detai lshoul db e provide dt o allo w u s t o replicat e th e mathematic s used
. I f Ke y Lim e believe s that non e o f thes e expense s wil l b e incurre dprio r t o it s commencemen t

o f revenu e flight operations , it

shoul dstat e i n detai l th e reason s why th e Departmen t shoul dconside r

thi s forecas t reasonable
. 5
. Pleas e provid e aforecas t balanc e shee t

an dprofi t

an dlos s statemen t

(broke n dow n b y month o r b y quarter ) for

th e firs t twelv e full month s o f

actual flight

operation s conducte d unde r th e commute r

authority a

t issue
. Thes e document s shoul dinclud e ampl e note s explainin g th e basi s for

th e amount s show n an dwhethe r th e statement s wer e prepare do n acas h o r accnia l basis
. Th e descriptio n shoul db e i n sufficient detai l t o replicat e th e mathematic s involve dan dt o determin e th e reasonablenes s of th e forecast
. a . Th e revenu e forecas t

shoul dinclud e th e following : i
. Fare s o r

rate s t o b e charged , an dth e resultin g gros s revenues ; an d ii
. Th e total numbe r

of revenu e bloc k

hour s an drevenu e mile s expecte dt o b e flown , an dth e exten t

o f an y seasona l traffi c peaks
. b
. Th e expens e dat ashoul dinclud e th e following : i
. Detai l b y expens e category (direc t an dindirect) , indicatin g ho w th e amount s were computed
. Ke y Lim e shoul dinclud e separat e estimate s o f expense s for

training , maintenance , preparatio n o f manuals , etc. , for

eac h aircraf t typ e o r model ; an d ii
. Fo r indirec t expenses , i

f Ke y Lim e i s engage di n othe r aviation-relate d operation s (e.g. , aircraf

t leasin g o r

repai r station) , expense s shoul db e allocate do n arationa l basi s betwee n th e propose dcommute r operation s an dth e othe r

operations , with appropriat e explanations
. Ke y Lim e shoul d prepar e aconsolidate dforecas t incom e statemen t

for th e entir e busines s a s wel l a s separat e forecas t

statement s for

eac h operatin g segment , includin g th e propose dcommute r

operation
. 6
. Pleas e provid e statement s whic h includ e adescriptio n of th e following : a . An y lien s o r

encumbrance s agains t

any o f th e applicant' s o r

an y relevan t corporation' s assets , includin g thos e pledge da s collatera l for any outstandin g obligations ; b
. An y major

commitment s int o whic h th e applican t o r any relevan t

corporatio n ha s entere ddurin g th e pas t

6 months , o r

propose s t o ente r

int o durin g th e nex t 6 months , includin g ban k o r othe r institutiona l financing , privat e financing , issuanc e of

bond s o r stoc k i n th e applicant , o r

major contract s t o perfor

mservices ; c . An y transaction s i n whic h th e applican t o r any'relevan t

corporatio n sol do r exchange dany major

asset s (aircraft , land , buildings , etc. ) durin g th e pas t 6 months , o r

plan s t o sel l o r

exchang e withi n th e nex t 6 months , includin g ho w an y fund s realize dfro mthos e transaction s were , o r ar e intende dt o be , used ; d
. An y liabilitie s o f

th e applican t

o r an y relevan t

corporatio n that

are mor e than 6 0 day s pas t

du e a t th e tim e o f

th e application , includin g th e amoun t an dth e circumstance s unde r

whic h the y are pas t

du e an dwil l b e paid ;e . An y contingen t liabilitie s tha t

may hav e an effec t

o n th e applicant' s o r

an y relevan t corporation' s financial positio n (e.g. , lawsuits , pendin g judgments) , includin g plan s t o mee t

thos e obligations ; an d f
. An y event s that

occurre dafte

r th e preparatio n o f

th e mos t

recen t financial statement s that

may hav e asignifican t

impac t o n th e financial positio n o r o n th e operation s o f

th e applican t

o r an y relevan t

corporation
. If n o suc h event s hav e occurred , provid e astatemen t t o that effect
. Note : Unti l w e ar e abl e t o determin e that th e pre-operatin g an dfirst-yea r forecast s provide d are reasonable , w e canno t determin e what

leve l o f fundin g Ke y Lim e wil l requir e t o mee t th e Department' s financial fitnes s standard
. In addition , shoul dth e company' s curren t financia l statement s (t o b e provide di n respons e t o thi s informatio n request ) als o show s anegativ e workin g capita l position , th e amoun t o f thi s defici t

woul db e adde dt o th e amoun t neede d unde r ou r standar dfinancial fitness ' criteri at o determin e Ke y Lime' s tota l fundin g requirement
. Absen t areasonabl e operatin g forecas t an dverificatio n o f

availabl e financial resource s sufficient t o mee t th e Department' s financial fitnes s requirement
. Ke y Lime' s applicatio n i s seriousl y deficient
. Therefore , unles s Ke y Lim e i s abl e t o demonstrat e th e reasonablenes s o f it s forecast s an dprovide s th e require dhistori c an dforecas t financial statement s i n sufficient detai l for u s t o evaluat e it s financial fitnes s an dadequatel y substantiate s that it wil l hav e fundin g sufficient

t o mee t ou r fitnes s criteria , w e wil l dismis s it s applicatio n a s incomplete
. COMPLIANC E DISPOSITIO N Th e informatio n provide dpursuan t t o thi s Informatio n Reques t shoul db e accompanie db y th e followin g certification : Th e content s o f

thi s applicatio n an dth e attache dexhibi t (s ) are tru e an dcorrec t

t o th e bes t o f my knowledg e an dbelief
. Pursuan t

t o Titl e 1 8 Unite dState s Cod e Sectio n 1001, 1 [th e individual signin g th e application , who shal l b e aprincipa l owner , senio r officer , o r

interna l counse l o f

th e applicant] , i n my individua l capacity an da s th e authorize drepresentativ e o f th e applicant , hav e no t i n an y manne r

knowingl y an d willfull y falsified , conceale do r faile dt o disclos e an y materia l fac t o r mad e an y false , fictitious , o r

fraudulent

statemen t

o r knowingl y use dany document s whic h contai n suc h statement s i n connectio n with th e preparation , filin g o r prosecutio n o f

th e application
. I understan dthat

a n individual wh o i s foun dt o hav e violate dth e provision s of 1 8 U.S. C sectio n 100 1 shal l b e fine do r imprisone dno t

mor e tha n fiv e years , o r

both
.

I Fund s sufficient

to cove r al l pre-operatin g cost s plu s one-fourt h o f th e operatin g expense s that th e applican t

wil l incur durin g it s firs t

yea r o f commute r

operations
.