Order 2012

- 6

- 1 Served: June 1, 2012

U N I T E D S

T A T E S O F A

M E R I C A D E P A R T M E N T O F 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 1 st day of June , 20 12

Application of

SUN AIR EXPRESS, LLC

d/b/a SUN AIR INTERNATIONAL

for auth ority to engage in scheduled passenger operations as a commuter air carrier under
49 U.S.C. § 41738 Docket DOT

- OST

- 20 11

- 0169

ORDER TO SHOW CAUSE PROPOSING ISSUANCE OF COMMUTER AIR CARRIER AUTHORITY

Summary

By this order, we tentatively find that Sun Air Express, LLC d/b/a Sun Air International (“Sun Air”) is a citizen of the United States and is fit, willing, and able to provide scheduled passenger operations as a commuter air carrier

, subject to conditions

.

Background

Section 41738 of Title 49 of the United States Code (“the Transportation Code”) and section 298.21(d) of the Department’s Aviation Economic Regulations direct us to determine whether companies proposing to provide scheduled passenger service as commuter air carriers are “fit, willing, and able to perform the service,” and to ensure that all operations relating to this service conform to the safety standards established by the Federal Aviation Administration ( “ FAA ” ). In making fitness findings, the Department uses a three

- part test tha t 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 n air carrier’s fitness are whether the applic ant: (1) will have the managerial skills and technical ability to conduct the proposed operations, (2) will have sufficient financial resources to commence the operations proposed without posing an undue risk to consumers or their funds, and (3) will compl y with the Transportation Code and regulations imposed by Federal and State agencies. We must also determine that the applicant is a U.S. citizen.

On September 9, 2011

, Sun Air filed an application in Docket DOT

- OST

- 20 11

- 0169 for authority to conduct sc heduled passenger operations as a commuter air carrier pursuant to section2

41738 of the Transportation Code. Sun Air accompanied its application with the fitness information required by section 204.3 of our regulations (14 CFR 204.3)

.

On September 23, 20 11, Sun Air amended its application to reflect a change in the market it intends to serve. Instead of offering commuter service between West Palm Beach, Florida, and Freeport, Grand Bahamas, Sun Air now intends to provide one daily roundtrip flight betwee n Miami, Florida, and Bimini, Bahamas.

On September 30, 2011, VPAA Co. d /b/a Gulfstream International Airlines (“Gulfstream”)

, 1 a U.S. commuter air carrier and the prior owner of Sun Air

, 2 filed an answer in response to Sun Air’s application, alleging t hat Sun Air is not able to perform the scheduled services it proposes. In support of its position, Gulfstream claims that based on a provision in the Membership Interest Purchase Agreement (“Membership Agreement”) entered into by Gulfstream and Sun Air’s

current owners , Sun Air could not engage in scheduled operations or compete with Gulfstream in certain markets the company serves, which consist primarily of markets between Florida and the
Bahamas , without Gulfstream’s prior written consent

. Gulfstream f urther states that “Sun Air’s operational restrictions are material and relevant to the Department’s decision

- making process regarding whether Sun Air is able to perform the requested scheduled service.” 3

On October 7, 2011, Sun Air filed a reply, disagre eing with Gulfstream’s interpretation of the provision in the Membership Agreement. Sun Air claims that the provision at issue simply states that “Sun Air cannot fly or serve, or provide schedule services, on any point or point route in
which Gulfstream o perates.” 4 The applicant states that Gulfstream does not offer service between Miami and Bimini, and therefore, Sun Air’s proposed scheduled service in this market is new and does not violate the Membership Agreement.

By letter dated October 21, 2011, t he Department requested updated information and clarification from Sun Air. Specifically, the Department asked the applicant to clarify dates of employment for its key personnel and to provide updated financial forecasts and third

- party verification of fu nding available to the company.

On November 15, 2011, Sun Air supplemented its application. The applicant provided the Department’s requested information and noted that it increased its pre

- operating cost forecast to account for additional legal fees and monthly set up fees for its newly purchased Radixx air passenger reservation system.

1 During the pendency of this application, VPAA Co. changed its corporate name to “Silver Airways Corp.” To avoid confusion, however, we will continue to reference the company as either VPAA or Gulfstream.

2 On January 21, 2011, VPAA acquired its ownership interest in Sun Air through the bankruptcy proceeding of

Gulfstream In ternational Group, Inc. (“GIG”). At that time, GIG was the parent company of Gulfstream International Airlines, Inc. (“GIA”), a U.S. commuter air carrier, and Gulfstream Connection, Inc. (“Connection”), a U.S. air taxi known now as Sun Air. Subsequently, VPAA was found fit as a commuter air carrier ( See Order 2 011

- 4

- 28) and reorganized Sun Air into a Delaware limited liability company. On July 26, 2011, VPAA sold its ownership interest in Sun Air to Cooper Trading Corporation and Mr. Thomas L. Cooper

. M r. Cooper was a former owner and executive of GIG, GIA, and Connection.

3 See Answer of VPAA (Gulfstream) dated September 30, 2011, at 5.

4 See R eply of Sun Air dated October 7, 2011, at 3.3

On November 22, 2011, Gulfst ream filed an answer in response to Sun Air’s supplemental filing, requesting the Department to deny the application at issue herein until “Sun Air provides (1) a realistic response to the Department’s October 21, 2011

, request regarding an estimate of the air carrier’s legal fees and (2) an explanation regarding how it intends to operate between Miami and Bimini, Bahamas

, when Gulfstream int ends to commence operations in the identical market in early 2012.” 5 In addition, Gulfstream claims that Sun Air grossly underestimated its pre

operating legal fee expenses in view of the fact that “Gulfstream is fully prepared to initiate litigation to e nforce its rights under the [Membership] Agreement.” 6

On November 29, 2011, Sun Air filed a reply, stating that Gulfstream has not provided any new arguments in the record of this case and the only difference in Gulfstream’s pleading is the fact
that the company has suddenly decided to offer service between the same markets Sun Air proposes to provide scheduled service to. Sun Air asserts that Gulfstream’s decision to enter the
Miami

- Bimini market is a “crude attempt to forestall competition in the entir e Florida

- Bahamas
market.” 7

By letter dated December 29, 2011, the Department requested that Sun Air submit third

- party verification from Cooper Trading Company showing that the company has the financial wherewithal to provide Sun Air a $100,000 line

- of

- c redit. On January 6, 2012, Sun Air filed the requested information.

We have reviewed the arguments submitted by Gulfstream and Sun Air regarding Sun Air’s ability to provide the proposed scheduled service based on a provision in a commercial contract

f reely entered into by Sun Air and Gulfstream and believe that this issue should not be decided in the context of the Department’s licensing proceeding

. Rather, such issues should be resolved in the appropriate legal forum established to address contractua l disputes. Further, s hould Sun Air
be found fit to commenc e scheduled passenger operations as a commuter air carrier and should Gulfstream choose to pursue legal action against Sun Air, which the Department acknowledges could impact both companies’ finan cial position, the Department will not hesitate to initiate a review of both air carriers’ fitness and take whatever action may be necessary as a result.

On February 23, 2012, SeaPort Airlines, Inc. (“SeaPort”), filed a motion for leave to file an
other wise unauthorized document, stating that Sun Air’s required level of funding necessary to meet the Department’s financial fitness test for commuter authority is significantly greater than
that current ly reflected in the company’s commuter application. In support of its position,
SeaPort notes that since applying for commuter authority, Sun Air has, in a separate proceeding, submitted a proposal to provide Essential Air Service (“EAS”) to three communities in Alabama and Mississippi

, 8 which changes the oper ating plan of Sun Air

. SeaPort argues that Sun Air should provide updated financial fitness information to reflect the additional scheduled flights it
proposes to operate. The air carrier maintains that the potential impact on EAS communities
should Sun Air be granted commuter authority based at the insufficient funding level in its

5 See Answer of VPAA (Gulfstream) dated November 22, 2011, at 1

. 6 Id

., at 2.

7 See Reply of Sun Air dated November 29, 2011, at 2.

8 See Order 2011

- 11

- 29, Order requesting proposals to provide EAS to Muscle Shoals, Alabama; Greenville, Mississippi; Laurel/Hattiesburg, Mississippi; and Tupelo, Mississippi.4

c ommuter application and then subsequently suspend flights for financial reasons would “be a great inconvenience to travelers, negatively impact the economies of affected comm unities, and place a burden on the replacement carrier to have to rebuild the market’s traffic after a period of dormancy.” 9

On February 28, 2012, Sun Air filed updated fitness information 10 and opposition to SeaPort’s
motion and comments. Sun Air states that it did inform the Department of its plans to submit an EAS proposal while its commuter application was pending. The company further states that should the Department select it to provide scheduled service between Memphis and the EAS communities, a se parate proceeding in which proposals are still being considered, Sun Air will update its fitness information, namely providing the required financial forecasts and other financial information, to the Department. Moreover, Sun Air requests that the Departm ent proceed with processing its commuter application, having provided all of the necessary fitness information relating to its proposed commuter air carrier services between Miami and Bimini.

SeaPort correctly notes that any changes affecting a new air ca rrier’s application for economic authority should be reflected in the record. The Department has, in the past, informed air carriers wishing to engage in EAS, to submit the appropriate application for economic authority to the Department that reflect s the schedule it intends to provide under its EAS proposal. In these instances, the new air carrier applicant wishes to engage in scheduled operations solely to provide EAS and to specific EAS communities . That being said, the case herein is different.

As mentioned previously, Sun Air’s main objective to obtain commuter authority is to operate daily roundtrip service between Mia mi and Bimini, and in this regard, we agree with Sun Air that processing of its commuter application to allow it to provide schedu led service between these markets should proceed while proposals to provide EAS to communities in which Sun Air is an applicant continue to be evaluated. 11 Sun Air is fully aware that should it be selected to provide EAS, it must submit updated financial f orecasts and third

- party verification of funds available to it to support the additional operations. Moreover, Sun Air provided t hird

- party verification from

Mr. Thomas Cooper, the applicant’s owner, showing that he has more than $2.0 million on deposit i n his name as of January 3, 2012, which should alleviate some concerns regarding Sun Air’s financial ability to support additional scheduled passenger operations.

Under these circumstances, we propose to decide the issue of Sun Air’s fitness on the basi s of the
written record. Based on our review of the record in this case , we tentatively conclude that Sun
Air is a U.S. citizen and is fit, willing, and able to operate its proposed commuter services,

9 See Motion of SeaPort, at 6.

10 Changes affecting Sun Air’s fitness are reflected in the FITNESS section of this order.

11 Most importantly, we note that the Department, by Order 2012

- 3

- 4, rejected the proposals filed by, among others, Sun Air and SeaPort, to provide EAS to communities in Alabama and Mississippi, and solicited its third round of proposals. The period in which air carriers could submit proposals to serve these EAS communities has passed and Sun Air did not resubmit a proposal. The company h as, however, submitted a new EAS proposal to provide scheduled passenger service to Hagerstown, Maryland, and Lancaster, Pennsylvania ( See Docket DOT

2006

- 25228 (Hagerstown, MD) and Docket DOT

- OST

- 2002

- 11450 (Lancaster, PA)

. The Department has yet to

sele ct an air carrier in that proceeding.5

subject to conditions. However, we will give interest ed persons an opportunity to show cause why we should not adopt as final these tentative findings and conclusions.

FITNESS

The Company

Sun Air , an air taxi operator registered under Part 298 of the Department’s regulations , was organized as a limited liability company under the laws of the State of Del a ware on May 4, 2011

. 12 The company holds a Part 135 certificate from the F AA authorizing on

- demand passenger and cargo operations. Sun Air primarily provides its passenger charter service within
Florida and between Florida and the Bahamas , and all

- cargo charter service between Miami, Florida, and Havana, Cuba, 13 using four Piper Chieftan aircraft

. The air carrier is wholly owned by Cooper Trading Corporation (“Cooper Trading”), which is in turn, wholly owned by

Mr. Thomas L. Cooper, a U.S. citizen

.

Managerial Competence

Mr. Cooper

, an Airline Transport Pilot, is Sun Air’s President and Chief Executive Officer (“CEO”). He is also Chairman and President of Sebastian Aero Services, Inc. (2010

- present); 14

President and CEO of Gulf stream Air Charter, Inc. (2005

- p resent); and Chairman, CEO, and President of Cooper Trading (1998

- present). Prior to this , Mr. Cooper held executive

- level positions with various companies, including Aero Group Associates (2002

- 2005), Gulfstream International Airlines (1989

- 2005), G

- Air Holdings Corp. (1998

- 2005), Gulfstream Academy of Aeronautics/Gulfstream Air Charter (1998

- 2005), and Gulfstream Training Academy (1997

-

12 The company was incorporated initially in 1992 as River Valley Aviation Academy, Inc., under the laws of the State of Arkansas. At that time, the company provided flight training and on

- demand charter services unde r 14 CFR Part 141 and Part 135, respectively. In 1998, the company changed its name to Gulfstream International Airlines Training Academy, Inc., and was sold later that year to Gulfstream Training Academy, Inc., a Florida corporation owned by Mr. Thomas L . Cooper (50 percent) and Mr. Thomas P. Cooper (50 percent). In May 2001, Gulfstream International Training Academy transferred its operations from Arkansas to Florida, and changed its name to Gulfstream Academy of Aeronautics, Inc., incorporated under th e laws of the State of Florida. In May 2002, the company restructured and changed its name to Gulfstream Air Charter, Inc., and transferred its Part 141 operations to a newly formed and separate Florida company, Gulfstream Academy of Aeronautics. Also in May 2002, Gulfstream Training Academy, the parent company of Gulfstream Air Charter, changed its corporate name to Aero Group Associates, Inc., and transferred its assets to a newly formed Florida marketing corporation named Gulfstream Training Academy. In August 2003, Aero Group Associates sold Gulfstream Air Charter to Mr. Thomas L. Cooper (50 percent) and Mr. Thomas P. Cooper (50 percent). Mr. Thomas P. Cooper subsequently sold his ownership shares in Gulfstream Air Charter to Mr. Thomas L. Cooper, le aving the company 100 percent owned by Mr. Thomas L. Cooper. Over the past few years, the company’s name has changed from Gulfstream Air Charter to Gulfstream Connection to Gold Coast Airline, LLC

, and most recently on June 16, 2011, from Gulfstream

Conne ction to Sun Air Express.

13 Sun Air has a contract with Gulfstream Air Charter, Inc., an indirect air carrier that is licensed by the Office of Foreign Assets Control and authorized by the Department to arrange public charter air transportation between authorized U.S. airports and authorized Cuban airports, to transport, on an as

- needed basis, overflow baggage from Miami, Florida, to Havana, Cuba.

14 Sebastian Aero Services, Inc., is a fixed

- based operation that provides aircraft maintenance, aircraft ti e

- down services, aircraft, and aviation fuel.6

2005). Mr. Cooper was also a Pilot, Captain, and Check Airm an for Eastern Airlines (1962

- 1991) and President of Caribbean Express Airlines (1982

- 1985).

Mr. Leo Krupilis is Sun Air’s Director of Maintenance since July 2011. Prior to joining the company, he was the Senior Vice President of Maintenance for Gulfstre am International Airlines
where he was respons ible for 21 aircraft and 72 employees (1988

- 2011). Mr. Krupilis was also employed by Paradise Island Airlines as its Director of Maintenance/Maintenance Control Manager (1995

- 1998) , and by Allegheny Commuter Airlines for over 17 years , serving in various capacities including Line Maintenance Manager, Maintenance Supervisor, and Quality Control Supervisor (1978

- 1994). From 1973

- 1977, Mr. Krupilis served in the U.S. Navy as a

m echanic.

Mr. Lahouari Otmane was promoted to Sun Air’s Director of Operations in December 2011, after having served as the applicant’s Chief Pilot since July 2011

. An Airline Transport Pilot,
Mr. Otmane has held various pilot positions with companies such as Gulfstream Connection (2008

- 2 011), Dayjet, Inc. (2008), Airflight Inc. (2007

- 2008), and Noble Air Charters (2007).

Mr. Mark D. Reichard recently joined the applicant in February 2012 as its Chief Pilot. Before this, he was employed by CommutAir (2011) and Gulfstream Connection (20 10

- 2011), managing each company’s compliance with Federal and State regulations, writing manuals, and acting as company liaison with the FAA and other company officials. Mr. Reichard h as served in various capacities, including Director of Regulatory Compl iance and Project Integration, Vice President of Training, Chief Pilot, Director of Maintenance, and Mechanic, with Gulfstream International Airlines (1992

- 2000 and again from 2009

- 2010). In addition, he was a Certification Program Manager for CAVOK Grou p (2004

- 2009); and Fleet Manager for US Airways (2002

- 2004) and Continental Express (2000

- 2002).

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

, we tentatively
conclude that Sun Air has the management skills and technical abilit y to conduct its proposed
commuter service

. 15

Financial Condition and Operating Proposal

If granted the commuter authority it seeks, Sun Air proposes to provide scheduled passenger service consisting of one round trip flight each day between Miami, Flori da, and Bimini,
Bahamas

, utilizing four Piper aircraft with nine passenger seats.

Sun Air provided forecasts of its pre

- operating costs and first

- year revenues and expenses for its proposed commuter operations. The applicant will operate the same or si milar aircraft to that it currently operates in its air taxi operations. Therefore, Sun Air indicated that it has all necessary infrastructure in place, including management and key technical personnel and maintenance

15 Before authorizing an air carrier to conduct air transportation operations, the FAA also evaluates certain of the air carrier's key personnel with respect to the minimum qualifications for those positions as prescribed in the FARs. The FAA’s evaluation of these key personnel provides an added practical and in

- person test of their skills and technical ability. The FAA has informed us that the applicant’s key technical personnel are qualified to hold thei r respective positions.7

facilities. Sun Air expects to incu r only the incremental costs associated with expanding its existing air taxi operations to commuter air carrier operations. Specifically, Sun Air projects that it will incur approximately $ 62,000 in pre

- operating expenses 16 and approximately $ 287,654 in
fi rst

- year expenses. Based on these forecasts, we find Sun Air’s expense projections to be
reasonable and estimate that Sun Air will need approximately $ 133,913 to meet the Department’s financial fitness criteria. 17

In support of its financial position, S un Air submitted historical and current financial information. The historical profit and loss statements provided by the applicant show that for calendar years 2009 and 2010, it reported net losses of approximately $161,740 and $195

, 858 on about $1.0 mill ion and $652,775 in operating revenues, respectively. For the seven months ended July 31, 2011, Sun Air reported a net loss of $50,930 on $505,658 in operating revenues. The company’s balance sheet dated August 1, 2011 , shows total current assets of $ 204 ,828 and total current liabilities of $ 46,714 , giving the applicant positive working capital of $ 158,114

. In addition, total shareholders’ equity is $ 222,314.

Sun Air states that it has sufficient funds to cover its pre

- operating costs plus one

- fourth of its operating expenses that it expects to incur during the first year of scheduled operations. The

company provided third

- party verification that, as of November14, 2011

, the applicant had approximately $ 52,277 on deposit in its name

. The applicant als o provided (1) a copy of an executed promissory note between it and Cooper Trading for $100,000, w hich has yet to be drawn down, (2) confirmation that Mr. Cooper is guaranteeing Cooper Trading’s credit facility in favor of Sun Air, and (3) third

- party veri fication that Mr. Cooper has the financial resources on deposit to extend the line

- of

- credit to Cooper Trading.

In light of the above, we tentatively conclude that Sun Air has access to sufficient financial resources to commence its commuter operations wi thout posing an undue risk to consumer s or their funds. 18 In addition , prior to making any authority awarded to Sun Air effective, we will require the company to demonstrate that it continues to have the financial resources needed to
meet our financial fit ness criteria. Should the air carrier no longer meet our fitness test, it will not be granted effective authority.

16 According to the applicant, its pre

- operating expenses include (1) legal fees and other expenses associated with its application, (2) costs of upgrading its reservation system and training staff on that system, (3) insurance

premiums covering commuter operations, (4) three

- month advance payments of landing fees at Miami airport, and (5) deposits for purchasing fuel for its proposed commuter operations.

17 In establishing financial fitness, the Department typically asks an applican t to demonstrate that it has access to financial resources sufficient to cover its pre

- operating expenses and the expenses that are reasonably projected to be incurred during three months of operations. In determining available resources, projected revenu es are generally not

included. The $ 133,913 noted above consists of the applicant’s pre

- operating expense forecast of $ 62,000 plus $71,913, which is one

- quarter of Sun Air’s estimated first

- year expenses.

18 As is our practice, prior to making any autho rity awarded to Sun Air effective, we will require the company to

demonstrate that it continues to have the financial resources needed to meet our financial fitness criteria.8

Compliance Disposition

The applicant states that there are no actions or outstanding judgments against it, its owners, or its key per sonnel, nor have there been any charges of unfair, deceptive or anti

- competitive business practices, or of fraud, felony or antitrust violations brought against any of these parties.
Sun Air also states that there are no pending investigations, enforcemen t 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. Our search of the Department’s r ecords found no compliance problems with Sun
Air . The FAA reports that Sun Air has a satisfactory compliance disposition and that its management team is qualified for their positions. Moreover, t here are no FAA enforcement
actions pending against the air carrier.

Although Gulfstream alleges that Sun Air’s proposal is in violation of a contract between the parties and implores the Department to impose a remedy, as discussed above, we believe this is
an issue for another forum

. In addition, to the exten t that any such legal outcome would have an effect on Sun Air financial fitness or its operating plan, Sun Air is required to notify the Department of such changes, and we would, in turn, determine at that time whether the company
continues to be fit. T he Department will carefully consider any ac tion brought to our attention
which may affect the applicant and its fitness

.

In light of the above, we tentatively conclude that Sun Air has the proper regard for the laws and regulations governing its services t o ensure that its aircraft and personnel conform to applicable safety standards and that acceptable consumer relation practices will be followed.

CITIZENSHIP

Section 41102 of the Transportation Code requires that authority 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 outstand ing voting interest be owned by
U.S. citizens , and that the air carrier is under the actual control of U.S. citizens

.

As discussed earlier, Sun Air is a Delaware limited liability company owned by Cooper Trading, which is in turn, solely owned by Mr. Th omas L. Cooper, a U.S. citizen

. Further, all of Sun
Air’s key personnel are U.S. citizens and the company has supplied an affidavit attesting that it is
a citizen of the United States under the actual control of U.S. citizens. O ur review of Sun Air’s
cit izenship has uncovered no reason to suggest that control of Sun Air rests with non

- U.S.
citizens.

Based on the above, we tentatively conclude that Sun Air is a citizen of the United States and is fit, willing, and able to provide air transportation servic es as a commuter air carrier.

OBJECTIONS

We will give interested persons 14 days following the service date of this order to show cause why the tentative findings and conclusions set forth here should not be made final; answers to9

objections will be due within 7 days thereafter. We expect that persons objecting to our tentative findings and conclusions will support their objections with relevant and material facts. If an oral evidentiary hearing or discovery procedures is requested, the objector should state in detail why such a hearing or discovery is considered necessary, and what material issues of decisional fact the objector would expect to establish through a hearing or discovery that cannot be established in written pleadings. The objector should consider whether discovery procedures alone would be sufficient to resolve material issues of decisional fact. If so, the type of procedure should be specified ( See Part 302, Rules 19 and 20); if not, the reasons why not should be explained. We
will not entertain general, vague, or unsupported objections. If no substantive objections are filed, we will issue an order that will make final our tentative findings and conclusions with
respect to Sun Air’s fitness and commuter authority.

EFFECTIVE COMMUTER AUTHORIZATION CONDITIONS AND LIMITATIONS

In the event that we find Sun Air fit, willing, and able to conduct the proposed commuter service,
we will issue to it a Commuter Air Carrier Authorization. However, that authorization will not
become effective un til the air carrier has fulfilled all requirements for effectiveness as set forth in the Terms, Conditions, and Limitations attached to its authorization. 19 In addition, consistent with the applicant’s proposed operations, we propose to limit any authority issued to Sun Air to operations using aircraft that can be operated under FAR Part 135 (in effect, aircraft with no more than 9 seats in scheduled passenger operations)

. Should Sun Air propose to operate larger
aircraft or conduct operations that would re quire certification from the FAA under Part 121, it must first be determined fit for such operations. 20

Furthermore, we remind Sun Air 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 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 chan ges they may undergo in areas affecting fitness. In this regard, should Sun Air propose any substantial changes in its ownership, management, or operations, it must first comply with the requirements of section 204.5 of our rules. 21 The compliance of the company with these requirements is essential if we are to carry out our responsibilities under the Transportation Code. 22

19 We also reserve the right to stay the effectiveness of Sun Air’s authority i f any new information becomes

available to us that warrants such action.

20 We note that the operation of larger aircraft could require the air carrier to have access to additional funds and/or hire additional management personnel.

21 The air carrier may contact our Air Carrier Fitness Division to report proposed substantial changes in its operations, ownership, or management, and to determine what additional information, if any, will be required under section 204.5. Moreover, by notice dated July 21, 19 98, the Department requested air carriers to provide a 30

- day advance notification of any proposed change in ownership, restructuring, or recapitalization. If the air carrier fails to

file the information or if the information fails to demonstrate that th e air carrier will continue 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.

22 We also remind Sun Air about the requirements of section 204.7 of our rules. This section provides, among other things, that (1) the commuter authority granted to a company shall be revoked if the company does not10

Finally, if Sun Air is granted effective authority, it would be required to submit a detailed progress report, within 45 days followin g the end of the first year of certificated flight operations, to the Air Carrier Fitness Division. The submission of a first year progress report is required of all newly authorized air carriers and was adopted as policy by the Department to aid
in monit oring the fitness of new air carriers. The report should include a description of the air carrier’s current operations (number and type of aircraft, principle markets served, total number
of full

- time employees), a summary of how its operations have chang ed during the year, a discussion of any changes it anticipates from its current operations during its second year, current financial statements, 23 and a listing of current senior management and key technical personnel. The air carrier should also be prepar ed to meet with staff members of the Fitness Division to discuss its current and future operations.

ACCORDINGLY:

1. We direct all interested persons to show cause why we should not issue an order finding that Sun Air Express, LLC d/b/a Sun Air Internatio nal 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 grant the Motion of SeaPort Airlines, Inc., for Le ave to File an Otherwise Unauthorized Document, dated February 23, 2012.

3

. We direct any interested persons having objections to the issuance of an order making final any of the proposed findings, conclusions, or the award of authority set forth here to file them with Department of Transportation Dockets, 1200 New Jersey Ave., SE, Room W12

- 140

, Washington, D.C. 20590, in Docket DOT

- OST

- 2011

- 0169 , and serve them upon all persons listed in Attachment A no later than 14 days after the service date of this o rder; answers to objections shall be filed no later than 7 days thereafter.

4

. If timely and properly supported objections are filed, we will accord full consideration to the matters or issues raised by the objections before we take further action.

5

. In the event that no objections are filed, we will consider all further procedural steps to be waived, and we will enter an order making final our tentative findings and conclusions set out here and awarding Sun Air Express, LLC d/b/a Sun Air International a Commuter Air Carrier Authorization, subject to the attached specimen Terms, Conditions, and Limitations.

6

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

.

commence actual flying operations under that aut hority within one year of the date of the Department’s determination of its fitness; (2) if the company commences operations for which it was found fit and subsequently ceases such operations, it may not resume commuter operations unless its fitness has be en redetermined; and (3) if the company does not resume operations within one year of its cessation, its authority shall be revoked for dormancy.

23 These financial statements should include a balance sheet as of the end of the company’s first full year of actual

commuter flight operations and a 12

- month income statement ending that same date.11

7

. We will publish a summary of this order in the Federal Register.

B y:

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

### Attachment Specimen 

### Te rms, Conditions, and Limitations

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

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 a uthority to conduct scheduled passenger operations will not become effective until six (business) days after the Department has received the following documents; provided

, however , that the Department may stay the effectiveness of this authority at any

tim e 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

insura nce 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 Sho w 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

an d 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 issu e tickets for scheduled passenger operations, and any advertisement or listing of flights by the holder must prominently state: "This service is subject to receipt of government operating authority."

(3) The holder shall at all times conduct its operatio ns 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 limitations as the Department of Tran sportation may prescribe in the public

interest.2

(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 U.S. Government r equirements concerning security , including, but not limited to 49

CFR Part 1544

. ∗

( 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 is limited to operations conducted pursuant to Part 135 of the Federal Aviation Regulations. In the event that the holder wishes to institute operations that would require Part 121 certification from the FAA, it must first be determ ined fit for such operations.

(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 insurance coverage as required under 14
CFR Part 205. Failur e 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 revok e 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 complia nce 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 wi thin the limits set forth in section 29 of the International Air Transportation Compet ition Act of 1979, as amended or as modified by any future legislation addressing access restrictions to or from Love Field.

( 10 ) Should the holder propose any substant ial 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.

(1 1 ) In the event that the holder does not commence actual flying operations as a
commuter air carrier unde r this authority within one year of the date of the Department's determination of its fitness, its commuter authority shall be revoked for dormancy. Further,

∗ To assure compliance with all applicable U.S. Government requirements concerning security, the holder shall, before commencing any new service (including charter fl ights) 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 se rved.3

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 resum e such operations within one year of its cessation, its commuter authority shall be revoked for dormancy.Attachment A

SERVICE LIST FOR SUN AIR EXPRESS, LLC

MS LONNIE A PERA
ZUCKERT SCOUTT &
RASENBERGER LLP
888 SEVENTEENTH ST NW
SUITE 700
WASHINGTON D C 20006 MR WILLIAM J WEBER
CERTIFICATION SECTION
MANAGER
FAA AFS

- 900
45005 AVIATION DRIVE SUITE
131
DULLES VA 20166 MR PETER LYNCH
ASST CHIEF COUNSEL F OR

ENFORCEMENT AGC

- 300
FEDERAL AVIATION
ADMINISTRATION
800 INDEPENDENCE AVE SW
WASHINGTON DC 2059 1

MR THOMAS L COOPER
CEO & PRESIDENT
SUN AIR EXPRESS LLC
3201 GRIFFIN RD
FOURTH FLOOW
FT LAUDERDALE FL 33 312 OFFICE OF AIRLINE
INFORMATION
DOT/RITA/BTS E

- 34
1200 NEW JERSEY AVE SE
WASHINGTON DC 20590 MR DAVID M HERNANDEZ
ATTORNEY FOR SILVER
AIRWAYS CORP f/k/a VPAA CO
VEDDER PRICE PC
1401 I STREET NW
SUITE 1100
WASHINGTON DC 20005

MR STEPHEN CARL
MR JAMES RAMNANAN
FAA
FT LAUDERDALE FSDO

- 19
FT LAUDERDALE FL 33315