U.S. Department of

Transportation

Office of the Secretary

Of Transportation

February 6, 2014

1200 New Jersey Ave .•S.E.

Washington. DC 20590

Mr. JE Murdock 1I1

Counsel for Pentastar Aviation Charter, Inc.

5034 Nebraska Ave., NW

Washington, DC 20008

Re: Docket DOT-OST-2014-0004

Application of Penta star Aviation Charter, Inc.

for Authority to Conduct Commuter Operations

Dear Mr. Murdock 1I1:

We have completed our initial review of the application you filed on January 9, 2014, on behalf

of Pentastar Aviation Charter, Inc. ("PACI"), for the determination of its fitness to conduct

commuter operations. We have determined that we will need additional and/or clarifying

information before we may complete our review. The attached Information Request lists the

areas where further information/clarification is necessary. I ask that you respond fully to this

request within 30 days of the date of this letter. You may upload your response via the web

at www.regulations.gov, in Docket DOT-OST-2014-0004.

In the meantime, as is the Department's practice, further processing of your application will be

deferred pending receipt of this materia!. Thank you for your cooperation in this matter. If you

have any questions regarding this letter or the requested information, please feel free to contact

Shabu Thomas of my staff at (202) 366-9721.

~ a . Remo

Chi ,Air Carrier Fitness Division

Office of Aviation Analysis

Enclosure

cc: Docket DOT-OST-2014-0004

Mr. Bartholemew M. Angle

POI for Pentastar Aviation Charter, Inc.
INFORMATION REQUEST

PENTASTAR AVIATION CHARTER, INC.

GENERAL INFORMATION

1. Please provide a copy ofPACl's most recently approved OST form 4507.

2. FAA Modernization and Reform Act of 2012, requires U.S. air carriers that operate

scheduled passenger service or public charter service using any aircraft with a design

capacity of 30 or more seats, and operators of large hub, medium hub, or non-hub

U.S. airports, to submit contingency plans for lengthy tarmac delays. The Act also

requires each covered carrier and airport to ensure public access to its plan after DOT

approval by posting the plan on its website. Therefore, we ask that PACI promptly

file the contingency plan at http://filingtarmacdelayplan.dot.gov.

OWNERSIDP AND KEY PERSONNEL

1. In the application, you state that PACI is wholly owned subsidiary of Pentastar

Aviation, LLC ("LLC"), which is in tum, ultimately owned by Mr. Edsall Ford, II. Is

Mr. Ford the sole owner of LLC? If not, please identify any other owners of LLC,

their citizenship, and the type and number of shares held by each.

2. What is the principal business ofLLC?

3. For Messrs. Michael L. Baker and Gerald M. Boprie, please'state what their position

titles are.

FINANCIAL POSITION

An applicant for commuter authority is expected to be prepared to fully prosecute its

application at the time it is filed. With respect to financial fitness, the applicant is required to

provide current financial data,1and three years of historic financial data, together with a

detailed forecast of its pre-operating costs and a pro-forma forecast profit and loss statement

reflecting all revenues and expenses the applicant expects to earnlincur during its first year of

commuter operations. In addition, the company must demonstrate that it has obtained all of

the funding needed to meet our financial fitness test or, at a minimum, that it has a reasonable

plan for doing so. PACI did not present a sufficiently detailed first year profit and loss

forecast. In addition, the applicant did not provide evidence that it has funding necessary to

support its proposed scheduled passenger operations. Therefore, please provide the following

information:

1. A current (within 3 months) balance sh~t and income statement for PACI, along with

their accompanying explanatory footnotes. The footnotes should include a description

of:

IThe balance sheet and income statement supplied must be for a period ending no more than three months prior

to the date of filing.
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a. The companies significant accounting policies, such as for depreciation,

amortization of intangibles, overhauls, unearned revenues;

b. Any liens or encumbrances against any of the applicant's or any relevant

corporation's assets, any major commitments into which the applicant or

relevant corporation has entered during the past six months, or proposes to

enter during the next six months, including a bank or other institutional

financing and private financing;

c.Any liabilities of the applicant or relevant corporation that are more than 60

days past due at the time of the application, including the amount and the

circumstances under which they are past due and will be paid.

2. Balance sheets and income statements, together with their explanatory footnotes for

calendar years 2011, 2012, and 2013. The footnotes should include a description of:

a. The companies significant accounting policies, such as for depreciation,

amortization of intangibles, overhauls, unearned revenues;

b. Any liens or encumbrances against any of the applicant's or any relevant

corporation's assets, any major commitments into which the applicant or

relevant corporation has entered during the past six months, or proposes to

enter during the next six months, including a bank or other institutional

financing and private financing;

c. Any liabilities of the applicant or relevant corporation that are more than 60

days past due at the time of the application, including the amount and the

circumstances under which they are past due and will be paid.

3. The first year forecast profit and loss statement does not appear to include significant

expense categories such as those for showing aircraft lease, fuel, and hangar expenses.

In other words, insufficient detail was provided on the expense categories shown and,

as a result, we cannot determine whether these expenses are reasonable. In light of the

foregoing, we ask that you provide a new first year profit and loss forecast (broken

down by month or by quarter) which, at a minimum, provides details by expense

category (direct and indirect) for all expenses that will be incurred in conducting the

proposed scheduled passenger operations, indicating how the amounts were computed.

These expenses should include all cash and non-cash (Le., aircraft or facilities

depreciation or lease expense) items that are related to the provision of the proposed

operations. If certain of the expenses will be assumed by a third-party, PACI should

include footnotes to this effect and provide independent third-party verification

supporting its statements. If certain expenses normally associated with air

transportation operations will not be incurred, please explain.
,

•

3

4. In Attachment T, you state that $34,000 of PACI's pre-operating costs will be

reimbursed by its customer. Please identify the customer and provide a statement

from said customer indicating the amount of such available resources and the terms

and conditions under which such funds will be provided. In addition, documentation

from the customer should be provided that clearly establish the customer's ability to

fulfill the financial commitments made to the applicant.

5. Please provide third-party verification of all funds currently (within 3 months of the

date of the application filed) on deposit in PACI's name.

6. Please provide third-party verification of all lines-of-credit available to support

PACI' s proposed operations. This verification should include the total line-of-credit

being made available, the amount such credit line has been drawn down to date, any

conditions that must be met before funds will be advanced, the terms of repayment,

and the expiration date. Further, if the line-of-credit is being supplied by an individual

or organization (other than a recognized financial institution) copies of the personal or

corporate financial statements of the individual or organization should also be

provided. .

Note: Until we are able to determine that the first-year forecast provided is reasonable, we

cannot determine what level of funding PACI will require to meet the Department's financial

fitness standard. In addition, we note that should the company's current financial statements

(to be provided in response to this information request) also show a negative working capital

position, the amount of this deficit will be added to the amount needed under our standard

financial fitness2criteria to determine PACI's total funding requirement.

The information provided pursuant to this Information Request should be accompanied by the

following certification:

The contents of this 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 a principal owner, senior

officer, or internal counsel of the 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 or imprisoned not more than five

years, or both.

2 Funds sufficient to cover all pre-operating costs plus one-fourth of the operating expenses that the applicant

will incur during its first year of commuter operations.