US.Departmentof Transportation OfficeoftheSecretary ofTransportation January 3, 2012

Mr. ShaunR. Christian President StarMarianas Air, Inc. P.O. Box 520461 TinianMP 96952

Re: DocketDOT-OST-2010-0235 Application ofStarMarianas Air, Inc. for CommuterAuthority

DearMr. Christian: 

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On October 13, 2011, Star Marianas Air, Inc. ("Star" or "SMA"), submitted a formal contract between it and Tinian Dynasty Hotel and Casino ("TDHC" or "Dynasty"), which, according to DOT records, is ultimately owned and controlled by a Hong Kong entity, 1 in response to the Depm1ment's concem regarding the control of Star and its operations bynon-U.S. citizens.

As you are aware, the Department informed Star that without an agreement in place describing the rights and obligations each party has to the other and detailing the protections in place that would prevent TDHC from exerting influence or control over Star and its operations, we would be unable to determine whether Star is under the actual control ofU.S. citizens and incompliancewith49 U.S.C. §40102(a)(15).

We have reviewed the agreement submitted and at this time believe that it does not adequately address our concems. For instance, on page 1, Section I (C), Dynasty is not restricted to utilizing SMA exclusively and can make bookings with other airlines or surface transportation providers. There is no companion provision that speaks to Star's ability to provide charter air transportation to other entities should it choose to do so. From the provisions included in the agreement, it appears that Star can only provide air transportation to TDHC, while TDHC is free to "shop around" for other transportation providers.

There are also provisions throughout the agreement that are not typicallyfound in charter agreements. For example, on page 3, Section II (D), Price and Payment, several ofthe

See Order 2007-12-11 at I. TDHC is a company incorporated under the laws ofthe Commonwealth of the Northern Marianas Islands that is ultimately owned and controlled by Tinian Dynasty Holdings Limited. a British Virgin Island entity. whose ownership in turn. is majority held by Mr. Michael Kwan. a Hong Kong citizen.2
provisions are not typical and indicate lack ofcontrol. It is not typical for charter prices to change over the course of the agreement term without the written consent of both parties, effectuated with a signed and executed amendment; to continueto provide charter services when payment for charter flights already provided have yet to be made; and, to simply have the charterer reinstate the services of the charter air carrier by bringing delinquent payments cun·ent without any considerationfor the charter air carrier should it refuse to provide charter flights to the charterer due to past non-payments. All ofthese conditions do not indicate independence onthe part ofthecarrier, and mustbe addressed.

We also note that on page 7 of the agreement, it states that each party is solely responsible for translating the charter agreement and that the English version is binding should there be a conflict between it and any translation. This is inconsistent with customary contract arrangements, where in most cases no translation provisions are made, and should there be translations, they are included with the original, binding text. In what language was this agreement originally written, and what languages, if any, has this agreement been translated, and for what purpose are the translations needed? This further leads us to questionthe independence and control ofthe carrier.



### In light ofthe above, we are still unable to determine that Star is aU.S. citizen and under the actual control ofU.S. citizens. Wenote that it is the applicant's responsibilityto bear the burden ofproofand provide sufficient evidence to prove it is aU.S. citizen as defined bythe Transportation Code. Should Star Marianas fail to do so within 30 days from the date ofthis letter, we intend to issue a show cause order proposing to revoke its air taxi registration and deny its application for commuterauthorityfor failure to complywiththe citizenshiprequirements set forth 49 U.S.C. §40102(a)(15).



### In the meantime, as is the Department's practice, further processing of your application will be deferred pending receipt ofthis material. We note that anyfurther submissions to therecord inthis caseneedto be accompaniedbythe following certification:

The contents ofthis application and the attached exhibit (s) are true and correct to the best of my knowledge and belief. Pursuant to Title 18 United States Code Section 1001, I [the individual signing the application, who shall be aprincipal owner, senior officer, or internal counsel ofthe applicant], in my individual capacity and as the authorized representative of the applicant, have not in any manner knowingly and willfully falsified, concealed or failed to disclose any material fact or made any false, fictitious, or fraudulent statement or knowingly used any documents which contain such statements in connection with the preparation, filing or prosecution of the application. I understand that an individual who is found to have violated the provisions of 18 U.S.C section 1001 shall be fined orimprisonednotmore thanfive years, orboth.3

Thank you for your cooperation in this matter. If you have any questions regarding this letter orthe requested information, please feel free to contact Katy O'Toole ofmy staffat (202) 366-9721. Sincerely,

. emo Chief,AirCarrierFitness Division Office ofAviationAnalysis

cc: DocketDOT-OST-2010-0235

Mr. Thomas Brehm FAA HonoluluFSDO 135 NakoloPlace Honolulu, HI 96819