# BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

)

Application of )

)

AVIATION SERVICES, LTD. ) DOCKET DOT-OST-2010-0153 *

(d/b/a FREEDOM AIR (Guam)) )

)

for a Certificate of Public Convenience )

and Necessity (Foreign Passenger )

Charter Service) )

ANSWER OF AVIATION SERVICES, LTD. (d/b/a

FREEDOM AIR (Guam)) TO THE DEPA RTMENT’S INFORMATION REQUEST

Communications with respect to th is document should be sent to:

Gregory P. Cirillo

Wiley Rein LLP

7925 Jones Branch Drive

McLean, Virginia 22102

Ph: 703-905-2800

Fx: 703-905-6701

E: GCirillo@wileyrein.com

September 28, 2010

*/ A substantively identical Answer has b een filed in the related docket DOT-OST-2010-0190

# 1 BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

)

Application of )

)

AVIATION SERVICES, LTD. ) DOCKET DOT-OST-2010-0153

(d/b/a FREEDOM AIR (Guam)) )

)

for a Certificate of Public Convenience )

and Necessity (Foreign Passenger )

Charter Service) )

)

ANSWER OF AVIATION SERVICES, LTD. (d/b/a

FREEDOM AIR (Guam)) TO THE DEPA RTMENT’S INFORMATION REQUEST

On July 14, 2010, Aviation Services, Ltd. (d/b/a Freedom Air (Guam)) (“Freedom

Air”) filed the above-captioned application for a determination of its fitness to conduct

foreign charter air transpor tation. On July 28, 2010, Freedom Air filed a parallel

application for a determination of its f itness to conduct inters tate scheduled air

transportation. See Docket DOT-OST-2010-0190. In connection with its foreign and

interstate applications, on September 13, 2010, Freedom Air received an Information

Request ( see Exhibit A ) from Vanessa R. Balgobin of the Department’s Air Carrier

Fitness Division.

Freedom Air hereby submits the below in formation supplemented by Exhibits A –

G in response to the Department’s Information Request (the “DOT-IR”).

1. DOT-IR: The resume of Mr. James Gazley, indicates that he has some experience

maintaining large aircraft. Please identify the type of large aircraft he has maintained.

The specific response is in the following paragraph. In general response to this

question and the three that follow, as the Department knows, Freedom Air is pursuing a

parallel process with the Fe deral Aviation Administration (“FAA”) to upgrade its Part

121 certificate and operating specifications to permit the operation and maintenance of

the B727 aircraft. This includes satisf ying the FAA as to the employment and

qualifications of persons satisfying the requi rements of 14 C.F.R. Part 119 and otherwise

necessary to support the operati on of the B737 aircraft. As of today, Freedom Air is at

various stages in the hiring pr ocess with the goal of hiring four (4) specialized 737

mechanics and three (3) administrative support personnel for the 737 operations. In

addition, current maintenance personnel at Freedom Air will atte nd specialized 737

# 2 training. Freedom Air is willing to provide sp ecific updates, with confidential treatment

as needed, as hiring progresses.

From November of 1993 to January of 1995, Mr. James Gazley worked for

Pacific Island Aviation as a part time/weekend work assisting with line maintenance and

servicing of a Kitty Hawk Boeing 727. Infe rring that this question relates to Mr.

Gazley’s expanded role resulting from the a ddition of 737 aircraft to the Freedom Air

operating specifications, we note that in s upport of Mr. Gazley, Freedom Air is

recruiting personnel specifically for the ma intenance of that aircraft type.

2. DOT-IR: With respect to the resume fo r Mr. James Jamison, please provide a

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

education and training, including FAA certific ations and license num bers if applicable.

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 au thority, the type of aut hority held should be

noted.

See Exhibit B . Mr. James Jamison also has the following aviation training:

- Air Training Center, Greeley, Colora do, July 1967 to January 1968 - Full time

student; obtained Commercial, Single Engine Land and Certified Flight Instructor

Instrument

- University of Illinois, Champaign-Urbana, Illinois, 1969 (concurrent with

instructor) - Part Time student; obtained multiengine rating

- Burnside Ott Aviation Training Center, Mi ami, Florida, 1970 - Part time Student;

obtained Airline Transport Rating (DC3 type)

- Ag Rotors, Gettysburg, Pennsylvania, 1970 - Part time Student; obtained

Commercial Helicopter followe d by Helicopter Instructor

- Received Single Engine Sea rating in Hibbing, Minnesota during a vacation in

1969

3. DOT-IR: Based on the resume submitted for Mr. Cardiff Walker, Chief Pilot, it

does not appear that he has any experience ope rating large aircraft. Please discuss Mr.

Walker’s qualifications for this position as it pertains to large aircraft operations.

Mr. Cardiff Walker is the current Chief Pilot at Freedom Air. Mr. Walker will

continue to be the Chief Pilot for small airc raft operations. Freedom Air will recruit a

qualified and trained Chief Pilot for the large aircraft (737) operations subject to receipt

of DOT authority requested by the pending applications.

# 3 4. DOT-IR: Please indicate if any of Freedom Air’s current pilots are qualified to

operate B737 aircraft. If not, please disc uss the air carrier’s pl ans to hire qualified

pilots or further trai n its current pilots.

Freedom Air’s current pilots are certified for the aircraft currently in the fleet, and

none are currently qualified to operate B 737 aircraft. Freedom Air has no plans to

upgrade its current pilots into this operation (as they remain necessary for the existing

operation), instead, Freedom Air will hire sixteen (16) trained and qualified pilots to

operate B737 aircraft. Recruiting is underw ay and Freedom Air is willing to provide

updates of this process upon request.

5. DOT-IR: Please provide copies of a ll agreements between Freedom Air, WAI

Asia, Ltd. (“WAI”), and Fly Micronesia Limi ted that have not yet been submitted to the

Department.

Since Freedom Air’s last filing, Freedom Air and Fly Micronesia Limited and

entered into an Agreement extending and superseding th e prior agreements governing

their business relationship. See Exhibit C

.

6. DOT-IR: Please discuss Freedom Air’s pl ans for maintaining the B737 aircraft.

Will aircraft maintenance be performed in-house , or will it be cont racted out? If the

maintenance will be contracted out, please indicate who will perform the maintenance.

The B737 aircraft will be maintained under a standard Boeing maintenance

program, with scheduled and line maintenan ce allocated between qualified Freedom Air

personnel and qualified third party contractors. For example, “A” checks, line

maintenance, PDSC (Pre Departure Service Ch ecks) and routine maintenance will likely

be carried out by Freedom Air maintenance personnel for operations at the Guam base.

Those procedures when undertak en at remote airports, in addition to “C” and further

checks will be contracted to FAA approved facilities and personnel. Freedom Air has

initiated negotiations with Hong Kong Airc raft Engineering Comp any Limited (HAECO)

and with Air Asia in Taipei.

In any event, Freedom Air will provid e maintenance only when it has qualified,

trained and experienced personnel, the necessa ry equipment and facilities, and the FAA

authorization to do so.

7. DOT-IR: Provide a copy of any lease and/ or sublease agreem ents for the B737

aircraft Freedom Air intends to operate.

A fully executed copy of the Letter of Intent outlining the lease of two Boeing

737s from Air Transport Acquisition Corp. (lesso r) to Fly Micronesia (lessee) is attached

as Exhibit D . The initial deposit referenced therein has been placed, and the definitive

# 4 lease agreement is under discussion. As w ith other 737-related commitments, Freedom

Air is limited pending DOT action on the applic ations for authority. Fly Micronesia will

enter into parallel subleases with Freedom Air.

8. DOT-IR: Does WAI intend to market the foreign charter fli ghts as “Freedom

Air”? If not, please state the name u nder which the flights will be marketed.

Fly Micronesia Limited owns the rights to the trade name “Fly Guam” and is

licensing that tradename to Freedom Air for purpo ses of the flights that are the subject of

the applications ( see Exhibit C , Section 2.3). Flights will be marketed and sold under the

name “Fly Guam by Freedom Air” (as illustrate d below), and such or similar livery will

appear on the 737 aircraft. Freedom Air will obtain the necessary “d/b/a” authority and

registrations with local authorities and the DOT. A registration pursu ant to Part 215 of

the Federal Aviation Regulation will be processed prior to any such use.

9. DOT-IR: What percentage of Freedom Air’s annual revenues will come from

business generated by WAI?

As set forth in Freedom Air’s Application for Foreign Passenger Charter

Authority, Exhibit T-2, as confirmed in Exhibit C hereto, Section 2.3, Freedom Air will

earn a fee equal to 1% of the gross revenue of planned jet operations by Freedom Air or

US$12,000 per month, whichever is greater (beginning 6 months after the first

commercial flight).

Based on current 2010 revenues, and assuming operations remained static for the

future (without regard to the 737 operations), total annual revenues would be

approximately $2.5 million ( see Exhibit E ). Freedom Air estimates gross monthly

revenues from the B737 opera tions (excluding the first si x months when Freedom Air

will be paid the fixed $12,000 fee) will be between $4.0 million and $5.0 million in 2011

( see Exhibit F ), resulting in a fee to Freedom Air of $40,000 to $50,000 per month, or

$480,000 to $600,000 per year. Ther efore, approximately 19.2% to 24.0% of Freedom

Air’s projected, annual revenue will come from business ge nerated jointly by Freedom

Air and WAI (Fly Micronesia).

# 5 10. DOT-IR: Freedom Air proposes to conduct in terstate charter fli ghts using larger

aircraft, however, the applicant has not provided an operating proposal for such flights,

nor has the applicant submitt ed forecast financ ial information. Provide such

information.

Freedom Air intends to use the 737 airc raft primarily for charter operations

between foreign countries and certain U. S. territories including Guam and the

Commonwealth of Northern Mariana Islands (CNMI). The 737 operation is premised

and is sustainable solely on the foreign charte r activities described in the applications and

financial forecasts. However, based on decad es of prior experience, Freedom Air is

aware of a periodic on-demand need for larger aircraft for charte r service between and

within the U.S. territories, a nd Freedom Air intends to opport unistically compete for this

service as and when the demand arises and ai rcraft are available. Likely origins and

destinations would include Guam, the CNMI (including Sa ipan, Rota and Tinian) and

Hawaii. Freedom Air may elect to include some or all of these destinations as a part of

its FAA operating specifications. Because interstate charter is to be pursued

opportunistically, on a case-by-case basis, th e financial forecasts do not ascribe any

revenue or costs to this activity.

11. DOT-IR: Please provide current (within 3 months) compiled balance sheets and

income statements for Freedom Air.

A copy of Freedom Air’s compiled balance sheets and income statements for the

period of March 2010 through June 2010 is attached as Exhibit E

.

12. DOT-IR: Freedom Air’s February 28, 2010 ba lance sheet shows a liability of

$1.6 million due to “ASLtd-CNMI.” Please expla in this liability. Al so, state whether or

not this is a current liability, that is, payable within the next 12 months.

Aviation Services (CNMI), Ltd., a CNMI entity, (identified in the February 28,

2010 balance sheet as “ASLtd-CNM I”) is a corporate entity th at is a “sister” company

that is under common control with Freedom Ai r. Mr. Joaquin Flores holds a controlling

interest in both entities. There is an internal, long term liability accrued between

Freedom Air and Aviation Services (CNMI), Lt d. This liability has no fixed payment

schedule and no specific maturity date; accordingly, it is not payable within the next

twelve (12) months.

13. DOT-IR: The forecast financial informat ion that Freedom Air provided is

somewhat unclear. Please provide a revise d forecast of the air carrier’s first year

expenses associated with its large aircraft operation, by month, showing each expense

category, such as fuel, maintenance, salaries, etc. Further, this information should be

broken down between interstate and foreign charter operations.

See Exhibit F

.

# 6 14. DOT-IR: Please identify which of the pre-operating costs have been paid to date

and which costs remain outstanding.

See Exhibit G

.

13190542.1

# FA EXHIBIT A

# FA EXHIBIT B

# 114 Gloria Way, Yona, Guam 96915 ● +1

- 671

- 472

- 8007 

# James Jamison

Aviation Certificates

**•** Airline Transport Pilot

Certificate #1797337

**•** Aircraft Dispatcher

#1797337

**•** Flight Attendant

#3011003

**•** Ground Instructor

#1837476



# Other Certificates

**•** American Red Cross

Instructor



# Education

1972 Master of Arts

University of

Illinois

1965 Bachelor of Arts

Cornell College

Also Attended:

**•** American University

**•** University of Guam 

# EMPLOYMENT HISTORY

1990 to present

Aviation Services Ltd. (D/B/A Freedom Air , FAR 121 and 135 Airlines )

Guam International Airport, Tamuning, Guam

**•** Line Pilot/Chief Pilot/Director of Operations

Directed airlines operations in accordance with requirements of FAR 119

and company procedures

1993 to 1998

Guam Department of Education (concurrent with Freedom Air)

Hagatna, Guam

**•** School Teacher

Administered Classroom

1987 to 1990

Guam Marianas Airway ( FAR 135 Scheduled Airline )

Guam International Airport, Tamuning, Guam

**•** Line Pilot/Director of Operations

Assisted with start

- up of airline and managed operations

1985 to 1987

Air Guam ( FAR 135 Scheduled Airline )

Guam International Airport, Tamuning, Guam

**•** Pilot/Director of Operations

Assisted with start

- up of airline and managed operations

1983 to 1985

Guam Department of Education

Hagatna, Guam

**•** School Teacher

Administered Classroom

1981 to 1983

Pacific Island Aviation ( FAR 121 and 135 Airline ) s

Guam International Airport, Tamuning, Guam

**•** Line Pilot/Chief Pilot

Assisted with merger of airline and Chief Pilot duties

1980 to 1981

TransMicronesia Airways

Guam International Airport, Tamuning, Guam

FAR 135 Airline

**•** Line Pilot/Director of Operations

Line Pilot duties then appointed to Director of Operations

# 114 Gloria Way, Yona, Guam 96915 ● +1

- 671

- 472

- 8007 

# James Jamison

EMPLOYMENT HISTORY (continued from previous page, Page 1)



# 1977 to 1979

General Aviation Services

Mbabane, Swaziland

**•** Pilot

Line Co

- pilot duties

19 77 to 19 79 (concurrent with General Aviation Services)

Manzini Department of Education

Mbabane, Swaziland

**•** School Teacher

A dministered a classroom

19 7 5 to 19 7 6

Alaska Aeronautical (FAR 135 Scheduled Airlines)

Anchorage, Alaska

**•** Pilot

Line Co

- pilot duties

19 7 2 to 19 75

Marist International School

Kobe, Japan

**•** School Teacher

Administered c lassroom

1968 to 1972

University of Illinois

– Institute of Aviation

Champaign, Illinois

**•** Instructor

Administered c lassroom and part

- time research

1965 to 1967

U.S. Army

(varied locations)

**•** Soldier

As per the U.S. Army basic duties: obedience to orders, performance as

assigned, teamwork, appearance and oath to support and defend the

Constitution of the United States against all enemies, foreign and domestic

# FA EXHIBIT C

# FA EXHIBIT D

# FA EXHIBIT E

# FA EXHIBIT F20/9/2010

Revised by: Charles Tse 

## Freedom Air Forecast Income Statement and Operating Assumptions (USD)

(All countries)

Total

Weekly Block Hours 144.33 144.33 144.33 144.33 144.33 144.33 144.33 144.33 144.33 144.33 144.33 144.33 144.33 144.33

Weeks during the month (Revenue) 2.00 5.00 5.00 3.20 4.50 4.00 4.25 5.00 4.00 5.00 4.50 4.00 4.25 5.00 59.70

First 13.5 months

Revenue 15-30 Nov 10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 of Operation

Estimated Y seats Revenue per wk 1,728,000.00 4,320,000.00 4,320,000.00 2,764,800.00 3,888,000.00 3,456,000.00 3,672,000.00 4,320,000.00 3,456,000.00 4,320,000.00 3,888,000.00 3,456,000.00 3,672,000.00 4,320,000.00 51,580,800.00

Estimated F seats Revenue per wk 286,000.00 715,000.00 715,000.00 457,600.00 643,500.00 572,000.00 607,750.00 715,000.00 572,000.00 715,000.00 643,500.00 572,000.00 607,750.00 715,000.00 8,537,100.00

Total Estimated Revenue 2,014,000.00 5,035,000.00 5,035,000.00 3,222,400.00 4,531,500.00 4,028,000.00 4,279,750.00 5,035,000.00 4,028,000.00 5,035,000.00 4,531,500.00 4,028,000.00 4,279,750.00 5,035,000.00 60,117,900.00

Weeks during the month (Cost) 2.00 5.00 5.00 4.00 5.00 4.00 5.00 5.00 4.00 5.00 5.00 4.00 5.00 5.00 63.00

Operating Expenses Per Block Hour

Aircraft Leasing 377.00 108,827.33 272,068.33 272,068.33 217,654.67 272,068.33 217,654.67 272,068.33 272,068.33 217,654.67 272,068.33 272,068.33 217,654.67 272,068.33 272,068.33 3,428,061.00

Direct Maintenance - Airframe 1,190.00 343,513.33 858,783.33 858,783.33 687,026.67 858,783.33 687,026.67 858,783.33 858,783.33 687,026.67 858,783.33 858,783.33 687,026.67 858,783.33 858,783.33 10,820,670.00

Direct Maintenance - Engines 191.00 55,135.33 137,838.33 137,838.33 110,270.67 137,838.33 110,270.67 137,838.33 137,838.33 110,270.67 137,838.33 137,838.33 110,270.67 137,838.33 137,838.33 1,736,763.00

Flight Crew Cost 546.00 157,612.00 394,030.00 394,030.00 315,224.00 394,030.00 315,224.00 394,030.00 394,030.00 315,224.00 394,030.00 394,030.00 315,224.00 394,030.00 394,030.00 4,964,778.00

Fuel Cost 1,800.00 519,600.00 1,299,000.00 1,299,000.00 1,039,200.00 1,299,000.00 1,039,200.00 1,299,000.00 1,299,000.00 1,039,200.00 1,299,000.00 1,299,000.00 1,039,200.00 1,299,000.00 1,299,000.00 16,367,400.00

Ground Handling 430.00 124,126.67 310,316.67 310,316.67 248,253.33 310,316.67 248,253.33 310,316.67 310,316.67 248,253.33 310,316.67 310,316.67 248,253.33 310,316.67 310,316.67 3,909,990.00

Inflight and Catering 480.00 138,560.00 346,400.00 346,400.00 277,120.00 346,400.00 277,120.00 346,400.00 346,400.00 277,120.00 346,400.00 346,400.00 277,120.00 346,400.00 346,400.00 4,364,640.00

Ins 136.00 39,258.67 98,146.67 98,146.67 78,517.33 98,146.67 78,517.33 98,146.67 98,146.67 78,517.33 98,146.67 98,146.67 78,517.33 98,146.67 98,146.67 1,236,648.00

Landing / Parking 365.00 105,363.33 263,408.33 263,408.33 210,726.67 263,408.33 210,726.67 263,408.33 263,408.33 210,726.67 263,408.33 263,408.33 210,726.67 263,408.33 263,408.33 3,318,945.00

Total Operating Expenses 5,515.00 1,591,996.67 3,979,991.67 3,979,991.67 3,183,993.33 3,979,991.67 3,183,993.33 3,979,991.67 3,979,991.67 3,183,993.33 3,979,991.67 3,979,991.67 3,183,993.33 3,979,991.67 3,979,991.67 50,147,895.00

Selling, General and Adminstrative Expenses

Administrative costs 71.70 20,697.40 51,743.50 51,743.50 41,394.80 51,743.50 41,394.80 51,743.50 51,743.50 41,394.80 51,743.50 51,743.50 41,394.80 51,743.50 51,743.50 651,968.10

Overhead (Staffs, Rental) 330.90 95,519.80 238,799.50 238,799.50 191,039.60 238,799.50 191,039.60 238,799.50 238,799.50 191,039.60 238,799.50 238,799.50 191,039.60 238,799.50 238,799.50 3,008,873.70

Sales Cost 204.05 58,902.43 147,256.08 147,256.08 117,804.87 147,256.08 117,804.87 147,256.08 147,256.08 117,804.87 147,256.08 147,256.08 117,804.87 147,256.08 147,256.08 1,855,426.65

Total Selling, General and Admin. Expenses 606.65 175,119.63 437,799.08 437,799.08 350,239.27 437,799.08 350,239.27 437,799.08 437,799.08 350,239.27 437,799.08 437,799.08 350,239.27 437,799.08 437,799.08 5,516,268.45

Total Expenses 6,121.65 1,767,116.30 4,417,790.75 4,417,790.75 3,534,232.60 4,417,790.75 3,534,232.60 4,417,790.75 4,417,790.75 3,534,232.60 4,417,790.75 4,417,790.75 3,534,232.60 4,417,790.75 4,417,790.75 55,664,163.45

Gross Profit / (Loss) 246,883.70 617,209.25 617,209.25 (311,832.60) 113,709.25 493,767.40 (138,040.75) 617,209.25 493,767.40 617,209.25 113,709.25 493,767.40 (138,040.75) 617,209.25 4,453,736.5520/9/2010

Revised by: Charles Tse 

## Freedom Air Forecast Income Statement and Operating Assumptions (USD)

(GUM - ROR)

Total

Weekly Block Hours 11.50 11.50 11.50 11.50 11.50 11.50 11.50 11.50 11.50 11.50 11.50 11.50 11.50 11.50

Weeks during the month (Revenue) 2.00 5.00 5.00 3.20 4.50 4.00 4.25 5.00 4.00 5.00 4.50 4.00 4.25 5.00 59.70

First 13.5 months

Revenue 15-30 Nov 10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 of Operation

Y-Seats (112 seats)

Revenue per seat A 600.00

Estimate load B 90.00

Revenue per flight C = A x B 54,000.00

Weekly Freq. D 3.00

Estimated Y seats Revenue per wk E = C x D 162,000.00 324,000.00 810,000.00 810,000.00 518,400.00 729,000.00 648,000.00 688,500.00 810,000.00 648,000.00 810,000.00 729,000.00 648,000.00 688,500.00 810,000.00 9,671,400.00

F-Seats (12 seats)

Revenue per seat F 1,100.00

Estimate load G 5.00

Revenue per flight H = F x G 5,500.00

Weekly Freq. I 3.00

Estimated F seats Revenue per wk J = H x I 16,500.00 33,000.00 82,500.00 82,500.00 52,800.00 74,250.00 66,000.00 70,125.00 82,500.00 66,000.00 82,500.00 74,250.00 66,000.00 70,125.00 82,500.00 985,050.00

Total Estimated Revenue 178,500.00 357,000.00 892,500.00 892,500.00 571,200.00 803,250.00 714,000.00 758,625.00 892,500.00 714,000.00 892,500.00 803,250.00 714,000.00 758,625.00 892,500.00 10,656,450.00

Weeks during the month (Cost) 2.00 5.00 5.00 4.00 5.00 4.00 5.00 5.00 4.00 5.00 5.00 4.00 5.00 5.00 63.00

Operating Expenses Per Block Hour

Aircraft Leasing 377.00 8,671.00 21,677.50 21,677.50 17,342.00 21,677.50 17,342.00 21,677.50 21,677.50 17,342.00 21,677.50 21,677.50 17,342.00 21,677.50 21,677.50 273,136.50

Direct Maintenance - Airframe 1,190.00 27,370.00 68,425.00 68,425.00 54,740.00 68,425.00 54,740.00 68,425.00 68,425.00 54,740.00 68,425.00 68,425.00 54,740.00 68,425.00 68,425.00 862,155.00

Direct Maintenance - Engines 191.00 4,393.00 10,982.50 10,982.50 8,786.00 10,982.50 8,786.00 10,982.50 10,982.50 8,786.00 10,982.50 10,982.50 8,786.00 10,982.50 10,982.50 138,379.50

Flight Crew Cost 546.00 12,558.00 31,395.00 31,395.00 25,116.00 31,395.00 25,116.00 31,395.00 31,395.00 25,116.00 31,395.00 31,395.00 25,116.00 31,395.00 31,395.00 395,577.00

Fuel Cost 1,800.00 41,400.00 103,500.00 103,500.00 82,800.00 103,500.00 82,800.00 103,500.00 103,500.00 82,800.00 103,500.00 103,500.00 82,800.00 103,500.00 103,500.00 1,304,100.00

Ground Handling 430.00 9,890.00 24,725.00 24,725.00 19,780.00 24,725.00 19,780.00 24,725.00 24,725.00 19,780.00 24,725.00 24,725.00 19,780.00 24,725.00 24,725.00 311,535.00

Inflight and Catering 480.00 11,040.00 27,600.00 27,600.00 22,080.00 27,600.00 22,080.00 27,600.00 27,600.00 22,080.00 27,600.00 27,600.00 22,080.00 27,600.00 27,600.00 347,760.00

Ins 136.00 3,128.00 7,820.00 7,820.00 6,256.00 7,820.00 6,256.00 7,820.00 7,820.00 6,256.00 7,820.00 7,820.00 6,256.00 7,820.00 7,820.00 98,532.00

Landing / Parking 365.00 8,395.00 20,987.50 20,987.50 16,790.00 20,987.50 16,790.00 20,987.50 20,987.50 16,790.00 20,987.50 20,987.50 16,790.00 20,987.50 20,987.50 264,442.50

Total Operating Expenses 5,515.00 126,845.00 317,112.50 317,112.50 253,690.00 317,112.50 253,690.00 317,112.50 317,112.50 253,690.00 317,112.50 317,112.50 253,690.00 317,112.50 317,112.50 3,995,617.50

Selling, General and Adminstrative Expenses

Administrative costs 71.70 1,649.10 4,122.75 4,122.75 3,298.20 4,122.75 3,298.20 4,122.75 4,122.75 3,298.20 4,122.75 4,122.75 3,298.20 4,122.75 4,122.75 51,946.65

Overhead (Staffs, Rental) 330.90 7,610.70 19,026.75 19,026.75 15,221.40 19,026.75 15,221.40 19,026.75 19,026.75 15,221.40 19,026.75 19,026.75 15,221.40 19,026.75 19,026.75 239,737.05

Sales Cost 204.05 4,693.15 11,732.88 11,732.88 9,386.30 11,732.88 9,386.30 11,732.88 11,732.88 9,386.30 11,732.88 11,732.88 9,386.30 11,732.88 11,732.88 147,834.23

Total Selling, General and Admin. Expenses 606.65 13,952.95 34,882.38 34,882.38 27,905.90 34,882.38 27,905.90 34,882.38 34,882.38 27,905.90 34,882.38 34,882.38 27,905.90 34,882.38 34,882.38 439,517.93

Total Expenses 6,121.65 140,797.95 351,994.88 351,994.88 281,595.90 351,994.88 281,595.90 351,994.88 351,994.88 281,595.90 351,994.88 351,994.88 281,595.90 351,994.88 351,994.88 4,435,135.43

Gross Profit / (Loss) 216,202.05 540,505.13 540,505.13 289,604.10 451,255.13 432,404.10 406,630.13 540,505.13 432,404.10 540,505.13 451,255.13 432,404.10 406,630.13 540,505.13 6,221,314.5820/9/2010

Revised by: Charles Tse 

## Freedom Air Forecast Income Statement and Operating Assumptions (USD)

(GUM - HND)

Total

Weekly Block Hours 18.00 18.00 18.00 18.00 18.00 18.00 18.00 18.00 18.00 18.00 18.00 18.00 18.00 18.00

Weeks during the month (Revenue) 2.00 5.00 5.00 3.20 4.50 4.00 4.25 5.00 4.00 5.00 4.50 4.00 4.25 5.00 59.70

First 13.5 months

Revenue 15-30 Nov 10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 of Operation

Y-Seats (112 seats)

Revenue per seat A 400.00

Estimate load B 90.00

Revenue per flight C = A x B 36,000.00

Weekly Freq. D 3.00

Estimated Y seats Revenue per wk E = C x D 108,000.00 216,000.00 540,000.00 540,000.00 345,600.00 486,000.00 432,000.00 459,000.00 540,000.00 432,000.00 540,000.00 486,000.00 432,000.00 459,000.00 540,000.00 6,447,600.00

F-Seats (12 seats)

Revenue per seat F 2,000.00

Estimate load G 5.00

Revenue per flight H = F x G 10,000.00

Weekly Freq. I 3.00

Estimated F seats Revenue per wk J = H x I 30,000.00 60,000.00 150,000.00 150,000.00 96,000.00 135,000.00 120,000.00 127,500.00 150,000.00 120,000.00 150,000.00 135,000.00 120,000.00 127,500.00 150,000.00 1,791,000.00

Total Estimated Revenue 138,000.00 276,000.00 690,000.00 690,000.00 441,600.00 621,000.00 552,000.00 586,500.00 690,000.00 552,000.00 690,000.00 621,000.00 552,000.00 586,500.00 690,000.00 8,238,600.00

Weeks during the month (Cost) 2.00 5.00 5.00 4.00 5.00 4.00 5.00 5.00 4.00 5.00 5.00 4.00 5.00 5.00 63.00

Operating Expenses Per Block Hour

Aircraft Leasing 377.00 13,572.00 33,930.00 33,930.00 27,144.00 33,930.00 27,144.00 33,930.00 33,930.00 27,144.00 33,930.00 33,930.00 27,144.00 33,930.00 33,930.00 427,518.00

Direct Maintenance - Airframe 1,190.00 42,840.00 107,100.00 107,100.00 85,680.00 107,100.00 85,680.00 107,100.00 107,100.00 85,680.00 107,100.00 107,100.00 85,680.00 107,100.00 107,100.00 1,349,460.00

Direct Maintenance - Engines 191.00 6,876.00 17,190.00 17,190.00 13,752.00 17,190.00 13,752.00 17,190.00 17,190.00 13,752.00 17,190.00 17,190.00 13,752.00 17,190.00 17,190.00 216,594.00

Flight Crew Cost 546.00 19,656.00 49,140.00 49,140.00 39,312.00 49,140.00 39,312.00 49,140.00 49,140.00 39,312.00 49,140.00 49,140.00 39,312.00 49,140.00 49,140.00 619,164.00

Fuel Cost 1,800.00 64,800.00 162,000.00 162,000.00 129,600.00 162,000.00 129,600.00 162,000.00 162,000.00 129,600.00 162,000.00 162,000.00 129,600.00 162,000.00 162,000.00 2,041,200.00

Ground Handling 430.00 15,480.00 38,700.00 38,700.00 30,960.00 38,700.00 30,960.00 38,700.00 38,700.00 30,960.00 38,700.00 38,700.00 30,960.00 38,700.00 38,700.00 487,620.00

Inflight and Catering 480.00 17,280.00 43,200.00 43,200.00 34,560.00 43,200.00 34,560.00 43,200.00 43,200.00 34,560.00 43,200.00 43,200.00 34,560.00 43,200.00 43,200.00 544,320.00

Ins 136.00 4,896.00 12,240.00 12,240.00 9,792.00 12,240.00 9,792.00 12,240.00 12,240.00 9,792.00 12,240.00 12,240.00 9,792.00 12,240.00 12,240.00 154,224.00

Landing / Parking 365.00 13,140.00 32,850.00 32,850.00 26,280.00 32,850.00 26,280.00 32,850.00 32,850.00 26,280.00 32,850.00 32,850.00 26,280.00 32,850.00 32,850.00 413,910.00

Total Operating Expenses 5,515.00 198,540.00 496,350.00 496,350.00 397,080.00 496,350.00 397,080.00 496,350.00 496,350.00 397,080.00 496,350.00 496,350.00 397,080.00 496,350.00 496,350.00 6,254,010.00

Selling, General and Adminstrative Expenses

Administrative costs 71.70 2,581.20 6,453.00 6,453.00 5,162.40 6,453.00 5,162.40 6,453.00 6,453.00 5,162.40 6,453.00 6,453.00 5,162.40 6,453.00 6,453.00 81,307.80

Overhead (Staffs, Rental) 330.90 11,912.40 29,781.00 29,781.00 23,824.80 29,781.00 23,824.80 29,781.00 29,781.00 23,824.80 29,781.00 29,781.00 23,824.80 29,781.00 29,781.00 375,240.60

Sales Cost 204.05 7,345.80 18,364.50 18,364.50 14,691.60 18,364.50 14,691.60 18,364.50 18,364.50 14,691.60 18,364.50 18,364.50 14,691.60 18,364.50 18,364.50 231,392.70

Total Selling, General and Admin. Expenses 606.65 21,839.40 54,598.50 54,598.50 43,678.80 54,598.50 43,678.80 54,598.50 54,598.50 43,678.80 54,598.50 54,598.50 43,678.80 54,598.50 54,598.50 687,941.10

Total Expenses 6,121.65 220,379.40 550,948.50 550,948.50 440,758.80 550,948.50 440,758.80 550,948.50 550,948.50 440,758.80 550,948.50 550,948.50 440,758.80 550,948.50 550,948.50 6,941,951.10

Gross Profit / (Loss) 55,620.60 139,051.50 139,051.50 841.20 70,051.50 111,241.20 35,551.50 139,051.50 111,241.20 139,051.50 70,051.50 111,241.20 35,551.50 139,051.50 1,296,648.9020/9/2010

Revised by: Charles Tse 

## Freedom Air Forecast Income Statement and Operating Assumptions (USD)

(GUM - SHA)

Total

Weekly Block Hours 28.00 28.00 28.00 28.00 28.00 28.00 28.00 28.00 28.00 28.00 28.00 28.00 28.00 28.00

Weeks during the month (Revenue) 2.00 5.00 5.00 3.20 4.50 4.00 4.25 5.00 4.00 5.00 4.50 4.00 4.25 5.00 59.70

First 13.5 months

Revenue 15-30 Nov 10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 of Operation

Y-Seats (112 seats)

Revenue per seat A 600.00

Estimate load B 90.00

Revenue per flight C = A x B 54,000.00

Weekly Freq. D 3.00

Estimated Y seats Revenue per wk E = C x D 162,000.00 324,000.00 810,000.00 810,000.00 518,400.00 729,000.00 648,000.00 688,500.00 810,000.00 648,000.00 810,000.00 729,000.00 648,000.00 688,500.00 810,000.00 9,671,400.00

F-Seats (12 seats)

Revenue per seat F 1,900.00

Estimate load G 5.00

Revenue per flight H = F x G 9,500.00

Weekly Freq. I 3.00

Estimated F seats Revenue per wk J = H x I 28,500.00 57,000.00 142,500.00 142,500.00 91,200.00 128,250.00 114,000.00 121,125.00 142,500.00 114,000.00 142,500.00 128,250.00 114,000.00 121,125.00 142,500.00 1,701,450.00

Total Estimated Revenue 190,500.00 381,000.00 952,500.00 952,500.00 609,600.00 857,250.00 762,000.00 809,625.00 952,500.00 762,000.00 952,500.00 857,250.00 762,000.00 809,625.00 952,500.00 11,372,850.00

Weeks during the month (Cost) 2.00 5.00 5.00 4.00 5.00 4.00 5.00 5.00 4.00 5.00 5.00 4.00 5.00 5.00 63.00

Operating Expenses Per Block Hour

Aircraft Leasing 377.00 21,112.00 52,780.00 52,780.00 42,224.00 52,780.00 42,224.00 52,780.00 52,780.00 42,224.00 52,780.00 52,780.00 42,224.00 52,780.00 52,780.00 665,028.00

Direct Maintenance - Airframe 1,190.00 66,640.00 166,600.00 166,600.00 133,280.00 166,600.00 133,280.00 166,600.00 166,600.00 133,280.00 166,600.00 166,600.00 133,280.00 166,600.00 166,600.00 2,099,160.00

Direct Maintenance - Engines 191.00 10,696.00 26,740.00 26,740.00 21,392.00 26,740.00 21,392.00 26,740.00 26,740.00 21,392.00 26,740.00 26,740.00 21,392.00 26,740.00 26,740.00 336,924.00

Flight Crew Cost 546.00 30,576.00 76,440.00 76,440.00 61,152.00 76,440.00 61,152.00 76,440.00 76,440.00 61,152.00 76,440.00 76,440.00 61,152.00 76,440.00 76,440.00 963,144.00

Fuel Cost 1,800.00 100,800.00 252,000.00 252,000.00 201,600.00 252,000.00 201,600.00 252,000.00 252,000.00 201,600.00 252,000.00 252,000.00 201,600.00 252,000.00 252,000.00 3,175,200.00

Ground Handling 430.00 24,080.00 60,200.00 60,200.00 48,160.00 60,200.00 48,160.00 60,200.00 60,200.00 48,160.00 60,200.00 60,200.00 48,160.00 60,200.00 60,200.00 758,520.00

Inflight and Catering 480.00 26,880.00 67,200.00 67,200.00 53,760.00 67,200.00 53,760.00 67,200.00 67,200.00 53,760.00 67,200.00 67,200.00 53,760.00 67,200.00 67,200.00 846,720.00

Ins 136.00 7,616.00 19,040.00 19,040.00 15,232.00 19,040.00 15,232.00 19,040.00 19,040.00 15,232.00 19,040.00 19,040.00 15,232.00 19,040.00 19,040.00 239,904.00

Landing / Parking 365.00 20,440.00 51,100.00 51,100.00 40,880.00 51,100.00 40,880.00 51,100.00 51,100.00 40,880.00 51,100.00 51,100.00 40,880.00 51,100.00 51,100.00 643,860.00

Total Operating Expenses 5,515.00 308,840.00 772,100.00 772,100.00 617,680.00 772,100.00 617,680.00 772,100.00 772,100.00 617,680.00 772,100.00 772,100.00 617,680.00 772,100.00 772,100.00 9,728,460.00

Selling, General and Adminstrative Expenses

Administrative costs 71.70 4,015.20 10,038.00 10,038.00 8,030.40 10,038.00 8,030.40 10,038.00 10,038.00 8,030.40 10,038.00 10,038.00 8,030.40 10,038.00 10,038.00 126,478.80

Overhead (Staffs, Rental) 330.90 18,530.40 46,326.00 46,326.00 37,060.80 46,326.00 37,060.80 46,326.00 46,326.00 37,060.80 46,326.00 46,326.00 37,060.80 46,326.00 46,326.00 583,707.60

Sales Cost 204.05 11,426.80 28,567.00 28,567.00 22,853.60 28,567.00 22,853.60 28,567.00 28,567.00 22,853.60 28,567.00 28,567.00 22,853.60 28,567.00 28,567.00 359,944.20

Total Selling, General and Admin. Expenses 606.65 33,972.40 84,931.00 84,931.00 67,944.80 84,931.00 67,944.80 84,931.00 84,931.00 67,944.80 84,931.00 84,931.00 67,944.80 84,931.00 84,931.00 1,070,130.60

Total Expenses 6,121.65 342,812.40 857,031.00 857,031.00 685,624.80 857,031.00 685,624.80 857,031.00 857,031.00 685,624.80 857,031.00 857,031.00 685,624.80 857,031.00 857,031.00 10,798,590.60

Gross Profit / (Loss) 38,187.60 95,469.00 95,469.00 (76,024.80) 219.00 76,375.20 (47,406.00) 95,469.00 76,375.20 95,469.00 219.00 76,375.20 (47,406.00) 95,469.00 574,259.4020/9/2010

Revised by: Charles Tse 

## Freedom Air Forecast Income Statement and Operating Assumptions (USD)

(GUM - TPE)

Total

Weekly Block Hours 21.50 21.50 21.50 21.50 21.50 21.50 21.50 21.50 21.50 21.50 21.50 21.50 21.50 21.50

Weeks during the month (Revenue) 2.00 5.00 5.00 3.20 4.50 4.00 4.25 5.00 4.00 5.00 4.50 4.00 4.25 5.00 59.70

First 13.5 months

Revenue 15-30 Nov 10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 of Operation

Y-Seats (112 seats)

Revenue per seat A 400.00

Estimate load B 90.00

Revenue per flight C = A x B 36,000.00

Weekly Freq. D 3.00

Estimated Y seats Revenue per wk E = C x D 108,000.00 216,000.00 540,000.00 540,000.00 345,600.00 486,000.00 432,000.00 459,000.00 540,000.00 432,000.00 540,000.00 486,000.00 432,000.00 459,000.00 540,000.00 6,447,600.00

F-Seats (12 seats)

Revenue per seat F 1,800.00

Estimate load G 5.00

Revenue per flight H = F x G 9,000.00

Weekly Freq. I 3.00

Estimated F seats Revenue per wk J = H x I 27,000.00 54,000.00 135,000.00 135,000.00 86,400.00 121,500.00 108,000.00 114,750.00 135,000.00 108,000.00 135,000.00 121,500.00 108,000.00 114,750.00 135,000.00 1,611,900.00

Total Estimated Revenue 135,000.00 270,000.00 675,000.00 675,000.00 432,000.00 607,500.00 540,000.00 573,750.00 675,000.00 540,000.00 675,000.00 607,500.00 540,000.00 573,750.00 675,000.00 8,059,500.00

Weeks during the month (Cost) 2.00 5.00 5.00 4.00 5.00 4.00 5.00 5.00 4.00 5.00 5.00 4.00 5.00 5.00 63.00

Operating Expenses Per Block Hour

Aircraft Leasing 377.00 16,211.00 40,527.50 40,527.50 32,422.00 40,527.50 32,422.00 40,527.50 40,527.50 32,422.00 40,527.50 40,527.50 32,422.00 40,527.50 40,527.50 510,646.50

Direct Maintenance - Airframe 1,190.00 51,170.00 127,925.00 127,925.00 102,340.00 127,925.00 102,340.00 127,925.00 127,925.00 102,340.00 127,925.00 127,925.00 102,340.00 127,925.00 127,925.00 1,611,855.00

Direct Maintenance - Engines 191.00 8,213.00 20,532.50 20,532.50 16,426.00 20,532.50 16,426.00 20,532.50 20,532.50 16,426.00 20,532.50 20,532.50 16,426.00 20,532.50 20,532.50 258,709.50

Flight Crew Cost 546.00 23,478.00 58,695.00 58,695.00 46,956.00 58,695.00 46,956.00 58,695.00 58,695.00 46,956.00 58,695.00 58,695.00 46,956.00 58,695.00 58,695.00 739,557.00

Fuel Cost 1,800.00 77,400.00 193,500.00 193,500.00 154,800.00 193,500.00 154,800.00 193,500.00 193,500.00 154,800.00 193,500.00 193,500.00 154,800.00 193,500.00 193,500.00 2,438,100.00

Ground Handling 430.00 18,490.00 46,225.00 46,225.00 36,980.00 46,225.00 36,980.00 46,225.00 46,225.00 36,980.00 46,225.00 46,225.00 36,980.00 46,225.00 46,225.00 582,435.00

Inflight and Catering 480.00 20,640.00 51,600.00 51,600.00 41,280.00 51,600.00 41,280.00 51,600.00 51,600.00 41,280.00 51,600.00 51,600.00 41,280.00 51,600.00 51,600.00 650,160.00

Ins 136.00 5,848.00 14,620.00 14,620.00 11,696.00 14,620.00 11,696.00 14,620.00 14,620.00 11,696.00 14,620.00 14,620.00 11,696.00 14,620.00 14,620.00 184,212.00

Landing / Parking 365.00 15,695.00 39,237.50 39,237.50 31,390.00 39,237.50 31,390.00 39,237.50 39,237.50 31,390.00 39,237.50 39,237.50 31,390.00 39,237.50 39,237.50 494,392.50

Total Operating Expenses 5,515.00 237,145.00 592,862.50 592,862.50 474,290.00 592,862.50 474,290.00 592,862.50 592,862.50 474,290.00 592,862.50 592,862.50 474,290.00 592,862.50 592,862.50 7,470,067.50

Selling, General and Adminstrative Expenses

Administrative costs 71.70 3,083.10 7,707.75 7,707.75 6,166.20 7,707.75 6,166.20 7,707.75 7,707.75 6,166.20 7,707.75 7,707.75 6,166.20 7,707.75 7,707.75 97,117.65

Overhead (Staffs, Rental) 330.90 14,228.70 35,571.75 35,571.75 28,457.40 35,571.75 28,457.40 35,571.75 35,571.75 28,457.40 35,571.75 35,571.75 28,457.40 35,571.75 35,571.75 448,204.05

Sales Cost 204.05 8,774.15 21,935.38 21,935.38 17,548.30 21,935.38 17,548.30 21,935.38 21,935.38 17,548.30 21,935.38 21,935.38 17,548.30 21,935.38 21,935.38 276,385.73

Total Selling, General and Admin. Expenses 606.65 26,085.95 65,214.88 65,214.88 52,171.90 65,214.88 52,171.90 65,214.88 65,214.88 52,171.90 65,214.88 65,214.88 52,171.90 65,214.88 65,214.88 821,707.43

Total Expenses 6,121.65 263,230.95 658,077.38 658,077.38 526,461.90 658,077.38 526,461.90 658,077.38 658,077.38 526,461.90 658,077.38 658,077.38 526,461.90 658,077.38 658,077.38 8,291,774.93

Gross Profit / (Loss) 6,769.05 16,922.63 16,922.63 (94,461.90) (50,577.38) 13,538.10 (84,327.38) 16,922.63 13,538.10 16,922.63 (50,577.38) 13,538.10 (84,327.38) 16,922.63 (232,274.93)20/9/2010

Revised by: Charles Tse 

## Freedom Air Forecast Income Statement and Operating Assumptions (USD)

(GUM - HKG)

Total

Weekly Block Hours 36.00 36.00 36.00 36.00 36.00 36.00 36.00 36.00 36.00 36.00 36.00 36.00 36.00 36.00

Weeks during the month (Revenue) 2.00 5.00 5.00 3.20 4.50 4.00 4.25 5.00 4.00 5.00 4.50 4.00 4.25 5.00 59.70

First 13.5 months

Revenue 15-30 Nov 10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 of Operation

Y-Seats (112 seats)

Revenue per seat A 500.00

Estimate load B 90.00

Revenue per flight C = A x B 45,000.00

Weekly Freq. D 4.00

Estimated Y seats Revenue per wk E = C x D 180,000.00 360,000.00 900,000.00 900,000.00 576,000.00 810,000.00 720,000.00 765,000.00 900,000.00 720,000.00 900,000.00 810,000.00 720,000.00 765,000.00 900,000.00 10,746,000.00

F-Seats (12 seats)

Revenue per seat F 1,100.00

Estimate load G 5.00

Revenue per flight H = F x G 5,500.00

Weekly Freq. I 4.00

Estimated F seats Revenue per wk J = H x I 22,000.00 44,000.00 110,000.00 110,000.00 70,400.00 99,000.00 88,000.00 93,500.00 110,000.00 88,000.00 110,000.00 99,000.00 88,000.00 93,500.00 110,000.00 1,313,400.00

Total Estimated Revenue 202,000.00 404,000.00 1,010,000.00 1,010,000.00 646,400.00 909,000.00 808,000.00 858,500.00 1,010,000.00 808,000.00 1,010,000.00 909,000.00 808,000.00 858,500.00 1,010,000.00 12,059,400.00

Weeks during the month (Cost) 2.00 5.00 5.00 4.00 5.00 4.00 5.00 5.00 4.00 5.00 5.00 4.00 5.00 5.00 63.00

Operating Expenses Per Block Hour

Aircraft Leasing 377.00 27,144.00 67,860.00 67,860.00 54,288.00 67,860.00 54,288.00 67,860.00 67,860.00 54,288.00 67,860.00 67,860.00 54,288.00 67,860.00 67,860.00 855,036.00

Direct Maintenance - Airframe 1,190.00 85,680.00 214,200.00 214,200.00 171,360.00 214,200.00 171,360.00 214,200.00 214,200.00 171,360.00 214,200.00 214,200.00 171,360.00 214,200.00 214,200.00 2,698,920.00

Direct Maintenance - Engines 191.00 13,752.00 34,380.00 34,380.00 27,504.00 34,380.00 27,504.00 34,380.00 34,380.00 27,504.00 34,380.00 34,380.00 27,504.00 34,380.00 34,380.00 433,188.00

Flight Crew Cost 546.00 39,312.00 98,280.00 98,280.00 78,624.00 98,280.00 78,624.00 98,280.00 98,280.00 78,624.00 98,280.00 98,280.00 78,624.00 98,280.00 98,280.00 1,238,328.00

Fuel Cost 1,800.00 129,600.00 324,000.00 324,000.00 259,200.00 324,000.00 259,200.00 324,000.00 324,000.00 259,200.00 324,000.00 324,000.00 259,200.00 324,000.00 324,000.00 4,082,400.00

Ground Handling 430.00 30,960.00 77,400.00 77,400.00 61,920.00 77,400.00 61,920.00 77,400.00 77,400.00 61,920.00 77,400.00 77,400.00 61,920.00 77,400.00 77,400.00 975,240.00

Inflight and Catering 480.00 34,560.00 86,400.00 86,400.00 69,120.00 86,400.00 69,120.00 86,400.00 86,400.00 69,120.00 86,400.00 86,400.00 69,120.00 86,400.00 86,400.00 1,088,640.00

Ins 136.00 9,792.00 24,480.00 24,480.00 19,584.00 24,480.00 19,584.00 24,480.00 24,480.00 19,584.00 24,480.00 24,480.00 19,584.00 24,480.00 24,480.00 308,448.00

Landing / Parking 365.00 26,280.00 65,700.00 65,700.00 52,560.00 65,700.00 52,560.00 65,700.00 65,700.00 52,560.00 65,700.00 65,700.00 52,560.00 65,700.00 65,700.00 827,820.00

Total Operating Expenses 5,515.00 397,080.00 992,700.00 992,700.00 794,160.00 992,700.00 794,160.00 992,700.00 992,700.00 794,160.00 992,700.00 992,700.00 794,160.00 992,700.00 992,700.00 12,508,020.00

Selling, General and Adminstrative Expenses

Administrative costs 71.70 5,162.40 12,906.00 12,906.00 10,324.80 12,906.00 10,324.80 12,906.00 12,906.00 10,324.80 12,906.00 12,906.00 10,324.80 12,906.00 12,906.00 162,615.60

Overhead (Staffs, Rental) 330.90 23,824.80 59,562.00 59,562.00 47,649.60 59,562.00 47,649.60 59,562.00 59,562.00 47,649.60 59,562.00 59,562.00 47,649.60 59,562.00 59,562.00 750,481.20

Sales Cost 204.05 14,691.60 36,729.00 36,729.00 29,383.20 36,729.00 29,383.20 36,729.00 36,729.00 29,383.20 36,729.00 36,729.00 29,383.20 36,729.00 36,729.00 462,785.40

Total Selling, General and Admin. Expenses 606.65 43,678.80 109,197.00 109,197.00 87,357.60 109,197.00 87,357.60 109,197.00 109,197.00 87,357.60 109,197.00 109,197.00 87,357.60 109,197.00 109,197.00 1,375,882.20

Total Expenses 6,121.65 440,758.80 1,101,897.00 1,101,897.00 881,517.60 1,101,897.00 881,517.60 1,101,897.00 1,101,897.00 881,517.60 1,101,897.00 1,101,897.00 881,517.60 1,101,897.00 1,101,897.00 13,883,902.20

Gross Profit / (Loss) (36,758.80) (91,897.00) (91,897.00) (235,117.60) (192,897.00) (73,517.60) (243,397.00) (91,897.00) (73,517.60) (91,897.00) (192,897.00) (73,517.60) (243,397.00) (91,897.00) (1,824,502.20)20/9/2010

Revised by: Charles Tse 

## Freedom Air Forecast Income Statement and Operating Assumptions (USD)

(GUM - MNL)

Total

Weekly Block Hours 29.33 29.33 29.33 29.33 29.33 29.33 29.33 29.33 29.33 29.33 29.33 29.33 29.33 29.33

Weeks during the month (Revenue) 2.00 5.00 5.00 3.20 4.50 4.00 4.25 5.00 4.00 5.00 4.50 4.00 4.25 5.00 59.70

First 13.5 months

Revenue 15-30 Nov 10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 of Operation

Y-Seats (112 seats)

Revenue per seat A 400.00

Estimate load B 90.00

Revenue per flight C = A x B 36,000.00

Weekly Freq. D 4.00

Estimated Y seats Revenue per wk E = C x D 144,000.00 288,000.00 720,000.00 720,000.00 460,800.00 648,000.00 576,000.00 612,000.00 720,000.00 576,000.00 720,000.00 648,000.00 576,000.00 612,000.00 720,000.00 8,596,800.00

F-Seats (12 seats)

Revenue per seat F 950.00

Estimate load G 5.00

Revenue per flight H = F x G 4,750.00

Weekly Freq. I 4.00

Estimated F seats Revenue per wk J = H x I 19,000.00 38,000.00 95,000.00 95,000.00 60,800.00 85,500.00 76,000.00 80,750.00 95,000.00 76,000.00 95,000.00 85,500.00 76,000.00 80,750.00 95,000.00 1,134,300.00

Total Estimated Revenue 163,000.00 326,000.00 815,000.00 815,000.00 521,600.00 733,500.00 652,000.00 692,750.00 815,000.00 652,000.00 815,000.00 733,500.00 652,000.00 692,750.00 815,000.00 9,731,100.00

Weeks during the month (Cost) 2.00 5.00 5.00 4.00 5.00 4.00 5.00 5.00 4.00 5.00 5.00 4.00 5.00 5.00 63.00

Operating Expenses Per Block Hour

Aircraft Leasing 377.00 22,117.33 55,293.33 55,293.33 44,234.67 55,293.33 44,234.67 55,293.33 55,293.33 44,234.67 55,293.33 55,293.33 44,234.67 55,293.33 55,293.33 696,696.00

Direct Maintenance - Airframe 1,190.00 69,813.33 174,533.33 174,533.33 139,626.67 174,533.33 139,626.67 174,533.33 174,533.33 139,626.67 174,533.33 174,533.33 139,626.67 174,533.33 174,533.33 2,199,120.00

Direct Maintenance - Engines 191.00 11,205.33 28,013.33 28,013.33 22,410.67 28,013.33 22,410.67 28,013.33 28,013.33 22,410.67 28,013.33 28,013.33 22,410.67 28,013.33 28,013.33 352,968.00

Flight Crew Cost 546.00 32,032.00 80,080.00 80,080.00 64,064.00 80,080.00 64,064.00 80,080.00 80,080.00 64,064.00 80,080.00 80,080.00 64,064.00 80,080.00 80,080.00 1,009,008.00

Fuel Cost 1,800.00 105,600.00 264,000.00 264,000.00 211,200.00 264,000.00 211,200.00 264,000.00 264,000.00 211,200.00 264,000.00 264,000.00 211,200.00 264,000.00 264,000.00 3,326,400.00

Ground Handling 430.00 25,226.67 63,066.67 63,066.67 50,453.33 63,066.67 50,453.33 63,066.67 63,066.67 50,453.33 63,066.67 63,066.67 50,453.33 63,066.67 63,066.67 794,640.00

Inflight and Catering 480.00 28,160.00 70,400.00 70,400.00 56,320.00 70,400.00 56,320.00 70,400.00 70,400.00 56,320.00 70,400.00 70,400.00 56,320.00 70,400.00 70,400.00 887,040.00

Ins 136.00 7,978.67 19,946.67 19,946.67 15,957.33 19,946.67 15,957.33 19,946.67 19,946.67 15,957.33 19,946.67 19,946.67 15,957.33 19,946.67 19,946.67 251,328.00

Landing / Parking 365.00 21,413.33 53,533.33 53,533.33 42,826.67 53,533.33 42,826.67 53,533.33 53,533.33 42,826.67 53,533.33 53,533.33 42,826.67 53,533.33 53,533.33 674,520.00

Total Operating Expenses 5,515.00 323,546.67 808,866.67 808,866.67 647,093.33 808,866.67 647,093.33 808,866.67 808,866.67 647,093.33 808,866.67 808,866.67 647,093.33 808,866.67 808,866.67 10,191,720.00

Selling, General and Adminstrative Expenses

Administrative costs 71.70 4,206.40 10,516.00 10,516.00 8,412.80 10,516.00 8,412.80 10,516.00 10,516.00 8,412.80 10,516.00 10,516.00 8,412.80 10,516.00 10,516.00 132,501.60

Overhead (Staffs, Rental) 330.90 19,412.80 48,532.00 48,532.00 38,825.60 48,532.00 38,825.60 48,532.00 48,532.00 38,825.60 48,532.00 48,532.00 38,825.60 48,532.00 48,532.00 611,503.20

Sales Cost 204.05 11,970.93 29,927.33 29,927.33 23,941.87 29,927.33 23,941.87 29,927.33 29,927.33 23,941.87 29,927.33 29,927.33 23,941.87 29,927.33 29,927.33 377,084.40

Total Selling, General and Admin. Expenses 606.65 35,590.13 88,975.33 88,975.33 71,180.27 88,975.33 71,180.27 88,975.33 88,975.33 71,180.27 88,975.33 88,975.33 71,180.27 88,975.33 88,975.33 1,121,089.20

Total Expenses 6,121.65 359,136.80 897,842.00 897,842.00 718,273.60 897,842.00 718,273.60 897,842.00 897,842.00 718,273.60 897,842.00 897,842.00 718,273.60 897,842.00 897,842.00 11,312,809.20

Gross Profit / (Loss) (33,136.80) (82,842.00) (82,842.00) (196,673.60) (164,342.00) (66,273.60) (205,092.00) (82,842.00) (66,273.60) (82,842.00) (164,342.00) (66,273.60) (205,092.00) (82,842.00) (1,581,709.20)

# FA EXHIBIT G

# For the year 2010 / 2011

A/C: Payments Date:

Prepared by: Charles Tse

Rate: 7.8

HK$ USD

Aircrafts deposit 1,560,241.18 200,030.92

Adminstrative and Management 1,220,583.09 156,485.01

Aircraft Maintenance & Management Software 234,000.00 30,000.00

Bank Charges 200.62 25.72

Business plan presentation 3,082.17 395.15

Business Trips & Accomodation 166,067.73 21,290.73

Construction works 117,442.57 15,056.74

Consultation fee - draft manual 555,664.04 71,238.98

Design & Production of Air Plane Models 19,690.91 2,524.48

Fix assets 48,330.75 6,196.25

Incorporation fees 31,676.81 4,061.13

Labour & Allowances 38,937.68 4,992.01

Media & Marketing 24,030.00 3,080.77

Office Rental 188,781.40 24,202.74

PAX reservation system 312,338.29 40,043.37

Professional service - Legal fees 576,803.06 73,949.11

Staff trainings 48,496.50 6,217.50

5,146,366.80 659,790.62

Professional service - Legal fees 372,927.91 47,811.27

Construction works 78,000.00 10,000.00

450,927.91 57,811.27 

# Fly Micronesia Ltd

22/9/2010

Payments already paid

Pending for payments