Scott Aviation, Inc.

OST-04-18862 - Interstate Certificate of Public Convenience and Necessity

August 6, 2004

Application of Scott Aviation

Scott Aviation intends to continue to operate its on‑demand air taxi business, and to expand to provide charter services using the DC‑9 aircraft. These charters will be primarily ad hoc single entity charters on behalf of university and professional sports teams, musical groups, political candidates, and similar organizations and individuals.

The company operates Lear, Hawker, Falcon and Gulfstream aircraft with world-wide operating authority. Scott's core customer group is business travelers, but the company also serves passengers traveling for other reasons, and occasionally carries some cargo. Scott Aviation flies to both major metropolitan areas and smaller communities where commercial air service is not available. In 2002, for example, Scott Aviation flew to 260 destinations. (Flights with smaller aircraft to smaller airports will continue under Scott Aviation's Part 135 authority; the DC9 aircraft to be operated under the requested Part 121 authority will not use all the airports that the smaller jets currently use.)

Exhibits

Counsel: Sher & Blackwell, Mark Atwood, 202-463-2513

• Prior Scott Aviation Filings

August 6, 2004

Motion to Withhold Information from Public Disclosure

Counsel: Sher & Blackwell, Mark Atwood, 202-463-2513

OST-04-18862 - Interstate Certificate of Public Convenience and Necessity

August 16, 2004

Re: Request for Additional Information

Scott Aviation indicated that it expects to use one DC‑9 aircraft, flying approximately 500 hours annually, to perform the certificated operations at issue. This forecast would result in an average daily utilization of approximately 1.3 block hours. Generally, we would not consider such a rate to be realistic as the average daily utilization of DC‑9 aircraft historically is around 7.5 block hours. However, on page 2 of Exhibit 10, Scott Aviation states that its first year profit and loss forecast is based on AGS Partnership's recent operating history. Therefore, please submit balance sheets and income statements, together with their accompanying explanatory footnotes, current within three months and for calendar years 2001, 2002, and 2003, for AGS Partnership.

By: Lauralyn Remo

OST-04-18862 - Interstate Certificate of Public Convenience and Necessity

September 29, 2004

Re: Additional Information

Scott is making satisfactory progress in the FAA certification process. It is currently preparing its operations, training and maintenance manuals for submission to the FAA. Training of pilots, flight attendants, dispatchers and maintenance personnel is scheduled to begin in November. The startup date projected at this time is January 3, 2005.

Scott expects its Part 121 operations merely to supplement its already existing air taxi operations, which will remain its core business. As you note, Scott's quarterly operations forecast is indeed reached by calculating one‑quarter of the full‑year forecast, which Scott believes produces an accurate forecast for its non‑seasonal business. The full‑year forecast reflects the experiences of AGS Partnership, Scott's sister company, which operated DC‑9 aircraft as Scott now proposes to do. However, in order to completely address your concerns, Scott is in the process of modifying and expanding its financial forecast. This revised forecast will be submitted shortly.

Counsel: Sher & Blackwell, Mark Atwood, 202-463-2513

OST-04-18862 - Interstate Certificate of Public Convenience and Necessity

December 1, 2004

Re: Ruling on Motion for Confidential Treatment

We have decided to grant confidential treatment to the personal financial statements of Messrs. Aiello and Hodgson contained in Exhibit 11, submitted on August 5. We believe that public release of proprietary financial statements could cause substantial harm to Scott Aviation’s owners. In addition, these documents are the type to which the Department typically grants confidential treatment. Please note that should this letter-of-credit be opened, we will, at that time, ask that Scott Aviation provide a copy of the letter-of-credit and third-party verification attesting to the availability of these funds.

With respect to Scott Aviation’s bank statement set forth in Exhibit 7, Supplement 1, we will deny confidential treatment to Scott Aviation’s ending: bank balance as of August 31, 2004. The applicant submitted this statement as third-party verification of all funds currently on deposit in Scott Aviation’s name. It is the Department’s practice to release all such third-party verification. However, we believe that release of such sensitive details included in the applicant’s bank statement, such as account numbers and daily account activities, could have competitive implications for the applicant. Therefore, we will provide confidential treatment to this material.

By: Patricia Thomas

December 1, 2004

Re: Request for Additional Information

This review, however, identified additional areas in which the company needs to provide further information and/or clarification before the Department can fully process Scott Aviation’s application. Those areas are set out in the enclosed Information Request. I ask that you respond fully to this request within 30 days of the date of this letter. The original plus 6 copies of your response should be filed in Docket OST-2004-18862.

As is the Department’s practice, further processing of Scott Aviation’s application will be deferred pending receipt of this material. In addition, please remember that Scott Aviation 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.

By: Lauralyn Remo

OST-04-18862 - Interstate Certificate of Public Convenience and Necessity

January 24, 2005

Re: Request for Additional Information

On December 1, 2004, the Department requested additional information from Scott Aviation to supplement the information submitted in support of its application for interstate charter authority. The company's response was due January 3, 2005.

To date, however, we have not received any additional information or response from Scott Aviation. It is not the Department's policy to keep incomplete applications open indefinitely. Therefore, unless Scott Aviation provides a complete response to our December 1 Information Request.

By: Air Carrier Fitness, Lauralyn Remo

Scott Aviation, Inc.

Order 2005-3-19
OST-2004-18862 - Certificate of Public Convenience and Necessity - Interstate Charter Passenger

Issued March 14, 2005 | Served March 17, 2005

Order Dismissing Application

By letter dated January 24, 2005, we reminded Scott Aviation that we had yet to receive any information or response to our December 1, 2004, Information Request and advised it that should the carrier fail to provide the requested information within 14 days of the date of this letter, i.e., by February 7, 2005, we would dismiss its application without further notice. In that letter, we also reminded the applicant that the information for which we denied confidential treatment had not been submitted in the public record, and notified the applicant that unless this material was filed immediately, further delays in processing its application would result.

The Department fully expects an applicant for certificate authority to be prepared to prosecute its application at the time it is filed. While we are willing to work with applicants in the certification process and, where warranted, allow additional time to file information, we cannot allow applications to remain pending indefinitely, particularly where applicants are non- AGS Partnership, which shares the same ownership as Scott Aviation, holds authority under 14 CFR Part 125, to engage in private carriage operations. By Order 2004-2-7, issued February 9, 2004. the Department found that AGS Partnership had violated 49 U.S.C. § 41101 by engaging in air transportation without appropriate economic authority, which is an unfair and deceptive practice and an unfair method of competition under 49 U.S.C. § 41712. In this consent order, the Department directed AGS Partnership and all other entities owned and controlled by, or under common ownership and control with AGS Partnership and their successors and assignees, to cease and desist from further similar violations, and assessed the company $65,000 in civil penalties. To date, AGS Partnership has not paid its civil penalties.

By: Randall Bennett