Order 2011

- 9

- 2 UNI TED STATES OF AMERI CA DEPARTMENT OF TRANSPORTATI ON OFFICE OF THE SECRETARY WASHI NGTON, D.C. Is sued by the Department of Transportation on the 2 nd day

of September, 2011 Served: September 2, 2011
Ap plication of
**SERVICIOS A É**  **REOS PROFESSIONALES , S.A.**  Docket DOT

- OST

- 1997

- 3077

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

**ORDER TO SHOW CAUSE Summary**  By this order we tentatively

f ind 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

1 5, 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 purs u ing judicial co llection measures. EFL stated that the

1 By Notice of Action Taken , d ated February 26, 2008, in this Docket, w e renew ed 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 CF R Part 377 of the Department’s rules.2

accounts for SAP in the U nited States and Dominican Republic have been seized , and that SAP cannot pay

its creditors, including EFL . EFL further stated that S AP’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 Gove rnment had determined that it was fit to be an air carrier and to hold a Dominican air carrier certificate and operations specifications. I t stated that all of its personnel are fully qualified, and that while its Board of Directors has changed, its owner ship 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. 2 EFL stated that SAP had failed to provide any evidence of its financial fitness; that it questions the employ ment status of the new Board members SAP identified; and that the court judgment at issue here is final and not appealable. Finally , EFL stated t hat 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 manageri al 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 I nternational Av iation, 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. In stead , on April 4, 2011, SAP filed a ple ading requesting an extension of at least 30 day s 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 dor mancy waiver,” stating that it was in the process of reorganizing its operations, management personnel, equipment and facilities. SAP stated that this process w ould take several month s to be completed, and that it wa s requesting further extension so it c o uld “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, EFLfiled 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 requ est 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 f

indings 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 ownersh ip 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 i ts 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 conclu de 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 day s after the date of service of this order, file with the Department and serve on the parties to

3 Given our proposed action here, w e are also tentatively dismissing SAP’s June 1, 2011, motion for a “temporary dorm ancy 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 day s thereafter; 4
3 . I f 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 g rant the March 4, 2010, motion of Embraer Finance L td. for leave to file; and 6

. We will serve a copy

of this order on Servicios Aéreos Professionales, S.A.; Embraer Finance Lt d.; the Embassy

of the Dominican Republic in Washington, D.C. ; the Department of State ; and the Federal Aviation Administration. By : SUSAN L . KURL AND Assistant Secretary

for Aviation and I nternational Affairs

(SEAL )
An electronic version of this document is available on the World Wide Web at: http://www.regulations.gov

4 Sinc e provision is made for the filing of objections to this order, petitions for reconsideration w ill not be entertained.