BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

February 23, 2012

Application of 

SUN AIR EXPRESS, LLC d/b/a SUN AIR 

INTERNATIONAL

For authority to conduct scheduled passenger 

operations as a commuter air carrier under 49 U.S.C. 

41738

Docket OST-2011-0169

MOTION OF SEAPORT AIRLINES, INC FOR 

LEAVE TO FILE AN OTHERWISE UNAUTHORIZED DOCUMENT

SeaPort Airlines, Inc. (hereafter “SeaPort”) motions for leave to file an otherwise 

unauthorized document in the fitness proceeding of Sun Air Express, LLC d/b/a Sun Air 

International (hereafter “Sun Air”) for authority to conduct scheduled passenger operations as a 

commuter air carrier. We believe that Sun Air’s application does not accurately reflect its 

operating plans and, as a result, it should amend the application including demonstration of 

adequate funding that meets the Department’s financial fitness criteria.

SeaPort did not file during the regular comment period because at that time we believed 

that Sun Air intended to operate the limited services as described in its application. Since then, 

however, Sun Air filed a proposal with the Department to provide Essential Air Service (“EAS”) 

at communities in Alabama and Mississippi and with an operating plan that requires greater 

funding levels to satisfy the Department’s financial fitness criteria.

For this reason, SeaPort respectfully requests that the Department grant this motion,

place the attached comments in the Sun Air application docket, and give careful consideration 

to the merits of those comments. 

Communication with respect to this document should be sent to:

Timothy F Sieber

Vice President – Strategy & Corporate Development

SeaPort Airlines, Inc.

7505 NE Airport Way

Portland International Airport

Portland, Oregon 97218

(971) 340-1716

Email: tsieber@seaportair.com
BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

February 23, 2012

Application of 

SUN AIR EXPRESS, LLC d/b/a SUN AIR 

INTERNATIONAL

For authority to conduct scheduled passenger 

operations as a commuter air carrier under 49 U.S.C. 

41738

Docket OST-2011-0169

COMMENTS OF SEAPORT AIRLINES, INC.

SeaPort Airlines, Inc. (hereafter “SeaPort”) believes that the Department should suspend 

further review of the application of Sun Air Express, LLC d/b/a Sun Air International (hereafter 

“Sun Air”) for authority to conduct scheduled passenger operations as a commuter air carrier 

(hereafter “Application”) because it appears that Sun Air’s operating plans and, therefore, 

required level of funding necessary to meet the Department’s financial fitness criteria, is 

significantly different from that outlined to the Department in its application.1 

In support of its position, SeaPort states the following:

Sun Air filed for authority to conduct scheduled passenger operations as a commuter air 

carrier on September 12, 2011 with amendments filed on September 23, 2011 and January 10, 

2012. The operating plan outlined by Sun Air in the Application and subsequent amendments 

consists of a single roundtrip between West Palm Beach, Florida and Freeport, Bahamas. On 

January 18, 2012, however, Sun Air submitted a proposal to provide Essential Air Service 

 

1

SeaPort has read the objections of VPAA Co. relating to a non-compete agreement and how litigation costs could 

impact pre-operating expenses and, therefore, Sun Air’s financial fitness. While on the surface these arguments 

appear to have merit, SeaPort does not have a “dog in that fight” nor do we have all the material facts. Therefore, we 

will limit our comments herein to the change in operating plan of Sun Air and resultant impact on funding levels 

needed to meet the Department’s financial fitness criteria.
Comments of SeaPort Airlines, Inc.

OST -2011-0169

Page 2

(hereafter “Proposal”) between Memphis and three communities in the southeastern United 

States.2

The operating plan in Sun Air’s Application is materially different from that described in 

Sun Air’s Proposal and, as a direct result, the funding required of Sun Air to meet the 

Department’s financial fitness criteria is significantly greater than is currently reflected in its 

Application.

In the Department’s “Information Packet on How to Become A Commuter Air Carrier,” 

the Department provides detailed information on determining financial fitness which, in 

summary, requires the applicant to verify that it has sufficient resources (e.g., cash, lines-ofcredit, or bank loans) to cover all of its pre-operating costs plus the operating expenses that are 

reasonably projected to be incurred by the applicant during three months of “normal” commuter 

operations. More specifically, the Department notes:

“Because projected expenses during the first several months of operations do not 

include all costs that will be incurred during a “normal” or average period of 

operations, the three-month standard is calculated by dividing the applicant’s 

estimated total first year operating expenses by four. In addition, if the applicant’s 

most recent balance sheet shows a negative working capital balance for any 

ongoing operations (e.g., air taxi, aircraft leasing, or fixed base operation), the 

amount of that working capital deficit will be considered a pre-operating expense 

in calculating the amount of funds that the applicant must have available to meet 

the financial fitness criteria for the proposed operations.”

3

 

2 Greenville, MS (Docket OST-2008-0209), Muscle Shoals, AL (Docket OST-2000-7856), and Tupelo, MS (Docket 

OST-2009-0305).

3

“INFORMATION PACKET ON HOW TO BECOME A COMMUTER AIR CARRIER” prepared by US Department of 

Transportation, Air Carrier Fitness Division, May 2005, Footnote #15, page 17
Comments of SeaPort Airlines, Inc.

OST -2011-0169

Page 3

In Sun Air’s most recent amendment to its Application, the company states that as of 

November 14, 2011, it had $52,277.21 in its checking account and access to a $100,000 line of

credit for a total of $152,277.21 in available capital. This amount may be sufficient to meet the 

Department’s financial fitness criteria based on the operating plan that Sun Air described in its 

Application.

The operating plan provided in Sun Air’s Application, however, is materially different 

from the operating plan in Sun Air’s EAS Proposal and, therefore, the amount of funds required 

for Sun Air to meet the Department’s financial fitness criteria are significantly greater.

4

More specifically, Sun Air filed a Proposal to provide Essential Air Service at Greenville

and Tupelo, Mississippi and Muscle Shoals, Alabama on January 18, 2012. The various 

schedule options in that Proposal bear no resemblance to the operating plan that Sun Air 

outlined in its Application for commuter air carrier authority. More importantly, however, the 

greater scope of the EAS operations outlined in the Proposal means that for Sun Air to meet the 

Department’s financial fitness criteria it will require higher levels of funding than it has 

demonstrated in its Application. 

Table 1 (next page) compares the level of funding needed to meet the Department’s 

financial fitness criteria for both the operating plan outlined in Sun Air’s Application and the 

schedule options in Sun Air’s EAS Proposal. The projections of annualized operating expenses 

were taken directly from Sun Air’s Application and Proposal as filed with the Department, and

then divide by four in accordance with the Department’s own normal practices to determine the 

financial fitness requirement.

 

4

For purposes of these comments we have assumed that Sun Air still intends to operate the Bahamas service 

described in its Application, but acknowledge that only Sun Air can provide the Department with its true operating 

plan.
Comments of SeaPort Airlines, Inc.

OST -2011-0169

Page 4

Table 1

Capital Required to Meet DOT Financial Fitness Criteria

Sun Air Application for Scheduled Authority v Sun Air EAS Proposal

As described in its Application and the additional information provided at the 

Department’s request, the $152,277.21 that Sun Air currently has access to provides just a 

fraction of the amount needed to meet the Department’s financial fitness criteria if it were to be 

awarded some or all of the EAS markets in its Proposal.

Based on the above calculations, the lowest amount of funds that Sun Air will need to

meet the Department’s financial fitness criteria is $706,998. This assumes that Sun Air is 

Sun Air International 

Application for 

Commuter Air Carrier 

Authority

EAS Proposal - 

Schedule Option #1

EAS Proposal - 

Schedule Option #2

EAS Proposal - 

Schedule Option #3

West Palm Beach - Nassau

Sun Air Projection of 

Normalized Annual 

Operating Expenses

$267,564 $267,564 $267,564 $267,564

1/4 required for Financial 

Fitness Criteria $66,891 $66,891 $66,891 $66,891

EAS at Greenville, MS

Sun Air Projection of 

Normalized Annual 

Operating Expenses

$2,442,953 $2,883,743 $2,591,254

1/4 required for Financial 

Fitness Criteria $0 $610,738 $720,936 $647,814

EAS at Muscle Shoals, AL

Sun Air Projection of 

Normalized Annual 

Operating Expenses

$2,489,923 $2,481,424

1/4 required for Financial 

Fitness Criteria $0 $622,481 $620,356 $0

EAS at Tupelo, MS

Sun Air Projection of 

Normalized Annual 

Operating Expenses

$2,312,426 $3,085,910 $2,420,937

1/4 required for Financial 

Fitness Criteria $0 $578,107 $771,478 $605,234

Calculated Totals - ALL

Total of Normalized Annual 

Operating Expenses $287,654 $7,512,866 $8,718,641 $5,279,755

Sun Air Projected PreOperating Expenses $62,000 $62,000 $62,000 $62,000

1/4 required for Financial 

Fitness Criteria $128,891 $1,878,217 $2,179,660 $1,319,939

Market
Comments of SeaPort Airlines, Inc.

OST -2011-0169

Page 5

awarded the lowest cost option in only one market (assumed to be Tupelo because it represents 

the lowest cost market on stand-alone basis) and the planned Florida – Bahamas service as 

described in its Application. The highest amount of funding that Sun Air may need for financial 

fitness is $2,179,660. This assumes Sun Air is awarded EAS contracts in all three of the 

communities with the highest possible level of frequency as outlined in its Proposal and the 

planned Florida – Bahamas service in its Application. Regardless of the actual amount of funds 

needed, Sun Air does not demonstrate in its Application that it has access to a level that meets

the Department’s financial fitness criteria when projected operating expenses related to its EAS 

Proposal are included in the calculations.

Further, it is the view of SeaPort that the Department is unable to calculate the precise 

level of funds needed for financial fitness until such time as a replacement carrier and specific

service options are awarded in each of the EAS communities by the Department. If Sun Air 

were awarded any of the EAS communities, only then would the Department be able to

reasonably estimate Sun Air’s first year operating expenses and determine the funding level 

needed to meet financial fitness criteria. The Department, however, cannot award Sun Air an 

EAS contract until such time as it has the requisite authority to operate as a commuter air 

carrier. Sun Air has put the Department in an classic “chicken or the egg” quandary and, in our 

view, the only way reasonable solution is for Sun Air to amend its application and demonstrate 

adequate funding that accurately reflects a first year operating plan that includes the EAS 

markets in its Proposal.

Additionally, we note that a letter dated December 29, 2011 to counsel for Sun Air from 

the Air Carrier Fitness Division reminded Sun Air that it “should promptly provide the 

Department with any information regarding changes it may undergo in areas affecting its fitness 

(i.e., management, operating plans or financial condition, compliance disposition, or ownership) 

while its application is under review by the Department.”5 To our knowledge, Sun Air has yet to 

 

5

Letter from Laurelyn J. Remo, Chief of Air Carrier Fitness Division to Lonnie A. Pera, counsel for Sun Air Express, 

LCC (Zuckert, Scoutt & Rasenberger, LLP) on December 29, 2011.
Comments of SeaPort Airlines, Inc.

OST -2011-0169

Page 6

update with the information presented in its Application despite having filed its Proposal with the 

Department over 30 days ago.

Finally, and despite comments that we expect the Department will receive in response, 

SeaPort is not making this filing in an attempt to suppress potential competition from Sun Air. To 

the contrary, we believe a robust competitive environment is necessary to ensure that

consumers have choice (including communities selecting an EAS carrier) and that competition 

forces all airlines to continually strive for service improvement and operational efficiency. In this 

context, we look forward to challenging Sun Air in the market place. That being said, our 

concern is for the potential impact on EAS communities should Sun Air be granted commuter air 

carrier authority at the insufficient funding level currently in its Application and then 

subsequently suspends flights for financial reasons before a replacement carrier can initiate

service. This would be a great inconvenience to travelers, negatively impact the economies of 

affected communities, and place a burden on the replacement carrier to have to rebuild the 

market’s traffic after a period of dormancy. An extended service interruption could result in traffic 

rebuilding very slowly and put the affected communities at risk of permanently losing their EAS 

eligibility.

For the foregoing reasons, SeaPort respectfully urges the Department to suspend further 

review of Sun Air’s Application and that Sun Air be required to amend its Application to reflect 

the different operating plan described in its EAS Proposal, including demonstrating that it has 

the funds needed to satisfy the Department’s financial fitness criteria. In the alternative, SeaPort

urges the Department to exercise its ability to impose conditions on the operating authority of 

Sun Air, thus limiting the company to an operating plan that is appropriate to the level of funding 

described in its Application.6 

 

6

“INFORMATION PACKET ON HOW TO BECOME A COMMUTER AIR CARRIER” prepared by US Department of 

Transportation, Air Carrier Fitness Division, May 2005, page 25. “In order to ensure that a company remains fit after it 

is given effective authority, the Department may impose conditions on the company’s operations - such as a limit on 

the duration of the authority (e.g., for one year), or on the number, type, or size of aircraft (e.g., those that can be 

operated under Part 135 of the Federal Aviation Regulations) that the applicant may operate. If, at a later date, the 

company wishes to expand its operations beyond those limits, it would need to notify the Department and establish its 

fitness to do so. These conditions are intended to enable the Department to monitor the carrier’s operations more 

closely, particularly during its first several years.”
Comments of SeaPort Airlines, Inc.

OST -2011-0169

Page 7

Respectfully submitted,

Timothy F Sieber

Vice President – Strategy & Corporate Development

SEAPORT AIRLINES, INC.

7505 NE Airport Way

Portland International Airport

Portland, Oregon 97218

(971) 340-1716

Email: tsieber@seaportair.com

February 23, 2012
CERTIFICATE OF SERVICE

SeaPort Airlines, Inc. certifies that a copy of the foregoing MOTION FOR LEAVE TO FILE AN 

OTHERWISE UNAUTHORIZED DOCUMENT and COMMENTS OF SEAPORT AIRLINES, INC. 

has been served on the parties named below via electronic mail and then US Postal Service.

Ms. Laura Remo

Chief, Air Carrier Fitness Division, X-56

Office of Aviation Analysis

U.S. Department of Transportation

1200 New Jersey Avenue S.E., 8

th Floor

Washington, DC 20590

laura.remo@dot.gov

Mr. Dennis DeVany

Chief, Essential Air Service Division

Office of Aviation Analysis

U.S. Department of Transportation

1200 New Jersey Avenue S.E., 8

th Floor

Washington, DC 20590

dennis.devany@dot.gov

Mr. Edward Dasilva

Flight Standards District Office – 17

Federal Aviation Administration

2895 S.W. 145th Avenue

Suite 120

Miramar, FL 33207

edward.m.dasilva@faa.gov

Mr. Thomas L. Cooper

Chief Executive Officer & President

Sun Air Express, LLC d/b/a Sun Air International

3201 Griffin Road, 4th Floor

Fort Lauderdale, FL 33312

tlcooper@gosunair.com

Lonnie Anne Pera

(Counsel for Sun Air Express LLC d/b/a Sun Air International)

888 Seventh Street, N.W.

Suite 700

Washington, DC 20006

lapera@zsrlaw.com

Mr. David M. Hernandez 

(Attorney for Silver Airways Corp. f/k/a VPAA Co.)

Vedder Price P.C.

14011 I Street NW, Suite 1100

Washington, DC 20005

dhernandez@vedderprice.com