Order 2011

- 4

- 28
Served: April 29, 2011

UNITED STATES OF AMERICA
DEPARTMENT OF TRANSPORTATION
OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 29 th d ay of April , 2011

Joint A pplication of

GULFS TREAM INTERNATIONAL GROUP

, IN C

. and
VPAA CO.

for the transfer of commuter air carrier authority under

49 U.S.C. § 41105 Docket DOT

- OST

- 2011

- 0061

ORDER TRANSFERRING COMMUTER AIR CARRIER AUTHORITY

Summary

By this order, we (1) find VP AA Co

. (“ VPAA ”)

, fit, wil ling, and able to c onduct scheduled

passenger opera tions as a commuter air carrier; and (2) transfer to VPAA the commuter air

carrier authorization issued to Gulfstream International Airlines, Inc. (“GIA”) by Order 90

- 9

- 24

, subject to conditions

.

Background

By Order 90

- 9

- 24 , issu ed September 18, 1990, GIA was found fit to perform scheduled passenger operations as a commuter air carrier. Headquartere d in Fort Lauderdale, Florida, GIA provides scheduled air transportation to 18 destinations in Florida and the Bahamas, while also serving 5 destinations from Cleveland, Ohio, 7 destinations from B illings, Montana, and the city of Muscle Shoals, Alabama

, under the Department’s Essential Air Service Program (“EAS”). 1
GIA operates a fleet of 23 Beechcraft 1900D aircraft under its own name and serves as a feeder

airline to Continental Airl ines , Inc.

, as Continental Connection and to Uni ted Air L ines , Inc.

, as United Express. 2

On November 4 , 2010

, Gulfstream International Group, Inc. (“Gulfstream ”)

, the parent company of GIA, filed for bankruptcy protection under C hapter 11 of the Bankruptcy C ode . GIA has continued its current operations, with the intent of Gulfstream to sell GIA’s assets i n the

1 See Order 2011

- 3

- 26, issued March 18, 2011, where GIA was selected to serve the EAS community of Muscle Shoals, Alabama. This service has not yet commenced.

2 GIA also uses the trade names “Island Air” and “Gulfstream International” in certain markets.2

bankru ptcy process. In connection with it s ba nkruptcy filing, Gulfstream arranged a $5.0 million

debtor

- in

- possession loan from Victory P ark Capital Advisors, LLC (“Victory Park Capital ”)

, an investment firm located in Chicago, Illinois

. On January 5, 2011, an auction of GIA ’s assets was held, with the offer of VPAA, a newly formed Delaware corporation created by Victory Park Capital to acquire GIA , selected

. On January 21, 2011, the Bankrup t cy Court entered an order approving the sale of certain of GIA ’s assets to VPAA for approximately $23.6 million and approving VPAA’s assumption and assignment of Gulfstream’s Executory Contracts , including

4 Essential Air Service (“ EAS”) contracts 3 for providing EAS service to 13 communities

. 4

On March 23 , 2011

, Gulfstream /GIA and VPAA (together, the “Joint Applicants”) filed a joint applicatio n in Docket DOT

- OST

- 2011

- 0061

, requesting that the Department transfer the

commuter air carrier author ization held by GIA to VPAA pursuant to 49 U.S.C. § 41105

. 5 In support of their request, the Joint Applicants state that VPAA will operate all flights and services currently provided by GIA and that it will retain GIA’s core management and key technical personnel once the transaction is closed.

Conc urrently, the Joint Applicants filed a motion requesting that the Department shorten the answer period in this case to March 31, 2011, 6 to facilitate their request for expedited action in

this matter. On March 29, 2011, the Joint Applicants confirmed that no objections to the

shortene d answer period or the transfer application were filed. Therefore, by Notice dated March 31, 2011, the Department shortened the answer period to April 1, 2011.

Before tran sferring a company’s authority under section 41105, the Department must determine

t hat the transfer is consistent with the public interest. We have held that this public interest finding includes, among other things, a determination of the fitness of the e ntity receiving the authority. Further, the Department must assess the impact of any transfer on the viability of the air carrier applicants, competition in the domestic airline industry, and the trade position of the United States in the international air transportation market.

Based on our review of the record of this case and oth er data available to the Department, we find the proposed transaction warrants approval under the decisional criteria of section 41105. Moreover, as discussed mo re fully below, we find that VPAA is a U.S. citizen and that it is fit, willing, and able to c onduct scheduled passenger air transportation under the transferred authority, subject to conditions.

FITNESS

In making fitness findings, the Department uses a three

- part test that reconciles the Airline Deregulation Act's liberal entry policy with Congress' concern for operational safety and consumer protection. The three areas of inquiry that must be addressed in order to determine a

3 See Order 2010

- 6

- 25, Order 2010

- 9

- 12, Order 2011

- 1

- 27 , and Order 2011

- 3

- 26

. 4 An assumption or assignment of EAS contracts require s Department consent.

5 VPAA accompanied its application with fitness information required by section 204.3 of our regulations and supplemented its application with additional information on April 15, April 28 , and April 29

, 2011

. 6 Under the Department’s regulations, answers to the transfer request would be due on April 12, 2011 ( see 14 CFR § 302.204)

.3

company's fitness are whether the applicant (1) will have the managerial skills and technical ability to conduct the proposed operations, (2) will have access to resources sufficient to commence operations without posing an undue ri sk to consumers or their funds, and (3) will comply with 49 U.S.C. § 41 738 and regulations imposed by Federal and State agencies. We must also find that the applicant is a U.S. citizen.

The Company

VPAA is a non

- operating

, special purpose company set up by Victory Park Capital for the purpose of acquiring GIA. VPAA is owned by Victory Park Credit Opportunit ies, L.P. (“Fund

I ”) (25 percent ) and VPC Fund II, L.P. (“Fund II ”) (75 percent ), each a Delaware limited partnership. 7 VPAA proposes to continue GIA’s current operations, to maintain the same Federal Aviation Administration (“FAA”) operations office that supervise s GIA’s operations

, and use the “Gulfstream International Airlines” name in its commuter air carrier operations . In addition, VPAA inten ds to employ the same training and maintenance manuals used by GIA and all key GIA management and technical personnel.

Managerial Competence

VPAA’s Board of Directors comprises the following individuals: Messrs. Matthew Ray (Chairman), Richard Levy, and Charles Asfour , e ach of whom is a U.S. citizen.

Mr. Matthew Ray is a Principal and C o

- founder of Victory Park Capital (2007

- present)

. He has

held several fin ancial analysis positions with Magnetar Capital LLC (2005

- 2006) , Banc of

America Securities LLC (2004

- 2005), and SG Cowen Securities Corporation (200 0

- 2004)

. Mr. Ray is also the Chairman of the Board of Directors for Ascent Aviation Services Corp., Global Employment Solutions, Inc., and Victory Park Resources, Corp. He is a 2000 graduate of

th e Kelley School of Business at Indiana University.

Mr. Richard Levy is the Managing Partne r of VPC SBA I, LLC (2010

- present) and Managing

Partner and Founder of Victory Park Capital (2007

- present)

. Previously, he was a Portfolio Manager at Magnetar Financial

, LLC (2005

- 2007) , and Partner and Co

- founder of Crestview Capital Collateralized Debt Fund, LLC (2002

- 2005) and Crestview Capital Funds, LLC (1999

- 2005). Mr. Levy also was the Managing Director of Circle Group Internet Investment Bank (1998

- 199 9) and the C hief F inancial O fficer of Electric City Corporation (1997

- 1998).

From 1995

- 1997, he was an Intern at the Commodities Futures Trading Commission, and from

1993

- 1994, he was a Trading Associate with SG Cowen. He holds a B

. A

. from The Ohio State University, a J.D. from the Chicago Kent Law School, and an M.B.A from the Illinois Institute of Technology.

Mr. Charles J. Asfour is an Investment Professional with Victory Park Capital (2010

- present)

. Prior to his current position , he was the founde r of Blackbird Management Group, LLC, a private

investment firm (2008

- 2010) . He was also an Associate with Code Hennessy & Simmons LLC (2007

- 2008) and a Financial Analyst at J.P. Morgan in the Mergers and Acquisitions division

7 Of the 10,000 issued and outstanding shares in VPAA, Fund I holds 2,500 shares and Fund II holds 7,500 shares, respectively.4

(2004

- 2007) . Mr. Asfour is a 2004 graduate of the Kelley School of Business at Indiana University.

VPAA’s key management and technical personnel consist of the following U.S

. citizens:

Name Position

David Hackett President /C hief Operating Officer
Craig P. Attell Director of Safety
Leo Krupilis Senior Vice President of Maintenance
Philip S. LeFevre Director of Operations Timothy S. Murphy Director of Maintenance
Christopher J. Eason Chief Pilot
Leon Knight Director of Quality Control/Chief Inspector

Mr. David Hackett is President , C hief Operating Officer (“C EO ”) , and Director o f Gulfstream ( 2006

- present) and GIA (2007

- present )

. Before this, he served as President and C FO of GIA for four years ( 2003

- 2007)

. Mr. Hackett was an Independent Consultant with Newgate Associ ates, LLC (2002

- 2003); President, CEO and Director of Shuttl e America Corporation (1996

- 2001 ); and Vice President and Managing Director of Savoy Capital, Inc. (1991

- 1996). Mr. Hackett also held various positions of increasing responsibility at Continental Airlines

, including Director of Financial Planning and Analysis, Manager of Capital Planning, and Financial Analyst (1985

- 1991). He also worked at BF Goodrich Company (1983

- 1985).

Mr. Craig Attell, Vice President of Safety with GIA since 2008, is a licensed Air line Transport

Pilot. Prior to his current position, he worked for GIA as an Aircrew Program Designee, Proficiency Check Airman, Line Check Airman, Flight and Ground Instructor,

Pilot

- in

- Command, and Second

- in

- Command (2006

- 2008 and 1996

- 20 06). Mr. Attell also was a

Pilot with Ventura Air Service (2006

- 2008) and NetJets (2006).

Mr. Leo Krupilis has served as GIA’s Senior Vice President of M aintenance since 1999. Previously, he was employed by Paradise Island Airlines as its Director of Maintenance (1999) and Maintenance Control Manager (1995

- 1999). A licensed Airline and Powerplant Mechanic, Mr. Krupilis has also held several positi ons with Allegheny Airlines

, including Maintenance Control Manager, Production Supervisor, Quality Contro l Inspector, and Airline Mechanic (1978

- 1995). He was a U.S Navy Civilian Fuel Contractor (1977

- 1978) and served in the U.S. Navy as a Jet Mechanic (1973

- 1977).

Mr. Phil ip S. LeF evre is GIA’ s Director of Operations. A licensed Airline Transport Pilot, h e has held various positions during his tenure at GIA

, inclu ding Vice President of Training and Flight Standards, FAA Aircrew Pr ogram Designee, Proficie ncy Check Airman, Line Check Airman, Flight Instructor

, and Pilot

- in

- Command ( 1992 and again from 1996

- present ).

Mr. LeF evre also traveled and studied in Africa (199 3

- 1995), and held pilot positions with F l ight International ( 1992

- 1993).5

Mr. Timothy S. Murphy, a licens ed Airf rame and Powerplant Mechanic, has been the Director of

Maintenance for GIA s ince December 2010. While with GIA

, he has held various aviation

maintenance

- related positions, including Production Manager, Mechanic, Lead Mechanic,

Maintenance Production Supervisor, and Maintenance Manager ( March 1999

- August 2009 and

March

- December 2010 ). Mr. Murphy was a lso a Senior Technician with General Dynamics

Aviation Services (August 2009

- March 2010).

Mr. Christopher Eas on , a licensed Airline Transport Pilot with 13,400 flight hours, serves as GIA’ s Chief Pilot

. He has held numerous posit ions since joining GIA in 1992 , including System

Chief Pilot and Director of Line Flying, Line Check Airman, Pilot

- in

- Command, and

Second

- in

- Comma nd (1992

- present)

. Mr. Eas on also worked for Pan Am Express as a Cust o mer S ervice Manager (1990

- 1992)

, for LM Berry Company as a n Advertising Sales Execu tive (1988

- 1989), and for Peoples Express/Continental Airlines as a Lead Aircraft Dispatcher and Customer Service Manager (1982

- 1987).

Mr. Leon Knight serves as GIA ’s Dir ector of Quality Control and Chief Inspector (2008

- present)

. A licens ed Airframe and P owerplant Mechanic, Mr. Knight h as held several positions of increasing responsibility with GIA such as Mechanic Supervisor, Production Manager, and Di rector of Maintenance (1999

- 201 0 )

. Mr. Knight was a lso an Aircraft Mechanic and Inspector for Paradise Island Airlines (1996

- 1999).

Mr. F. Darrell Richardson , an Airframe and Powerplant Mechanic, was hired to serve as GIA’s Chief Restructuring Officer. Immediately prior, he was the CEO of InterIsland Aviation Services Group (July 2010

- April 2011 )

, where he was responsible for five companies: (1) Air Turks & Caicos, (2) Provo Air Cente r, (3) Flight Support Ltd., (4) Caribbean Aviation Maintenance Services, and (5) Agency Services. Previously, Mr. Richa rdson was an Independent Consultant specializing in aviation and marketing technology (2005

- 2010) ; President, CEO

, and Director of Pace Airlines, Inc. (2000

- 2005) ; Executive Vice President and Chief Operating Officer (“COO”) of Piedmont Hawthorne Aviation (2000

- 2002) ; and COO of Mesaba Airlines (1995

- 2000) . In addition, he served as Senior Vice President of Phoenix Airlines Services (1993

- 1995), President and CEO of United Aerodynami cs Corp. (1991

- 1993),

and Senior Director of Technical Operations of Cont inental Express (1987

- 1991) . Mr.

Richardson also held multiple positions with Piedmont Airlines, such as Vice President of Maintenance and Engineering ( 1968

- 1981 and again from 1984

- 1987) . From 1981

- 1984, he

served as Director of Engineering of Air Flori da

.

In view of the experience and background of the applicant’s key personnel, we tentatively

conclude that VPAA has dem onstrated that its key management and technical personnel have the managerial skills and technical ability to support its proposed operations. Moreover, the FAA

has advised us that all VPAA’ s key personnel have been found qualified to hold their respective positions. 8

8 Before authorizing an air carrier to conduct air transportation, the FAA evaluates certain of the applicant’s key personnel with respect to the minimum qualifications for those positions as prescribed in the Federal Aviation Regulations. The FAA’s evaluation of these key personnel provides an added practical and in

- person test of the skills and technical ability of these individuals. The FAA has advised us that VPAA’s key technical personnel are acceptable to that agency in their respective positions.6

Operating Plans and Financial Condition

If the requested transfer is approved, VPAA int ends to provide scheduled passenger air transportatio n as a commuter air carrier using the “ Gulfstream International Airlines ” name and

the trade names “Island Air,” “ Continental Connection

, ” and “ United Express .” 9

As stated previously, VPAA intends to continue GIA’s current operations, including its 4 EAS

contracts to serve 13 communities. The air carrier also intends to operate domestic and foreign charter service, including flights to Cuba. VPAA p roposes to provide all service s using GIA’s existing fleet of 23 Beechcraft 1900D aircraft

.

In evaluating a new entrant applicant’s financial fitness, the Department generally asks that a company have available to it resources sufficient to cover all pre

- operating costs plus a working capital reserve equal to the operating costs that would be incurred in three months of normal operations.

The significant pre

- op erating e xpenses incurred by VPAA are those associated with the purchase
of GIA’s assets

, $23.6 million

, of which $18.7 million has a lready been paid into an escrow

account

. These funds are to be released upon the finalization of regulatory approval from the

DOT and FAA

. Regarding its projected first

- year expenses associated w ith its p roposed operations, VPAA ex pects to incur approximately $52 .8 million. We have reviewed the company’s projected expenses and believe them to be reasonable. Based on thi s forecast, we

estimate that VPAA will need approximately $18.15 million to meet the Departme nt’s financial fitness requirements

. 10

In support of its ability to fund its proposed o perations, VPAA provided third

- party verification that, as of April 29, 2011, it has $19.0 million on deposit in its name with SunTrust Bank.

In light of this information , we conclude that VPAA has sufficient financial resources to enable it to commence its proposed operations without posing an undue risk to consumers or their funds.

Compliance Disposition

VPAA states that there are no actions or outstanding j udgments against it, its owners, or its key personnel, nor have there been any charges of unfair, deceptive or anti

- competitive business practices, or of fraud, felony or antitrust violations brought ag ainst any of these parties. VPAA also states that there are no pending investigations, enforcement actions, or formal complaints filed by the Department against it, its key personnel, or persons having a substantial interest in it with respect to compliance with the Transportation Code or the Department’s regulations.

9 We acknowledge VPAA’s registration of its c orporate and trade names under 14 CFR Part 215.

10 The $18.15 million consists of the applicant’s forecast s of approximately $4.9 million remaining to be paid in

pre

- operating expenses and about $13.2 million, which is one

- quarter of its estimated total first

- year expenses of $52.8 million.7

The FAA advises us that it is working with Joint Applicants in connection with GIA’s efforts to transfer its commuter operating authority to VPAA , and it knows of no reason why we should act unfavorably on the company’s ap plication.

Further, a review of our records and other information available to us has uncovered no information which would reflect negatively on VPAA, its owners, or its key personnel. 11

Under these circumst ances, we find that VPAA has the proper regard for the laws and regulations governing its services to ensure that its aircraft and personnel conform to applicable safety standards and that acceptable consumer relations practices will be followed

.

CITIZENSHIP

Section 41102 of the Transportation Code requires that certificates to engage in air transportation be held only by citizens of the United States as defined in 49 U.S.C. 40102(a)(15). That section requires that the president and two

- thirds of the Board of Directors and other managing officers

be U.S. citizens

, that at least 75 percent of the voting interest be owned by U.S. citizens

, and that the applicant must be under the actual control of U.S. citizens.

As previously stated, VPAA , a Delaware corporation, is owned by Fund I (25 percent) and Fund II (75 percent), each of which is organized under the laws of the S tate of Delaware as a limited partnership. Victory Park Capital , a Delaware limited liability company, acts as the investment manager for Fund I a nd Fund II and is owned by three U.S. citizens, Messrs. Mathew Ray, and Brendan Carroll, and Richard Levy.

Fund I is made up of 37 limited partners. Fund I’s 37 investors have indicated that they wi sh to remain anonymous. The general partner for Fund I is Victory Park GP, LLC, a Delaware limited liability company owned by Messrs. Ray and Carroll, and by Jacob Capital LLC (“Jacob Capital”)

. 12 While Fund I’s general partner is a U.S. citizen, absent f urther information regarding the citizenship of the limited partners, Fund I itself cannot be considered a U.S. citizen by Statute. 13

VPAA’s majority stockholder, Fund II

, consists of 16 limited part ners
, each of whom provided

sufficient information n ece ssary to verify their U.S. citizens hip

. 14 Victory Park GP II, LLC, a Delaware limited liability company owned by Messrs. Ray, Carroll, and Jacob Capital

, serves as the general partner of Fund II. VPAA states that all investment decisions on behalf of the two funds are made by the general partners.

Additionally, VPAA ’s president, board of directors, and other key personnel are all U.S. citizens

and the c ompany has provided an affidavit attesting that it is a citizen of the United States within

11 The Departm ent has reviewed the compliance dispositio n of Gulfs tream and finds it satisfactor y

. 12 Jacob Capital is an Illinois limited liability company whose sole member and manager is Mr. Richard Levy, a

U.S. citizen.

13 Section 40102(a)(15)(B) of the Statute states that a citizen of the United States, among other definitions, is “a partnership each of whose partners is an individual who is a citizen of the United States.”

14 The Joint Applicants requested that the Depart ment withhold from public disclosure the identities of Fund II’s investors. We address this request in CONFIDENTIAL TREATMENT section of this order.8

the meaning of the Transportation Code and that it is actually controlled by U.S. citizens. Finally, we have found nothing in the recor d to sugg est that control of VPAA rests with non

- U.S.

citizens.

Based on the above, we conclude that VPAA is a U.S. citizen and is fit, willing, and able to provide the commuter air transportation operations proposed, subject to certain conditions.

PUBLIC INTEREST

Section 41 105 of the Statute permits the Department to approve a transfer if it finds it in the public interest. In determining whether a transfer is consistent with the public interest, we must find that it will not conflict with important international aviation p olicy objectives and is not otherwise inconsistent with the public interest. In this latter regard, we must determine whether the acquiring entity is a U.S. citizen and will be fit to hold the economic authority at issue. 15
Moreover, section 41105(b) requires the Department to analyze the impact of the transfer on the viability of the air carrier applicants, competition in the domestic airline industry, and the trade position of the United States in the international air tr ansportation market.

The transfer of GIA ’s commuter air carrier authority , as described by this order, will prevent a disruption of air services in Flori da and in the EAS communities the air carrier serves in Alabama, Montana, New York, Pennsylvania, Ten nessee, and West Virg inia, . Also, the transfer will preserve competition in the inter

- Florida and Florida

- Bahamas market s while ensuring the

conti nued employment of more than 500 experienced GIA aviation professionals. The Joint Applicants also st ate in their application that “t he transfer will strengthen the trade position of the United States by providing another carrier to operate domestic and foreign routes, such as the
Caribbean tourism aviation market.” 16

After careful examination of the fitness inf ormation and application submitted by the Joint Applicants, we find that the proposed transaction warrants approval under the decisional criteria. We have determined that VPAA is a U.S. citizen and is fit, willing, and able to conduct the air transportati on authorized by the commuter authority currently held by GIA. Additionally, we find that the approval of the transfer will have a positive effect on the viability of VPAA since it will have access to significant financial resources. Moreover, since the acquisition and transfer of GIA’s commuter authority will not result in a change in the level of its operations, there should be no lessening of competition in the domestic airline industry or the U.S. international transportation market.

REQUEST FOR CON FIDENTIAL TREATMENT

On March 22 and April 15, 2011 , the Joint Applicants filed motion s for confidential treatment

under 14 CFR § 302.12 (“Rule 12”) of our rules to withhold from public disclosure the identities

of investors in Fund II

.

15 See Order 2000

- 8

- 5, Arrow Air; Order 2000

- 10

- 29, Kalitta Air; and Order 2000

- 12

- 10, Venture Travel/Taqu an Air.

16 See Joint Application of Gulfstream International Group, Inc. and VPAA Co. for Transfer of Commuter Air Carrier Authority, at 8.9

Rule 12 instruct s us to evaluate requests for confidential treatment by the standards of disclosure found in the Freedom of Information Act (5 U.S.C. section 552). Information may be withheld from disclosure under 5 U.S.C. 552(b)(4) if it is (1) commercial or financial, (2) obtained from a person outside of government, and (3) privileged or confidential ( Gulf and Western Industries,

Inc. v. United States , 615F.2d 527, 529 (D.C. Cir. 1979)).

There is no question that the information for which the Joint Applicants seek con fidential treatment is financial or commercial in nature and that it was obtained from a person outside the government. The remaining question is whether the information is privileged or confidential

-- whether “disclosure of the information is likely to ha ve either of the following effects: (1) impair the Government’s ability to obtain necessary information; or (2) cause substantial harm to the competitive position from whom the information was obtained” ( National Parks and

Conservation Association v. Morto n , 498 F.2d 765,770 (D.C. Cir.1974)). Further, to be privileged or confidential, the information must not be of the type that is usually released to the public ( Gulf and Western Industries, Inc. v. United States, 615F.2d 527,530 (D.C. Cir. 1979)).

We have reviewed the material submitted and have decided to grant confidential treatment to the information for which such treatment is sought. Regarding the list of private investors, the Department has in the past, granted confidential treatment to this type of information. We find that the release of this information could hamper any subsequent efforts to obtain financing and cause substantial harm to the competitive position of VPAA.

COMMUTER CONDITIONS & LIMITATIONS

While we are making the commut er air carrier authority transferred here effective immediately, VPAA’s ability to conduct its proposed commuter operations under this authority remains subject to our receipt of e vidence that VPAA has been certificated by the FAA to engage in the subject operations and a fully executed OST Form 6410 evidencing liability insurance coverage that meets the requirements of section 205.5(b) of our rules.

We remind VPAA of the requirements of 49 U.S.C. 41110(e). Specifically, that section requires that, once a n air carrier is found fit initially, it must remain fit in order to hold its authority. To

be assured that U.S. commuter air carriers continue to be fit after effective authority has been issued to them, we require that they supply information describing any subsequent substantial changes they may undergo in areas affecting fitness.

Further, should VPAA propose other substantial changes in its management or operations it must first comply with the requirements of section 204.5 of our rules. 17 The compliance of the

17 The air carrier may contact our Air Carrier Fitness Division to report proposed substantial changes in its

opera tions, ownership, or management, and to determine what additional information, if any, will be required under section 204.5. If the air carrier fails to file this updated information or if the information fails to demonstrate that the

air carrier will con tinue to be fit upon implementation of the substantial change, the Department may take such action as is appropriate, including enforcement action or steps to modify, suspend, or revoke the air carrier's commuter authority.10

company with this requirement is essential if we are to carry out our responsibilities under the section 41110(e). 18

Finally, to aid the Department in monitoring the fitness of new air carriers, we ask that all newly

authoriz ed comm uter air carriers submit a detailed progress report within 45 days following the

end o f the first year of commuter flight operations, to the Air Carrier Fitness Division. The report should include a description of the air carrier’s current operations (num ber 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, 19 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.

ACCOR DINGLY,

1

. We find that VP AA Co

. , is fit, willing, and able to engage in scheduled air tra nsport ation as a

commuter air carrier , subject to conditions.

2

. We transfer to VPAA Co.

, the C ommu ter Air Carrier Authorization issued to Gulfstream

Internatio nal Airlines, Inc.

, by Order 90

- 9

- 24 , in the form and subject to the Terms, Conditions,

and Limitations attached.

3

. We register the trade names “ Continental Connection,” “United Express

, ” “Gulfstream International,” “Island Air,” and “Gulfstream Internat ional Airlines” for use in VPAA Co. ’s

commuter operations.

4

. We direct VPAA Co. to submit to the Air Carrier Fitness Division a first year progress report within 45 days following the end o f its first year of commuter operations. 20

18 We also remind VPAA about the requirements of section 204.7 of our rules. This section provides, among other things, that (1) if the company ceases all operations for which it was found fit, it may not resume such operations unless its fitness has been redetermined, and (2) if the com pany does not resume operations within one year of its cessation, its commuter authority shall be revoked for dormancy.

19 These financial statements should include a balance sheet as of the end of the company’s first full year of actual commuter operation s and a twelve

- month income statement ending that same date.

20 The report shall 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 sum mary 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.11

5. We approve and consent to VPAA Co. assuming the 4 Essential Air Service contracts to provide EAS at 13 communities and transfer the obligations to serve those communities and the associated subsidy rates contained in those orders from Gulfstream Internati onal Airlines, Inc., to
VPAA Co.

, subject to the same terms and conditions of the EAS Orders

. 21

6

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

By:

SUSAN L. KURLAND Assistant Secretary

for Aviation and International Affairs

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

21 See Order 2010

- 6

- 25, Order 2010

- 9

- 12, Order 2011

- 1

- 27 , and Order 2011

- 3

- 26

.

# Commuter Air Carrier Authorization

This Certifies That



## VPAA CO

.

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 scheduled passenger air transportation operations as a commuter air carrier.

This Certificate is not transferable without the approva l of the Department of Transportation.

By Direction of the Secretary

Issued by Order 2011

- 4

- 28 Susan L. Kurland

On Month April 29

, 2011 Assistant Secretary for Effective on April 29, 2011 Aviation and International Affairs

### Attachment



### Terms, Conditions, and Limitations

VPAA CO.

is authorized to engage in scheduled passenger air transportation operations as a commuter air carrier.

This authority is subject to the following provisions:

(1) The holder shall at all times conduct its operations in accordance with the requirements of 14 CFR Part 298 and any other regulations prescribed by the Department of Transportation for the services authorized here, and with such other reasonable terms, conditions, and limitation s as the Department of Transportation may prescribe in the public interest.

(2) The holder may not operate aircraft designed to have a maximum passenger capacity of more than 60 seats or a maximum payload capacity of more than 18,000 pounds.

(3) The hold er's authority is effective only to the extent that such operations are also authorized by the Federal Aviation Administration (FAA), and comply with all U.S. Government requirements concerning security, including, but not limited to 49 CFR Part 1544.  

( 4 ) The holder shall at all times remain a "Citizen of the United States" as required by 49 U.S.C. 40102(a)(15).

(5 ) The holder shall maintain in effect liability insurance coverage as required under 14 CFR Part

205. Failure to maintain such insurance coverage will render this authority 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 authority.

(6 ) The h older may reduce or terminate service at any point or between any two points, subject to compliance with the provisions of 49 U.S.C. 41734 and all orders and regulations issued by the Department of Transportation under that section.



### (7) The holder may not provide scheduled passenger air transportation to or from Dallas (Love Field), Texas, except within the limits set forth in section 29 of the International Air Transportation Competition Act of 1979, as amended or as modified by any future legislation add ressing access restrictions to or from Love Field.

  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.2

(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 does not commence actual flying operations as a commuter air carrier under this authority within one year of the date of the Department's determination of its fitness, its commuter authority shall be revoked for dormancy. Furt her, in the event that the holder commences but subsequently ceases all scheduled passenger operations, the authority granted here 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 such operations within one year of its cessation, its commuter authority shall be revoked for dormancy.Attachment A

SERVICE LIST FOR

VPAA CO.

DHernandez@vedderprice.com Crichards@vedderprice.com dhacke@gulfstreamair.com szemnick@ Victory Park Capital dvisors.com mray@ Victory Park Capital advisors.com nancy.kessler@dot.gov Andrea.Handel@usdoj.gov peter.lynch@faa.dot.gov W.Jeff.Weber@faa.dot.gov bernard.Stankus@dot.gov anne.suissa@dot.gov rosendo.m.rigau@faa.dot.gov