Order 2011-9-2

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 2

nd day of September, 2011

Served: September 2, 2011

Application of

SERVICIOS AÉREOS PROFESSIONALES, S.A. Docket DOT-OST-1997-3077

 

 

for renewal of an exemption under 49 U.S.C. §40109 

ORDER TO SHOW CAUSE

Summary

By this order we tentatively find that we should deny the request of Servicios Aéreos 

Professionales, S.A. (SAP), a foreign air carrier of the Dominican Republic, to renew its 

exemption authority to conduct certain operations to and from the United States.

Application

By application filed January 29, 2010, SAP requests renewal of its current exemption from 

49 U.S.C. §41301 to engage in charter foreign air transportation of persons and property between 

the Dominican Republic and the United States.1

Responsive Pleadings

On February 15, 2010, Embraer Finance Ltd. (EFL) filed an answer in opposition to SAP’s 

request. EFL stated that “SAP is not financially fit, SAP does not have the requisite managerial 

competence, and SAP has shown that it does not comply or intend to comply with U.S. laws or 

regulations or U.S. court orders.” EFL stated that in 2008 and 2009, it obtained a final judgment 

against SAP for over $3 million in the Supreme Court for the County and State of New York, 

and that since that time it has been pursuing judicial collection measures. EFL stated that the 

 

1 By Notice of Action Taken, dated February 26, 2008, in this Docket, we renewed SAP’s existing exemption 

authority through February 10, 2010. This authority remains in effect under the provisions of the Administrative 

Procedure Act (5 U.S.C. 558(a)) and 14 CFR Part 377 of the Department’s rules.
2

accounts for SAP in the United States and Dominican Republic have been seized, and that SAP 

cannot pay its creditors, including EFL. EFL further stated that SAP’s President and Secretary

have resigned, and that the identity and citizenship of its current officers are unclear. EFL stated

that SAP did not inform the Department of its current financial status or change in ownership and 

control. 

On February 25, 2010, SAP filed a reply, stating that the Dominican Government had determined 

that it was fit to be an air carrier and to hold a Dominican air carrier certificate and operations 

specifications. It stated that all of its personnel are fully qualified, and that while its Board of 

Directors has changed, its ownership remains unchanged. SAP further stated that the civil 

judgment in favor of EFL has nothing to do with Department licensing matters, and that it is 

attempting to continue litigation in that case. 

On March 4, 2010, EFL filed an additional pleading.2EFL stated that SAP had failed to provide 

any evidence of its financial fitness; that it questions the employment status of the new Board 

members SAP identified; and that the court judgment at issue here is final and not appealable. 

Finally, EFL stated that the fact that SAP holds Dominican-issued authority does not compel the 

Department to grant economic authority to the carrier.

On September 27, 2010, EFL filed a letter in the Docket again challenging SAP’s ownership and 

control, financial and managerial qualifications, and stating that we should not allow SAP to 

continue operations under the terms of the Administrative Procedure Act.

Department Request for Additional Information

By letter dated March 23, 2011, the Director, Office of International Aviation, sent SAP a letter 

in which he noted that the record in this proceeding had raised questions concerning the 

ownership and control, and financial and managerial qualifications, of the carrier, and asked that 

it provide, within three weeks of the date of his letter, various evidentiary information described 

in 14 CFR §211.20 concerning these matters.

Additional Responsive Pleadings

SAP did not file the requested information within the requested three weeks. Instead, on April 4, 

2011, SAP filed a pleading requesting an extension of at least 30 days to supply the information 

we requested, stating that, because it was completing tax returns for its government, it would 

need the additional time.

On April 14, 2011, SAP filed a motion for a “temporary dormancy waiver,” stating that it was in 

the process of reorganizing its operations, management personnel, equipment and facilities. SAP 

stated that this process would take several months to be completed, and that it was requesting 

further extension so it could “complete its reorganization and can initiate again commercial 

operations to the United States.”

 

2 EFL accompanied its pleading with a motion to file. We will grant the motion.
3

On June 13, 2011, EFL filed a reply to SAP’s motion. EFL stated that a dormancy waiver is 

relief that is not available to foreign air carriers under the Department’s rules, and, in any event, 

that SAP cannot avoid its obligation to provide the information the Department requested.

Tentative Findings and Conclusions

We tentatively find and conclude that the public interest warrants that we deny SAP’s request in 

this Docket to renew its exemption authority.

3

 This action, if finalized, will terminate the 

authority held by SAP to conduct services in foreign air transportation to and from the United 

States.

Under the provisions of 49 U.S.C. § 40109, in order to grant a request by a foreign air carrier for 

exemption authority to conduct operations in foreign air transportation, we must find that the 

requested authority is consistent with the public interest. Central to that public interest 

determination are findings concerning the foreign carrier’s operational and financial 

qualifications and its ownership.

Our March 23, 2011, letter to SAP indicated that the record in this proceeding was not sufficient 

for us to conclude that SAP’s qualifications and ownership remained as they had been when we 

took our earlier actions granting the carrier exemption authority. SAP’s failure to provide this 

vital information to the Department precludes us from making the necessary public interest 

findings to act favorably on its renewal application. Under these circumstances, and in view of 

the carrier’s statement in the record that it is undergoing a major reorganization with a goal of 

reintroducing U.S. operations, we tentatively find that renewal of its exemption authority would 

not be consistent with the public interest. Rather, we tentatively find that denial of its request, in 

the circumstances presented, is required in the public interest.

In view of the foregoing and all facts of record, we tentatively find and conclude that:

1. The exemption application of SAP in this Docket, and its motion for a dormancy waiver,

should be denied; and 

2. The action described above should become effective immediately upon issuance of an order 

finalizing our tentative decision in this proceeding.

ACCORDINGLY,

1. We direct all interested persons to show cause why our tentative decision on the application of 

Servicios Aéreos Professionales, S.A., described above, should not be made final;

2. Any interested person objecting to the issuance of an order making final our tentative findings 

and conclusions with respect to the applicant’s request shall, no later than fourteen (14) calendar 

days after the date of service of this order, file with the Department and serve on the parties to

 

3 Given our proposed action here, we are also tentatively dismissing SAP’s June 1, 2011, motion for a “temporary 

dormancy waiver.”
4

this proceeding, a statement of objections specifying the part or parts of the tentative findings and 

conclusions objected to, together with a summary of testimony, statistical data, and concrete 

evidence to be relied upon in support of the objections; if objections are filed, answers to 

objections are due no later than seven (7) calendar days thereafter;4

3. If timely and properly supported objections are filed, we will give further consideration to the 

matters and issues raised by the objections before we take further action;

4. In the event no objections are filed, all further procedural steps shall be deemed waived, and 

the Department will enter an order which will make final our tentative findings and conclusions 

set forth in this order; 

5. We grant the March 4, 2010, motion of Embraer Finance Ltd. for leave to file; and

6. We will serve a copy of this order on Servicios Aéreos Professionales, S.A.; Embraer Finance 

Ltd.; the Embassy of the Dominican Republic in Washington, D.C.; the Department of State; and 

the Federal Aviation Administration.

By:

SUSAN L. KURLAND

Assistant Secretary for Aviation

and International Affairs

(SEAL)

An electronic version of this document is available on the World Wide Web at:

http://www.regulations.gov

 

4

Since provision is made for the filing of objections to this order, petitions for reconsideration will not be 

entertained.