Order 2012

- 7

- 5 Served: July 6 , 2012

UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation
on the 6 th day of July, 2012

Fitness Determination of

KEY LIME AIR CORPORATION

as a commuter air carrier under section
49 U.S.C. § 41738 Docket DOT

- OST

- 2009

- 0116

ORDER TO SHOW CAUSE PROPOSING ISSUANCE OF A COMMUTER AIR CARRIER AUTH O RITY

Summary

By this order, we tentatively conclude that Key Lime Air Corporation (“Key Lime” ) is a citizen of the United States and is fit, willing, and able to conduct scheduled passenger operations as a commuter air carrier, subject to conditions.

Background

Section 41738 of Title 49 of the United States Code (“the Transportation Code”) and

se ction 298.32 of the Department’s Aviation Economic Regulations (14 CFR 298.32) direct us to
determine that applicants proposing to provide scheduled passenger service as commuter air carriers are “fit, willing, and able to operate the proposed commuter service.” We must also ensure that all operations relating to this service conform to the safety standards established by the Federal Aviation Administration (“FAA”). In making fitness findings, the Department uses a
thr ee

- part test that reconciles the Airline Deregulation Act’s liberal entry policy with Congress’ concern for operational safety and consumer protection. The three areas of inquiry that must be
addressed in order to determine an air carrier’s fitness are wh ether the applicant : (1) will have the managerial skills and technical ability to conduct the proposed operations, (2) has sufficient financial resources to commence the operations proposed without posing an undue risk to consumers or their funds, and (3) will comply with the Statute and regulations imposed by federal and state agencies. We must also determine that the applicant is a U.S. citizen.

On May 12, 20 09 , Key Lime filed an application in Docket DOT

- OST

- 2009

- 0116 for authority

to conduct scheduled passenger operations as a commute r air carrier pursuant to 49 U.S.C.2

§ 41738 of the Statute . Key Lime accompanied its application with fitness information required by § 204.3 of our regulations (14 CFR 204.3)

. 1

No answers opposing Key Lime’s applicatio n were filed and no special issues regarding the applicant have come to our attention. Under these circumstances, we propose to decide the issue of the applicant’s fitness on the basis of the written record, and we tentatively conclude that Key
Lime is a U.S. citizen and is fit, willing, and able to provide scheduled passenger operations as a commuter air carrier. However, we will give interested persons an opportunity to show cause why we should not adopt as final these tentative findings and conclusions

.

FITNESS

The Company

Key Lime is a corporation that was organized under the laws of the State of Colorado in
November 1996

. The applicant was found fit to conduct interstate on

- demand air cargo transportation in May 1997, and later that same year

, commenced operations under Part 135 of the Federal Aviation Regulations using one Piper Navajo Chieftain aircraft. By 2000, Key Lime had secured several contracts with multiple freight forwarders , including U nited P arcel S ervice,

Inc

. (“UPS”) , Airborne E xpress, Inc. , and DHL Airways, Inc. In 2002, the applicant grew its
business to include on

- d emand passenger operations and obtained authority from the FAA to operate aircraft with up to 30 seats, which enabled Key Lime to acquire additional contract s with several universities to transport colleg iate athletes. In 2003, Key Lime was awarded a UPS
contract to conduct all of its Denver

- based operations.

Currently, Key Lime operates under its FAA Part 135 operating certificate and transports cargo and passe ngers between its base in Denver and the Western Slope of Colorado using a fleet consisting of approximately 32 aircraft

.

Managerial Competence

The following individuals, all U.S. citizens, serve as Key Lime’s key management and technical personnel.

Mr. Clifford D. Honeycutt President and C hief Executive Officer
Mr. Glen M. Rich Vice President Mr. Mark Hesting Chief Financial Officer
Mr. John T. Schleibaum Director of Operations

Mr. Johnnie Krien Director of Maintenance
Mr. Wade Goetz Director of Safety
Mr. Richard Jones Chief Pilot Mr. Paul Rylatt Chief Inspector

1 Key Lime filed additional information supplementing its application on October 23, 2009, March 19, 2010, December 13 and 19, 2011, and March 21 and 29, 2012.3

Mr. Clifford D. Honeycutt , Key Lime’s President and Chief Executive Officer, founded the

company in 1996. He is an Airline Transport Pilot with over 7,200 total flight hours logged, and
he has also worked as a p ilot and an aircraft m echanic for the air carrier

. Before establishing Key Lime

, Mr. Honeycutt moved progressively through a series of positions with multiple airlines, including Shop Man a ger/Mechanic for Precision Aircraft and En gine Services, Inc. (1990

- 1997) ; Director of Maintenance (1995

- 1997) and Line Pilot (19 94

- 1996) for Sundance Air, Inc., Line Technician for Den ver JetCenter, Inc. (1991

- 1992) ; and Line Technician/Mechanic Assistant/Apprentice for Judson Flying Servic e, Inc

. (198 6

- 1990).

Mr. Glen M. Rich, an Airline Transport Pilot with 8,800 total flight hours logged, assumed his current position as Vice President of Key Lime in 1996. During his tenure with the applicant, he developed skills in multiple area s of operations and management, having served as Director of Operations, Chief Pilot, Company Instructor, Check Airman, and Designated Examiner. Before that, Mr. Rich served as Chief Pilot and Company Flight Instructor for Sundance Air, Inc. (1995

- 1997) ; Flight Instructor for Wings of Denver, Inc. (1993

- 1995) ; Cargo Technician for DHL Airways, Inc. (1994

- 1995) ; and Aircraft Service Technician/Customer Service Representative for Denver JetCenter, Inc. (1992

- 1994). In 1994, Mr. Rich graduated from Metropoli tan State College of Denver with a Bachelor of Science in General Aviation (1991

- 1994).

Mr. Mark Hesting has served as the applicant’s Chief Financial Officer since 2008. Before joining Key Lime, he was employed as a Field Service Supervisor for DHL Int ernational, Inc. (2007

- 2008), and a Financial Consultant for A.G. Edwards, Inc. (2005

- 2006). He moved progressively through a series of positions with increasing levels of responsibility at UPS (1992

- 2005) Mr. Hesting holds a Bachelor of Arts in Psychol ogy from Western State College, and a Master of Business Administration with an emphasis in Finance from Daniels College of Business, University of Denver.

Mr. John T. Schleibaum, an Airline Transport Pilot, developed skills in multiple areas of operations and management, having served as Key Lime’s Line Pilot (2004

- 2005), Assistant Chief Pilot (2005

- 2006), Chief Pilot (2006

- 2008), and Director of Operations (2008

- Present). Before joining Key Lime , he was employed as a Truck Driver (2004) and performed gen eral labor tasks (1993

- 2004) for Spray Sand & Gravel, Inc. He served as Director of Operations for DK&L Company (2002

- 2004), and was employed as a Line Pilot for Frankfort Flight Service, Inc (2001

- 2002). He holds a Bachelor of Science in Professional Fl ight and a Bachelor of Arts in Aviation from Purdue University.

Mr. Johnnie Krien , an Airframe and Poweplant Mechanic, became Key Lime’s Director of
Maintenance in January 2012 . He initially joined the company as a mechanic in March 2003. Before coming to Key Lime, Mr. Krien worked for Sito Trus s M anufacturing as a Truss Fabricator (199 9

- 2003). Prior to that, he worked as a Mechanic’s Assistant for K & M Aviation (1998) and Thomason Aviation (1998

- 1999). Mr. Krien also has experience working as a truc k driver (1996

- 1998) and as a laborer (1994

- 1995).4

Mr. Richard E. Jones, an Airline Transport Pilot with 5,500 total flight hours logged, joined Key Lime as a Pilot in 2003, and assumed his current position as Chief Pilot in 2008. Previously, h e held the positions of Private Pilot Ground School Instructor (2001

- 2003), Assistant Chief Flight Instructor (2001

- 2003), and Flight Instructor (2000

- 2003) with Aspen Flying Club, Inc. Prior to that, he served in various non

- aviation

- related positions (1994

- 199 9 ). In 2000, Mr. Jones
received a Bachelor of Science Degree in Aviation Technology from the Metropolitan State College of Denver.

Mr. Wade Goetz, a Certified Flight Instructor, has served as Key Lime’s First Officer since 2003 and assumed his current po sition as Director of Safety in 2004. In addition to his duties with the appl icant, Mr. Goetz also serves as owner and Director of Charter Alli ance Group LLC, (2005

- p resent), Manager of the Cessna Aircraft Sales Center at Cent ennial Airport (2003

- p resent) and
C o

- C reator of A PA Centre, Inc. (1997

- p resent). He also is President a nd Chief Executive
Officer of Al titudes Flight Training Ce nter, Inc. (1992

- p resent). Previously , Mr. Goetz served as Chief Pilot for the Aspen Flying Club (1999

- 2000) . He also cre ated Elutions, Inc., a biotech company specializing in research and development (1996

- 1997). A ddition ally , Mr. Goetz
established t he Pilot Shop at Centennial Airport, a pilot supply company (1993

- 1998), and served as a Flight Instructor for Aero Training of the Rockies at Centennial Airport (1989

- 1992).
Mr. Goetz also served in various non

- aviation

- related positions from 1976

- 1987. He attended the Arapahoe Community College (1980

- 1982), University of Southern Colorado (1982

- 1984),
and holds an Aviation D egree from Emery Aviation College (1988

- 1989), and has, since 1996,
served on numerous b oards and c ommittees at the Centennial Airport on behalf of the Arapahoe County Public Airport Authority

.

Mr. Paul Rylatt, an Airframe and Powerplan t Mechanic, assumed his current position as Key Lime’s Chief Inspector in 2007, and before that, held the same post at Pilatus Business Aircraft, Inc. (2007). Previously, he served as a Quality Control Inspector (2004

- 2007) and Lead Airframe and Powerplan t Mechanic (2003) at Evergreen Air Center, and served a three

- month term as a Quality Control Supervisor at Bombardier Aerospace (2003

- 2004). Mr. Rylatt has held multiple positions with increasing levels of responsibility at Mesa Airlines, Inc., including Airframe and Powerplant Mechanic/Inspector/Day Shift Supervisor (1996

- 1999), Line Maintenance Manager (1999

- 2002), and Station Maintenance Manager (2002

- 2003). Before that, he served as a Senior Technical Advisor (1993

- 1996) and Fabrication Service
Techn ician/Warranty Administrator (1991

- 1992) at Mark VII Equipment, Inc. Additionally,

Mr. Rylatt held the position of Airframe and Powerplant Mechanic for Frontier Aero Structures (1992

- 1993), Continental Airlines (1990

- 1994), and Pennsylvania Airlines (1988

- 1990). He also
served in non

- aviation

- related positions from 1985

- 1988. Mr. Rylatt graduated from Colorado
Aero Tech in 1988.

In light of the experience and background of the applicant’s key management and technical personnel, we tentatively conclude that Key Lime’s management team possesses the managerial skills and technical ability to conduct its proposed operations. 2

2 Before authorizing an air carrier to conduct air transportation operations, the FAA also evaluates ce rtain of the air carrier’s key personnel with respect to the minimum qualifications for those positions as prescribed in the Federal Aviation Regulations. The FAA’s evaluation of these key personnel provides an added practical and in

- person test5

Operating Plan and Financial Position

If granted the commuter authorization it seeks, Key Lime intends to expand its existing

passenger operations by adding twice

- daily scheduled passenger service between Bloomfield

, Colorado, and Grand Junction, Colorado

, using one 18

- seat Fairchild Swearinge n Metro liner
aircraft. The applicant will also continue to develop its existing cargo business, on

- demand air taxi service, and Part 380 public charter operations . The air carrier anticipates adding additional
aircraft and markets served as demand dicta tes.

In evaluating a n applicant’s financial fitness, the Department generally ask s that those applicants have resources sufficient to cover all pre

- operating costs and any negative working capital balance, plus a working capital reserve equal to the operating costs that would be incurred in three months of normal commuter operations.

In support of its application, Key Lime submitted current and historical financial statements demonstrating the company’s most recent results from operation s . The historical profit and loss statements provided by the applicant show that for calendar year s 2009, 2010

, and 2011 , the company reported revenues of $12.6 million, $14.3 million, and $20.4 million and net income of $ 228,051, $494,307, and $1.0 million, respectively . In addition, the company’s December 31,
2011 , balance sheet shows that it has current assets of $ 2.3 million and current liabilities of $ 1.8 million , giving the company a positive working capital balance of approximately $ 500,000

. Key Lime also reports total shareholder equity of $ 724,860

.

Key Lime also provided the Department with a financ ial forecast for its first year of scheduled operations and a list of pre

- operating expenses. Key Lime states that it expects to incur minimal

pre

- operating ex penses of $25,000 since it already provides air service in the market it proposes to operate sch eduled service

. Further, Key Lime projects total first year operating expenses of approximately $1.1 million

. Based on our evaluation, we find these expense projections reasonable and estimate that the company will need approximately $ 266,103 in funds to meet our
financial fitness criteria. 3 This requirement is satisfied by the air carrier’s available funds.

Since Key Lime has positive working capital of approximately $500,000 , we tentatively conclude that Key Lime has sufficient financial resources to enable it to commence its proposed

of the sk ills and technical ability of these individuals. The FAA has advised us that Key Lime’s management personnel are qualified and acceptable for their positions.

3 To meet the Department’s financial fitness criteria, an applicant should have access to financial resources sufficient to cover its pre

- operating expenses and the expenses that are reasonably projected to be incurred during three months of “normal” operations. Because projected expenses during the first several months of air transportation s ervices frequently do not include all costs that will be incurred during a “normal” period of operations, it is our practice to base our three

- month test on one

- quarter of the first year’s operating cost forecast. Further, in calculating available resourc es, projected revenues may not be used. The $ 266,103 noted here is one

quarter of the applicant’s forecast of approximately $ 1,064,312 in first year expenses equaling $ 266,078 , plus $25,000 in pre

- operating expenses

.6

scheduled passenger commuter operations without posing an undue risk to consumers or their

funds. 4

Compliance Dispositio n

Our review of FAA records indicates that Key Lime has been cited for no violation s , accidents,
and incidents in the five years preceding its application for commuter authority. Further, the
FAA has advised us that the applicant is making satisfactory progress in obtaining its Part 121 authority and that it has no objection to the Depa rtment’s approval of Key L ime ’s application for commuter authority.

The applicant 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 br ought against any of these parties in the past ten years. The applicant also states that there are no pending investigations, 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 Statute or the Department’s regulations. Moreover, o ur review of the applicant ’s compliance disposition has produced no ev idence of any compliance issues.

In light of these circumstances, we tentativel y conclude that Key L ime has the proper regard for the laws and regulations governing its services to ensure that its aircraft and personnel conform to applicable safety standards and that acceptable consumer relations practices will be followed.

CITIZENS HIP

Section 41102 of the Transportation Code requires that authority to engage in air transportation be held only by citizens of the United States as defined in 49 U.S.C. 40102(a)(15). That section specifies that the president and two

- thirds of the board of directors and other managing officers
be U.S. citizens

, that at least 75 percent of the outstanding voting interest be owned by U.S.
citizens , and that the applicant must be under the actual control of U.S. citizens

.

As stated previously, Key Lime is a corporation o rganized under the laws of the S tate of
Colorado

. Three individuals, each of whom is a citizen of the United States, hold Key Lime’s 100,000 outstanding shares of common stock. Mr. Daniel J. Bauer holds 51,000 s hares (51 percent )

, 5 Mr. Clifford D. Honeycutt holds 25,000 s hares (25 percent )

, 6 and Mr. Glen M.

Rich holds 24,000 s hares (24 percent )

. 7

4 As is our practice, prior to making any authority awarded to Key Lime effective, we will require the company to provide third

- party verification that it continues to have access to the financial resources needed to meet our

financial test.

5 Mr. Bauer has been an owner of Key Lime since 1996 and has served as Owner/President of Precision Aircraft since 1984. He developed skills in multiple areas of operations and management, having served as Service Manager of Wings of Denver Flying Club (1983

- 1984), Representative at Cessna Dealership at Aurora Aviation (1982

- 1983), Field Mechanic at Columbia Helicopter (1981), and maintained a fleet of twin and single engine aircraft for Aero Sp ort, Inc. He served in the U

. S

. Navy (1975

- 1979) and holds an Airframe and Powerplant Mechanic license from Portland Community College and a Commercial Instrument Rated Pilot’s license from Western Skyways Flight7

In view of the foregoing, we tentatively find that Key Lime is owned and actually controlled by U.S. citizens, consistent with 49 U.S.C. § 40102(a) ( 15) and is fit, willing, and able to provide commuter operations, subject to conditions

.

OBJECTIONS

We will give interested persons 1 4 days following the service date of this order to show cause why the tentative findings and conclusions set forth here should not be made final ; answers to objections will be due within 7 days thereafter. We expect such persons to direct their objections, if any, to the application s and points at issue and to support such objections with detailed economic analyses. If an oral evidentiary hearing or discovery procedures are requested, the objector should state in detail why such a hearing or di scovery is c onsidered

necessary and what material issues of decisional fact the objector would expect to establish through a hearing or discovery that cannot be established in written pleadings. The objector should consider whether discovery procedures alone would be sufficient to resolve material issues of decisional fact. If so, the type of procedure should be specified ( See Part 302, Rules 19 and 20); if not, the reasons why not should be explained. We will not entertain general, vague, or unsupported objections. If no substantive objections are filed, we will issue an order that will make final our tentative findings and conclusions with respect to Key Lime’s fitness and
certification.

EFFECTIVE COMMUTER AUTHORIZATION CONDITIONS AND LIMITATIONS

In the event t hat we find Key Lime fit, willing, and able to conduct the proposed scheduled service, we will issue to it a Commuter Air Carrier Authorization. However, that authorization will not become effective until the company has fulfilled all of the requirements for effectiveness as set forth in the Terms, Conditions, and Limitations attached to it. Among other things, this
includes (1) our receipt of evidence of Key Lime’s authority from the FAA authorizing such operations , (2) evidence of liability insurance co verage that meets the requirements of section 205.5(b) of our rules

, (3) a statement of changes it may have undergone since its fitness was examined, and (4) evidence that Key Lime has adequate financial resources available to it.

Moreover, given the limi ted scope of Key Lime’s proposed operations, we will impose certain limitations on its authorization to provide scheduled air transportation as a commuter air carrier. Our finding of fitness for Key Lime is based on the operating plans described in its ap plication.

School. In addition to his ownership in Key Lime, Mr. Bauer also owns a 51 percent interest in the following three companies based at Centennial Airpo rt: Precision Aircraft, Inc., a light aircraft maintenance company; Western Aero LLC, a hanger leasing company; and EDB Air, Inc., an aircraft holding/leasing company. Mr. Bauer also owns a 40 percent interest in CBG LLC, an aircraft holding/leasing compa ny, and a 51 percent interest in Flights, Inc., a flight training school.

6 Mr. Honeycutt owns 25 percent of Flights, Inc., and 30 percen t of CBG LLC. He also holds the p ositions of President of Flights, Inc.

, and Manager of CBG LLC.

7 Mr. Rich owns 24 percent of Flights, Inc., and 30 percent of CBG LLC

.8

Should Key Lime desire to acquire and operate large aircraft, 8 our fitness findings, particularly involving the adequacy of Key Lime’s management and financial resources, might no longer apply. Therefore, we propose to limit any authority issu ed to Key Lime to operations conducted using small aircraft. 9 Should Key Lime desire to operate larger aircraft, it must first provide the Department with at least 45

- days advance notice of such plans and provide updated information establishing its fitne ss for such expansion. This limitation will not alter Key Lime’s ability to
increase the size of its on

- demand fleet.

Furthermore, we remind Key Lime of the requirements of 49 U.S.C. § 41110(e). Specifically, that section requires that, once an air carrier is found fit initially, it must remain fit in order to hold its authority. To be assured that commuter air carriers continue to be fit after effective authority has been issued to them, we require that they supply information describing any subseq uent substantial changes they may undergo in areas affecting fitness. Therefore, if Key
Lime is issued an effective Commuter Air Carrier Authorization and should it subsequently propose substantial changes in its ownership, management, or operations, it must first comply with the requirements of section 204.5 of our rules. 10 The compliance of the company with this requirement is essential if we are to c arry out our responsibilities under section 41110(e). 11

Additionally, if Key Lime is granted effective authority, it would be required to submit a detailed progress report, within 45 days following the end of the first year of commuter flight operations,

t o the Air Carrier Fitness Division. The submission of a first year progress report was adopted as policy by the Department to aid in monitoring the fitness of new air carriers. The report should include a description of the air carrier’s current operatio ns (number and type of aircraft, principal markets served, total number of full

- time employees), a summary of how its operations have changed during the year, a discussion of any changes it anticipates from its current operations during its second year, cu rrent financial statements, 12 and a listing of current senior management

8 A large aircraft is defined as any aircraft with an original design capacity of more than 60 passenger seats or an 18,000 pound payload.

9 A s mall aircraft is defined as any aircraft originally designed to have a maximum passenger capacity of less than 60 seats or a payload capacity of no more than 18,000 pounds.

10 The air carrier may contact our Air Carrier Fitness Division to report propose d substantial changes in its operations, ownership, or management, and to determine what additional information, if any, will be required under section 204.5. In addition, by notice dated July 21, 1998, the Department requested air carriers to provide a 3 0

- day advance notification of any proposed change in ownership, restructuring, or recapitalization. If the air carrier fails to file this updated information or if the information fails to demonstrate that the air carrier will continue to be fit upon impl ementation of the substantial change, the Department may take such action as is appropriate, including enforcement action or steps to modify, suspend, or revoke the air carrier's commuter authority.
11 We also remind Key Lime about the requirements of sect ion 204.7 of our rules. This section provides, among other things, that (1) the commuter authority granted to a company shall be revoked if the company does not commence actual flying operations under that authority within one year of the date of the Department's determination of its fitness; (2) if the company commences operations for which i t was found fit and subsequently ceases such operations, it may not resume commuter operations unless its fitness has been redetermined; and (3) if the company does not resume operations within one year of its cessation, its authority shall be revoked for dormancy.
12 These financial statements should include a balance sheet as of the end of the company’s first full year of commuter flight operations and a 12

- month income statement ending that same date.9

and key technical personnel. The air carrier should also be prepared to meet with staff members of the Fitness Division to discuss its current and future operations.

ACCORDINGLY,

1. We direct all interested persons to show cause why we should not issue an order finding that Key Lime Air Corporation is fit, wi lling, and able under 49 U.S.C. § 41738 to provide scheduled passenger service as a commuter air carrier.

2

. We direct any interested persons having objections to the issuance of an order making final any of the proposed findings, conclusions, or the award of authority set forth here to file such objections with the Department of Transportation Dockets, 1200 New Jersey Avenue, S.E., West Building Ground Floor, Rm. W12

- 140, Washington, D.C. 20590, in Docket
DOT

- OST

- 2009

- 0116 and serve them upon all persons listed in Attachment A no later than
14 days after the service date of this order; answers to objections shall be filed no l ater than

7 days thereafter.

3. If timely and properly supported objections are filed, we will accord full consideration to the matters or issues raised by the objections before we take further action. 13

4. In the event that no objections are filed, we will consider all further procedural steps to be waived and we will enter an order making final our tentative findings and conclusions.

5

. We will serve a copy of this order on the persons listed in Attachment A.

6

. We will publish a summary of this orde r in the Federal Register.

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.gov

13 Since we have provided for the filing of objection s to this order, we will not entertain petitions for
reconsideration.

### Attachment



### Specimen



### Terms, Conditions, and Limitations

KEY LIME AIR CORPORA TION

is authorized to engage in scheduled passenger air transportation operations as a commuter air

carrier.

This authority is subject to the following provisions:

(1) The authority to conduct scheduled passenger operations will not become effective until six (business) days after the Department has received the following documents; provid ed

, however , that the Department may stay the effectiveness of this authority at any time prior to that
date:

(a) A copy of the holder's Air Carrier Certificate and Operations Specifications authorizing such operations from the Federal Aviation
Administra tion (FAA).

(b) A certificate of insurance on OST Form 6410 evidencing liability insurance coverage meeting the requirements of 14 CFR 205.5(b) for all of its aircraft.

(c) A statement of any changes the holder has undergone in its ownership, key

personn el, operating plans, financial posture, or compliance history, since the date of the Show Cause Order in this case.

(d) A revised list of pre

- operating expenses already paid and those remaining to be paid, as well as independent verification that the hold er has available to it funds sufficient to cover any remaining pre

- operating expenses and to provide a working capital reserve equal to the operating costs that would be incurred in three months of operations.

(2) Pending receipt of effective authority, t he holder may not accept payment of any kind (i.e., cash, check, or credit card) or issue tickets for scheduled passenger operations, and any advertisement or listing of flights by the holder must prominently state: "This service is subject to receipt of g overnment operating authority."

(3) The holder shall at all times conduct its operations in accordance with the requirements of 14 CFR Part 298 and any other regulations prescribed by the Department of Transportation for the services authorized here, and with such other reasonable terms, conditions, and limitations as the Department of Transportation may prescribe in the public interest.

(4) The holder may not operate aircraft designed to have a maximum passenger capacity of
more than 60 seats or a maxim um payload capacity of more than 18,000 pounds.2

(5) The holder's authority under this certificate is effective only to the extent that such operations are also authorized by the Federal Aviation Administration (FAA), and comply with
all U.S. Government re quirements concerning security, including, but not limited to 49 CFR Part

1544. ∗

(6) The holder shall at all times remain a "Citizen of the United States" as required by 49 U.S.C. 40102(a)(15).

(7) The holder shall maintain in effect liability insurance coverage as required under 14 CFR Part 205. Failure to maintain such insurance coverage will render this authority ineffective, and this or other failure to comply with the provisions of Subtitle VII of Title 49 of the United States Code or the Department 's regulations shall be sufficient grounds to revoke this authority.

(8) In the event that the holder receives effective scheduled passenger authority, the following additional conditions will apply:

(a) The holder may reduce or terminate service at any point or between any two points, subject to compliance with the provisions of 49 U.S.C. 41734 and all orders and regulations issued by the Department of Transportation under that

section.

(b) The holder may not provide scheduled passenger air transportati on to or from Dallas (Love Field), Texas, except within the limits set forth in section 29 of the International Air Transportation Competition Act of 1979, as amended or as modified by any future legislation addressing access restrictions to or from Love

F ield.

(9) Should the holder propose any substantial change in its ownership, management, or operations (as defined in 14 CFR 204.2(l)), it must first comply with the requirements of 14 CFR
204.5.

(10) In the event that the holder does not commence actual flying operations as a commuter air carrier under this authority within one year of the date of the Department's determination of its fitness, its commuter authority shall be revoked for dormancy. Further, in the event that the
holder commences but subsequently ceases all scheduled passenger operations, the authority granted here shall be suspended under the terms of 14 CFR 204.7 and the holder may neither recommence nor advertise such operations unless its fitness to do so has been redetermined by the Department. Moreover, if the holder does not resume such operations within one year of its cessation, its commuter authority shall be revoked for dormancy.

∗ To assure compliance with all applicable U.S. Government requirements concerning security, the holder shall, before commencing any new service (including charter flights) to or from a foreign airport, contact its Principal Security Inspector (PSI) to advise the PSI of its plans and to find out whether the Transportation Security Administration has determined that security is adequate to allow such airport(s) to be served.Attachment A

SERVICE LIST FOR KEY LIME
AIR CORPORATION

CLIFFORD HONEYCUTT
PRESIDENT
KEY LIME AIR CORPORATION
13252 EAST CONTROL TOWER ROAD
ENGLEWOOD COLORADO 80112 GERALD F MURPHY
CROWELL & MORING LLP
1001 PENNSYLVANIA AVNUE NW
WASHINGTON DC 20004

- 2595 MR PETER LYNCH AGC

- 300
ASST CHIEF COUNSEL FOR
ENFORCEMENT
FEDERAL AVIATION ADMINISTRATIO
800 INDEPENDENCE AVE SW
WASHINGTON DC 20591

MR WILLIAM J WEBER
CERTIFICATION SECTION MANAGER
FAA AFS

- 900
45005 AVIATION DRIVE SUITE 131
DULLES VA 20166 CHRISTOPHER A LANG
PRINCIPLE OPERATIONS INSPECTOR
FEDERAL AVIATION ADM INISTRATION
DENVER FSDO
26805 EAST 68 TH AVENUE
DENVER COLORADO 8024 9 OFFICE OF AIRLINE
INFORMATION
DOT/R IT A /BTS
1200 NEW JERSEY AVE SE
WASHINGTON DC 20590