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OST-2005-20072 - Skybus Airlines - Interstate Certificate of Public Convenience and Necessity - Scheduled Passenger
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Skybus Airlines, LLC OST-2005-20072 - Interstate Certificate of Public Convenience and Necessity - Columbus-US January 7, 2005 Application of Skybus Airlines Skybus is a new entrant carrier intending to introduce scheduled, low-fare air service between Port Columbus International Airport, Columbus, Ohio and other points in the United States, using a fleet of Boeing 737NG or Airbus A320 family aircraft. Skybus will bring significant new travel benefits to the public in the Columbus metropolitan area and surrounding communities, as well as other U.S. focus cities it plans to develop. Service will be low‑fare, all‑coach service to markets that are underserved or where service is limited to propeller or regional jet aircraft. In many markets, service will also be high frequency. Based upon the experience of Southwest Airlines and other low‑cost, low‑fare carriers in the United States, Skybus believes the markets it will serve will be highly responsive to stimulation from low‑fare and high frequency service. Skybus intends to conclude its search for a CEO in early 2005, at which time the carrier will begin raising additional capital through a private placement offering as soon as feasible. Skybus is currently working with investment banker Morgan Stanley on a strategy to accomplish this objective. The company is targeting a capital raise in the $70 million to $100 million range, with a minimum of approximately $60 million Counsel: Sher & Blackwell, Mark Atwood
March 30, 2005 In its application, Skybus states that it has yet to decide on the aircraft it will use in its proposed operations. The applicant indicates that it will either choose between a fleet of Boeing 737 Next Generation aircraft or Airbus A320 aircraft and that it expects to issue a Request for Proposal in early 2005 and decide on the aircraft within 60 days of the suppliers' response. Has Skybus issued a Request for Proposal? If so, please identify the aircraft to be used in Skybus' operations and a copy of the aircraft lease or purchase agreement outlining the terms and conditions of the agreement. Skybus indicates that it is working with Morgan Stanley on a private placement offering to raise between $70 million to $100 million to support its proposed operations. Is this correct? If so, please provide a copy of the agreement between Skybus and Morgan Stanley, including the terms and conditions of the private placement offering. In addition, if the private placement offering has been enacted, please provide information regarding the amount of funds raised to date. By: Air Carrier Fitness, Lauralyn Remo
May 3, 2005 Motion fo Confidential Treatment Counsel: Sher & Blackwell, Alison Macdonald, 202-463-2513
May 3, 2005 Re: Response to Information Request - Bookmarked Skybus states that it has yet to decide on the aircraft it will use in its proposed operations. The applicant indicates that it will either choose between a fleet of Boeing 737 Next Generation aircraft or Airbus A320 aircraft and that it expects to issue a Request for Proposal in early 2005 and decide on the aircraft within 60 days of the suppliers' response. Has Skybus issued a Request for Proposal? If so, please identify the aircraft to be used in Skybus' operations and a copy of the aircraft lease or purchase agreement outlining the terms and conditions of the agreement. Counsel: Skybus Airlines, Mark Atwood
OST-2005-20072 - Interstate Certificate of Public Convenience and Necessity - Scheduled Passenger July 8, 2005 Re: Ruling on Confidential Treatment We have reviewed the information for which Skybus requests confidentiality and agree with the applicant that public disclosure of Exhibit 7, which identifies the city pairs Skybus intends to provide service between, could negatively affect the applicant's competitive posture by allowing its competitors to focus service and price incentives on the selected cities even before Skybus has the authority to commence such operations. In addition, the applicant has provided more than enough detail in the public portion of its applications to allow us to verify the reasonableness of its operating plan and financial forecasts. Therefore, we have decided to grant confidential treatment to this exhibit. By: Air Carrier Fitness, William Bertram
OST-2005-20072 - Interstate Certificate of Public Convenience and Necessity - Scheduled Passenger July 14, 2005 Skybus indicated that the company has received informal advice from Morgan Stanley with respect to raising between $70 million to $100 million in additional capital through a private placement offering. The applicant also stated that the terms and conditions related to the PPO would not be completed until such time as its senior management team was in place. Based on the recent hiring of Mr. Diffenderffer, Skybus' new Chief Executive Officer, it appears as though Skybus' management team is in place. If this is correct, please state whether the PPO has been enacted. If so, please provide a copy of the PPO agreement and state the amount of additional funds raised to date. By: Air Carrier Fitness, Lauralyn Remo
August 19, 2005 Motion for Confidential Treatment Pursuant to Rule 302.12 of the Department's Rules of Practice, Skybus Airlines, LLC hereby moves to withhold from public disclosure Exhibit 1 to its responses to the information request issued by the Department by letter dated July 14, 2005 in the above-captioned docket. Exhibit I is a copy of Skybus' Operating Agreement governing the internal structure and operation of the limited liability company. This agreement contains privileged and confidential commercial and financial information obtained from a person and is therefore protected from disclosure under 5 U.S.C. § 552(b)(4). Furthermore, the information contained in the Operating Agreement would, under normal circumstances, not be available to the general public. Public disclosure of this document would adversely affect Skybus by making sensitive information about the structure and finances of the company available to it competitors. Counsel: Sher & Blackwell, Mark Atwood, 202-463-2513
August 23, 2005 Response to Information Request of July 14, 2005 - Bookmarked The company has not yet decided on the type of aircraft to be used in its fleet. It continues to analyze technical specifications and proposals it has received from both Boeing and Airbus, as described in our letter of May 3, 2005. The company has chosen to defer this decision based on the advice of its financial advisor, Morgan Stanley. Waiting until its startup capital has been largely raised should put the company in a much better position to negotiate favorable terms for fleet acquisition. The status of this capitalization process is described below. Counsel: Sher & Blackwell, Mark Atwood, 202-463-2500
OST-2005-20072 - Interstate Certificate of Public Convenience and Necessity - Columbus-US September 1, 2005 We have reviewed the information for which Skybus requests confidentiality and agree that public disclosure of the carrier's Operating Agreement could place the carrier at a competitive disadvantage. This agreement contains information governing the internal structure and operation of the company, as well as commercially sensitive information about its structure and financing. Moreover, it has been the Department's practice to grant confidential treatment to agreements such as this and we see no reason not to do so here. Therefore, we have decided to grant confidentiality to Skybus' Operating Agreement contained in Exhibit 1. By: William Bertram
OST-2005-20072 - Interstate Certificate of Public Convenience and Necessity - Scheduled Passenger November 29, 2005 Re: Information Request - Bookmarked The following responds to the Information Request attached to your letter of October 14, 2005 regarding the application in this docket of Skybus Airlines for certificate authority. Counsel: Sher & Blackwell, Mark Atwood, 202-463-2500
Order 2006-2-22 Issued and Served February 28, 2006 Order to Show Cause and Proposing Issuance of Certificate Authority - Bookmarked If granted the certificates it seeks, Skybus intends to provide scheduled passenger, low-fare, all-coach air service from Port Columbus International Airport. Columbus, Ohio, to various cities in the United States and Canada. To begin operations, the applicant plans to lease two new aircraft configured between 130 and 160 passenger seats, and to add one additional aircraft every two months until it has a total of 8 aircraft by the end of its first year of operations, with the eighth aircraft designated as a spare. The applicant expects to operate these aircraft an average of 15 block hours per day. The applicant furnished data on its proposed flight operations, including forecast monthly block hour usage and rates, revenue, and operating costs, and a schedule of projected pre-operating expenses. We have examined Skybus' projected expenses and find them to be reasonable. Specifically, the applicant expects to incur approximately $40.0 million in pre-operating expenses, of which $4.5 million has already been paid, and approximately $80.3 million in first-year expenses. Based on these forecasts, we estimate that Skybus will need about $55.6 million to meet the Department's financial fitness criteria. By: Michael Reynolds
Order 2006-3-12 Issued and Served March 14, 2006 By Order 2006-2-22, issued February 28, 2006, we directed all interested persons to show cause why we should not make final our tentative findings and conclusions stated in it and award certificates of public convenience and necessity to Skybus Airlines, LLC authorizing it to engage in interstate and foreign scheduled air transportation of persons, property, and mail. Interested persons were given 14 days to file objections to the order. No objections to the show-cause order were received. We issue a certificate of public convenience and necessity to Skybus Airlines, LLC to engage in interstate air transportation in the form and subject to the Terms, Conditions, and Limitations attached. Should Skybus Airlines, LLC propose to operate more than 8 aircraft, we direct it to notify the Department in writing at least 45 clays prior to the proposed change in operations and demonstrate its fitness to conduct such operations before their commencement. By: Michael Reynolds
Order 2006-5-9 Issued March 15, 2006 | Served May 12, 2006 Order Issuing Foreign Certificate | Word By this order, we are issuing a companion certificate authorizing Skybus Airlines, LLC to engage in foreign passenger scheduled air transportation. Instead of repeating our findings and conclusions in Order 2006-3-12, we incorporate them here by reference. By: Michael Reynolds
OST-2005-20072 - Interstate Certificate of Public Convenience and Necessity - Scheduled Passenger February 20, 2007 Application for a Temporary Waiver of 14 CFR 204.7 Skybus Airlines, Inc. submits this Application for a waiver of 14 C.F.R. 204.7(a), which provides that if an air carrier has not commenced any type of air transportation operations for which it was found fit willing and able within one year of the date of that finding, the authority granted shall be revoked for dormancy. Skybus seeks a temporary waiver of this provision so as to allow it to delay commencement of scheduled service for up to 90 days after March 14, 2007 (i.e., until June 12, 2007) and requests a 90-day waiver to allow for any additional unforeseen delays. Until the FAA issues the Air Carrier Certificate and Part 121 Operations Specifications, Skybus cannot commence operations. In addition, the company will require some time after the issuance of the FAA authority to publish its schedules, begin advertising and selling tickets, and make other final preparations to begin operations. Skybus will submit to the Department updated financial and fitness information as required by Orders 2006-3-12 and 2006-5-9, and as promised by Skybus in its September 25, 2006 update to the Department. Counsel: Sher & Blackwell, Mark Atwood
OST-2005-20072 - Interstate Certificate of Public Convenience and Necessity - Scheduled Passenger March 1, 2007 DOT Letter Granting 90-Day Waiver In your filing, you state that Skybus has been working diligently and cooperatively with the FAA, and the carrier is in its final stages of the FAA certification process. You also indicate, however, that Skybus will not be able to commence operations by March 14, 2007, one year after its fitness finding, and, therefore, request that the Department grant Skybus a waiver from §204.7(a) and give the carrier an additional 90 days to commence operations. The FAA has advised us that Skybus is making satisfactory progress toward obtaining its FAA certificate, and that the agency knows of no reason why we should not grant the requested waiver. The FAA states that it fully expects that the carrier will commence its proposed operations within the time frame indicated by the carrier. Therefore, we grant Skybus’ request for a 90-day waiver from §204.7(a). This waiver will expire on June 14, 2007. By: Air Carrier Fitness Division, William Bertram
OST-2005-21744 - Foreign Certificate of Public Convenience and Necessity - Canada-US March 23, 2007 Re: Updated Information - Bookmarked The FAA certification process is proceeding satisfactorily. Skybus expects to operate proving runs in late April 2007. The anticipated start-up date is May 20, 2007. Skybus has two leased A-319 aircraft on hand, and an additional two will be delivered by the end of May. A lease for a further six, to be delivered in intervals through mid-2008 has been executed, and the company has an order for 65 new A 319s from Airbus. Skybus recently completed an additional round of financing, raising a further $69.6 million (net) through private placement of the company's stock. This round of financing makes Skybus the best‑financed startup airline in U.S. history (per the company's investment bankers), and brings with it some additional investors as well as additional investments. It does not, however, materially change the company's ownership or corporate structure.
Counsel: Sher & Blackwell, Mark Atwood, 202-463-2513
OST-2005-20072 - Interstate Certificate of Public Convenience and Necessity - Scheduled Passenger April 2, 2007 Application for a Waiver of The Provisions of 14 CFR & 201.5(a)(2) Skybus has invested a significant amount of resources in anticipation of its start‑up of passenger operations. Skybus has hired and trained the personnel necessary to implement its service, and it has the requisite operational personnel and plans in place to begin its service. Further, in preparation for advertising and selling tickets for its flights, Skybus has already: (a) made arrangements to list and sell tickets through its website; (b) retained an advertising agency; and (c) hired an in‑house marketing staff. It is imperative that Skybus avoid the pattern experienced by other new entrant carriers, many of whom have subsequently ceased operations, wherein scheduled operations are initiated with relatively low load factors and similarly low revenue per seat mile. Accordingly, the carrier seeks to begin advance tickets sales for its initial flights and thereby increase the likelihood of financial success for its initial service. Skybus will not, however, initiate sales until it is in a position to announce a definitive startup date, with a high level of confidence, based on the status of the FAA certification process. Counsel: Sher & Blackwell, Mark Atwood
OST-2005-20072 - Interstate Certificate of Public Convenience and Necessity - Scheduled Passenger April 19, 2007 Skybus Airlines, Inc., hereby requests a disclaimer of jurisdiction and reissuance of certificates or, alternatively, approval pursuant to 49 U.S.C. § 41105 of the transfer of Skybus's certificates of public convenience and necessity and other operating authority from Skybus Airlines, LLC, an entity which no longer exists. The transfer of operating authority to Skybus, Inc. and the reissuance of the certificates in the name of Skybus, Inc. is part of a corporate restructuring intended to take advantage of tax and business-related benefits that are offered by the corporation organizational structure. Skybus previously advised Department staff that it had converted its form of organization from a limited liability company to a "C" corporation following issuance of the Department's Order to Show Cause, as originally planned at the time of its initial application. This Application for a Disclaimer of Jurisdiction is intended to bring the carrier's certificate authority in line with that transition. This restructuring has not materially changed the management, control, operations, financial condition or citizenship of the carrier. To complete the reissuance or transfer of the certificates prior to its anticipated operational date, Skybus respectfully requests that this application be handled on an expedited basis and that the transfer and reissued certificates have an effective date of not later than May 21, 2007. Counsel: Sher & Blackwell, Mark Atwood
OST-2005-20072 - Interstate Certificate of Public Convenience and Necessity - Scheduled Passenger June 6, 2007 As requested, I am submitting attached hereto the resumes of Joseph Hexter, the new Director of Safety, and Donald Smith, the new Chief Inspector, for Skybus Airlines, Inc. This submission brings the record up to date for Skybus, and accordingly we look forward to receiving the order confirming the oral grant of effective certificate authority made on May 10, 2007. Pursuant to our request in this docket, dated April 19, 2007, for a disclaimer of jurisdiction, we ask that this order re-issue Skybus' certificate authority reflecting the company's new corporate name, Skybus Airlines, Inc. Counsel: Sher & Blackwell, Mark Atwood, 202-463-2513
Order 2007-7-19 Issued and Served July 25, 2007 Order Confirming Oral Action, Disclaiming Jurisdiction and Issuing Effective Certificates We confirm our oral action of May 10, 2007, making the section 41102 interstate and foreign scheduled certificate authority issued to Skybus Airlines, LLC, effective on that same date. We disclaim jurisdiction over the transfer of the interstate and foreign certificates issued to Skybus Airlines, LLC, to Skybus Airlines, Inc. We reissue the section 41102 interstate and foreign scheduled passenger certificates issued to Skybus Airlines, LLC, by Order 2006-3-12, in the name Skybus Airlines, Inc., effective May 10, 2007. Should Skybus Airlines, Inc., propose to conduct operations with more than 8 aircraft, we direct it to notify the Department in writing at least 45 days prior to the proposed change in operations and demonstrate its fitness to conduct such operations before their commencement. By: Todd Homan |
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