Order 2010

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- 1 Served: August 6, 2010

U N I T E DS T A TE S O F A M E R I C A D E P A R T M E N T OF T R

A N S P O R T A T
I O N UNITED STATES OF AMERICA

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

Issued by the Department of Transportation on the 6 th day

of August, 2006 Fitness Determination of SCHUMAN AVIATION COMPANY LTD. d/b/a MAKANI KAI HELICOPTERS d/b/a KO OLINA HELICOPTERS d/b/a PACIFIC AIR EXPRESS d/b/a MAKANI KAI AIR CHARTERS as a commuter air carrier under section 49 U.S.C. § 41738 Docket DOT
-OST
-20 10
-0006

FINAL ORDER By Order 2010

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- 17 , issued June 16, 2010 , we directed all interested persons to show cause why we should not make final our tentative findings and conclusions that Schuman Aviation Company Ltd. d/b/a Makani Kai Helicopters d/b/a Ko Olina Helicopters d/b/a Pacific Air Express d/b/a Makani Kai Air Charters (“Schuman Aviation”) is fit, willing, and able to provide scheduled passenger service as a commuter air carrier using small aircraft pursuant to Part 135 of the Federal Aviation Regulations. Interested persons were given 14 calendar days to file objections to the order. On June 29, 2010 , Pacific Wings , LLC

. d/b/a Pacific Wings Airlines d/b/a PW Express d/b/a Kentucky Skies d/b/a KentuckyS kies d/b/a Tennessee Skies d/b/a TennesseeSkies d/b/a GeorgiaSkies d/b/a Georgia Skies d/b/a Nashville Air Shuttle d/b/a New Mexico Airlines (“Pacific Wings”), a U.S. certificated air carrier, 1 filed an objection to the show

- cause order. Pacific Wings states that it does not object to the Department’s tentative finding proposing to find Schuman Aviation fit, willing, and able to provide scheduled passenger service as a commuter air carrier

. It does, however, object to Schuman’s registration of the trade name “Pacific Air Express.” Pacific Wings states that it currently performs scheduled and charter operations between and among destinations in Hawaii using the names Pacific Wings, Paci fic Wings Airlines, and/or PW Express. Moreover, Pacific Wings states that it performs its inter

- island flights using 9

- seat aircraft similar to the aircraft Schuman Aviation proposes to operate and contends that the use of the name “Pacific Air Express” by S chuman Aviation will result in public confusion. P acific

1 See Order 2001

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-2, issued August 7, 2001.2

Wings also asks that the Department preclude Schuman Aviation from using the “Pacific Air Express” name in scheduled or charter passenger service. On July 1 4, 2010, Schuman Aviation filed a response to the objection of Pacific Wings. Schuman Aviation believes that there is no potential for public confusion regarding its operations using the Pacific Air Express name. 2 The applicant states that it currently only uses the Pacific Air Express name for inter

- island Hawaii flights operated on behalf of Pacific Air Cargo pursuant to an agreement between the companies. Schuman also states that it intends to conduct its ongoing charter passenger operations using the name Makani Kai Air Charters and that its proposed commuter operations will be operated using the name “Is land Air” pursuant to an agreement with Island Air, whereby Hawaii Island Air d/b/a Is land Air (“Island Air”), a U.S. certificated air carrier, 3 would sell and market the service. Furthermore, Schuman Aviation claims that Pacific Wings lacks the appropriate Federal Aviation Administration (“FAA”) authority and the proper equipment to provide air service between Honolulu International Airport and Princeville Airport, the market in which Schuman Aviation intends to conduct its proposed commuter operations

. On July 22 , 2010, Pacific Wings filed a reply to Schuman Aviations response. P acific Wings reiterates its belief that the use of the name “Pacific Air Express” by S chuman Aviation will result in public confusion and refutes Schuman Aviation’s contention that it lacks the required authority or equipment to provide air service between Honolulu International Airport and Princeville Airport. Finally, Pacific Wings ask that the Department condition its final order in this proceeding on Schuman not using the “Pacific Air Express” name in any of its operations. No other objections to Order 2010

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- 17 were received. Under Part 215 (14 CFR 215) of our rules, requires air carriers to seek Department approval for the use of a name and to notify all air carriers that use a similar name . In 1988, the Department issued a final rule applicable to all certificated air carriers, commuter air carriers, foreign direct air carriers, and applicants for initial or amended authority stating, among other things, that we would not necessarily prohibit similar name registrations, 4 and encouraging air carriers to resolve potential problems among themselves using existing legal protections without unnecessary government action. At the same time, the Department is charged with ensuring that the public is not subject to any unfair or deceptive practices or unfair methods of competition. 49 U.S.C. § 41712. Thus, although we made clear in Part 215 that we would not ordinarily b ecome involved in name similarity disputes, we specifically reserved the possibility o f intervention where there was evidence of a significant potential for public confusion. 14 CFR 215.2. The Department may also pursue enforcement action in cases where there is evidence of actual public harm or

2 We will grant Schuman Aviation leave to file an Otherwise Unauthorized Document. 3 See Order 2006

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- 9. 4 Use and Change of Names of Air Carriers, Foreign Air Carriers, and Commuter Air Carri ers; Final Rule. (53 FR 17921; May 19, 1988)3

confusion in violation of the unfair and deceptive practices provisions set forth under 49 U.S.C. 41712; however, no such practices have been alleged here.
Inthis case, we find no compelling evidence that would lead us to conclude that public confusion would likely

result from the applicant’s use of the “Pacific Air Express” name in its operations. The names used by

the two companies are not identical. Moreover, as Schuman Aviation noted in its response to Pacific Wings ’ objection, it has been using the Pacific Air Express name in Hawaii in connection with operations on behalf of Pacific Air Cargo and it intends to conduct its proposed commuter operations pursuant to an agreement with Is land Air, whereby Island Air would sell and market the service under the Is land Air name. In addition, we note that each air carrier has performed their respective operations s imultaneously now for more than two years and the Department is neither aware of any evidence of public harm or confusion nor have we received any consumer complaints regarding the applicant and its operating name.
In light of the above, we acknowledge the registration of the trade name “Pacific Air Express ” for use by

S chuman Aviation in its operations. However, should the Department find evidence of public confusion, we will take appropriate action under § 41712. ACCORDINGLY,
1. We find that Schuman Aviation Company Ltd. d/b/a Makani Kai Helicopters d/b/a Ko Olina Helicopters d/b/a Pacific Air Express d/b/a Makani Kai Air Charters is fit, willing, and able under 49 U.S.C. § 41738 to provide scheduled passenger service as a commuter air carrier using small aircraft pursuant to Part 135 of the Federal Aviation Regulations. 2. We issue a Commuter Air Carrier Authorization to Schuman Aviation Company Ltd. d/b/a Makani Kai Helicopters d/b/a Ko Olina Helicopters d/b/a Pacific Air Express d/b/a Makani Kai Air Charters , subject to the Terms, Conditions, and Limitations attached. 3. We direct Schuman Aviation Company Ltd. d/b/a Makani Kai Helicopters d/b/a Ko Olina Helicopters d/b/a Pacific Air Express d/b/a Makani Kai Air Charters to submit to the Air Carrier Fitness Division a first year progress report within 45 days following the end of its first year of commuter operations. 5

5 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 em ployees), a summary of

how thes e operations have changed during the year, a discussion of any changes it anticipates from its current operations during its second year, a balance sheet as of the end of the com pany’s first full year of actual flight operations and a twelve month income statement ending that same date, 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.4

4. We grant all motions for leave to file an Otherwise Unauthorized Document filed in Docket DOT

- OST

-2010

- 0006

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. We will s erve 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 W ide Web at: http://www.regulations.gov

# Commuter Air Carrier Authorization

SCHUMAN AVIATION COMPANY LTD. d/b/a MAKANI KAI HELICOPTERS d/b/a MAKANI KAI AIR CHARTERS d/b/a KO OLINA HELICOPTERS d/b/a PACIFIC AIR EXPRESS
is authorized, subject t

o the provisions of Subtitle VII of Title 49 of the 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 authorization is not transferable without the approval of the Department of Transportation.
By Direction of the Secretary

Issued by Order 2010
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-1 Susan L. Kurland On August 6, 2010 Assistant Secretary for Effective (See Attached) Aviation and International Affairs

### Attachment 

### Terms, Conditions, and Limitations
SCHUMAN AVIATION COMPANY LTD. D/B/A MAKANI KAI HELICOPTERS D/B/A KO OLINA HELIC OPTERS D/B/A MAKANI KAI AIR CHARTERS D/B/A PACIFIC AIR EXPRESS
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 authority to conduct scheduled passenger operations will not become effective until six (business) days af

ter the Department has received the following documents; provided , however , that the Department may stay the effectiveness of this authority at any time prior to that date: (a ) A copy of the holder's Air Carrier Certificate and Operations Specifications authorizing such operations from the Federal Aviation Administration (FAA). (b ) 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. (c) A statement of any changes the holder has undergone in its ownership, key personnel, operating plans, financial posture, or compliance history, since the date of the Show Cause Order in this case. (d ) A revised list of

pre-operating expenses already paid and those remaining to be paid, as well as independent verification that the holder has available to it funds sufficient to cover any remaining pre-operating expenses and to provide a working capital reserve equal to the operating costs that would be incurred in three months of operations. (2 ) Pending receipt of effective authority, the holder may not accept payment of any kind (i.e., cash, check, or credit card) or issue tickets for scheduled passenger operations, and any advertisement or listing of flights by the holder m ust prominently state: "This service is subject to receipt of government operating authority." (3 ) 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 Transportation2

for the services authorized here, and with such other reasonable terms, conditions, and limitations as the Department of Transportation may prescribe in the public interest. (4 ) The holder’s authority is limited to operations conducted pursuant to Part 135 of the Federal Aviation Regulations. I n the event that the holder wishes to institute operations that would require Part 121 certification from the FAA, it must first be determined fit for such operations. ( 5 ) 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. ( 6 ) The holder's authority under this certificate is effective only to the extent that such operations are a lso authorized by the FAA, and comply with all U.S. Government requirements concerning security

, including, but not limited to 49 CFR Part 1544

.  ( 7 ) The holder shall at all times remain a "Citizen of the United States " as required by 49 U.S.C. § 40102(a) (15). ( 8 ) The holder shall maintain in effect liability insuran ce coverage as required under 14 CFR Part 205. F

ailure to maintain such insurance coverage will render this authority ineffective, and this or other failure to comply with the provisions of S ubtitle VII of Title 49 of the United States Code or the Department's regulations shall be sufficient grounds to revoke this authority. ( 9 ) In the event that the holder receives effective scheduled passenger authority, the following additional conditions will apply: (a ) The holder 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. (b ) 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 an

y future legislation addressing access restrictions to or from Love Field.

. ( 10 ) Should the holder propose any substantial changes in its ownership, management, or operations (as that term is defined in 14 CFR 204.2(l)), it must first comply with the requirements of 14 CFR 204.5.

 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.3

(1 1 ) 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 sha ll be revoked for dormancy. F urther, 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. M

oreover, 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 SCHUMAN AVIATION COMPANY LTD. D/B/A MAKANI KAI HELICOPTERS D/B/A KO OLINA HELIC OPTERS D/B/A MAKANI KAI AIR CHARTERS D/B/A PACIFIC AIR EXPRESS RICHARD SCHUMAN PRESIDENT SCHUMAN AVIATION COMPANY LTD 130 IOLANA PLACE HONOLULU HAWAII 96819 PETER LYNCH AGC

- 300 ASST CHIEF COUNSEL FOR ENFORCEMENT FEDERAL AVIATION ADMINISTRATION 800 INDEPENDENCE AVE SW WASHI NGTON DC 20591 WILLIAM J WEBER CERTIFICATION SECTION MANAGER FAA AFS

- 900 45005 AVIATION DRIVE SUITE 131 DULLES VA 20166 GI NO REZZONICO PRI NCIPLE OPERATIONS INSPECTOR FEDERAL AVIATION ADMINISTRATION HONOLULU FSDO 135 NAKOLO PLACE HONOLULU HAWAII 9681 9 ANNE SUISSA RTS

-42 OFFICE OF AIRLINE INFORMATION DOT/RITA/BTS E

- 34 1200 NEW JERSEY AVE SE WASHI NGTON DC 20590 BERNARD STANKUS OFFICE OF AIRLINE INFORMATION DOT/RITA/BTS RTS

-42 1200 NEW JERSEY AVE SE WASHI NGTON DC 20590 CLAY MORITZ OFFICE OF AIRLINE INFORMATION DOT/RITA/BTS RTS

-42 1200 NEW JERSEY AVE SE WASHI NGTON DC 20590 GREG WALDEN PATTON BOGGS LLP 2550 M STREET NW WASHI NGTON DC 20037