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Freedom Airlines, Inc.

Freedom Airlines, Inc. was recently formed and therefore has no history of operations. However, its affiliate, Mesa, has been in operation since 1982. Mesa was formed in August 1982. Mesa founder Larry Risley bought an airplane and a few spare parts that eventually led to one of the biggest success stories in the regional airline industry.

Mesa Chairman and CEO Jonathan Ornstein and his team have built upon Risley's modest beginnings by strengthening the company's operations as Mesa Airlines, America West Express, US Airways Express and a partnership with Midwest Express. Mesa will also commence a code share relationship with Frontier Airlines, Denver, Colorado during first calendar quarter of 2002.

Freedom Airlines will initially operate regional jet aircraft flights under the trade name "America West Express" pursuant to an agreement between America West and Mesa, an affiliate of Freedom Airlines. The Freedom Airlines organization will include, at a minimum, a separate group of five employees to hold the five FAA required positions of Director of Operations, Director of Maintenance, Chief Pilot, Chief Inspector and Director of Safety. See, 14 C.F.R. § 119.65. In addition, members of the Freedom Airlines Board of Directors have substantial airline experience, including running the Mesa companies. Based on Mesa's proven track record, and the inclusion of a separate cadre of FAA-required employees, Freedom Airlines will have the managerial expertise and compliance disposition to conduct regional jet service with full regard for the rules and regulations of the DOT and Federal Aviation Administration.

Freedom Airlines will conduct operations pursuant to a route schedule to be developed by America West and coordinated with Freedom Airlines' operations group. Initially, Freedom Airlines expects its America West Express operations to be conducted primarily in the western portion of the United States from their hubs in Columbus, Ohio; Phoenix, Arizona; and Las Vegas, Nevada. At the end of the first 12 months of operations Freedom Airlines' regional jet aircraft fleet will consist of 9 CRJ 700 and 2 CRJ 900 aircraft (assuming the timely delivery of the aircraft by their manufacturer). An additional 11 CRJ-700 and 13 CRJ 900 aircraft are projected to be operating by the end of the second year of operations, for a total fleet of 20 CRJ-700 and 15 CRJ-900 aircraft. Because Freedom Airlines is not responsible for the scheduling of the aircraft to be operated as America West Express flights, the applicant is not submitting a route map with this application. However, based on a projection of 15,605 aircraft block hours in the first fiscal year of Mesa's operation, Freedom Airlines has prepared and included as Exhibit 15 a forecast income statement, consolidated balance sheet and other statistical data.

The Freedom Airlines plan entails considerably less financial risk than an independent new entrant carrier plan. Therefore, the certification issues to be addressed by the Department will be less challenging in this case. Specifically, under the America West Code Share Agreement, America West will be responsible exclusively for the marketing of the new service. America West will sell the air transportation and collect the revenue therefrom. Freedom Airlines will be paid by America West its direct cost of operating aircraft on America West's behalf. These costs are defined in the Agreement between Freedom Airlines and America West and are subject to adjustment under various circumstances. America West will be responsible for all other costs of operations including marketing, planning, advertising, ground handling and other costs not directly associated with the operation of Freedom Airlines' aircraft. America West will also be responsible for all reservations, sales and ticketing functions using America West ticket stock, as well as revenue accounting functions. America West will make all required collections and adjudicate and pay all passenger and similar claims.

Counsel:  Freedom Airlines, George Lippemeier 

Counsel:  Freedom Airlines, George Lippemeier 

Freedom Airlines, Inc.

It is not the Department's practice to withhold from public disclosure information regarding an applicant's pre-operating and first-year operating cost forecasts. Nor is it our practice to withhold all information regarding the applicant's proposed operating plan and related statistics. The Department has stated however that, if requested, we will generally grant confidential treatment to information regarding an applicant's revenue forecast, including information on its estimated revenue passenger miles, available seat miles, and projected load factor. While the majority of the information contained in Exhibit 15 is of the type that is usually released to the public, some of it is provided at a level of detail exceeding the norm and, hence, release of this information in its current form could well cause substantial harm to the competitive position of Freedom Airlines.

It appears that Freedom Airlines intends to rely solely on funding provided by Mesa Air Group. Therefore, please provide a copy of Mesa Air Group's income statement for its fiscal year ended September 30, 2001, and for the 4' quarter of 2001. In addition, provide balance sheets for Mesa Air Group as of September 30 and December 31, 2001. On page 1 of Exhibit 18, the applicant states that Mesa Air Group has on hand over $74.5 million in cash and cash equivalents; has total assets of almost $423.4 million; total liabilities of $321 million; and stockholders equity of approximately $102.4 million. However, the most recent data provided (as of June 30, 2001) reflects differing numbers. Therefore, please indicate the source of the figures cited on page 1 of Exhibit 18.  

 According to the June 30, 2001, balance sheet, Mesa Air Group is currently in a negative working capital position (negative $25.4 million) with a current assets to current liabilities ratio of 0.89:1. This raises the question as to Mesa Air Group's ability to cover all of Freedom Airlines' pre-operating costs and provide other financial support that may be necessary in light of its own financial obligations. Therefore, please summarize all lines-of­credit or other loans currently available to Mesa Air Group, including the amount undrawn and the terms and conditions under which Mesa Air Group may use such funds. Further, please provide a copy of the contract between America West and Freedom Airlines that establishes the method and amount of America West's payments to Freedom Airlines for the services at issue.

Part 215 of the Department's regulations provides that an applicant for certificate or commuter authority must register its name and any trade names it wishes to use with the Department. The rule further states that the Department may register such name/trade name after the carrier gives notification to similarly named carriers of the applicant's proposed use of the name/trade name. In the case of an applicant for new certificate or commuter authority, the Part 215 registration is considered to be part of the application. However, this does not alleviate the need for an applicant to provide notice to similarly named air carriers. In this case, Aviation Services, Ltd., located in Guam (P.O. Box 1578. Hagatna, GU 96932) operates under the trade name of Freedom Air. As this trade name is similar to the applicant's corporate name, Freedom Airlines must provide notice of its name to Aviation Services and file evidence that it has done so in Docket OST-01-11206.

By:  Patricia Thomas

Freedom Airlines, Inc.

This letter is to advise you that Freedom Airlines; Inc has filed a certificate application with the Department of Transportation. Freedom is a wholly-owned subsidiary of Mesa Air Group, Inc. and intends to use the trade name Freedom Airlines, Inc. Freedom will initially operate regional jet aircraft flights under the trade name "America West Express" pursuant to an agreement between America West and Mesa. Part 215 of the DOT's regulations provides that a carrier must give notification to similarly named carriers.

By:  Mesa Air Group, Brian Gillman

By:  Mesa Air Group, Brian Gillman

Freedom Airlines, Inc.

We have been in business and using the trade name Freedom Air since 1976. We operate as a Flag Carrier under FAR 121 and Commuter FAR 135. The public's ability to differentiate between Freedom Air and Freedom Airlines has not been without error, as we have been incorrectly referred to as Freedom Airlines on several occasions. Therefore we suggest that you find another name for your carrier.

By:  Aviation Services, Joaquin Flores, 671.472.8009

Freedom Airlines, Inc.

Mesa Air Group has more than sufficient working capital to start the Freedom operations. On January 3, 2002, Mesa announced that it had reached an agreement with lessors to provide financing for up to 20 64-seat Bombardier CRJ-700 and 84-seat 900 aircraft. The commitment is in the form of equity to be used in long-term U.S. leveraged leases. Mesa Air Group showed negative working capital as of June 30, 2001 due to the classification of $166.8 million in indebtedness as "Current portion of long-term debt." At that time, Mesa was in negotiations with Raytheon Aircraft Corporation, the debt holder, and according to the accounting regulations, these obligations (both short and long-term) had to be classified as current because of Mesa's non-payment. Subsequently, the dispute was resolved and the obligations were reclassified. (See the balance sheet information referenced above). Mesa obtained significant annual subsidy amounts related to its Beechcraft 1900D fleet as a result of these negotiations, which will further strengthen the Company's turboprop divisions.

Counsel:  Freedom Airlines, George Lippemeier 

Exhibit 28 contains detailed financial and cost and revenue information related to Mesa's current and Freedom's proposed operations on behalf of America West Airlines. It incorporates private, commercial and financial information of a type that is not usually disclosed to the public and would not, in this case, be disclosed to the public by Freedom Airlines, Mesa Airlines or America West Airlines. In fact, Mesa and America West have previously requested and received confidential treatment in their filings with the Securities and Exchange Commission in their 34 Act filings. Rather, it is being provided to the Department solely in support of the Application. Disclosure of this information would cause material harm to the competitive positions of Mesa Airlines, Freedom Airlines and America West Airlines and violate various contractual obligations of the parties.

Counsel:  Freedom Airlines, George Lippemeier 

Freedom Airlines, Inc.

Freedom Airlines, Inc. answers the February 19th letter of Aviation Services, Ltd, d/b/a Freedom Air, which Freedom Airlines received on March 1, 2002 and which was submitted to the above docket. In that letter, ASL indicates that its use of the trade name "Freedom Air" predates the Freedom Airlines application and suggests that Freedom Airlines therefore should "find another name."

Freedom Airlines' operations will be undertaken with Canadair Regional Jet aircraft, predominantly in the southwestern United States. By contrast, ASL's use of the trade name Freedom Air appears to be limited to operations in Guam and the Northern Mariana Islands with Shorts 330, Piper, and Cessna propeller-driven aircraft. Moreover, Freedom Airlines' initial operations will be conducted for America West Airlines under the trade name "America West Express"

By:  Mesa Air Group, Brian Gillman

Freedom Airlines, Inc.

Freedom Airlines was organized as a corporation under the laws of the State of Nevada on December 3, 2001, by Mesa Air Group, Inc. (Group), the parent company of Mesa Airlines, Inc., Air Midwest, Inc., and CCAir, Inc., all certificated air carriers.³ Group formed Freedom Airlines for the purpose of operating as an America West code share partner utilizing 64-seat Canadair Regional Jet (CRJ) 700 and 80-seat CRJ-900 aircraft currently on order for Mesa. While Mesa will continue various operations it currently conducts on behalf of America West and US Airways,⁴ it will assign the regional jet flights it operates on behalf of America West to Freedom Airlines.

If granted the certificate authority it seeks, Freedom Airlines will commence regional jet operations operated on behalf of America West under a code share arrangement. Under this arrangement, Freedom Airlines will be responsible for all aircraft operations, while America West will handle all marketing and passenger ticketing matters such as the collection of passenger funds and the processing of all refunds. America West will compensate Freedom Airlines for its services without regard to the number of passengers carried. That is, America West will purchase from Freedom Airlines all of the available seat miles and is assuming the financial burden for any shortfall in passenger and other revenue. Freedom Airlines forecasts that it will operate a total of nine 64-seat CRJ-700s and two 80-seat CRJ-900s by the end of its first year of actual flight operations under the of America West arrangement, flying a total of 15,605 aircraft block hours. The applicant expects to expand these operations during its second year of operations to include an additional 11 CRJ-700s and 13 CRJ-900s.

Mesa presently operates over 70 regional jet and turboprop aircraft in scheduled service under the trade names "America West Express," "USAirways Express," and "Frontier JetExpress." In addition, Mesa operates, or will soon operate, other aircraft in partnership with Midwest Express. Further, Air Midwest and CCAir also conduct operations as "USAirways Express." In total, Mesa and its sister companies currently operate approximately 116 aircraft.

By:  Read Van de Water

Freedom Airlines, Inc.

By:  Mesa Air Group, Brian Gillman, 972.819.2040

Freedom Airlines, Inc.

Order 2002-4-3 finds that Freedom Airlines, Inc. d/b/a America West Express is fit, willing, and able to engage in interstate scheduled air transportation of persons, property, and mail.  

By:  Read Van de Water

Freedom Airlines, Inc.

Supplement of Freedom Airlines, Inc. to its Application submitting a new president, Michael Ferverda, in place of George Lippemeier.

By: Michael Ferveda

Freedom Airlines, Inc.

Counsel:  Mesa, Brian Gillman

Freedom Airlines, Inc.

Supplement to Application of Freedom Airlines, Inc. pursuant to the provisions of Order 2002-4-3.

A copy of Freedom's air carrier certificate from the FAA; Operations Specifications Al, A3, A6, A7, B50, C70; A copy of the certificate of insurance, Form 6410. The original was filed with the FAA on September 18,2002; Statement of changes following Show Cause Order 2002-3-3; Revised list of pre-operating expenses.

By: Michael Ferverda

Freedom Airlines, Inc.

Additional Information of Freedom Airlines, In. submitting its Air Carrier Certificate and Operations Specifications.

By: Thomas Stuckey

Freedom Airlines, Inc. d/b/a America West Express

By this order, we (1) confirm our oral action taken with respect to Freedom Airlines, Inc. d; b/a America West Express and (2) reissue to the carrier its section 41102 certificate authorizing it to engage in interstate scheduled passenger operations to reflect its effective date.

By: Randall Bennett

Freedom Airlines, Inc. d/b/a America West Express

Order 04-07-27
OST-01-11206 - Interstate Scheduled Air Transportation

Issued July 27, 2004 | Served July 30, 2004

Order Issuing Corrected Certificate | Word

We reissue the interstate scheduled passenger certificate of public convenience and necessity issued to Freedom Airlines, Inc. d/b/a America West Express by Order 2002-10-38 in the attached form to reinstate the requirement that Freedom remain a wholly owned subsidiary of Mesa Air Group, Inc.

We direct that, should Freedom Airlines, Inc. d/b/a America West Express propose to conduct operations with more than 24 aircraft or independent of a code-share agreement with another certificated air carrier, it must first notify the Department in writing at least 45-days prior to the proposed operations and demonstrate its fitness to conduct such operations before their commencement.

By: Randall Bennett

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