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 http://www.azxpress.com/

Arizona Express Airlines, Inc.

Arizona Express Airlines, Inc. was formed on August 8, 2001 by Daniel C. Hall, it's President. This corporation was formed under the laws of the state of Arizona. Arizona Express initially intends to provide scheduled passenger flight services between Show Low, Arizona and Phoenix, Arizona. Expansion into other markets will be considered and may include, but not be limited to, Tucson, Arizona, Flagstaff, Arizona, and Las Vegas, Nevada. Additional aircraft will be required to provide these expanded services.

All major maintenance operations will be contracted out to Cutter Aviation, located at Phoenix Sky Harbor International Airport. Aircraft to be used initially are as follows: Beech King Air 200, 9 Passenger Seats/2 Crew Seats. This aircraft will be leased from Jet Associates. Letter of intent is attached. Cessna 421 C, 6 Passenger Seats/2 Crew Seats This aircraft will be leased from The Charleston Group.

By:  Arizona Express Airlines, Daniel Hall, 480.396.0660

By:  Arizona Express Airlines, Daniel Hall, 480.396.0660

Arizona Express Airlines, Inc.

Arizona Express Airlines, Inc. (Arizona Express) filed an application in Docket OST-0110529 requesting authority to conduct scheduled passenger operations as a commuter air carrier. In submitting its application, the company filed a motion under section 302.12 of our rules asking the Department to withhold certain documents from public disclosure. The purpose of this letter is to rule on that request. In addition, we have now completed our initial review of the application itself and will take this opportunity to also advise Arizona Express of certain additional information and/or clarification needed before we can process its application further.

We will grant Arizona Express confidential treatment for Exhibits A and B. These documents are of the type that we have provided confidential treatment to in the past and we find no reason not to do so here. However, actual or projected balance sheets and other financial statements provided for applicants are not typically withheld from the public record in fitness cases and Arizona Express has provided no information that persuades us that we should do so here. Thus, we will deny confidential treatment to Exhibit I.  Under Rule 12, the information identified above for which confidential treatment is not granted will be released to any person requesting it unless, within five days from the date of receipt of this letter, you file with this office a petition for reconsideration or a written statement in good faith of your intention to seek judicial review of this decision. Please inform Delores King of my staff (202-366-2343) if Arizona Express wishes to pursue either option. If reconsideration or judicial review of this decision is not sought, Arizona Express should resubmit Exhibit I for placement on the public record.

By:  Patricia  Thomas

Arizona Express Airlines, Inc.

By:  Arizona Express Airlines, Daniel Hall, 480.396.0660

Arizona Express Airlines Inc.

By:  Arizona Express, Daniel Hall, 480.396.0600

By:  Arizona Express, Daniel Hall, 480.396.0600

By:  Arizona Express, Daniel Hall, 480.396.0600

Arizona Express Airlines, Inc.

By:  Arizona Express Airlines, Jeffrey Mark, 480.991.9111

Arizona Express Airlines, Inc.

By:  Arizona Express, Daniel Hall, 480.396.0600

Arizona Express Airlines, Inc.

We have enclosed a revised Exhibit B. This Exhibit states that one flight per day will be accomplished. As with any startup company, we are finding that the demands and opportunities placed on us, progress on an almost daily basis. We have found that in today's aviation market, a company must be ready to quickly adapt to the needs of the customer and economic environment. In the spirit of quick adaptation, we are constantly changing our projections to match the demands and opportunities presented to us. It is for this reason that giving you an accurate exhibit B is difficult, we would have to update you on an almost daily basis as to the most recent developments. After the events of the Show Low City Council meeting of March 2002, we realized that we have more opportunity than before. After hearing the proposal of Mesa Airlines to the City of Show Low, we believe we are more positioned to take a larger piece of the Show Low market, even if not awarded the EAS subsidy. This news combined with several entities desiring to buy bulk tickets, lead us to believe that we have a larger market segment than previously projected. Unfortunately we cannot fully explore the potential of the community as our marketing and operations are limited until we get economic authority. Please advise us as to what we can do to advise you on a more real-time basis of our current projections and opportunities. We would request that this information be kept confidential as it would position our competition to have an advantage that they otherwise would not.

The EAS division of the department is rapidly approaching the decision for subsidized carrier for the Show Low and Gallup communities. We want to have all necessary requirements met as it effects the decision of the department on EAS award. We believe that Arizona Express has an exceptionally strong team, please grant our economic authority and let us show the Communities, the Department of Transportation, and the FAA the performance and capabilities of Arizona Express Airlines.

By:  Arizona Express Airlines, Daniel Hall, 480.396.0660

Arizona Express Airlines, Inc.

The compliance information applicable to you consists of two court filings. It is our understanding that these documents would already be on the public record, and you have provided no information that indicates that they are not. Since it is not our practice to grant confidential treatment to information already on the public record, we will deny the company's request for such treatment here.

By:  Patricia Thomas

Arizona Express Airlines, Inc.

By:  Arizona Express Airlines, Daniel Hall, 480.396.0660

Arizona Express Airlines, Inc.

The company has made the decision to move the Base of Operations and the Maintenance Base to Phoenix Sky Harbor Airport. We have acquired a lease on offices and a hangar located on the north runway. This facility will give the company a centralized location where the management team can be closer to the hub of future operations. The communication benefits have already been seen. The company has been better able work together as a team, with the many resources located at the airport, to resolve issues.  Being located at Sky Harbor also gives us greater access to parts and maintenance personnel. Since we are located in a Swift Aviation facility we have access to a large parts inventory and trained maintenance personnel to assist Arizona Express in our operations. These benefits of having readily accessible parts and parts locating services, as well as a large number of technicians, gives Arizona Express the tools to improve customer safety and company reliability.

With the transition to Phoenix and the future growth plans for Arizona Express, Mr. William Halpin and Arizona Express have agreed to end our relationship. We wish Mr. Halpin the best and appreciate all that he has done for the company. We are interviewing several candidates that appear to be qualified. We are striving to find an individual who is experienced in the airline industry and Beach 1900s. When we have reached a decision as to who shall fill the Director of Operations position, we will forward his compliance information to you.

By:  Daniel Hall

Arizona Express Airlines, Inc.

As we have notified you in the past, Arizona Express has gone through some personnel changes. Arizona Express has made the decision to promote Mr. Agioantonides to Director of Operations. His experience and knowledge of regulations and procedures will be of great benefit to Arizona Express. We have supplied you with compliance information regarding Mr. Agioantonides in past correspondence. If you require any additional information please notify us and we will respond immediately. Please find attached information regarding Mr. Randy A Young. We have hired Mr. Young for the position of Chief Pilot. His experience with beech 1900s well as his experience within scheduled airlines will be invaluable during this growth period and into the future. Mr. Young has no information to report regarding compliance. Mr. Young is an American Citizen. We have gotten confirmation from the Scottsdale FSDO that these gentlemen meet the requirements set forth by regulation. Early this week they were approved for their positions.

By:  Arizona Express Airlines, Daniel Hall, 480.396.0660

Arizona Express Airlines, Inc.

Per your request, I have attached the financial information you requested. You will find a current Balance Sheet and a current P&L.

By:  Arizona Express Airlines, Daniel Hall, 480.396.0660

Arizona Express Airlines, Inc.

By:  Arizona Express, Daniel Hall

Arizona Express Airlines, Inc.

Arizona Express is a corporation that was organized under the laws of the State of Arizona on August 8, 2001. Its principal base of operations is located in Phoenix. The applicant's sole shareholder is J.L. Mark, Inc. On November 15, 2001, Arizona Express registered with the Department as an on-demand air taxi operator under Part 298 of the Department's Economic Regulations, and has been providing such services since obtaining the requisite FAA Part 135 Air Carrier Certificate in December. The carrier currently operates one six-seat Cessna 421 aircraft, although it anticipates adding more aircraft to its air taxi fleet in the near future. In addition to charter services, Arizona Express currently offers four weekly scheduled round trips between Show Low and Phoenix. By Order 2002-4-21, issued April 25, 2002, the Department selected Arizona Express to provide subsidized essential air services between Show Low and Phoenix, subject to its being found fit and issued commuter authority. Thus, if it is found fit, the company plans to expand its scheduled Show Low-Phoenix services to 14 weekly round trips.

By:  Read Van de Water

Arizona Express Airlines, Inc.

By:  Read Van de Water

Arizona Express Airlines, Inc.

By Order 2002-7-6, issued July 2, 2002, we found Arizona Express fit and issued it a Commuter Air Carrier Authorization authorizing it to engage in scheduled passenger operations as a commuter air carrier, subject to certain limitations. That authority was to become effective six (business) days after the Department had received evidence that Arizona Express had obtained required FAA operating authority and had obtained liability insurance coverage as required by our rules (14 CFR Part 205), as well as a statement of any changes the company had undergone relative to its fitness since the issuance of the show cause order in this case.

By:  Randall Bennett

July 21, 2003

OST-01-10529 - Scheduled Commuter Passenger Operations

Request for a Waiver for the 45-Day Filing Requirement for Renewal of Commuter Authority

Arizona Express is currently looking to expand into other markets. We are currently bidding on EAS routes for Vernal and Moab, UT. The DOT has told us we can expect a decision to me made within the next 60 days on those routes. We are also poised to compete for the Arizona markets that are currently on hold awaiting decision of the SCASDPP Grants. The position and timing of those communities is unclear as so much is dependant on the outcome of the SCASDPP decision. As of right now, the DOT has issued an order that the EAS routes in Arizona with remain open until the SCASDPP grants are awarded. We are looking at several other non-EAS markets. We are working with several Communities and Aviation Consultants on markets throughout the Southwest. We are in the process of joining the three GDS systems that we are not yet on. Also, we are completing inter-line agreements with several other major airlines to add to our connectivity. The additional GDS connectivity as well as additional inter-lines will add convenience for our passengers and give us more ability to compete for future markets. We are also in the final stages of completing our TSA AOSSP so we are prepared if Phoenix makes us move to a secured area or we expand into a market that requires us to be secured.

By: Arizona Express, Sean Kienle, 605-275-6828

August 18, 2003

OST-01-10529 - Scheduled Commuter Passenger Operations

Correspondence of the Air Carrier Fitness Division

Letter from the Air Carrier Fitness Division to Arizona Express Airlines, Inc., informing them that their authority to engage in scheduled passenger operations as a commuter air carrier is currently slated to expire on August 19, 2003.

By: Patricia Thomas

OST-01-10529 - Scheduled Commuter Passenger Operations

August 27, 2003

Re: Request for Additional Information

Arizona Express states that it has four aircraft in its fleet, including two 9-seat Beech 1900's. The carrier has applied to provide subsidized essential air service at Vernal and Moab. If selected as the EAS carrier, does Arizona Express expect to provide such services using one (or both) of the Beech 1900's currently in its fleet? If not, state the number of additional aircraft it would need to acquire to provide such services as well as how it intends to finance the acquisition of such aircraft.

By: Air Carrier Fitness, Delores King

OST-01-10529 - Scheduled Commuter Passenger Operations

September 10, 2003

Re: Additional Information

Of the two 1900D aircraft we currently operate one is dedicated to our Show Low and Sierra Vista routes. The second 1900 is a backup aircraft only. If we are selected as the EAS carrier for the Vernal and Moab routes, we would move the backup aircraft into service on those routes. We would start the process of obtaining a third l900D for a back up aircraft. We would obtain the third aircraft from Raytheon Aircraft on a "Power by the Hour" type lease. The acquisition of a third aircraft would be financed by a capitol infusion from Mr. Mark.

By: Arizona Express, Daniel Hall, 602-275-5739

Arizona Express Airlines, Inc.

Order 03-12-24
OST-01-10529 - Commuter Air Carrier Authority

Issued December 29, 2003 | Served December 29, 2003

Order Renewing Commuter Air Carrier Authority

We conclude that Arizona Express continues to be fit to hold its commuter authority. However, in light of the compliance issues discussed above, we have decided to extend its authority only for a period of one year from the date of this order, during which time we will continue to monitor its compliance posture. At the conclusion of this period, and upon receipt from Arizona Express of an application for renewal of its authority (along with updated fitness information), we will re-evaluate whether to extend its commuter authority further. In addition, given that the carrier has provided no plans to operate aircraft having more than nine passenger seats, nor has it demonstrated its fitness to operate such aircraft, we will also continue our current condition restricting the company's operations to aircraft operated under Part 135 of our rules.

Arizona Express registered with the Department in November 2001 as an air taxi under Part 298 of our rules and began providing such services in December 2001 after receiving the required operating authority from the FAA. Since being found fit and receiving effective commuter authority in August 2002, Arizona Express has been providing 14 weekly round trips between Phoenix and Show Low, Arizona. In April 2003, it began scheduled passenger service between Phoenix and Sierra Vista, Arizona, currently providing 11 weekly round trips in that market. At the present time, the carrier's fleet consists of two 9‑seat Beech 1900's that it uses in its scheduled passenger services, plus a five‑seat Cessna 525, and a six‑seat Cessna 525A, which it uses to conduct on‑demand charter services.

By: Karan Bhatia

OST-01-10529 - Commuter Air Carrier Authority

October 15, 2004

Re: Information Request

By Order 2003-12-24, issued December 29, 2003, we renewed Arizona Express' authority to engage in scheduled passenger operations as a commuter air carrier. That authorization contained a condition limiting its effectiveness to a period of one year, and Arizona Express' authority is slated to expire on December 29, 2004.

To prevent expiration of its commuter authority, Arizona Express must request, in writing, renewal of its authority and file the following information with the Department in Docket OST-2001-10529 no later than November 12, 2004.

By: Patricia Thomas

OST-01-10529 - Commuter Air Carrier Authority

December 9, 2004

Re: Forthcoming Expiration of Commuter Air Carrier Authority

As a result of its most recent failure to submit a timely request for renewal of its commuter authority, we must conclude that Arizona Express either no longer wishes to operate as a commuter air carrier, or the carrier is unwilling or unable to meet the Department's requirements. In either event, Arizona Express will be required to cease all commuter operations scheduled after December 29, 2004.

We note that the expiration of its commuter authority would not preclude Arizona Express from providing other air taxi operations under its Part 298 authority provided that the company files an amended registration reflecting air taxi operations only and maintains on file with the Department evidence that it has in effect required liability insurance coverage and otherwise complies with the requirements of that rule.

By: Air Carrier Fitness, Patricia Thomas

OST-01-10529 - Commuter Air Carrier Authority

December 10, 2004

Motion for Leave

Arizona Express Airlines, Inc. hereby requests a waiver for the 45 day filing requirement for the renewal of its Commuter Air Carrier Authority.

The filing was not submitted by its due date of July 5, 2004. Due to some changes in executive management of Arizona Express Airlines, Inc., the filing was overlooked.

Arizona Express Airlines, Inc. is currently awaiting final order from the Department in the matter of the Essential Air Service contract at Show Low, Arizona (OST-98-4409). Arizona Express is a contender for this market and is currently the incumbent service provider. Despite the oversight on our part, it would be detrimental to the City and citizens of Show Low and the surrounding area for the Department not to grant the waiver in order to provide continued service.

By: Sean Kienle

OST-01-10529 - Commuter Air Carrier Authority

December 15, 2004

Re: Ruling on Motion for Leave

In its motion for leave, Arizona Express indicates that it failed to meet the 45-day filing requirement in Order 2003-12-24 due to a "management oversight." This argument does not justify relief from the Department's requirements to file timely documents. As mentioned in previous correspondence, we limited Arizona Express' commuter authority to a period of one year from its effective date to better monitor the carrier's operations, particularly because of concerns over the management team's lack of aviation experience and the compliance history of the carrier and its officers. Arizona Express has reinforced these very concerns in its repeated failure to submit timely requests for renewal of its commuter authority despite several reminders.

In light of the above, we will deny Arizona Express' motion for leave. If Arizona Express still desires renewal of its commuter authority, the carrier must resubmit its application along with a motion for leave that demonstrates good cause and presents compelling arguments for granting relief. Also, such motion should identify the individual responsible for preparing and submitting Arizona Express' renewal application, and include a full explanation of why that individual failed to meet the requirements of the Department. Thus, we will take no further action on Arizona Express' December 10, 2004, request for renewal of its commuter authority.

By: Air Carrier Fitness, Patricia Thomas

OST-01-10529 - Scheduled Commuter Passenger Operations

December 16, 2004

Motion for Leave by Arizona Express

The filing was not submitted by its due date of November 12, 2004. As stated in the motion of December 10, 2004, some significant changes in executive management have taken place. Daniel Hall, President of Arizona Express Airlines, Inc., for personal reasons, had reduced his involvement in day-to-day operations. Maintaining communications with the Department of Transportation was one of the duties that remained with Mr. Hall. In light of the recent events, including the missed deadlines for the renewal of Arizona Express' Commuter Air Carrier Authority, Mr. Hall has been dismissed as the President of Arizona Express Airlines. It was the sole responsibility of Mr. Hall to submit any applications to the Department.

In order to prevent a reoccurrence of this oversight, the responsibility of timely filings will be assigned to Sean Kienle, Vice President. Additionally, an executive committee has been formed to conduct a monthly review of all items that are time sensitive.

On December 15, 2004, the City of Show Low recommended Arizona Express Airlines, Inc. for the award of the Essential Air Service contract for Show Low, Arizona. If the Department does not grant the request for waiver, Arizona Express will not be eligible for the award. It is the hopes of Arizona Express that the Department will not subject the entire airline to punitive action based on one individual's failure to execute his duties.

By: Jeffrey Mark and Sean Kienle

OST-01-10529 - Scheduled Commuter Passenger Operations

December 21, 2004

Re: Notice Granting Request for Motion

We have reviewed the carrier’s motion and find good cause for granting the request. Arizona Express indicated in its motion that the carrier’s application was filed late due to personnel issues. The carrier has since addressed such issues and established procedures to prevent future occurrences of untimely filings with the Department. Also, Arizona Express provides essential air service (EAS) to Show Low, AZ, under the Department’s EAS Program. If the carrier’s commuter authority were to expire, transportation to and from that community would be adversely affected.

In consideration of the foregoing, we find it in the public interest to grant Arizona Express’ motion for leave to file its renewal application late and, by this letter, we extend Arizona Express’ commuter authority until such time as the Department takes final action on the carrier’s renewal request.

By: Patricia Thomas

OST-01-10529 - Scheduled Commuter Passenger Operations

February 15, 2005

Motion to Withhold Information from Public Disclosure

By: Sean Kienle

Order 2006-9-13
OST-2001-10529 - Revocation of Certificate Authority

Issued and Served September 14, 2006

Order Revoking Commuter Air Carrier Authorization

By letter dated May 5, 2005, the Department advised Arizona Express that, pursuant to section 204.7, its authority was suspended and that it could not resume air transportation operations until the Department had re‑determined its fitness to do so. We further stated that if Arizona Express did not resume operations by April 30, 2006, we would revoke its authority for dormancy. It has now been more than one year since Arizona Express ceased operations and we have not received an application from Arizona Express to have its fitness re‑determined.

By: Todd Homan

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