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|[pic] |UNITED STATES OF AMERICA |

| |DEPARTMENT OF TRANSPORTATION |

| |OFFICE OF THE SECRETARY |

| |WASHINGTON, D.C. |

Issued by the Department of Transportation

on the 11th day of January, 2005

|Application of | |

| | |

|AMERISTAR AIR CARGO, INC. |Docket OST-2003-16773 |

|d/b/a AMERISTAR CHARTERS |Docket OST-2003-16774 |

| | |

|for certificates of public convenience and necessity under 49 U.S.C. 41102 to engage in | |

|interstate and foreign charter air transportation of persons, property, and mail | |

ORDER TO SHOW CAUSE

PROPOSING ISSUANCE OF CERTIFICATE AUTHORITY

Summary

By this order, we tentatively find that Ameristar Air Cargo, Inc. d/b/a Ameristar Charters (“Ameristar”) is a citizen of the United States and is fit, willing, and able to provide interstate and foreign charter air transportation of persons, property, and mail as a certificated air carrier, and should be issued amended certificates authorizing such operations, subject to conditions.

Background

Section 41102 of Title 49 of the United States Code (“the Transportation Code”) directs us to determine whether applicants for certificate authority to provide interstate scheduled air transportation are “fit, willing, and able” to perform such transportation, and to comply with the Transportation Code and the regulations of the Department. In making fitness findings, the Department uses a three-part test that 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 company's fitness are whether the applicant (1) will have the managerial skills and technical ability to conduct the proposed operations, (2) will have access to resources sufficient to commence operations without posing an undue risk to consumers, and (3) will comply with the Transportation Code and regulations imposed by Federal and State agencies. We must also find that the applicant is a U.S. citizen.

On December 19, 2003, Ameristar filed applications in Dockets OST-2003-16773 and OST-2003-16774 for certificates to provide interstate and foreign charter air transportation of persons, property, and mail. Ameristar currently holds certificates of public convenience and necessity issued by the Department authorizing it to engage in interstate and foreign charter all-cargo air transportation.[1] Ameristar accompanied its applications with fitness information required by section 204.3 of our regulations.[2]

USA Jet Airlines, Inc. (“USA Jet”) filed an answer on April 22, 2004, opposing Ameristar’s applications, and Ameristar filed responses to USA Jet’s answers.[3] In general, USA Jet contends that Ameristar did not provide the Department with all required fitness information and that the omitted information, as well as the carrier’s failure to provide it, raises serious questions regarding Ameristar’s overall fitness.[4] In addition, USA Jet questions whether Ameristar has the requisite managerial experience to oversee its proposed passenger operations. Ameristar replies that it did file all required fitness information, and that its management personnel are qualified to oversee the applicant’s proposed passenger charter services.

After reviewing the filings of both USA Jet and Ameristar, we propose to decide the issues of the applicant’s fitness and citizenship on the basis of the written record and find that there are no other issues that require further evidentiary procedures. While the issues raised by USA Jet are not without some merit, as more fully discussed in the FITNESS section below, we tentatively conclude that Ameristar is a U.S. citizen and is fit, willing, and able to conduct passenger charter operations, subject to limitations, and should be issued amended certificates authorizing it to engage in interstate and foreign air transportation of persons, property and mail. However, as is our practice, we will give interested persons an opportunity to show cause why we should not adopt as final the tentative findings and conclusions stated herein.

FITNESS

The Company

Based in Addison, Texas, Ameristar was incorporated under the laws of the State of Texas in July 1999 to provide charter cargo operations with large jet aircraft. Ameristar presently operates a fleet of three aircraft: two B-737s and one DC-9.[5] The carrier is wholly owned by Mr. F. Thomas Wachendorfer, Jr., a U.S. citizen. Mr. Wachendorfer also owns Ameristar Jet Charter, Inc. (“AJC”), an air taxi established in 1991,[6] which also serves as Ameristar’s exclusive sales and marketing agent; Sierra American Corporation, an aircraft leasing company established in 1990; Tom Wachendorfer Aviation, an aviation management company formed in 1982; and Ameristar Airways (“Airways”), an FAR Part 125 commercial operator which operates DC-9 aircraft.

If its present applications are approved, Ameristar intends to conduct single-entity passenger charter services using up to three leased B-737 aircraft in an executive configuration with 46 seats.[7]

Managerial Competence

Ameristar’s management and key technical personnel team is comprised of the following individuals:

Mr. F. Thomas Wachendorfer – President

Mr. Fleet Lassetter – Chief Financial Officer

Mr. Daniel P. Hulsey – Director of Operations

Mr. Theodore Smith – Director of Maintenance

Mr. Grady Penley – Director of Quality Control/Quality Assurance

Mr. James Matthew Raymond – Chief Pilot

Mr. Lindon Frazier – Director of Safety

Ms. Julie K. Redmond – Director of In-flight

The backgrounds of Messrs. Wachendorfer, Hulsey, Crawford and Frazier have previously been reviewed by the Department.[8]

Mr. Fleet Lassetter, a Certified Public Accountant, has served as Chief Financial Officer for Ameristar and related companies since 1998. His previous employment includes Executive Vice President at Alice National Bank, in Alice, Texas (1987-1988) and Resolution Specialist for the Resolution Trust Corp. (1989-1990). He also managed Emerald Hills Funeral Home and Memorial Park, a family-owned business between 1990 and 1995.[9] Mr. Lassetter also owns Executive Airlines Company, Inc. (Executive), a non-operating air taxi operator.

Mr. Theodore Smith, an FAA-certificated Airframe and Powerplant Mechanic, became Ameristar’s Director of Maintenance in September 2004. Prior to assuming this position, Mr. Smith had been serving as the carrier’s Chief Inspector since November 2002. Mr. Smith initially joined the carrier in August 2000 as an aircraft mechanic after transferring from Ameristar’s sister carrier, AJC, where he had been working as a mechanic since January 1998 and as Chief Inspector since August 2000. Mr. Smith has more than 10 years of aircraft maintenance experience, and he has held several mechanic positions for various companies.

Mr. Grady Penley, an FAA-certificated Airframe and Powerplant Mechanic and Airline Transport Pilot, is Ameristar’s Director of Quality Control, a position he assumed in September 2004. Prior to this, he served for two years as Ameristar’s Director of Maintenance. Prior to joining Ameristar, he worked as an aviation consultant specializing in aircraft maintenance for over 20 years. From 1998 to 2002, Mr. Penley served as the Director of Quality Control and Chief Inspector for Express One International. Mr. Penley also has several years of maintenance experience working for aircraft repair stations. From September 1995 to January 1996, he held the position of Quality Control Inspector with AAR Oklahoma City, and from January 1996 to May 1998, he served as Director of Quality Control and Chief Inspector for International Aviation Services, Ltd. Mr. Penley was also a line maintenance supervisor for AeroExo Airlines, a foreign air carrier, from January 1994 to September 1995.

Mr. James Matthew Raymond, an FAA-certificated Airline Transport Pilot, joined Ameristar as a pilot in January 2000 and became its Chief Pilot in October of that year. In January 2003, he briefly left Ameristar to became the Director of Operations for Ameristar’s sister company, Airways, but subsequently returned to Ameristar. Other management positions Mr. Raymond has held include Chief Pilot for Access Air (August 1999-January 2000), Director of Operations and Chief Pilot for Prime Air, Inc. d/b/a Transmeridian Airlines (1995-1997), Chief Pilot (Denver Base) for MarkAir, Inc. (1994-1995), and Chief Pilot and/or Director of Operations for South Central Air, Inc.[10] Mr. Raymond has over 14,000 total flight hours, 11,800 of which were as pilot-in-command.

Ms. Julie Redmond became Ameristar’s Director of In-flight in early 2004. Prior to joining the carrier, she served as the Manager for In-flight Training for Express One International (1985-1989), and Director of In-flight for Legend Airlines (1999-2001) and Omni Air International (2001-2003). Ms. Redmond also served for a number of years as a flight attendant for Braniff Airlines (1968-1989). From 1990 to 1999, Mrs. Redmond was the owner of The Party Line, an event planning company whose business involved full service catering and event planning. During this time, she also served as a flight attendant instructor on a consulting basis.

USA Jet questions whether Ameristar’s management personnel are qualified to oversee passenger operations. In this regard, USA Jet takes no position as to whether Ameristar’s personnel are or are not qualified for their respective positions. Rather, it contends that the Department should hold Ameristar to the same standards that it held USA Jet to when that company applied for passenger authority in 2002.[11]

Ameristar argues that its key management personnel are qualified. Ameristar states that Mr. Daniel (Pat) Hulsey, Ameristar’s Director of Operations, and Ms. Julie Redmond, its Director of In-flight, will have primary responsibility for overseeing passenger consumer issues including compliance with DOT consumer rules, handling applicable aspects of the company’s Family Assistance and Passenger Manifest Plans, processing passenger complaints, as well as overseeing aircraft scheduling and other issues related to arranging for passenger charter flights.[12]

As to Mr. Hulsey’s qualifications, Ameristar notes that he has been employed by Part 121 scheduled and charter carriers for over 27 years, during which time he has held line and management positions with such companies.[13] Ameristar also notes that, in recent years, Mr. Hulsey has been an active participant on the FAA’s Part 125/135 Aviation Rulemaking Committee (ARC), working on issues involving Part 125 rule changes and Part 380 Public Charter requirements. As to Ms. Redmond, Ameristar believes that her previous experience as a flight attendant, instructor and Manager/Director of Inflight for various Part 121 carriers will allow her to fulfill many of the required passenger responsibilities.

USA Jet is correct that we expect companies proposing to operate passenger service to employ personnel with appropriate management experience in handling consumer issues and with knowledge of the Department’s rules with respect to passenger operations. While Ameristar’s management team is not strong in this area, we believe that they have sufficient qualifications to oversee the modest and specialized passenger charter operations proposed by the applicant involving single-entity charters with executive configured aircraft.[14] The company is currently operating B-737 aircraft in its cargo services and its key FAA technical personnel, including Ms. Redmond, have previously worked for passenger air carriers. Moreover, the applicant has experienced legal counsel who are knowledgeable about the Department’s requirements for passenger charter operations.[15] As more fully discussed below, with the additional conditions we are imposing on Ameristar’s passenger operations, we tentatively conclude that Ameristar has a management team that is qualified to oversee its expansion into limited passenger services.

However, aside from the qualifications issue, we note that Ameristar’s key personnel also hold positions or have responsibilities with other companies. In this connection, Ameristar’s Director of Safety also serves as Director of Maintenance for its sister company, AJC, and another company, Executive Airlines.[16] Moreover, according to the FAA, Ameristar’s Director of Maintenance and Director of Quality Control also coordinate the maintenance for Airways. Additionally, Mr. Wachendorfer, the carrier’s owner and President, occupies similar positions at other related companies.

During the course of our review, the FAA has expressed to us its concern that the process of applying for expanded FAA authority, coupled with other on-going responsibilities, appears to have placed a heavy workload burden on Ameristar’s key management personnel. While the FAA advises us that Ameristar has now fulfilled the requirements to obtain FAA passenger authority and that that agency is prepared to add the passenger aircraft currently under lease to Ameristar to its operations specifications, the FAA remains concerned that the carrier’s management personnel may be overburdened,[17] particularly if Ameristar expands to the full eight aircraft it currently envisions.[18]

Under these circumstances, notwithstanding our tentative conclusion that the applicant’s personnel are, per se, qualified to oversee its proposed passenger services, we cannot ignore the concerns expressed by the FAA. After discussing this issue further with the FAA, we believe that the agency’s concerns would be alleviated if Ameristar’s key technical personnel did not have similar responsibilities with other companies. Therefore, if Ameristar is found fit and issued the passenger authority it seeks, we propose to require that the carrier’s key personnel not hold a key technical position (or similar responsibilities) with any Ameristar-related company or any other air carrier without the prior approval of the Department and the FAA.[19] We have also tentatively decided to limit the company’s passenger authority to a period of one year and, at least initially, to not more than one aircraft. Further, we have tentatively decided to reduce the total number of aircraft the carrier is authorized to operate without prior Department approval from five to four.[20] We believe these conditions will allow us and the FAA to ensure that Ameristar has the management and other infrastructure needed before implementing any future expansion. It will also allow us to monitor the ability of the carrier’s management and personnel to comply with our passenger consumer rules.

Operating Proposal and Financial Plan

As noted earlier, Ameristar currently operates three cargo aircraft. Ameristar has entered into an agreement with an unrelated company that provides for Ameristar to manage a passenger aircraft for that company and to lease the aircraft to conduct its own charter operations when not in use by the owner. In its application, Ameristar proposes to commence passenger charter operations using this 46-seat B-737 aircraft and to add two more B-737 aircraft during the first 12 months of operations.[21] Using these aircraft, the carrier proposes to conduct single entity charters, primarily corporate shuttles and for sports and entertainment industry customers. Ameristar forecasts that it will operate a modest 50 block hours per aircraft per month for a total of 850 block hours during its first year of passenger operations.[22]

As part of the lease agreement, the lessor is responsible for most costs associated with having the aircraft put on Ameristar’s Part 121 authority. Thus, Ameristar does not expect to incur many of the expenses often associated with the start-up of passenger charter operations.[23] In addition, the lessor is responsible for many other aircraft costs, including maintenance and insurance both before and after operations start. For its part, Ameristar pays the lessor a set amount for each hour that it operates the aircraft. As is the case with its current cargo operations, Ameristar intends to have its sister company, AJC, market its planned passenger services as its agent.

Ameristar has provided forecasts of its anticipated pre-operating and first year operating expenses. Ameristar forecasts that it will incur approximately $55,000 in start-up costs, and that its first year expenses with all three aircraft will result in incremental costs totaling approximately $3.5 million.

USA Jet questioned the reasonableness of Ameristar’s projections, stating that the company’s projections lacked estimates for such expenses as maintenance, liability insurance, fuel and indirect expenses (e.g., administrative and other personnel salaries). Ameristar subsequently provided revised forecasts and other information addressing many of these issues. For example, its amended forecasts provided for fuel, landing fees, etc., not initially accounted for. Moreover, as noted above, the aircraft lease provides that the owner of the aircraft is responsible for costs associated with aircraft maintenance and liability insurance coverage that meets the Department’s requirements.

Ameristar states that its forecasts are based on its previous operating experience. Nevertheless, the applicant has not provided sufficient information to enable us to fully determine the reasonableness of its forecasts for the three aircraft it proposes to operate. For instance, although Ameristar’s forecasts appear to be based on the operation of one aircraft for 50 hours a month for the first nine months, its crew salaries (and related taxes and benefits) for those nine months fluctuate from a low of $4,000 per month to $40,500 per month, with no explanation from the applicant as to the basis for such varying estimates. In addition, Ameristar states that “ . . . there is no rational basis for allocating costs relating to salaries and other fixed expenses associated with its ongoing cargo operations to its proposed passenger charter forecast,” and thus has not included such administrative or indirect expenses in its forecasts. We do not understand Ameristar’s position in this regard since we routinely expect, and are provided, such projections by applicants for new or amended certificate authority.

However, as noted in the MANAGEMENT section of this order, we are proposing to limit Ameristar’s proposed passenger operations to one aircraft at this time. We have reviewed the total $3.5 million in projected expenses as compared to costs reported by other carriers operating, or proposing to operate, similar aircraft as well as within the context of the aircraft lease terms presented by the applicant and accept them as reasonable for this single aircraft operating 600 block hours.[24] Using this forecast, we estimate that Ameristar will need approximately $1 million to meet our financial fitness criteria.[25]

Ameristar provided its financial statements in support of its ability to finance its proposed charter operations. These show that, for the 12-month period ended June 30, 2004, Ameristar earned $1.1 million on $6.3 million in operating revenues. The carrier’s most recent balance sheet indicates that, as of June 30, 2004, it had positive working capital of approximately $3.3 million, a current assets to current liabilities ratio of 15.44 to 1, and positive retained earnings and positive stockholder’s equity of $4.071 million and $4.072 million, respectively.[26]

In light of the foregoing, we tentatively conclude that Ameristar will have sufficient financial resources available to it to enable the carrier to commence passenger operations without posing an undue risk to consumers or their funds.

Compliance Disposition

In its original application in this case, Ameristar stated that there were no pending actions or outstanding judgments against it involving amounts less than or in excess of $5,000; that there were no pending investigations, enforcement actions, or formal complaints, filed by the Department or the FAA, involving Ameristar, or any personnel employed by (or expected to be employed by) Ameristar; and that Ameristar had not been charged with any unfair or deceptive or anticompetitive business practices, or with fraud, felony or antitrust violations during the past 10 years. Ameristar further stated that neither it, its owner, or its employees have been involved in an aircraft accident or incident during the past that remained under investigation by the FAA, National Transportation Safety Board (NTSB) or Ameristar, itself.

In addition to the above assertions specific to the applicant itself, Ameristar initially noted certain safety and compliance issues involving its sister companies, AJC and Airways. These included a general statement that there were cases or actions less than or greater than $5,000 pending against AJC that were typical of the litigation commenced against air taxi operators; and reference to a Notice of Proposed Civil Penalty issued by the FAA to Airways, as well as an on-going investigation into the Part 125 operations of Airways by the FAA and the Department’s Office of Aviation Enforcement and Proceedings (Enforcement Office). Ameristar also noted a September 19, 2003, accident involving AJC which was under investigation by the NTSB.[27]

In its answer, USA Jet contended that Ameristar’s compliance disclosures fell far short of the disclosures required by the Department for companies requesting new or amended operating authority. In this connection, USA Jet provided an April 2004 verdict in a case pending against AJC in the 14th Judicial District of Dallas County, Texas (Charles Jeffrey Cobbs v. Ameristar Jet Charter, Inc., Case No. 02-05262-A) in which a jury had recently rendered a verdict that would impose compensatory and exemplary damages against AJC in excess of $2 million.[28] USA Jet contends that Ameristar’s omissions represented a “pattern of willful non-disclosure, if not concealment, of highly relevant and legally required information” and that such conduct requires the Department to “undertake a serious inquiry into the carrier’s fitness to continue to hold any economic operating authority. . .”[29]

Ameristar countered that it had provided all required and relevant compliance information and noted its earlier assertions as to pending actions against AJC and Airways. It also, at the Department’s request, provided additional information relative to its compliance. This included additional information on the Cobbs case,[30] as well as other cases or issues involving Ameristar or related companies.

According to Ameristar, there are four other outstanding non-FAA related cases against Airways or AJC besides the Cobbs case, two of which involve AJC and two involve Airways. Three of these cases appear to involve pending actions seeking monetary compensation filed by employees who were dismissed by Airways or AJC; the fourth, currently pending in Michigan State court against AJC, initially alleged violation of RICO, monopoly, unfair competition, tortuous interference with contract, and conspiracy.[31]

Information from the FAA indicates that Ameristar has had 16 FAA enforcement cases (Letters of Investigation) opened against it alleging possible violations of FAA rules. Ten of these cases were closed with administrative action (that is, a Letter of Correction or Warning Letter, etc.); six remain open at this time.[32] FAA records also indicate that Ameristar has had one incident and no accidents since receiving its certificate authority in 2000.[33]

It is also appropriate in this case to consider the compliance history for Airways, AJC and other companies owned by Mr. Wachendorfer in assessing Ameristar’s compliance posture. In this connection, FAA records show that Airways has had 11 enforcement cases opened since beginning operations in 2002; three remain open at this time.[34] FAA records indicate that Airways has not been involved in any accidents or incidents. AJC has had 11 FAA enforcement cases opened since 2000, four of which are pending at this time.[35] FAA records show that AJC has had two accidents--both involving fatalities--and nine incidents since 2000.[36]

Finally, by Consent Order 2004-8-9, issued August 12, 2004, the Department’s Office of Aviation Enforcement and Proceedings entered into a settlement agreement with Airways, a Part 125 Commercial Operator, involving allegations that Airways had conducted numerous flights in common carriage over an extended period of time since beginning operations in 2002 and that such flights were in violation of section 49 U.S.C. 41101 and 49 U.S.C. 41712. While Airways did not admit to the allegations it agreed to issuance of the order directing it to cease and desist from any such future unlawful conduct and assessing it a compromise civil penalty of $70,000.[37]

It is clear that Ameristar’s intitial disclosures fell short of what we would expect from an applicant for certificate authority.[38] However, we are not prepared to find the carrier unfit on this basis.[39] The nature of the belatedly disclosed information is not such as to warrant a negative finding or to conclude that the applicant lacks the proper compliance disposition. However, we warn the carrier that in all future filings with the Department, it must take care to provide complete, timely, and accurate information. Finally, as noted earlier, the FAA advises us that it has completed its review of Ameristar’s application for passenger authority and is prepared to amend Ameristar’s FAA operating authority to authorize the carrier to provide passenger charter operations.

In light of the above, we tentatively conclude that Ameristar has shown that it has the proper regard for the laws and regulations governing its services. As noted earlier, however, we intend to monitor the carrier’s operations closely for the foreseeable future. Should any information come to our attention regarding Ameristar or related companies that brings into question its continuing fitness to operate, we will not hesitate to initiate a review of the carrier’s fitness and take whatever action may be necessary as a result.

CITIZENSHIP

Section 41102 of the Transportation Code requires that certificates 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 outstanding voting stock be owned by U.S. citizens; and that the carrier must actually be controlled by U.S. citizens.

Ameristar’s sole owner and only board member, continues to be Mr. F. Thomas Wachendorfer, Jr., who is a U.S. citizen. Each member of the applicant’s senior management team is also a U.S. citizen. In addition, Ameristar has provided an affidavit attesting that it is a citizen of the United States within the meaning of the Transportation Code and that it is actually controlled by U.S. citizens. Finally, our review of the applicant’s citizenship has uncovered no reason to suggest that control of Ameristar rests with non-U.S. citizens.

In view of the foregoing, we tentatively conclude that Ameristar is a citizen of the United States and is fit, willing, and able to provide the interstate and foreign charter passenger operations proposed, subject to conditions.

PUBLIC CONVENIENCE AND NECESSITY

No finding of consistency with the public convenience and necessity is required for the award of authority for interstate charter air transportation under section 41102, although such a finding is required for authority to engage in foreign charter air transportation.

We tentatively find that the foreign charter air transportation proposed by Ameristar is consistent with the public convenience and necessity. By Order 78-7-106, which instituted The Former Large Irregular Air Service Investigation, the Civil Aeronautics Board found that there was a continuing demand and need for additional charter air carriers. These findings remain valid and apply to the authority sought by Ameristar. Therefore, if Ameristar meets the fitness requirements of the Transportation Code, it will receive certificates authorizing it to engage in interstate and foreign charter air transportation of persons, property, and mail under section 41102.[40]

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 to objections will be due within 7 days thereafter. We expect such persons to direct their objections, if any, to the application and points at issue and to support such objections with detailed economic analyses. If an oral evidentiary hearing or discovery procedures are 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 Ameristar’s fitness and certification.

CERTIFICATE CONDITIONS & LIMITATIONS

If Ameristar is found fit and issued amended certificates, its passenger authority will not become effective until the company has fulfilled all requirements for effectiveness as set forth in the terms and conditions attached to its certificates.[41] Among other things, this includes our receipt of evidence that Ameristar has been certificated by the FAA to engage in passenger operations and a fully executed OST Form 6410 evidencing liability insurance coverage that meets Part 205 of our rules for passenger services, and updated fitness information. Also, as mentioned previously, we will not grant Ameristar effective passenger authority until the carrier has provided evidence that (1) none of its key technical personnel hold key positions (or responsibilities) with Ameristar-related companies or other air carriers,[42] and (2) its personnel have met the Department’s Aviation Consumer Protection Division to discuss the carrier’s responsibilities under our consumer protection rules.

In addition, Part 243 of the Department’s regulations requires that, with respect to international air transportation, each certificated air carrier must file with the Department in Docket OST-98-3305 a brief statement summarizing how it will collect certain passenger manifest information and transmit it to the Department of State should an aviation disaster occur.[43] While Ameristar has filed documentation in the passenger manifest docket, the procedures it describes appear to apply to its current cargo operations. Therefore, it will need to update its stated procedures to apply to its proposed passenger operations as well. We will not grant the carrier effective certificate authority until it has done so.[44]

Once Ameristar receives effective passenger authority, that authority will expire one year from its effective date. Should Ameristar wish to renew its passenger authority, it will be required to file a renewal application including updated fitness information.[45] We will then review all of this material prior to making a decision on whether permanent or extended authority should be granted. Moreover, should Ameristar want to operate more than four total aircraft and/or more than one passenger aircraft, it must first provide the Department with at least 45-days advance notice of such plans and provide updated information establishing its fitness for such expansion.

Finally, we remind Ameristar of the requirements of 49 U.S.C. 41110(e). Specifically, that section requires that, once a carrier is found fit initially, it must remain fit in order to hold its authority. To be assured that certificated air carriers continue to be fit after effective authority has been issued to them, we require that they supply information describing any subsequent substantial changes they may undergo in areas affecting fitness. Therefore, should Ameristar subsequently propose other substantial changes in its ownership, management, or operations, it must first comply with the requirements of section 204.5 of our rules. [46] The compliance of the company with this requirement is essential if we are to carry out our responsibilities under the Transportation Code.[47]

ACCORDINGLY,

1. We direct all interested persons to show cause why we should not issue orders making final the tentative findings and conclusions stated above and award certificates to Ameristar Air Cargo, Inc. d/b/a Ameristar Charters authorizing it to engage in interstate and foreign charter air transportation of persons, property, and mail, subject to the attached specimen Terms, Conditions, and Limitations.

2. We direct any interested persons having objections to the issuance of an order making final any of the proposed findings, conclusions, or the certificate award set forth here to file them with Docket Operations, Department of Transportation, 400 Seventh Street, SW, PL-401, Washington, DC 20590, in Dockets OST-2003-16773 and OST-2003-16774, and serve them upon all persons listed in Attachment A no later than 14 days after the service date of this order; answers to objections shall be filed no later than 7 days thereafter.

3. 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.[48]

4. 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.

5. We grant the motions of Ameristar Air Cargo, Inc., and USA Jet Airlines, Inc., for leave to file in this proceeding.

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

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

By:

KARAN K. BHATIA

Assistant Secretary

for Aviation and International Affairs

An electronic version of this document is available on the World Wide Web at:



Attachment

|[pic] |Specimen |

| |Terms, Conditions, and Limitations |

| | |

| |AMERISTAR AIR CARGO, INC. |

| |d/b/a AMERISTAR CHARTERS |

| | |

is authorized to engage in interstate charter air transportation of persons, property and mail between any point in any State, territory, or possession of the United States or the District of Columbia, and any other point in any of those entities.

This authority is subject to the following provisions:

(1) The authority to conduct cargo charter air transportation under this certificate became effective on September 5, 2000. The authority to conduct passenger charter air transportation under this certificate 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 time 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 insurance 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 Show 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 and to provide a working capital reserve equal to the operating costs that would be incurred in three months of operations.

(e) An updated Passenger Manifest Plan in Docket OST-98-3305.

(f) Evidence that none of the holder’s key technical personnel hold key positions (or responsibilities) with related companies or other air carriers, and that the carrier has met with the Department’s Aviation Consumer Protection Division.

__________________

* This certificate is being reissued to authorize the holder to conduct interstate charter passenger air transportation operations.

(2) With respect to the passenger authority conferred by this certificate, pending receipt of effective passenger authority, the holder may not accept payment of any kind (i.e., cash, check, or credit card), issue tickets for the operations proposed under this certificate, or enter into contracts with charterers, and any advertisement 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 operations in accordance with the regulations prescribed by the Department of Transportation for the services authorized by this certificate, and with such other reasonable terms, conditions, and limitations as the Department of Transportation may prescribe in the public interest.

(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 requirements concerning security.

(5) The holder shall at all times remain a "Citizen of the United States" as required by 49 U.S.C. 40102(a)(15).

(6) The holder shall maintain in effect liability insurance coverage as required under 14 CFR Part 205. Failure to maintain such insurance coverage will render a certificate 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 revoke this certificate.

(7) The holder is not authorized to engage in air transportation operations between points within the State of Alaska.

(8) Should the holder propose any substantial changes in its ownership, management, or operations (as that term is defined in 14 CFR 204.2(l)), it must first comply with the requirements of 14 CFR 204.5.

(9) In the event that the holder does not commence actual flying operations under this certificate within one year of the date of the Department's determination of its fitness, its authority shall be revoked for dormancy, unless the holder is conducting operations under another type of certificate authority. Further, in the event that the holder commences operations for which it was found "fit, willing, and able" and subsequently ceases all such operations, its authority under all certificates held 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 resume operations within one year of its cessation, its authority shall be revoked for dormancy.

(10) The holder’s authority to conduct passenger operations under this certificate shall expire one year from the effective date of this certificate.

Attachment

|[pic] |Specimen |

| |Terms, Conditions, and Limitations |

| | |

| |AMERISTAR AIR CARGO, INC. |

| |d/b/a AMERISTAR CHARTERS |

is authorized to engage in foreign charter air transportation of persons, property, and mail:

Between any place in the United States and any place outside thereof.

This authority is subject to the following provisions:

(1) The authority to conduct cargo charter operations under this certificate became effective on September 5, 2000. The authority to conduct passenger charter operations under this certificate 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 time 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 insurance 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 Show 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 and to provide a working capital reserve equal to the operating costs that would be incurred in three months of operations.

(e) An updated Passenger Manifest Plan in Docket OST-98-3305.

(f) Evidence that none of the holder’s key technical personnel hold key positions (or responsibilities) with related companies or other air carriers, and that the carrier has met with the Department’s Aviation Consumer Protection Division.

______________________

* This certificate is being reissued to authorize the holder to conduct foreign charter passenger air transportation operations.

(2) With respect to the passenger authority conferred by this certificate, pending receipt of effective passenger authority, the holder may not accept payment of any kind (i.e., cash, check, or credit card), issue tickets for the operations proposed under this certificate, or enter into contracts with charter operators, and any advertisement 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 operations in accordance with the regulations prescribed by the Department of Transportation for the services authorized by this certificate, and with such other reasonable terms, conditions, and limitations as the Department of Transportation may prescribe in the public interest.

(4) The holder shall at all times conduct its operations in accordance with all treaties and agreements between the United States and other countries, and the exercise of the privileges granted by this certificate is subject to compliance with such treaties and agreements and with any orders of the Department of Transportation issued under them or for the purpose of requiring compliance with them.

(5) The exercise of the authority granted here is subject to the holder's first obtaining from the appropriate foreign governments such operating rights as may be necessary.

(6) 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 requirements concerning security.**

(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. Failure to maintain such insurance coverage will render a certificate 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 revoke this certificate.

(9) Should the holder propose any substantial changes in its ownership, management, or operations (as that term is defined in 14 CFR 204.2(l)), it must first comply with the requirements of 14 CFR 204.5.

_________________

** To assure compliance with all applicable U.S. Government requirements concerning security, the holder shall, before commencing any new service (including charter flights) to or from a foreign airport, contact its Principal Security Inspector (PSI) to advise the PSI of its plans and to find our whether the Transportation Security Administration has determined that security is adequate to allow such airport(s) to be served.

(10) In the event that the holder does not commence actual flying operations under this certificate within one year of the date of the Department's determination of its fitness, its authority shall be revoked for dormancy, unless the holder is conducting operations under another type of certificate authority. Further, in the event that the holder commences operations for which it was found "fit, willing, and able" and subsequently ceases all such operations, its authority under all certificates held 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 resume operations within one year of its cessation, its authority shall be revoked for dormancy.

(11) The holder’s authority to conduct passenger operations under this certificate shall expire one year from the effective date of this certificate.

| |SERVICE LIST FOR |Appendix A |

| |AMERISTAR AIR CARGO, INC. | |

| |D/B/A AMERISTAR CHARTERS | |

|MS SHERYL ISRAEL |MR THOMAS WACHENDORFER |MR MARK ATWOOD |

|COUNSEL FOR AMERISTAR |PRESIDENT |COUNSEL FOR USAJET AIRLINES INC |

|AIR CARGO INC |AMERISTAR AIR CARGO INC |SHER & BLACKWELL LLP |

|SHAW PITTMAN LLP |4400 GLENN CURTIS DRIVE |1850 M STREET NW |

|2300 N STREET NW |SUITE 202 |WASHINGTON DC 20036 |

|WASHINGTON DC 20037 |DALLAS TX 75001 | |

|MR DEE EHMAN |MR TERRY LAMBERT |MR THOMAS E STUCKEY |

|POI FOR AMERISTAR AIR CARGO |PAI FOR AMERISTAR AIR CARGO |MANAGER |

|FEDERAL AVIATION ADMINISTRATION |FEDERAL AVIATION ADMINISTRATION |FLIGHT STANDARDS DIVISION ASW-200 |

|FLIGHT STANDARDS DISTRICT OFFICE |FLIGHT STANDARDS DISTRICT OFFICE |FEDERAL AVIATION ADMINISTRATION |

|CENTREPORT BUSINESS PARK |CENTREPORT BUSINESS PARK |SOUTHWEST REGION HQ |

|14800 TRINITY BOULEVARD SUITE 200 |14800 TRINITY BOULEVARD SUITE 200 |2601 MEACHMAN BOULEVARD |

|FORT WORTH TX 76155 |FORT WORTH TX 76155 |FORT WORTH TX 76137-4298 |

|MS LYNETTE WORD |MR DON BRIGHT K-14 |MS LORI AQUILINO |

|REGIONAL COUNSEL ASW-7 |OFFICE OF AIRLINE INFORMATION |CSET ASSISTANT MANAGER |

|FEDERAL AVIATION ADMINISTRATION |DEPARTMENT OF TRANSPORTATION |FEDERAL AVIATION ADMINISTRATION |

|SOUTHWEST REGION HQ |400 SEVENTH STREET SW |SFO-IFO |

|2601 MEACHMAN BOULEVARD |WASHINGTON DC 20590 |831 MITTEN ROAD SUITE 105 |

|FORT WORTH TX 76137-4298 | |BURLINGAME CA 94010 |

| | | |

| | | |

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[1] See Order 2000-9-7, served September 14, 2000.

[2] The applicant supplemented its application with additional information, most recently on September 15, 2004. In addition, on December 19, 2003, and July 30, 2004, Ameristar requested confidential treatment for certain information submitted with its applications. By letters dated January 30, and September 15, 2004, the Department granted confidential treatment to some of the material for which such treatment was requested. The material for which confidential treatment was denied was subsequently placed in the public portion of the docket.

[3] On May 6, 2004, Ameristar replied to USA Jet’s answer; on May 17, USA Jet filed a surreply; and, on May 26, Ameristar filed a rejoinder to USA Jet’s surreply. Both carriers accompanied their pleadings with motions for leave to file. We will grant these motions.

[4] USA Jet states that Ameristar’s applications did not include the required current and historical financial statements and financial verifications, that the expense forecasts provided did not appear to be reasonable, and that the applicant failed to advise the Department of at least one outstanding judgment pending against Ameristar Jet Charter, which is a sister-company to the applicant.

[5] At the time of its initial certification, the Department placed a two-aircraft limitation on the carrier’s fleet. In November 2003, the Department approved an expansion in the company’s cargo fleet to up to five cargo aircraft.

[6] As an air taxi operator registered under Part 298 of the Department’s rules, AJC currently conducts on-demand passenger and cargo operations using a fleet of approximately 35 small aircraft. In addition to its own air taxi operations, AJC arranges for cargo shipments that cannot be accommodated by its fleet to be transported by cargo operators with large aircraft, including Ameristar.

[7] Ameristar notes that the aircraft can be reconfigured for as many as 126 passengers.

[8] See Order 2000-1-27, issued January 28, 2000.

[9] After the sale of the family business, he worked for the new owner of the funeral home for three years (1995-1998) before becoming Chief Financial Officer for Ameristar-related companies in 1998.

[10] Mr. Raymond was employed by South Central Airlines as a pilot off and on between 1980 and 1999. He served as either Director of Operations or Chief Pilot between 1986 and 1988, between 1989 and 1990, and between 1997 and 1999.

[11] USA Jet states that, when it applied for certificate authority (see Dockets OST-2002-12987 and OST-2002-12989), the Department required it to demonstrate that it had personnel “who had significant experience in passenger charter service to ensure adequate oversight of the various regulatory requirements of passenger operations . . .” (USA Jet answer at p. 6). In this connection, USA Jet states that the Department specifically informed it that its Director of In-flight was not sufficient personnel to fulfill these responsibilities.

[12] Specifically, Ameristar states that Mr. Hulsey has responsibility for all flight operations issues, as well as for handling the company’s Family Assistance and Passenger Manifest Plans, and for overseeing aircraft scheduling. Ms. Redmond will be responsible for handling any passenger complaints. The carrier further notes that Mr. Wachendorfer, the applicant’s owner and President, is currently actively involved in the day-to-day business of Ameristar and other companies he owns, including arranging charters and ensuring compliance with the applicable DOT consumer rules. Ameristar also notes that its Chief Pilot, Matthew Raymond, has had managerial experience with Part 121 carriers and believes that his experience shaping policies and procedures, scheduling pilots and flight attendants, etc., will be an asset in the company’s proposed passenger services. It also notes that its sister company, AJC, will act as sales and marketing agent for Ameristar’s passenger charters and will also provide other support, such as computer support in conjunction with the carrier’s passenger consumer responsibilities.

[13] Mr. Hulsey was employed for many years with Braniff.

[14] Under the Department’s rules (14 CFR Part 212), single-entity charters are not subject to the same detailed consumer protection requirements as are applicable to the operation of Public Charter flights.

[15] Despite the limited and specialized nature of Ameristar’s proposed charter service, we will require that the applicant contact and meet with our Aviation Consumer Protection Division prior to beginning sales and operations to ensure that it is fully prepared regarding the Department’s consumer protection requirements.

[16] Executive Airlines is a Part 135 air taxi that, while not directly related to Ameristar (it is owned by Mr. Lassetter, Ameristar’s Chief Financial Officer), shares facilities and other resources with the applicant or companies related to it. Ameristar advises us that Mr. Frazier has no on-going responsibilities with Executive because that carrier is not currently conducting operations. However, we understand from the FAA that there are certain requirements that all companies must meet in order to maintain their FAA Part 135 authority, whether operational or not (such as updating of carrier maintenance or other manuals as needed). We therefore must assume that at least some of Mr. Frazier’s time involves Executive matters. Moreover, although Executive may not have any current plans to conduct operations, the fact that it continues to hold its FAA and DOT operating authority leaves open the possibility that it will decide to do so in the future.

[17] The FAA has also indicated to us that some of the burden on Ameristar’s key technical personnel may also be due to the fact that the company has limited staff available to support these key technical personnel. Thus, tasks that in other companies may fall to lower level employees now must be attended to by the company’s key technical personnel themselves. The FAA has advised us that Ameristar has committed to adding support personnel as it expands its operations.

[18] That is, the five cargo aircraft currently authorized plus as many as three passenger aircraft.

[19] “Key technical personnel” refers to the positions required by Part 119 of the Federal Aviation Regulations, namely, the Director of Operations, Director of Maintenance, Director of Safety, Chief Pilot, and Chief Inspector. We will not issue Ameristar effective passenger authority until we have been assured that such changes have been implemented.

[20] We do not believe that such restriction should be unduly burdensome on the carrier since we have no information on the record in this proceeding that the carrier has specific plans during its initial year of combined passenger and cargo operations to expand beyond the three cargo aircraft it currently operates. The addition of the one passenger aircraft we are proposing at this time would bring its fleet to four aircraft. Prior to expanding beyond four total aircraft and/or one passenger aircraft, the carrier will need to provide us with notice of such expansion plans and provide information establishing its continuing fitness for them.

[21] As presented, the forecast provides for Ameristar to operate one aircraft for 9 months, add a second aircraft in the 10th month, with a third aircraft in the 11th month.

[22] The block hours are broken down to 600 for the first aircraft, 150 for the second, and 100 for third.

[23] Ameristar’s initial costs appear to be primarily those associated with hiring and training new flight personnel.

[24] In addition, we note that, based on the carrier’s service proposal and aircraft lease terms as discussed above, we would expect that Ameristar will not incur many expenses unless it has a contract to provide such services.

[25] In evaluating an applicant’s financial fitness, the Department generally asks that the company have available to it resources sufficient to cover all pre-operating costs plus a working capital reserve equal to the operating costs that would be incurred in three months of normal certificated operations. Because projected operations during one or more of the first three months of anticipated actual air transportation services frequently do not include all costs of operations that will be incurred during a normal period of operations, it is our practice to base our three-month standard on one quarter of the first year’s operating cost forecast. In calculating available resources, projected revenues may not be used.

[26] We note that Ameristar’s working capital currently consists entirely of receivables due to it from its sister company, AJC, for services performed in connection with its operations. Ameristar has provided a balance sheet for AJC at June 30, 2004. This financial statement indicates that, at June 30, AJC had positive working capital, a current assets to current liabilities ratio of 1.05 to 1, positive stockholder’s equity and positive retained earnings.

[27] In September 2003, an AJC Part 91 flight landing at Del Rio, Texas, overshot the runway and crashed and burned on impact; the pilot-in-command was killed and the second pilot was seriously injured. This accident is still under investigation by the NTSB.

[28] USA Jet also cited as omissions the September 2003 accident involving AJC and the Department’s on-going investigations of Airways’ operation, which, as noted above, the applicant had, in fact, included in its initial filings. USA Jet also questioned whether compliance information should have been provided for Executive, which shares facilities with Ameristar and related companies. However, Executive is not considered a “relevant corporation” under section 204.2 of our rules and we see no reason to require such information in this proceeding.

[29] See USA Jet Surreply at p. 10.

[30] As we understand the facts of the Cobbs case, Mr. Cobbs was an employee of AJC who, during his employment with that company, started his own company, Falcon Air Charter, LLC. Falcon Air Charter then made an agreement with another company, Tech Air, to use an aircraft that Tech Air had previously made available to AJC in order to solicit business from customers of AJC. AJC apparently felt such action to be in violation of a confidentiality agreement that Mr. Cobbs signed while with AJC and AJC obtained an injunction against Mr. Cobbs, Falcon Air Charter and Tech Air. Mr. Cobbs filed suit and, in April 2004, a jury found that AJC had acted improperly in obtaining the injunction and with malice in its actions and returned a verdict recommending actual damages in favor of Mr. Cobbs/Falcon Air Charter and Tech Air of $70,856 and $96,154, respectively, as well as exemplary damages in the amount of $2.15 million. AJC states that it filed a Motion for Judgment Notwithstanding the Verdict (JNOV), requesting that the claims be dismissed, on which a hearing was held on April 30. According to Ameristar, on June 20, a JNOV was granted to AJC on three of the four claims and a judgment was entered for $350,000. On July 28, AJC filed a motion for new trial, which stays the judgment, and on October 8, AJC filed a notice of appeal and posted a bond in this case. Currently, AJC is waiting for the Fifth District Court of Appeals to issue a briefing schedule.

[31] Cherry Air, Inc., v. Ameristar Jet Charter, Inc. Ameristar states that the Federal Court hearing the claims granted AJC’s request to dismiss the RICO claim. The case was then remanded to State court for adjudication of the state claims. AJC filed a motion for summary disposition, and the hearing on that motion was held on October 21. On October 28, the Judge denied the motion for summary disposition on the count of civil conspiracy and the count of Restraint of Trade; therefore the case will go to trial in spring 2005. However, the Judge granted the motion for summary disposition on the monopoly count.

[32] The FAA advises us that it has issued notices of proposed civil penalties in five of these pending cases.

[33] Specifically, in January 2003, the pilot of an Ameristar flight declared an emergency after the landing gear would not retract after take-off from Kansas City; the pilot returned to Kansas City and the landing gear was fixed and the aircraft returned to service.

[34] The closed cases were closed with FAA administrative action (Letters of Correction or Warning Letters). One of the open cases involves possible unauthorized flights, another involves recordkeeping issues, and the third is related to maintenance. The FAA has issued Notices of Proposed Civil Penalties in each case.

[35] One of the closed cases was terminated with no action; the remaining open cases involve issues such as drug testing and maintenance.

[36] The other accident occurred in August 2001 and involved a Part 135 cargo flight that flew into the perimeter fence on take-off from the airport at Ithaca, New York; two crew members were on board; both were killed on impact. The incidents involved various operational issues (such as engine malfunctions, etc.), but resulted in no fatalities or injuries.

[37] Of this amount, $35,000 was due and payable by September 12, 2004. The carrier paid this amount on September 3, and the remaining $35,000 was suspended for one year following the issuance of the order, and will be forgiven after that time period, unless Airways violates the orders’ cease and desist provisions, in which case the entire unpaid amount becomes due and payable immediately. The Enforcement Office advises us that it has no objections to issuance of this show cause order. The FAA’s case involving the company’s Part 125 operations remains open at present.

[38] For instance, in its initial application filed in December 2003, Ameristar stated that there were no open FAA or DOT investigations or enforcements against it. While this appears to have been correct at the time, subsequent to that time, the FAA opened five investigations into potential violations of the FAA’s rules. Though the carrier has made subsequent filings in this proceeding since December 2003, it did not act immediately to correct the record to reflect these pending cases. With respect to AJC and Airways, until responding to issues raised by USA Jet and the Department, Ameristar provided no details as to the pending cases against those companies, merely stating that all of the pending cases were in the normal course of business. However, we do not consider actions such as in the Cobbs case or the Cherry Air case as falling in that category.

[39] We would caution Ameristar, however, that, should it file for new or amended authority in the future, we will expect full information relative to reportable investigations or actions involving not only it, but also AJC, Airways and any other related companies.

[40] Pursuant to 49 U.S.C. 41307, issuance of foreign authority to Ameristar is subject to Presidential review.

[41] The carrier can continue to operate under its current cargo charter certificates until its amended certificates are made effective for passenger authority

[42] Evidence may be in the form of an affidavit attesting that none of its key technical personnel hold key technical positions with other air carriers and a list that identifies the key technical personnel for itself and its related companies, or a letter of confirmation from the FAA.

[43] The information to be collected includes that name of the traveling party as well as a contact name and telephone number. Plans are to be filed in Docket OST 98-3305.

[44] Section 41113 of the Transportation Code requires certificated air carriers to develop and submit to the Department and the NTSB an accident plan that addresses the needs of the families of passengers and other victims involved in any aircraft accident that results in a major loss of life. Ameristar has filed such a plan in Docket OST 96-1960.

[45] Ameristar should file any renewal request with the Department at least 45 days prior to the one-year expiration date. The renewal application should include updated information on any changes in its ownership, key personnel, compliance history, operating plans, or financial posture which it may have undergone since the effective date of its passenger authority.

[46] The 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. If the carrier fails to file this updated information or if the information fails to demonstrate that the 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 carrier's certificate authority.

[47] We also remind Ameristar about the requirements of section 204.7 of our rules. This section provides, among other things, that (1) if a company commences operations for which it was found fit and subsequently ceases such operations, it may not resume certificated operations unless its fitness has been redetermined; and (2) if the company does not resume operations within one year of its cessation, its authority shall be revoked for dormancy.

[48] Since we have provided for the filing of objections to this order, we will not entertain petitions for reconsideration.

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