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SkyMark Aviation, Inc.

SkyMark Aviation, Inc. was incorporated as an Idaho corporation by Messrs. Chestnutt, Nilson and Slaney on September 7, 1999. SkyMark Aviation acquired Air Charters, Inc., an on-demand charter air taxi operator based in Fort Lauderdale, Florida, on May 26, 2000. Air Charters has ceased its prior on-demand operations and has surrendered its FAA Part 135 Operating Certificate as a result of its inactive status. The primary purpose of that acquisition was to acquire one (1) Piper Navaho Chieftain aircraft and FAA-approved operating manuals owned by Air Charters. On April 1, 2001, SkyMark acquired a second small on-demand air taxi operator, Amelia Air, Inc. The purpose of that acquisition was to acquire two (2) additional Piper Chieftain aircraft, FAA-approved manuals and Part 135 Operating Certificate, and the ongoing charter business operations of Amelia Air.

SkyMark plans to continue the current on-demand charter services conducted by Amelia Air under that name, in addition to its own scheduled and charter operations.

Counsel:  Shaw Pittman, Nathaniel Breed, 202.663.8078

SkyMark Aviation, Inc.

By:  Howard Serig

SkyMark Aviation, Inc.

The purpose of this Supplement No. 1 is to furnish certain additional information and documents in response to the requests contained in the letter dated June 8, 2001 from Mr. Howard Serig of the Department's Air Carrier Fitness Division to counsel for SkyMark (see Attachment A.).

In response to the Fitness Division's letter, SkyMark submits the personal net worth statement of Mr. William J. Slaney as of April 30, 2001 (Exhibit SMA-S/1-1). Mr. Slaney is SkyMark's principal financial backer at this initial stage of SkyMark's existence. In addition, SkyMark hereby submits third-party verification of an investment account statement issued by Resource Development International, L.L.C. (RDI), dated July 5, 2001, reflecting payments made and the current balance owed by RDI to Mr. Slaney's personal investment company, BLS, L.L.C., as of June 30, 2001 (Exhibit SMA-S/1-2). An explanation of the relationship of those two investment companies to each other, and to Mr. Slaney, is contained in Exhibit SMA-S/1-2.

Counsel:  Shaw Pittman, Nathaniel Breed, 202.663.8078

Counsel:  Shaw Pittman, Nathaniel Breed, 202.663.8078

SkyMark Aviation, Inc.

By:  Patricia Thomas

SkyMark Aviation, Inc

Counsel:  Shaw Pittman, Nathaniel Breed, 202.663.8078

SkyMark Aviation, Inc

I am pleased to inform you that I have been advised by SkyMark that it has made significant progress in its efforts to secure additional new financing, as described below, and that SkyMark has received assurances by its principal investor, Mr. William J. Slaney, that he continues to be willing, but not yet able, to fulfill his commitment to invest up to an additional $500,000 in SkyMark.

On September 20, 200 1, SkyMark reached an agreement with a group of Florida investors to refinance its short-term financing of its purchase of' two Piper Navaho Chieftain aircraft in March, 200 1. Documentation of that loan agreement, amounting to $920,000, secured by liens on three Piper Navaho Chieftain aircraft (including one aircraft previously acquired by SkyMark), will be provided to the Fitness Division following closing on that loan which is scheduled to close on or about September 28, 2001.

SkyMark is engaged in ongoing negotiations with the same group of Florida investors regarding an equity investment of up to $500,000 in SkyMark in exchange for up to fifteen percent (15%) of SkyMark's total equity. Each of the potential Florida investors is a citizen of the United States. SkyMark hopes to conclude those negotiations on a satisfactory basis in the next six weeks, but concedes that schedule may be delayed by the adverse impact on economic conditions in the aviation industry following the horrific terrorist actions on September 11, 2001.

Counsel:  Shaw Pittman, Nathaniel Breed, 202.663.8078

This responds to your request, sent via fax on September 20, that the Fitness Division take no action to -dismiss SkyMark's pending application for commuter authority for at least six months. Given the current difficulties facing the airline industry, and our continuing desire to provide new entrants with every opportunity to successfully complete our fitness requirements, we will allow SkyMark an additional six months to complete its application. That is, we extend the date by which SkyMark must successfully complete its application for commuter authority until March 21, 2002.

We also wish to make very clear that the longer SkyMark takes to complete its application, the more likely that certain portions of the documentation will have to be updated to reflect changes. We would therefore request that you apprise your client that it must carefully review what it has already submitted and make any necessary changes to reflect the current situation as of the date of its next, and hopefully final, submission.

By:  Howard Serig

SkyMark Aviation, Inc

Hereby moves the Department of Transportation to dismiss SkyMark's April 19, 2001 application for issuance of commuter air carrier authority, without prejudice to the right of SkyMark to file a new application for the same or different authority in the future. The basis for this Motion arises from SkyMark's inability to conclude arrangements for working capital financing in an amount sufficient to meet the Department's established financial fitness test for new-entrant applicants.

Counsel:  Shaw Pittman, Nathaniel Breed, 202.663.8078

SkyMark Aviation, Inc

On June 8 and August 17, 2001, we requested additional information from SkyMark, in particular, on the financial resources that were available to support its proposed operation. The carrier's responses, dated July 31 and September 4, did not satisfactorily answer our questions. On September 20, SkyMark requested that the Department defer action on its application for six months so that the company might secure the necessary financial resources. We granted this request on the same date. On March 5, 2002, SkyMark informed us that it was unable to conclude arrangements for working capital financing in an amount sufficient to meet the Department's established financial fitness test for new-entrant applicants. The carrier moved that we dismiss its application without prejudice to filing a new application in the future.

By:  Randall Bennett

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