e 

U.& Department of 

Transportation 

Office of the Secretary 

of Transportation 

DLPIOFTBANSPOBWION 1200 New Jersey Avenue, SE 

Washington, DC 20590 

January 5, 2010 

Ms. Eileen M. Gleimer 

Mr. Gerald F. Murphy 

Crowell & Moring LLP 

1001 Pennsylvania "Avenue, NW 

Washington, DC 20004-2595 

Re: Docket DOT-OST-2009-0116 

Application of Key Lime Air Corporation 

for Section 41738 Commuter Air Carrier Authorization 

Dear Ms. Gleimer and Mr. Murphy: 

We have reviewed the supplemental information filed on behalf of Key Lime Air Corporation 

("Key Lime") in Docket DOT-OST-2009-0116 on October 23, 2009, for the determination of its 

fitness to engage in scheduled passenger air transportation as a commuter air carrier. 

This review has revealed that Key Lime has not yet responded fully to the Department's June 

29, 2009, Request for Additional Information. In its supplemental filing, Key Lime explains that 

the remaining items will be supplied to the Department in an additional supplemental filing in 

the Docket. To our knowledge, no such filing has been submitted to Docket DOT-OST-2009-

0116. 

The attached Information Request lists the areas where further and/or clarifying information is 

still needed in order for us to fully prosecute Key Lime's application. I ask that you please 

respond fully to this request within 30 days of the date of this letter. The original plus 6 copies 

of your response must be filed in Docket DOT-OST-2009-0116. 

As is the Department's practice, further processing of Key Lime's application will be deferred 

pending receipt of this material. In addition, please remember that Key Lime should promptly 

provide the Department with any information regarding changes it may undergo in areas 

affecting its fitness (i.e., management, operating plans or financial condition, compliance 

disposition, or ownership) while its application is under review by the Department. 
Thank you for your cooperation in this matter. If you have any questions regarding this letter or 

the requested information, please feel free to contact Scott Faulk of my staff at 202-366-9967. 

Sincerely, 

Lauifal^ J. Remo 

Chief, Air Carrier Fitness Division 

Office of Aviation Analysis 

Enclosure 

cc: Docket DOT-OST-2009-0116 

Cliff Honeycutt 

President 

Key Lime Ah- Corporation 

13252 E. Control Tower Road 

Englewood, CO 80112 

Christopher Lang 

POI for Key Lime Air Corporation 

FAA Denver FSDO-03 

26805 East 68th Ave. 

Denver, CO 80249 
INFORMATION REQUEST 

Key Lime Air Corporation 

GENERAL INFORMATION 

1. The application submitted on behalf of Key Lime states that the air carrier is in the 

process of obtaining a Part 121 certificate from the FAA. Please provide the Department 

with a status update on any progress the air carrier has made in obtaining this 

certification. 

MANAGEMENT AND KEY TECHNICAL PERSONNEL 

1. Please provide a resume for Mr. Daniel J. Bauer. The resume should include Mr. Bauer's 

full name, citizenship, current address, and telephone numbers, together with a detailed 

listing of all previous employment (both aviation and non-aviation) and education and 

training. The employment listing should include the name of employer, location (city, 

state), type of business, position(s) held, description of responsibilities, and dates 

employed. Further, if the employer held any aviation authority, the type of authority held 

should be noted. 

FINANCIAL POSITION 

1. Please provide a copy of Key Lime's current (within 3 months) balance sheet and income 

statement, as well as balance sheets and income statements for calendar years 2006, 2007, 

and 2008. The financial documents should be accompanied by explanatory footnotes. In 

addition, the financial documents should include a statement as to who prepared them, his 

or her qualifications and relationship, if any, to the applicant, and whether they were 

prepared in accordance with Generally Accepted Accounting Principles. If an annual 

audit, review, or compilation by an independent CPA is performed, the name and address 

of the firm, and type of services provided should be listed. 

2. Please provide third-party verification of all lines-of-credit available to support Key 

Lime's proposed operations. This verification should include the total line-of-credit 

being made available, the amount such credit line has been drawn down to date, any 

conditions that must be met before funds will be advanced, the terms of repayment, and 

the expiration date. Further, if the line-of-credit is being supplied by an individual or 

organization (other than a recognized financial institution), copies of the personal or 

corporate financial statements of the individual or organization should also be provided. 

3. Please provide third-party verification of all cash deposits available to support Key 

Lime's proposed operations. 

4. Please provide a detailed pre-operating cost forecast. This forecast should include all 

costs directly associated with Key Lime's move from Part 135 authority to Part 

121 authority, including aircraft lease expense, training, fuel, salaries, gates and hangar 

space, insurance, preparation of FAA manuals, FAA proving nms, etc. Sufficient detail 
should be provided to allow us to replicate the mathematics used. If Key Lime believes 

that none of these expenses will be incurred prior to its commencement of revenue flight 

operations, it should state in detail the reasons why the Department should consider this 

forecast reasonable. 

5. Please provide a forecast balance sheet and profit and loss statement (broken down by 

month or by quarter) for the first twelve full months of actual flight operations conducted 

under the commuter authority at issue. These documents should include ample notes 

explaining the basis for the amounts shown and whether the statements were prepared on 

a cash or accnial basis. The description should be in sufficient detail to replicate the 

mathematics involved and to determine the reasonableness of the forecast. 

a. The revenue forecast should include the following: 

i. Fares or rates to be charged, and the resulting gross revenues; and 

ii. The total number of revenue block hours and revenue miles expected to be 

flown, and the extent of any seasonal traffic peaks. 

b. The expense data should include the following: 

i. Detail by expense category (direct and indirect), indicating how the 

amounts were computed. Key Lime should include separate estimates of 

expenses for training, maintenance, preparation of manuals, etc., for each 

aircraft type or model; and 

ii. For indirect expenses, if Key Lime is engaged in other aviation-related 

operations (e.g., aircraft leasing or repair station), expenses should be 

allocated on a rational basis between the proposed commuter operations 

and the other operations, with appropriate explanations. Key Lime should 

prepare a consolidated forecast income statement for the entire business as 

well as separate forecast statements for each operating segment, including 

the proposed commuter operation. 

6. Please provide statements which include a description of the following: 

a. Any liens or encumbrances against any of the applicant's or any relevant 

corporation's assets, including those pledged as collateral for any outstanding 

obligations; 

b. Any major commitments into which the applicant or any relevant corporation has 

entered during the past 6 months, or proposes to enter into during the next 

6 months, including bank or other institutional financing, private financing, 

issuance of bonds or stock in the applicant, or major contracts to perform services; 

c. Any transactions in which the applicant or any'relevant corporation sold or 

exchanged any major assets (aircraft, land, buildings, etc.) during the past 

6 months, or plans to sell or exchange within the next 6 months, including how 

any funds realized from those transactions were, or are intended to be, used; 

d. Any liabilities of the applicant or any relevant corporation that are more than 

60 days past due at the time of the application, including the amount and the 

circumstances under which they are past due and will be paid; 
e. Any contingent liabilities that may have an effect on the applicant's or any 

relevant corporation's financial position (e.g., lawsuits, pending judgments), 

including plans to meet those obligations; and 

f. Any events that occurred after the preparation of the most recent financial 

statements that may have a significant impact on the financial position or on the 

operations of the applicant or any relevant corporation. 

If no such events have occurred, provide a statement to that effect. 

Note: Until we are able to determine that the pre-operating and first-year forecasts provided 

are reasonable, we cannot determine what level of funding Key Lime will require to meet the 

Department's financial fitness standard. In addition, should the company's current financial 

statements (to be provided in response to this information request) also shows a negative 

working capital position, the amount of this deficit would be added to the amount needed 

under our standard financial fitness' criteria to determine Key Lime's total funding 

requirement. 

Absent a reasonable operating forecast and verification of available financial resources 

sufficient to meet the Department's financial fitness requirement. Key Lime's application is 

seriously deficient. Therefore, unless Key Lime is able to demonstrate the reasonableness of 

its forecasts and provides the required historic and forecast financial statements in sufficient 

detail for us to evaluate its financial fitness and adequately substantiates that it will have 

funding sufficient to meet our fitness criteria, we will dismiss its application as incomplete. 

COMPLIANCE DISPOSITION 

The information provided pursuant to this Information Request should be accompanied by the 

following certification: 

The contents of this application and the attached exhibit (s) are true and correct to the 

best of my knowledge and belief. Pursuant to Title 18 United States Code Section 

1001,1 [the individual signing the application, who shall be a principal owner, senior 

officer, or internal counsel of the applicant], in my individual capacity and as the 

authorized representative of the applicant, have not in any manner knowingly and 

willfully falsified, concealed or failed to disclose any material 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 application. I 

understand that an individual who is found to have violated the provisions of 18 U.S.C 

section 1001 shall be fined or imprisoned not more than five years, or both. 

I Funds sufficient to cover all pre-operating costs plus one-fourth of the operating expenses that the applicant will 

incur during its first year of commuter operations.