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OST-2006-24295 - Independence Air and Compass Airlines - Transfer of Certificate Authority
Order 2004-11-9 - Independence Air Certificate Authority
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Independence Air, Inc. and Compass Airlines, Inc. OST-2006-24295 - Transfer of Certificate Authority
March 27, 2006 Joint Application for Transfer of Certificate Authority - Bookmarked On February 3, 2006, Independence Air's bankruptcy advisors circulated a request for proposals relating to Independence Air's economic and safety certificates and all operations specifications, manuals, and related assets. At the time, Northwest Airlines, Inc. was in the process of establishing a regional air carrier subsidiary which is a lengthy process. Northwest, which is in the process of restructuring under Chapter 11 of the Bankruptcy Code, had announced to the Creditors Committee and to the public its need to establish an affiliated regional air carrier as part of its plan of reorganization. The expansion of Northwest's regional flying through the proposed Compass Airlines operation is an essential part of the plan for restructuring Northwest. Compass is expected to enhance Northwest's service in a variety of the small and medium‑sized markets Northwest serves by providing convenient connections with new 76‑seat regional jet aircraft to Northwest's hubs in Minneapolis/St. Paul, Detroit and Memphis.' Compass' service will thus provide numerous communities and passengers with improved access to Northwest's extensive domestic system, trans‑Pacific service and trans‑Atlantic service as well as connections to Northwest's SkyTeam alliance partners. It is anticipated that Compass' proposed operation with 76‑seat regional jet aircraft will be principally utilized to (i) replace service currently being provided by Mesaba Aviation, Inc. with 69‑seat Avro regional jet aircraft, and (ii) upgrade service in markets currently served with 50‑seat regional jet aircraft. Counsel: Independence - Silverberg Goldman, Robert Silverberg, 202-944-3300, rsilverberg@sgbdc.com / Compass - Wiley Rein, Edward Faberman, 202-719-7402, efaberman@wfr.com
March 27, 2006 Motion for Confidential Treatment Compass Airlines, Inc. herewith moves to withhold from public disclosure the confidential information in the exhibits in the above-captioned joint application. Counsel: Wiley Rein, Edward Faberman, 202-719-7402, efaberman@wfr.com
May 30, 2006 Supplement No. 1 to Joint Application - Bookmarked
Counsel: Silverberg Goldman, Robert Silverberg, 202-944-3300, rsilverberg@sgbdc.com for Independence / Wiley Rein, Edward Faberman, 202-719-7402, efaberman@wrf.com for Compass
August 23, 2006 Re: Ruling on Motion for Confidential Treatment of Documents It is not the Department's practice to withhold from public disclosure information regarding an applicant's first‑year operating cost forecasts. Nor is it our practice to withhold all information regarding the applicant's proposed operating plan and related statistics. However, the Department has generally granted confidential treatment to contractual agreements and financial projections when the nature of the information reflected in the financial statements could well provide commercially sensitive information to competitors. We find that the material contained in Exhibits A‑3 and A‑14 is similar to material we have granted confidential treatment to in the past and see no reason no to do so here. Therefore, we grant confidential treatment to Exhibits A‑3 and A‑14. By: Air Carrier Fitness, William Bertram
August 29, 2006 Petition of Compass Airlines for Partial Reconsideration of Ruling Denying Confidential Treatment By letter ruling dated August 23, 2006, the Department granted the Motion of Compass Airlines, Inc. for Confidential Treatment and accorded confidentiality with respect to Exhibits A-3 and A-14 to its Joint Application, but denied confidentiality to Exhibits A-7, A-10, and A-12. Accordingly, Compass will submit versions of Exhibits A-10 and A-12 in the public docket as instructed, but respectfully requests that the Department reconsider its decision with respect to Exhibit A-7 (Key Personnel and Organization Chart of Compass) to the limited extent of treating as confidential the Social Security and Airman Certificate numbers of certain Key Management Personnel contained therein. Compass specifically requests that any listing of Social Security numbers and/or the FAA numbers assigned to the Certificates be given confidential treatment (i) because the numbers, in some cases, are identical to the Key Person's Social Security and thus should be held in confidence in order to protect the integrity of the Social Security System and the privacy of each person, and (ii) because the numbers of these Certificates (and the Social Security numbers) should generally not be disclosed to the public for obvious national security reasons. As so redacted, Compass is prepared to submit the Exhibit in the public docket. Counsel: Wiley Rein, Edward Faberman, 202-719-7402, efaberman@wrf.com
August 31, 2006 Supplement No. 2 to Joint Application Compass Airlines, Inc. hereby files this Supplement No. Two to the Joint Application of Independence Air, Inc. and Compass dated March 27, 2006, for the transfer to Compass of the certificate of public convenience and necessity issued by the Department of Transportation to Independence Air by Order 2004-11-19 on November 15, 2004 authorizing Independence Air to engage in interstate scheduled air transportation. Since that filing, there is a need to publicly file certain exhibits and file changes to information contained in the March 27 application. On August 23, 2006, the Department held that Compass' Exhibits A-10 and A-12 would not be granted Confidential Treatment. Compass does not challenge that decision and therefore, those Exhibits are attached hereto. In the August 23, 2006 ruling, the Department also held that Exhibit A-7 would not be granted Confidential Treatment, however, by a Petition for Partial Reconsideration, dated August 29, 2006, Compass asked that some of the information in that Exhibit be held to be confidential. The applicants again respectfully request that this application receive expedited consideration in order that regional jet air transportation services under the economic authority being transferred herein may be resumed as quickly as possible. As a result of the change in aircraft availability, initiation of operations by Compass will likely begin in October 2006. Counsel: Wiley Rein, Edward Faberman, 202-719-7402, efaberman@wrf.com
September 1, 2006 DOT Letter Granting Request for Petition for Reconsideration Compass asks that the Department reconsider its ruling with respect to the Social Security numbers and Airman Certificate numbers contained in the resumes provided for Compass' key management personnel. In support of its request, Compass states that in certain cases Airman Certificate numbers are identical to Social Security numbers and therefore public disclosure would not be in the interest of national security. We agree with Compass that this information warrants confidential treatment. We also note that Compass has provided the public record with complete resumes of its key management personnel. Therefore, upon reconsideration, we have decided to grant Compass' request with respect to the information noted in its August 29 petition for reconsideration. By: William Bertram
Order 2006-9-7 Issued and Served September 11, 2006 Order to Show Cause - Bookmarked If the requested certificate transfer is approved, Compass intends to provide scheduled air transportation initially between its base at Dulles International Airport and Minneapolis-St. Paul International Airport, pursuant to an Airline Services Agreement with Northwest Airlines using CRJ-200 aircraft configured for 50 passenger seats. Compass expects to initiate service using one 50-seat aircraft in October 2006, and to take delivery of 76-seat regional jet aircraft in March 2007. During its first-year of certificate operations, Compass proposes to operate four aircraft. Though the Department generally does not require applicants proposing to conduct operations under a fee-for-service agreement to meet the Department's three-month zero revenue test, we do require applicants to have a sufficient amount of working capital reserve to cover its pre-operating expenses. In this regard, Compass states that it expects to incur pre-operating expenses of approximately $3.63 million. We have reviewed Compass' pre-operating expense forecast and find the forecast to be reasonable. By: Michael Reynolds
September 14, 2006 Supplement No. Three to Joint Application By letter ruling dated September 1, 2006, the Chief of the Air Carrier Fitness Division, Office of Aviation Analysis, granted the Petition of Compass Airlines, Inc. for Partial Reconsideration of the Chief's earlier letter ruling dated August 23, 2006, requesting that Compass be permitted to redact Airman Certificate numbers from the personnel information in Exhibit A-7 of its Certificate Transfer Application in this Docket. Compass is herewith submitting the redacted version of Exhibit A-7 for inclusion in the public docket. The Amendment also includes a revised resume of Andy Roberts, Executive Vice President of Operations for Northwest Airlines, to clearly state his positions at Northwest Airlines. Counsel: Silverberg Goldman, Robert Silverberg, 202-944-3300, rsilverberg@sgbdc.com for Independence / Wiley Rein, Edward Faberman, 202-719-7402, efaberman@wrf.com for Compass
September 20, 2006 Objection Letter of Kevin Baumann By: Kevin Baumann
September 19, 2006 Objection Letter of Robert Cox By: Robert Cox
Order 2006-9-24 Issued and Served September 26, 2006 By Order 2006-9-7, issued September 11, 2006, we directed all interested persons to show cause why we should not make final our tentative findings and conclusions stated therein and transfer the interstate scheduled passenger certificate currently held by Independence Air, Inc., to Compass Airlines, Inc. Interested persons were given 14 calendar days to file objections to the order. No objections to the show-cause order were received. We transfer to Compass Airlines, Inc. the interstate scheduled passenger authority issued to Independence Air, Inc., by Order 2004-11-9, in the form and subject to the Terms, Conditions, and Limitations attached. We direct Compass Airlines, Inc. to submit to the Air Carrier Fitness Division a first year progress report within 45 days following the end of its first year of actual certificated flight operations. We direct that should Compass Airlines, Inc. wish to operate more than four aircraft in scheduled air transportation, it must first provide the Department with at least 45-days’ notice and demonstrate its fitness for such operations. By: Michael Reynolds
September 26, 2006 Reply to Comments in Response to Show Cause of Order Pursuant to the Show Cause Order, no "substantive" objections were filed. Therefore, Compass asks that the Department, without delay, issue an order making final the Department's tentative findings and conclusions with respect to Compass' fitness and certification. Counsel: Wiley Rein, Edward Faberman, 202-719-7402, efaberman@wrf.com
March 22, 2007 Counsel: Wiley Rein, Edward Faberman, 202-719-7402, efaberman@wileyrein.com
April 9, 2007 Establishing Effectiveness of Certificate Compass intends to start operation no later than May 2,2007. The following information is provided to establish the effectiveness of Compass’ Certificate:
Counsel: Wiley Rein, Edward Faberman, 202-719-7402, efaberman@wileyrein.com
April 11, 2007 Establishing Effectiveness of Certificate - Follow Up As a follow-up to our letter of April 9th, the attached letter supplements the statement made relating to Northwest Airlines providing financial resources to Compass to cover its costs. Counsel: Wiley Rein, Edward Faberman, 202-719-7402, efaberman@wileyrein.com
Order 2007-4-28 Issued and Served April 30, 2007 Order Confirming Oral Action and Issuing Effective Certificate By this order, we (1) confirm our oral action of April 13, 2007, making effective the certificate authority transferred to Compass Airlines, Inc. from Independence Airlines, Inc., to engage in interstate scheduled air transportation of persons, property, and mail, and (2) reissue the air carrier's certificate of public convenience and necessity to reflect its effective dates. By: Todd Homan
June 7, 2007 On September 26, 2006, the Department of Transportation issued a Final Order (Order 2006-9-24) finding that Compass Airlines, Inc. is "fit, willing, and able to engage in interstate scheduled air transportation of persons, property, and mail." Compass hereby advises the Department that Mr. Neal Cohen will no longer serve as CEO of Compass, as a result of other management responsibilities with Northwest Airlines. Compass will no longer have a CEO position. Mr. John Bendoraitis, Compass' current President, will remain in that position and will be the senior ranking executive at the company. Counsel: Wiley Rein, Edward Faberman, 202-719-7402, efaberman@wileyrein.com
January 11, 2008 Application for an Amendment of Certificate Compass hereby applies to the Department for an amendment to its certificate of public convenience and necessity to remove Condition 4 to Compass's certificate, so that Compass's air carrier authority will not be limited solely to operations performed under a fee-for-service agreement with major U.S. carriers. Compass has no immediate plans to operate any flights outside of its established major carrier relationship with Northwest. However, the absolute restriction of Condition 4 is blocking Compass' ability to secure permanent operating rights in foreign jurisdictions, i.e. Canada, and unnecessarily restricts Compass' ability to respond to market opportunities. By Order 2007-11-27, the Department eliminated a similar condition to Republic Airline's air carrier certificate. Compass recently provided updated fitness information to the Department, demonstrating its ability to expand its fleet to 36 new, state-of-the-art EMB-175 aircraft. This request was approved by a DOT fitness letter on December 27, 2007. Counsel: Wiley Rein, Edward Faberman, 202-719-7402, efaberman@wileyrein.com
January 18, 2008 Application to Amend Exemption Compass Airlines, Inc. hereby requests amendment of its U.S.-Canada exemption (Notice ofAction Taken, Docket OST-2007-28132; issued on August 6, 2007) to remove the condition which limits Compass's authority to operations performed under a fee-for-service agreement with major U.S. carriers. Compass respectfully requests that the Department amend the U.S.-Canada exemption condition described herein simultaneously with the amendment of Compass's Interstate Certificate Authority in Docket OST-2006-24295. Counsel: Wiley Rein, Edward Faberman, 202-719-7402, efaberman@wileyrein.com
January 25, 2008 On January 11, 2008, Compass Airlines, Inc. submitted an Application of Compass Airlines, Inc. to amend its certificate of public convenience and necessity to remove Condition 4 to Compass' certificate so that Compass' air carrier authority will not be limited solely to operations performed under a fee-for-service agreement with major U.S. carriers. Compass said it would poll all parties served with the application and would report that information to the Department. On behalf of Compass, I have polled the air carriers on the service list and none of the carriers on the list objected to this proposed amendment. Therefore, Compass respectfully requests that the Department eliminate the condition that limits its authority to operations performed under a fee-for-service agreement with major U.S. carriers. Counsel: Wiley Rein, Edward Faberman, 202-719-7402, efaberman@wileyrein.com
January 25, 2008 On January 18, 2008, Compass Airlines, Inc. submitted an Application of Compass to amend its exemption to remove the condition which limits Compass's U.S. Canadian authority to operations performed under a fee-for-service agreement with major U.S. carriers. Compass said it would poll all parties served with the application and would report that information to the Department. Therefore, on behalf of Compass, I have polled the air carriers on the service list and none of the carriers on the list objected to this proposed amendment. Therefore, Compass respectfully requests that the Department eliminate the conditions that limit its U.S.-Canadian authority to operations performed under a fee-for-service agreement with major U.S. carriers. Counsel: Wiley Rein, Edward Faberman, 202-719-7402, efaberman@wileyrein.com
May 9, 2008 Compass Airlines, Inc. has applied for an amendment to remove Condition 4 from its certificate of public convenience and necessity -- so that Compass's air carrier authority will not be limited solely to operations under a fee-for-service agreement with major carriers. Although Compass does not have immediate plans for service independent of its existing fee-for-service arrangement with Northwest, removal of this condition is necessary to enable Compass to secure permanent operating authority in foreign jurisdictions, including Canada. To allow Compass to continue its operations to Canada, it is essential that Condition 4 be removed as soon as possible. Compass has met its targeted growth plans and remains a successful regional jet carrier operating more than 80 daily scheduled flights to 27 cities in the United States, Canada, and Mexico. In these circumstances, and in light of Compass's significant management experience and financial resources, the provisional start-up Condition 4 is no longer necessary or required in the pubic interest. To assist the Fitness Division's evaluation of the financial feasibility of operations by Compass, Exhibit A to this Supplement contains a Pro Forma Income Statement for an illustrative service proposal independent of Compass's fee-for-service operations. This service proposal is based on two roundtrip scheduled flights six days per week (Sunday-Friday) and one flight on Saturdays, using one aircraft with 76 seats, and a 400 mile stage length. Counsel: Wiley Rein, Edward Faberman, 202-719-7402, efaberman@wileyrein.com
May 16, 2008 Re: First Quarter 2008 Balance Sheet and Request for Confidential Treatment Compass Airlines has applied for an amendment to remove Condition 4 from its certificate of public convenience and necessity -- so that Compass's air carrier authority will not be limited solely to operations under a feefor-service agreement with major carriers. For your use and reference in connection with that proceeding, we are providing you an updated balance sheet for the first quarter of 2008. Pursuant to Section 302.12 of the Department's Rules of Practice, Compass Airlines, Inc. hereby moves to withhold from disclosure this non‑public balance sheet information. Counsel: Wiley Rein, Edward Faberman, 202-719-7402, efaberman@wileyrein.com
May 20, 2008 Re: Ruling on Confidential Treatment With regard to Compass' request for confidential treatment of its current balance sheet, it is not the Department's practice to withhold from public disclosure information relating to the applicant's financial statements, first‑year expense forecasts and forecasted balance sheets, nor is it our practice to withhold from public disclosure documents that contain information that is already publicly available from other sources. Moreover, section 204.3 of the Department's rules requires an air carrier, as part of the fitness determination process, to provide information on its current financial condition in the public docket. Therefore, we are denying Compass' request for confidential treatment. By: Lauralyn Remo
May 23, 2008 Re: Withdrawal of Confidentiality Request In response to the Department's May 20, 2008 letter, Compass Airlines, Inc. hereby withdraws its May 16 letter and request for confidential treatment. Compass is submitting its most recent Form 41 quarterly balance sheet and cash flows for inclusion in the public docket. The record is now complete, and Compass urges the Department to act expeditiously in approving Compass's pending request for an amendment to its certificate, to remove Condition 4. Counsel: Wiley Rein, Edward Faberman, 202-719-7402, efaberman@wileyrein.com
Order 2008-6-17 Issued and Served June 16, 2008 We remove the condition in the interstate certificate of public convenience and necessity issued to Compass Airlines, Inc., by Order 2006-9-24 that limits the air carrier’s scheduled passenger operations to those conducted under a fee-for-service agreement, or a similar agreement, with a major U.S. air carrier. We note that Compass Airlines, Inc., is limited to conducting independent operations using no more than three aircraft. By: Michael Reynolds |
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