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OST-97-3017

Sky King, Inc. (Certificate of Public Convenience, Interstate/Foreign Charter Air)

OST-97-3017 | October 15, 1997

Application

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Applicant requests authority to engage in charter air transportation under an FAR Part 121 Operating Certificate. Currently, Sky King, Inc. operates under an FAR Part 125 Operating Certificate, which allows long-term lease arrangements with select clientele. Sky King, Inc. has provided air transportation for the Sacramento Kings Professional Basketball team for the past seven years, and has entered into lease contracts with entertainment tours during the summer season. The issuance of said Part 121 certificate is not expected to significantly alter current operations of Sky King, Inc., but would allow flexibility in procurement of additional business by means of marketing and solicitation of additional sports teams, both professional and amateur; additional entertainment tours, and corporations that may have a need for our specialized, custom interior aircraft.

The applicant proposes to operate a Boeing 737-200 aircraft to be leased, or more likely purchased. Owns a BAC-111

Exhibit Index

By: Gregg Lukenbill, President

Sky King, Inc.

OST-97-3017 | December 8, 1997

Re: Response to Information Request

• Article 1 - Bylaws of Sky King, Inc.
• Article 2 - Re: B737-200Aircraft Letters of Intent / Training Information / Wet-Lease Information
• Article 3 - Preapplication Statement of Intent
• Article 4 - Family Assistance Plan
• Article 5 - Greg Lukenbill Awards/Achievements (2 pages will not be available: poor quality of original documents)
• Article 6 - Milford Fred Dickson Work Experience Résumé
• Article 7 - Sky King Certificates, etc.
• Article 8 - Daniel Stanzione Résumé
• Article 9 - Cook vs. Lukenbill et. al. Documents
• Article 10 - Partial Sky King Equity and Liquidity Re: 737-200 Aircraft

By: Greg Lukenbill, 916-736-6821

Sky King, Inc. (Certificate of Public Convenience, Charter Passenger)

OST-97-3017 | OST-97-3113 | February 10, 1998

Re:  Information Clarification and Supplemental Information

The contents of this application and the attached exhibit(s) are true and correct to the best of my knowledge and belief. Gregg Lukenbill individually and on behalf of applicant, certifies that, pursuant to Title 18 United States Code Section 1001, he has not in any manner knowingly and willfully falsified, concealed or covered up by trick, scheme, or device any material fact, or made any false, fictitious or fraudulent statement or entry in connection with the preparation, filing and prosecution of this application. Gregg Lukenbill further acknowledges and understands that whoever violates the provisions of 18 USC 1001 shall be fined not more than $10,000 or imprisoned not more than five years, or both.

Resume of Carl Wobser, Chief Pilot

By:  Gregg Lukenbill, President, 916-454-4148

Sky King, Inc.

OST-97-3017 | March 4, 1998

Second Amendment | Resume of John Canavan

By: Gregg Lukenbill, Pres.

Sky King, Inc.

Order 98-3-12 | OST-97-3017 | OST-97-3113 | Issued and Served March 11, 1998

Order to Show Cause Proposing Issuance of Certificate Authority

By this order, we tentatively find that Sky King, Inc., is fit, willing, and able to provide interstate and foreign charter air transportation of persons, property, and mail as a certificated air carrier.

Attachment - Certificates | Attachment A -  Service List

By: Charles Hunnicutt

Sky King, Inc. (Certificates of Public Convenience, Interstate/Foreign Charter)

Order 98-3-26 | OST-97-3017 | OST-97-3113 | Issued March 26, 1998 | Served April 1, 1998

Final Order

We find that Sky King, Inc., is fit, willing, and able to engage in interstate and foreign charter air transportation of persons, property, and mail.

Certificate of Public Convenience | Service List

By:  Charles Hunnicutt

Sky King, Inc.

Sky King personnel have been anything but dormant, and have continued relentlessly in pursuit of the FAR Part 121 Operating Certificate. The Sacramento Flight Standards District Office (FSDO) is underfunded, understaffed, and has had very limited resources and time to dedicate toward Sky King FAR Part 121 certification. The SFSDO certification team conflicting workload of other operators and duties, annual out of town training requirements, and vacation schedules of FSDO personnel have dramatically impacted the processing of Sky King's 121 certification. This FSDO lack of personnel time and resources has been exacerbated by the recent mandatory insertion of the national Certification Standardization Evaluation Tenon the certification process, and further involvement of the Seattle Aircraft Evaluation Group (AEG), the Long Beach Aircraft Certification Office (ACO), and personnel from the Reno FSDO, Hawaii FSDO and from the FAA Western Region. Absent the lateness of the mandatory CSET involvement in the process, and the certification process path uncertainty and confusion emanating therefrom, Sky King believes it would have been timely certified prior to April 1, 1999.

By:  Greg Lukenbill, Sacramento, CA

Sky King Inc.

Sky King Inc. hereby respectfully requests an exemption from the dormancy provision of Rule 204.7 of the Department's Economic Regulations (14 C.F.R. § 204.7) allowing the carrier an additional six month period from which to begin the operations for which it was found fit by the Department in Orders 98-3-26 and 98-4-14. Absent such an exemption, Sky King's certificate, issued by those orders would be revoked for dormancy by October 1, 1999.

Counsel:  Sky King, Gregg Lukenbill

Sky King, Inc.

By:  John Coleman

Sky King Inc.

Counsel:  Sky King, Gregg Lukenbill

Sky King, Inc.

By:  Randall D. Bennett

Sky King, Inc.

By:  Randall D. Bennett

Sky King, Inc.

During the past several years, Sky King has been diligently pursuing steps required to obtain a Part 121 Operating Certificate. These efforts were periodically communicated to the Department in connection with requests by Mr. Gregg Lukenbill, owner of Sky King, for relief from the dormancy provisions of 14 CFR §204.7. By letter dated May 30, 2000, the Department extended the deadline for receipt of effective certificate authority until November 19, 2000. During this extension of time, Sky King was making significant progress in satisfying FAA requirements. However, Sky King failed to notify the Department of its status and request another extension of time prior to November 19, 2000, and this oversight resulted in immediate revocation of Sky King's interstate charter authority. As a consequence of the Department's Order stating its intention to revoke both the interstate and foreign charter certificates, the FAA advised Sky King that the agency may not be in a position to complete Sky King's Part 12 1 certification.

Order 2000-12-7 noted that the revocation was without prejudice to Sky King filing a new application, thus indicating that the Department's action was ministerial in nature and not based on evidence that Sky King lacks the requisite citizenship, qualified personnel, financing, or compliance disposition to provide certificated charter services. The Department's action has had the apparently unintended effect of suspending or terminating the FAA certification process, which is now in its final stages. While Sky King could file a new application with the Department, this course of action will not alleviate the potentially significant cost and delay that would be caused by interruption of the FAA certification process in which Sky King has already invested heavily.

Sky King is now preparing a report on the status of its certification by the FAA and a comprehensive update of information required by the Department to assess the continuing fitness of Sky King to provide interstate and foreign charter services as authorized in its DOT certificates. This information will be supplied to the Department within 30 days. Pending receipt and analysis of the updated fitness data, Sky King requests that the Department grant Sky King's petition for review of Order 2000-12-7 and rescind the order submitted for Presidential review. It is Sky King's understanding that grant of the requested relief will forestall interruption of the FAA Part 121 certification process.

By:  Sky King, Susan Jollie, 704.354.8450, sjollie@erols.com

Sky King, Inc.

By this order, we rescind Order 2000-12-7, served December 12, 2000, which canceled the interstate charter certificate issued to Sky King, Inc., for reason of dormancy. In addition, we grant Sky King an additional six-months (until August 1, 2001) in which to fulfill the conditions contained within its interstate and foreign charter certificates for receipt of effective authority and commence actual flight operations there-under.

By:  Randall D. Bennett

Sky King, Inc.

While it may be theoretically possible to limit Sky King's charter services to one aircraft, it would be cumbersome and unwarranted. Sky King has presented ample evidence of its qualifications and Financial fitness to provide charter services as herein described with two aircraft. The addition of a second aircraft will enhance the quality of the services Sky King can offer to the public. With a single aircraft, there is always a danger that a mechanical problem, weather related delays or operational difficulties will have a very disruptive effect on the direct air carrier's ability to provide promised services. Authorization of a second aircraft would provide a desirable back-up to respond in these unanticipated or unavoidable situations. Sky King anticipates that the decision to add aircraft in the future will be driven by the demand for its specialized service transporting sports teams and that the charter business for which it seeks DOT authority will be an adjunct to these flight operations. Sky King, Inc. therefore respectfully requests that the Department remove condition 3 or, in the alternative, authorize it to provide charter services utilizing two aircraft.

By:  Sky King, Susan Jollie, 704.354.8450, sjollie@erols.com

Sky King, Inc.

Sky King, Inc. hereby requests an extension of time in which to fulfill the conditions contained in orders issued by the Department of Transportation and the Department's regulations that require the carrier to commence actual flight operations within a one-year time frame. While Sky King continues to make significant progress in securing a Part 121 Air Carrier Certificate and Operations Specifications from the Federal Aviation Administration (FAA), this certification process will not be completed by the current deadline of August 1, 2001.

Sky King was granted certificates to engage in interstate charter and foreign charter transportation by Orders 98-3-26 and 98-4-14. In Order 200-12-7, served December 12, 2000, the Department canceled Sky King's interstate charter certificate for reasons of dormancy as provided by § 204.7 of the Department's Economic Regulations, 14 CFR §204.7. Following submissions by Sky King, this order was rescinded by Order 2001-2-3, which was issued on February 2, 2001. At that time, the deadline for receiving effective certificate authority, which is contingent upon successfully completing the Part 121 certification process, and commencing flight operations under the DOT certificates was extended until August 1, 2001.

By:  Sky King, Susan Jollie, 704.354.8450, sjollie@erols.com

Sky King, Inc.

By:  Patricia Thomas

Sky King, Inc.

By:  Sky King, Susan Jollie, 704.354.8450, sjollie@erols.com

Sky King, Inc.

You have requested that your client Sky King, Inc., be granted additional relief from the dormancy provisions of 14 CFR 204.7 of our rules, so that its certificate authority (see Orders 98-3-26 and 98-4-14, issued March 26, 1998) would not be revoked. This request was necessary because Sky King was unable to complete its FAA Part 121 certification by the end of the last extension period (that is, by January 31, 2002).

By:  Patricia Thomas

Sky King, Inc.

As Sky King reported in its last submission, the carrier has been intensively engaged with the FAA in the development of manuals over the last year. By the end of June, the FAA had accepted all Sky King's manuals. Training commenced immediately thereafter and in some cases has been completed. Attached is a schedule of events which sets forth the schedule for training various personnel. Flight attendant training has been completed and the pilot training will be completed on schedule.

Counsel:  Sky King, Susan Jollie, 703.354.8450, sjollie@erols.com 

Sky King, Inc.

In a letter dated July 30, 2002, 1 advised that Sky King is nearing completion of the regulatory process required to obtain a Part 121 Air Carrier Certificate and Operations Specifications from the Federal Aviation Administration (FAA). Sky King is submitting updated fitness information which the Department of Transportation requested as a pre-requisite to issuing an effective certificate of public convenience and necessity to provide charter air transportation pursuant to 49 U.S.C. §41102. Sky King now estimates that proving runs will be completed by September 20, 2002, and flights as a charter air carrier could realistically be expected to commence on or about October 1, 2002.

Sky King has operated flights on behalf of 10 National Hockey League teams under multi-year contracts. Sky King has not performed revenue flights following the end of the hockey season. With an effective DOT certificate, Sky King will be able to market charter services to public charter operators, customers seeking first class services with large aircraft, such as entertainers booking aircraft to accompany concert tours, gaming establishments sponsoring casino junkets, and corporations with special charter transportation requirements. The pro forma Income and Expense Statement for the first year of operations as a certificated charter air carrier projects profitable operations.

Counsel:  Sky King, Susan Jollie, 703.354.8450, sjollie@erols.com 

Sky King, Inc.

Sky King provides specialized contract services to professional sports teams and has done so with consistent profitability since beginning operations in 1990. During the half year ending June 30, 2002, Sky King performed flights and accordingly generated revenues. for team travel to scheduled away games during the season and flights during the post-season for those teams that advanced. As a result, there was a substantial period of time during the summer months in which Sky King performed no flight services, and therefore could earn no revenue. As explained in its August 26, 2002 filing, Sky King at the same time was incurring extraordinary one-time costs relating to certification by the Federal Aviation Administration (FAA) under Part 121.

In 2002, Sky King's cash flow position was stretched beyond what would be customary due to non-recurring expenditures relating to the FAA certification process. Maintenance related expenses totaled approximately $ 500,000.00 above average due to installation of equipment to meet Part 121 standards. In the ordinary course of business, flight crews would have been furloughed during periods in which no flight services were being performed. Instead, they remained on the payroll while undergoing Part 121 training. For the most part, "pre-operating expenses," which in this case relate to Part 121 certification, have been satisfied from revenues generated during the 2001-2002 season.

Counsel: Susan Jollie,  703-354-8540

Sky King, Inc.

On August 26, 2002, you filed updated fitness information for Sky King, Inc. I have competed my initial review of this information and find that additional and/or clarifying information is needed in order for the Department to reach a conclusion regarding Sky King's fitness.

By: Janet Davis

Sky King, Inc.

This letter responds to your oral requests to Sky King, Inc. for additional or clarifying information.

Counsel: Susan Jolie,  703 354-8450

Sky King, Inc.

While the type of operations Sky King proposes to operate under the interstate and foreign charter certificates at issue has not changed, the number of aircraft involved has increased. At the time of our initial fitness review, Sky King's Part 125 operations were principally limited to service on behalf of a single sports team using one B737 aircraft, which was the only aircraft it planned to use when it converted to certificated operations. During the time period that elapsed from the conclusion of our initial review of Sky King's fitness until Sky King's actual receipt of Part 121 authority from the FAA, its operations grew significantly. Currently, Sky King operates five B737 aircraft under contracts with ten sports teams. With Sky King's receipt of effective certificate authority, these operations will be continued and Sky King will seek other charter opportunities. The company continues to estimate that these other operations will account for only a very limited portion of its total operations (that is, approximately 440 out of its total projected block hours of 1,740 during the next twelve months).

By: Randall Bennett

OST-97-3017 - Certificate - Interstate Air Transportation
OST-97-3113 - Certificate - Foreign Charter Air Transportation

December 30, 2003

Re: Annual Fitness Report

Sky King has successfully met the challenges of a difficult economic environment and is poised to grow responsibly in the next year. Sky King therefore requests that the Department of Transportation amend its certificates to authorize charter operations with nine aircraft.

Sky King has developed a well-deserved reputation for meeting professional sports teams' schedule commitments, often under trying winter conditions, and providing the highest level of customer service on the ground and in the air. This high level of safety and service reliability is achieved by devoting substantial resources to routine maintenance at Sky King's dedicated maintenance facility at the de-commissioned Castle Air Force Base at Atwater, California. In addition, Sky King has the capabilities to deal with unanticipated maintenance issues, which are managed by a flight mechanic who accompanies each flight and coordinates with the Sky King maintenance base. Aircraft utilization is low because the aircraft and crew travel with the teams, often remaining in one city for several days.

Sky King had entered into multi-year contracts to operate flights on behalf of 10 National Hockey League teams during the 2002-2003 season, which runs from mid-September to June of the following year, depending on whether teams advance in the play-offs. The base revenue generated from these contracts was projected to fund substantially all of Sky King's first year operations. In addition, Sky King in its first year performed ad hoc charter services for other professional teams, such as the Portland Trailblazers, New Jersey Devils, Texas Rangers, New York Knicks, New York Rangers, Phoenix Coyotes, Utah Jazz, and Arizona Diamondbacks. Modest off-season charter revenues were also projected, but were not realized for reasons that will be discussed in the section dealing with Financial Results.

Counsel: Susan Jollie, 703-354-8450, sjollie@erols.com

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