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### BEFORE THE DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C.

__________________________________________ ) In the matter of the ) Application of ) ) **SCOTT AIR, LLC** ) Docket DOT- OST - 2012 - 0178 ) For a certificate of public convenience ) and necessity under 49 U.S.C. § 41102 ) to engage in interstate scheduled air ) transportation of persons, property and mail ) __________________________________________)

RESPONSE OF THE KETCHIKAN CARRIERS TO T HE ANSWER OF SCOTT AIR, LLC

Communications with respect to this document should be addressed to: Hank Myers P.O. Box 7142 Bellevue, WA 98008 - 1142

(425) 429 - 3454 hank@mtcworld.com June 2 4, 20131 

### BEFORE THE DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C.

__________________________________________ ) In the matter of the ) Application of ) ) **SCOTT AIR, LLC** ) Docket DOT- OST - 2012 - 0178 ) For a certificate of public convenience ) and necessity under 49 U.S.C. § 41102 ) to engage in interstate scheduled air ) transportation of persons, property and mail ) __________________________________________)

RESPONSE OF THE KETCHIKAN CARRIERS TO THE ANSWER OF SCOTT AIR, LLC

The Answer of Scott Air, LLC (Scott) is not only one more missed opportunity for Scott to make the required case for its certification, it is yet another example of the inability of Scott to comply with regulations. Scott’s continuous flouting of regulations and requirements , with which every other air carrier has complied , not only demonstrates its lack of compliance disposition, but also calls into serious doubt the managerial competence of a group that refuses to accept either its own violations or the requirements for curing those violations.2

The Ketchikan Carriers filed a Motion to Dismiss in this docket, and tha t Motion was posted on the Docke t Section website on June 5, 2013. 14CFR302.11(c) requires that answers to a motion must be made “Within seven (7) days after a motion is served.” Seven working days after June 5 is June 14. Scott’s Answer neither ac knowledges that it is filed late , nor does it ask for leave to file late. The Answer is dated June 17, 2013, and was received by U.S. Mail by the u ndersigned on June 20, 2013, and has still not been posted on the Docket Section website. The Ketchikan Carriers herein respond to Scott’s Answer assuming that it will be filed with the Docket Section, and request leave to file this otherwise unauthorized document due to the false, misleading, and vacuous nature of the Answer.

**WHAT THE ANSWER SAYS** Scott complains that the Ketchikan Carr iers have engaged in a ten month campaign, instigating a “veritable barrage of opposition to Scott”. For example, the Carrier filed an informal complaint against Scott “which resulted 6 month[sic] ago in Order 2012 - 12 - 16. That order upheld each and every issue the Carriers complained of, and found that Scott had violated the rules and regulations of the Department as well as Federal law. A fine was imposed, part of which depends on Scott complying with all D.O.T. regulations in the future . As it has fai led to comply with 14CFR204.3(t), the Carriers request that the remaining fine be applied. Scott says the Carriers “improperly attempted on several occasions to make reservations knowing that could not be made”. In fact, the Carriers made five reservatio ns, each of which was accepted by the online reservation system. The first reservation was made by the undersigned, was accepted, and the payment accepted and never refunded. This reservation was part of the evidence of Scott’s illegal activities and was quoted in Order 2012 - 12 - 16 finding Scott in violation and assessing penalties. After3

the Order was issued, the undersigned waited three weeks to allow Scott to comply with Department requirements, and then submitted another reservations request using all of the same passenger and credit card information. The reservation was accepted and money transferred into Scott’s accounts. A day later the reservation was rescinded manually. The next test was to see if anyone not named Hank Myers could make a reserv ation clearly involving interstate commerce. Three reservations were attempted, three were accepted, and three payments were transferred into Scott’s accounts and remain there today. It is indicative of Scott’s compliance disposition that it seeks to bla me the parties making the reservations for the violations. Scott says that the Carriers “improperly attempted...to make reservations knowing that could not be made.” Aside from being grammatical gibberish, it seeks to place the burden of compliance on the passenger rather than the carrier. Scott faults the Carriers for objecting after the issuance of a Show Cause Order, but that is the purpose of the Show Cause Order, to make findings and seek objection . Furthermore, the Carriers were waiting to see if it s informal complaints were found to be valid. Had Enforcement found that there were no violations, the Carriers’ complaints of poor compliance disposition and managerial fitness would have been groundless. Once the complaint was upheld on every basis, a n objection was filed.

**WHAT THE ANSWER OMITS** In its objections to Order 2013 - 1 - 12 filed nearly five months ago, the Carriers clearly documented that Scott had not complied with the specific requirements of 14CFR204.3(t)(2). Scott did not provide quarterly breakdowns for its forecasts, it did not show any load factors, either passenger or total, nor did it provide the required peak load factor data. It did not provide any information on how “...the underlying traffic forecasts were made”, or “...an ex planation of how the estimated costs and revenues4

were developed”. Without these data and information, it is impossible to determine the feasibility of the proposal, as well as the managerial competence and compliance disposition. Scott describes this as “the usual mish - mash of distortions and misrepresentations of fact.” More importantly, it failed again to provide any of the missing but required data. A new argument was raised in the Motion to Dismiss, and that was also ignored by Scott. The undersigned has been working with Enforcement to determine the interpretation of the phrase “operating pursuant to a published schedule”. Previously, the Carriers had complained on ly of the number flights specifically listed in newspaper ads and on Scott’s website. In reviewing Enforcement cases as well as interpretation letters issued by F.A.A. Counsel and accepted by the D.O.T., it is clear that Scott has historically operated a significant number of flights between Ketchikan International Airport and several fishing lodges that were operated pursuant to a published schedule. In each case the carrier, Scott, advised the passengers in advance of booking of the departure time of th e available flight before accepting the booking. This practice, informally known as “seat fares” is operating pursuant to a published schedule. Scott should have included all of these operations in its service proposal and economic forecasts, including t he need to working capital.

**PROCEDURAL ISSUES** The Ketchikan Carriers gave Scott Air several months to cure the deficiencies of its application and comply with the requirements of 14CFR204.3. Having seen no apparent attempt by Sco tt to respond, the Carri ers properly filed a Motion to Dismiss. Although filed late, if at all, Scott has Answered as allowed by 14CFR302.11. The Motion is ripe for decision, and has procedural precedence.5

Scott’s Answer contains no refutations of the factual arguments raised by the Carriers. Scott did not refute that it had not complied with 14CFR204.3, nor did argue that the regulation did not apply, nor did it provide in any form the required data and information. Scott did not refute the allegation that it had engaged in operations pursuant to a published schedule which were neither reported nor included in its operational and financial projections. Scott’s A nswer is entirely silent on these issue s . Based on the proof offered and Scott’s lack of refutation, the Departme nt must conclude that Scott has not complied with appropriate regulations and has not filed information sufficient to support a finding of fitness. The Department must now rule on the Motion based on the unrefuted facts on the record, and dismiss Scott’s application. The Carriers have long documented Scott’s cavalier attitude toward regulatory compliance, but perhaps the best example is on the first page of the Answer when Scott complains of the Carriers’ conduct in insisting that Scott comply with 14CFR2 04.3. Scott says, “This conduct has unnecessarily and improperly burdened the resources of both the Department and Scott.” We will let the Fitness Division determine if it is burdened by having to review a complete submission of data, but clearly Scott i s asserting that complying with the certification requirements is unduly and improperly burdensome for it . This is the same attitude Scott displayed when it was in violation of law and regulations last year, which led to the Enforcement action against it. Nothing has changed. Scott is clearly unfit to be certificated.

**WHEREFORE** , the Ketchikan Carriers request the Department to dismiss the application of Scott Air for a certificate of public convenience and necessity in this docket immediately. Scott ha s caused immense harm to certificated carriers who willingly and successfully complied with all requirements, and every day of Scott’s service increases the damage. All procedural steps are complete, with Scott having filed6

an Answer which left unrefuted all factual allegations. The Carriers also ask that this Response be accepted although otherwise unauthorized. Respectfully submitted, Pacific Airways, Inc. and PM Air, LLC

___________________________________ By Hank Myers, authorized representative June24, 2013 CERTIFICATE OF SERVICE I hereby certify that I have this day served a copy of the foregoing Response of the Ketchikan Carriers upon all parties to this document by First Class U.S. Mail.

_________________________ Hank Myers June 24, 2013