Order 2015-1-21

 Served: January 26, 2015

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 26th day of January, 2015

Application of

NATIONAL AIR CARGO GROUP, INC.

 d/b/a NATIONAL AIRLINES

for issuance of an amended certificate of public 

convenience and necessity under 49 U.S.C. § 41102 to

engage in foreign scheduled air transportation of 

persons, property, and mail

 Docket DOT-OST-2012-0204

 

ORDER CONFIRMING ORAL ACTION

AND ISSUING EFFECTIVE CERTIFICATE

Summary

By this order, the Department (1) confirms its oral action of November 10, 2014, making 

effective the authority of National Air Cargo Group Inc., d/b/a National Airlines (“National”), to 

operate foreign scheduled air transportation of persons, property, and mail; and (2) reissues the 

air carrier’s foreign certificate to reflect its effectiveness. 

Background

By Order 2013-7-12, issued July 12, 2013, the Department found National fit to engage in 

foreign scheduled passenger operations between a point or points in the United States, a point or 

point in the United Arab Emirates and beyond to a point or points in Afghanistan and issued to it 

a certificate for such operations. The authority granted under this certificate was not to become 

effective until six (business) days after the Department had received (1) a copy of National’s Air 

Carrier Certificate and Operations Specifications authorizing such operations from the Federal 

Aviation Administration (“FAA”), (2) a certificate of insurance on OST Form 6410 evidencing 

liability insurance coverage meeting the requirements of 14 CFR 205.5(b) for all of its aircraft, 

(3) a statement of changes it may have undergone since its fitness was examined, and 

(4) evidence that the air carrier continued to have sufficient funding to meet our financial fitness

test. In that order, the Department also directed that should National wish to operate its own 

aircraft between the United States and the United Arab Emirates, it must first provide the 

Department with at least 45 days advance notice of such plans and provide updated information 

establishing its fitness for such expansion prior to commencement. 

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION
2

On March 24, 2014, National provided updated fitness information to make its foreign scheduled 

certificate effective. However, the air carrier did not submit adequate material supporting its 

fitness, including Operations Specifications issued by the FAA authorizing the air carrier to 

engage in foreign scheduled operations in Afghanistan. As National was seeking to operate 

solely in a market that was not authorized by its Operations Specifications and provided 

incomplete information regarding its fitness, we were not able to make effective National’s 

certificate for foreign scheduled air transportation of persons, property, and mail. In light of the 

above, the Department stayed the effectiveness of National’s foreign scheduled passenger 

certificate.1 

On June 10, 2014, National amended its application to (1) remove its request for

beyond-authority to Afghanistan, and (2) change its service proposal whereby the air carrier 

would now provide scheduled passenger operations between the United States and United Arab 

Emirates, using National’s own aircraft.2 The air carrier now proposes to operate bi-monthly 

flights between Sanford International Airport and Dubai International Airport using one of its 

existing B-757 aircraft.3 National expects to incur approximately $5.39 million in first-year 

expenses and states that it has no unpaid pre-operating expenses. Thus, based on its forecast, we 

estimate that National will require approximately $1.34 million to meet our financial fitness 

requirement.4

National submitted updated financial statements representing its financial position. For the four 

months ended April 30, 2014, the air carrier incurred a net loss of approximately $12.85 million 

on $9.78 million in revenues. Despite the loss, the air carrier’s balance sheet at April 30, 2014, 

showed National as having current assets of $25.35 million and current liabilities of 

$20.80 million, giving the air carrier positive working capital of $4.56 million. In addition, 

National provided third-party verification from Wells Fargo Bank dated June 3, 2014, showing 

that it has access to $4.20 million on deposit in its name.

The air carrier also identified three changes to its key management personnel, all of whom are 

U.S. citizens, and provided their resumes.5 Specifically, Mr. Joseph R. Batten replaced 

Mr. Jeffrey Miller as Director of Operations; Mr. Steven N. Smith replaced Mr. James VanZino

as Chief Pilot; and Mr. Matthew S. McKnight replaced Mr. William E. Phillips as Director of 

Quality. 

 1 The Department stayed the effectiveness of National’s authority on three occasions. See Order 2014-3-20, 

issued March 31, 2014; Order 2014-4-33, issued April 30, 2014; and Order 2014-5-14, issued May 29, 2014.

2 National’s application for foreign scheduled air transportation initially stated that the air carrier intended to 

operate a daily flight between the United Arab Emirates and points in Afghanistan and planned to operate the U.S. to 

UAE portion of the flight with a codeshare partner. In the event National determines it may offer flights under a 

codeshare arrangement, we again remind it that prior to commencing any codeshare operations with a foreign air 

carrier, that air carrier will need a codeshare statement of authorization, and that a codeshare safety assessment 

compliance statement will be required pursuant to the FAA’s IASA program.

3 National states that the proposed twice-monthly flights will operate from Sanford to Dubai via technical stops in 

Bangor, Maine, and Shannon, Ireland.

4 The $1.34 million noted here is one quarter of the applicant’s forecast of approximately $5.39 million in first 

year expenses. 

5 National supplemented its filing with additional information on August 19, 2014.
3

Mr. Joseph R. Batten was named National’s Director of Operations effective October 31, 2013. 

Prior to that, he was National’s Director of Training and Standards (June 2013-October 2013). 

He also held the positions of Director of Operations with Sky King (August 2012-May 2013), 

B767 Captain and Check Airman with Dynamic Airways (January 2012-July 2012), and Director 

of Training and Standards (June 2010-October 2010) and Chief Pilot (August 2008-June 2010) 

with Capital Cargo International Airlines. Mr. Batten held various pilot positions with ATA 

Airlines (March 1992-April 2008) and Pan American World Airways (December 1988-

December 1991). Mr. Batten is both a licensed Airline Transport Pilot and an Airframe and 

Powerplant Mechanic.

Mr. Steven N. Smith was promoted to National’s Chief Pilot in June 2013 after previously 

serving as the company’s B757 Fleet Manager (April 2012-June 2013) and Captain and Check 

Airman (January 2012-April 2012). A licensed Airline Transport Pilot, Mr. Smith held Captain 

and First Officer positions with Kalitta Charter II (August 2009-January 2012), UPS Airlines 

(May 1994-March 2009), ACT Group (March 1993-May 1994), Air Wisconsin (January 1991-

March 1993), and Air Midwest (July 1989-January 1991).

Mr. Matthew S. McKnight was promoted to National’s Director of Quality Control in September 

2013 from his previous position as National’s Manager of Quality Control (July 2010-September 

2013). A licensed Airframe and Powerplant Mechanic, Mr. McKnight previously worked as a 

Heavy Maintenance Representative with Astar Air Cargo (December 2004-July 2010), Quality 

Control Inspector and Heavy Maintenance Representative with Express.net Airlines 

(April 2000-December 2004), and held Aircraft Mechanic positions with Kitty Hawk 

International (March 1997-January 1998 and July 1998-April 2000), Connie Kalitta Enterprises 

(June 1996-March 1997), and American International Airways (August 1993-June 1996). Mr. 

McKnight also served as a Petty Officer in the United States Navy (1989-1992).

National also provided information that states that there are no actions, outstanding judgments, 

charges of unfair, deceptive, or anticompetitive business practices, or of fraud, felony or antitrust 

violations against Messrs. Batten, Smith or McKnight, nor are there any pending investigations, 

enforcement actions, or formal complaints, except as noted below, filed by the Department 

against them with respect to compliance with the Department’s regulations. The air carrier noted 

that there are two pending FAA investigations: EIR 2014SO670015 concerning National’s 

website advertising “scheduled public charters,” which has since been removed from National’s

website, and EIR 2013GL230041, alleging improper loading of vehicles in a B747 aircraft. As a 

result of the latter investigation, National states it is working closely with the FAA on this issue. 

Both investigations remain open and carry recommended civil penalties of $17,500 and 

$122,500, respectively. Information available to the Department indicates that National also has 

two other pending FAA enforcement investigations, involving proposed civil penalties totaling 

$121,000.6

 

6 See EIR 2014SO670048 and 2014SO670050, both related to an alleged violation of FAA-approved cargo 

loading procedures.
4

CONCLUSION

In light of the information presented above, the Department concluded that National remained fit 

to conduct its proposed foreign scheduled passenger operations. Therefore, on November 10,

2014, we orally advised National that we were making its authority to conduct foreign scheduled 

air transportation effective. By this order, we confirm our oral action of November 10, 2014, and 

reissue National’s air carrier certificate to reflect the date that its authority to operate foreign 

scheduled air transportation between a point or points in the United States, a point or point in the 

United Arab Emirates and beyond to a point or points in Afghanistan became effective. 

However, we note that National’s authority to conduct scheduled foreign air transportation of 

persons, property, and mail to/from a point or points in Afghanistan under this certificate shall 

become effective at such time as the Department has received updated fitness information from 

the holder and has determined that the holder remains a citizen of the United States and is fit to 

conduct such scheduled services. 

Additionally, we remind National that should it wish to operate more than six cargo aircraft 

and/or more than two passenger aircraft, it must first provide the Department with 45 days 

advance notice and provide updated information establishing its fitness for such expansion prior 

to commencement. 

ACCORDINGLY, 

1. We confirm our oral action of November 10, 2014, making the amended foreign certificate 

issued to National Air Cargo Group, Inc. d/b/a National Airlines by Order 2013-7-12, effective 

on that same date.

2. We reissue to National Air Cargo Group, Inc. d/b/a National Airlines the amended foreign 

certificate issued to it by Order 2013-7-12 in the attached form to reflect the effective date of its 

authority.

3. We direct that, should National Air Cargo Group, Inc. d/b/a National Airlines propose to 

increase its fleet to more than 6 cargo aircraft and 2 passenger aircraft, it must first notify the 

Department in writing 45 days prior to the proposed operation and demonstrate its fitness to 

conduct such operations before their commencement.

4. We direct National Air Cargo Group, Inc. d/b/a National Airlines to submit to the Air Carrier 

Fitness Division a first year progress report within 45 days following the end of its first year of 

actual scheduled flight operations.7

5. We will serve a copy of this order on the persons listed in Attachment A. 

 

7 The report should include a description of the air carrier’s current operations (number and type of aircraft, 

principal markets served, total number of full-time and part-time employees), a summary of how these operations 

have changed during the year, a discussion of any changes it anticipates from its current operations during its second 

year, current financial statements, and a listing of current senior management and key technical personnel. The air 

carrier should also be prepared to meet with staff members of the Fitness Division to discuss its current and future 

operations.
5

Persons entitled to petition the Department for review of this order, under 14 CFR 385.30, may 

file their petitions within 10 days of the service date of this order.

The action confirmed in this order was effective when taken and the filing of a petition for 

review shall not alter its effectiveness.

By: 

TODD M. HOMAN

Director

Office of Aviation Analysis

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

http://www.regulations.gov
 

Certificate of Public Convenience and Necessity for

Interstate Air Transportation

(as reissued)

This Certifies That

NATIONAL AIR CARGO GROUP, INC.

d/b/a NATIONAL AIRLINES

is authorized, subject to the provisions of Subtitle VII of Title 49 of United 

States Code, the orders, rules, and regulations issued thereunder, and the 

attached Terms, Conditions, and Limitations, to engage in foreign scheduled air 

transportation of persons, property, and mail.

This Certificate is not transferable without the approval of the Department of 

Transportation.

By Direction of the Secretary

Issued by Order 2015-1-21 Todd M. Homan

On January 26, 2015 Director 

Effective November 10, 2014 Office of Aviation Analysis
 

Attachment

∗As reissued by Order 2015-1-21

Terms, Conditions, and Limitations

NATIONAL AIR CARGO GROUP, INC.

d/b/a NATIONAL AIRLINES

Is authorized to engage in foreign scheduled air transportation of persons, property, and mail: 

Between a point or points in the United States, a point or points in the United Arab Emirates 

and beyond to a point or points in Afghanistan

This authority is subject to the following provisions: 

(1) (a) The holder’s authority to conduct scheduled foreign air transportation of persons, property, 

and mail between a point or points in the United States and a point or points in the United Arab 

Emirates under this certificate became effective on November 10, 2014.

(b) The holder’s authority to conduct scheduled foreign air transportation of persons, property, 

and mail to/from a point or points in Afghanistan under this certificate shall become effective at 

such time as the Department has received updated fitness information from the holder and has 

determined that the holder remains a citizen of the United States and is fit to conduct such 

scheduled services.

(2) The holder shall at all times conduct its operations in accordance with all treaties and agreements 

between the United States and other countries, and the exercise of the privileges granted by this 

certificate is subject to compliance with such treaties and agreements and with any order of the 

Department of Transportation issued under them. To the extent that the holder has authority to

serve more than one country or points in more than one country on the same route segment, that 

authority does not confer upon the holder any additional rights (including fifth-freedom 

intermediate and/or beyond rights) in limited entry markets unless the Department has completed 

any necessary carrier selection procedures to determine which carrier(s) should be authorized to 

exercise such rights and has notified the foreign country(ies) involved that any such selected 

carrier(s) has the required authority. In such cases, the fact that the carrier may hold authority to 

serve the countries (points) at issue on the same segment will not be considered as providing any 

preference to the holder in a carrier selection proceeding.

(3) The exercise of the authority granted here is subject to the holder's first obtaining from the 

appropriate foreign governments such operating rights as may be necessary.

(4) The holder's authority under this certificate is effective only to the extent that such operations are 

also authorized by the Federal Aviation Administration (FAA), and comply with all 

 

∗ This certificate is being reissued to reflect its effective date.
2

U.S. Government requirements concerning security, including, but not limited to 49 CFR Part 

1544.∗∗

(5) The holder shall at all times remain a "Citizen of the United States" as required by 

49 U.S.C. 40102(a)(15).

(6) The holder shall maintain in effect liability insurance coverage as required under 

14 CFR Part 205. Failure to maintain such insurance coverage will render a certificate 

ineffective, and this or other failure to comply with the provisions of Subtitle VII of Title 49 of the 

United States Code or the Department's regulations shall be sufficient grounds to revoke this 

certificate.

(7) The holder is authorized to conduct charter flights in interstate and/or foreign air transportation in

accordance with the provisions of 14 CFR 212. 

(8) Should the holder propose any substantial change in its ownership, management, or operations (as 

defined in 14 CFR 204.2(l)), it must first comply with the requirements of 14 CFR 204.5.

(9) In the event that the holder commences but subsequently ceases all operations for which it was 

found “fit, willing and able,” its authority under this certificate shall be suspended under the terms 

of 14 CFR 204.7 and the holder may neither recommence nor advertise such operations unless its 

fitness to do so has been redetermined by the Department. Moreover, if the holder does not resume 

operations within one year of its cessation, its authority shall be revoked for dormancy.

 

∗∗ To assure compliance with all applicable U.S. Government requirements concerning security, the holder 

shall, before commencing any new service (including charter flights) to or from a foreign airport, contact its

Principal Security Inspector (PSI) to advise the PSI of its plans and to find out whether the Transportation 

Security Administration has determined that security is adequate to allow such airport(s) to be served.
 

Attachment A

SERVICE LIST FOR

NATIONAL AIR CARGO 

GROUP, INC. 

d/b/a NATIONAL AIRLINES

MR PIERRE MURPHY

LAW OFFICES OF PIERRE MURPHY

1200 NEW HAMPSHIRE AVE NW

SUITE 590

WASHINGTON DC 20036

MR MARK MAZOR

MANAGER CSET

FAA SUITE 203B

45005 AVIATION DRIVE

DULLES VA 20166-7537

LUTHER HIPPS

CHARLEY BEERS

ORLANDO FSDO

FEDERAL AVIATION

ADMINISTRATION

MR GLEN G JOERGER

PRESIDENT

NATIONAL AIRLINES 

5955 TG LEE BOULEVARD

SUITE 500

ORLANDO FL 32822

MS KATHERINE TATUM

TECHNICAL PROGRAMS BRANCH

AFS 260

FEDERAL AVIATION 

ADMINISTRATION

800 INDEPENDENCE AVE SW

WASHINGTON DC 20591

MR PETER LYNCH AGC-300

FAA ASST CHIEF COUNSEL

FOR ENFORCEMENT

800 INDEPENDENCE AVE SW 

WASHINGTON DC 20591

MR WILLIAM CHADWICK

OFFICE OF AIRLINE INFORMATION

DOT/RSPA/BTS E-36

1200 NEW JERSEY AVE SE

WASHINGTON DC 20590