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OST-2014-0192 - Monagerie Enterprises d/b/a Monarch Air - Houston/Austin-Dallas Commuter Authority

http://www.monarchair.com/

 


Monagerie Enterprises, Inc. d/b/a Monarch Air

OST-2014-0192 - Commuter Authority - Houston/Austin-Dallas

November 7, 2014

Application for Commuter Air Carrier Authority

Motion to Withhold Information from Public Disclosure

Applicant requests authority to engage in scheduled passenger operations as a commuter air carrier and proposes to provide scheduled service exclusively to members of a newly established membership club, Rise. Based upon Rise member demand, Monarch Air will operate flights initially between Dallas, Texas and Houston, Texas and between Dallas, Texas and Austin, Texas. The number of scheduled operations will be dictated by member demand, although at within the first year of operations least four daily roundtrip flights between Dallas and Houston and two daily roundtrip flights between Dallas and Austin are contemplated. In addition, based on member demand, applicant may expand operations to include the San Antonio and Midland markets in Texas and the Oklahoma City and Tulsa markets in Oklahoma. Applicant will purchase three King Air 350 aircraft to support the commuter operations. Each aircraft will seat nine passengers. Monarch Air will use its existing aircraft, as needed, in the event one or more of the new King Air are unavailable because of maintenance. These aircraft consist of two Beech King Air B200s (7 passengers), one Beech King Air B300 (7 passengers), one Cessna 525 (6 passengers), one Westwind 1124 (8 passengers), one Westwind 1124A (8 passengers) and one Learjet 31 (7 passengers).

Counse: Jones Day, Rebecca MacPherson, 202-626-1700


 

December 11, 2014

DOT Response to Motion for Confidential Treatment

  1. With respect to Exhibit 8A, we have decided to partially grant confidential treatment to the list of current aircraft fleet. Specifically, we grant confidentiality to the name of the lessees and their addresses.
  2. With respect to Exhibit 8B, 8C, 8D, 8E, 8F, 8G and 8H, we have decided to grant confidential treatment. The Department has, in the past, afforded confidential treatment to agreements such as these and we see no reason not to do so here.
  3. With respect to Exhibit 9, letter from Steve Young, Legacy Texas Bank, dated October 31, 2014, the Department finds that the information contained in this exhibit is not needed to make a fitness determination. Thus, we grant confidential treatment to Exhibit 9.
  4. With respect to Exhibit 13, letter from Steve Young, Legacy Texas Bank, dated October 1, 2014, we have decided to deny confidential treatment. Exhibit 13 contains the financial information necessary to determine Monarch's fitness.
  5. With respect to Exhibit 14, we have decided to partially grant confidential treatment. Specifically, we grant: confidentiality to the bank account number mentioned in the letter.

By: Lauralyn Remo




December 11, 2014

DOT Request for Additional Information

  1. General Information
  2. Operations and Financial Information
  3. Certification

By: Lauralyn Remo


 

December 23, 2014

Response to Information Request

Motion to Withhold Information from Public Disclosure

Rise Alpha is a membership organization that arranges air transportation services on behalf of its members. Rise expects to also arrange other services, such as surface travel, for its members.

Rise's analysis shows strong demand for air service in high-volume short-haul business markets like Dallas-Houston, Dallas-Midland, and Dallas-Austin. Today, the car is the best way to get from Dallas to Austin, for example. Transportation by car in that market can take nearly four hours. Rise expects that the overwhelming majority of members will be businesspeople, with the knowledge and experience to evaluate the costs and benefits of membership.

Counse: Jones Day, Rebecca MacPherson, 202-626-1700


 

January 13, 2015

Submission of Exhibits

  • Aircraft and Financial Statements

Counsel: Jones Day, Rebecca MacPherson, 202-626-1700


 

January 24, 2015

Response of Rise Alpha to DOT Information Request

Motion for Confidential Treatment

Rise Alpha, LLC, a ticket agent acting on behalf of its members, is pleased to provide the following information to assist the Department in its review of the above-captioned application. Rise is neither an applicant in, nor a party to, this proceeding. Instead, Rise has a vital interest in the expeditious grant of Monarch Air’s application because Rise wishes to charter aircraft from applicant Monarch Air on behalf of its membership. Rise has identified significant, urgent demand for its unique business model, and it is anxious for Monarch Air to be able to provide air services to its membership.

  1. Unaudited Financial Statement
  2. Cash Balance Confirmations
  3. Line of Credit Agreement and Note

Counsel: Thompson Hine, Patricia Snyder, 202-263-4189


 

January 23, 2015

Response to Second Information Request

  • General Information
  • Management and Key Technical Personnel
  • Financial Position and Operating Plans
  • Certification

Counsel: Jones Day, Rebecca MacPherson, 202-626-1700


 

February 25, 2015

Supplemental Response to Second Information Request

  • Financial Position and Operating Plans
  • Certification

Counsel: Jones Day, Rebecca MacPherson, 202-879-3939


 

March 19, 2015

DOT Request for Additional Information

  1. Finances
  2. Operations
  3. Certification

By: Lauralyn Remo





March 23, 2015

DOT Partially Granting Confidential Treatment

  1. With respect to Exhibit 1 - Rise unaudited Financial Statement as of 11/30/2014, we grant confidential treatment to the unaudited financial statements as of 11/30/2014. The Department finds that the information contained in this exhibit is not needed to make a fitness determination.
  2. With respect to Exhibit 2 - First Financial Bank letter confirming total cash balance at 1/21/2015, we have decided to deny confidential treatment. Exhibit 2 contains the financial information necessary to determine Monarch's fitness.
  3. With respect to Exhibit 3 - Liberty Capital Bank letter confirming total cash balance at 1/21/2015, we have decided to partially grant confidential treatment. Specifically, we grant confidentiality to the bank account number mentioned in the letter.
  4. With respect to Exhibit 4, commercial line of credit agreement from Liberty Capital, we have decided to partially grant confidential treatment. Specifically, we grant confidentiality to the Loan Number, Interest rate and scheduled payment changes and Line of credit terms. The Department finds that this information contained in this exhibit is not needed to make a fitness determination.

To the extent that confidential treatment is not specifically granted above, it is denied.

By: Lauralyn Remo


 

March 25, 2015

Response to Third Information Request

  • Finances
  • Operations
  • Certification

Counsel: Jones Day, Rebecaa MacPherson, 202-626-1700


 

March 30, 2015

Motion of Monarch Air to Expedite and Shorten Public Comment Period

Monarch Air's charter customer, Rise LLC, has made significant investments in starting the innovative membership group, including the acquisition of aircraft, hiring of pilots, design of computerized membership service systems, and has accomplished all other administrative and managerial tasks necessary to commence operations. It has a substantial number of memberships reserved and businesses eager to take advantage of Monarch Air's services. In short, both Monarch Air and Rise are ready to begin operations as soon as the Department approves Monarch Air's commuter fitness application.

In the meantime, however, significant expenses are continuing to accrue, without any revenues coming in. Although both Monarch Air and Rise wholeheartedly support and respect the critical nature of the DOT inquiry, the length of the inquiry is adding expenses that diminish the ability and incentives of entrepreneurs to bring innovative products to market. The Applicant therefore respectfully requests as much expedition as is consistent with the Department's thorough review of its fitness for commuter operations.

To this end, Monarch Air requests that the Department reduce its standard 14-day objection and 7-day answer period for any show-cause order it issues with respect to Monarch Air's request for a commuter fitness determination to respectively five days for objections and three days for answers. Monarch Air's application is ripe for decision, and we anticipate issuance of a show-cause order in the
very near future. Grant of our request will reduce the objection/answer period by 16 days, and every day saved promotes the new operation. Moreover, shortening the answer period would be reasonable, since no comments or answers have been filed in respect of Monarch Air's application.

This relief would be consistent with recent Department precedent. See, e.g., Notice of Sky King, Order 2014-12-8.

Counsel: Jones Day, Rebecca MacPherson, 202-626-1700




March 30, 2015

Additional Information Response of Rise Alpha

This letter is in response to your March 23, 2015 letter to Ms. Rebecca MacPherson, attorney for
Menagerie Enterprises, Inc. d/b/a Monarch Air granting in part and denying in part a January 23, 2015 motion requesting certain materials belonging to Rise Alpha to be withheld from public disclosure. Monarch Air has asked Rise to respond to your Ietter.

  • First Financial Bank Letter
  • Liberty Capital Bank Letter
  • Liberty Capital Bank Commercial Line of Credit

Counsel: Thompson Hine, Patricia Snyder, 202-331-8800


 

April 22, 2015

Amended Application

Menagerie Enterprises, Inc. d/b/a Monarch Air submits this amendment to its application for authority to operate scheduled passenger service as a commuter air carrier.

In paragraph (f)(2) of the appendix to the original application, Monarch Air identified Trey Sawtelle as Monarch Air's president, director of operations and chief pilot, and Shaun Braley as Monarch Atr' s assistant chief pilot. In the period between filing the original application and now, Shaun Braley has replaced Trey Sawtelle as chief pilot. Trey Sawtelle remains the president and director of operations for Monarch Air. Updated resumes for Trey Sawtelle and Shaun Braley are attached.

Counsel: Jones Day, Rebecca MacPherson, 202-626-1700


 

April 23, 2015

Request of Monarch Air for Grant of Motion

On March 30, 2015, Menagerie Enterprises, Inc. d/b/a Monarch Air submitted a motion to expedite and shorten the public comment and reply period of a Department of Transportation show-cause order on Monarch Air's fitness to operate as a commuter air carrier. On the same date, I sent a copy of the motion to Monarch Air's principal operations inspector at the Federal Aviation Administration and the directors of operations at Love Field Airport, William P. Hobby Airport, Austin-Bergstrom International Airport, San Antonio International Airport, Midland International Airport, Tulsa International Airport and Will Rogers World Airport. All of the above-named potentially interested parties were also served with complete copies of the original application for commuter authority.

Only the Federal Aviation Administration has expressed interest in Monarch Air's application for commuter authority. In addition, Rise Alpha LLC has submitted documentation to the docket as an interested party. No other parties have submitted comments to the docket. Accordingly, Monarch Air has determined that the Federal Aviation Administration and Rise Alpha LLC are the only interested parties in Monarch Air's application for commuter authority.

Trey Sawtelle, president and director of operations for Monarch Air, has spoken to Cameron Baker, Monarch Air's POI at the FAA, and confirmed that Mr. Cameron does not oppose the Department granting Monarch Air's motion to expedite and shorten the public comment period to any show-cause order the Department issues with respect to Monarch Air's fitness determination. Likewise, Rise Alpha LLC has informed me that it supports the motion for a shortened comment period.

Counsel: Jones Day, Rebecaa MacPherson


 

April 22, 2015

DOT Request for Updated Resumes for Key Personnel

Review of information submitted in support of Menagerie Enterprises' request to conduct scheduled passenger air transportation as a commuter airline, identified that the following individuals have changes in their positions with the company:

Mr. Raymond F. (Trey) Sawtelle III
Mr. Shaun Braley

Please provide an updated resume indicating the new position held and a brief description of the responsibilities handled.

By: Shabu Thomas, 202-366-9721


 

April 23, 2015

Motion to Expedite and Shorten Public Comment Period

This letter supplements our earlier correspondence regarding any potential objections to a shortened comment period by potentially interested parties. As noted in that earlier correspondence, only the Federal Aviation Administration has expressed interest in Monarch Air's application for commuter authority. In addition, Rise Alpha LLC has submitted documentation to the docket as an interested party. Prior to submitting that correspondence Monarch Air verified that the FAA and Rise Alpha LLC did not object to a shortened comment period.

Either Trey Sawtelle, president and director of operations for Monarch Air, Greg Carboy, Monarch Air's local counsel, or I have also spoken with qualified representatives of each airport listed in the certificate of service that accompanied the original application and the motion to shorten the comment period. Each airport has indicated that it does not oppose the Department granting Monarch Air's motion to expedite and shorten the public comment period to any show cause order the Department issues with respect to Monarch Air's fitness determination.

Based on this input, Monarch Air urges the Department to grant its motion.

Counsel: Jones Day, Rebecca MacPherson, 202-879-4645


 

Order 2015-6-1
OST-2014-0192
- Commuter Authority - Houston/Austin-Dallas

Issued and Served June 3, 2015

Order to Show Cause Proposing Issuance of Commuter Air Carrier Authority

By this order, we tentatively conclude that Menagerie Enterprises, Inc. d/b/a Monarch Air is a citizen of the United States and is fit, willing and able to conduct scheduled passenger operations as a commuter air carrier.

Monarch is organized as a corporation under the laws of the State of Texas. The company is wholly-owned by Mr. Raymond Sawtelle, Jr., a US citizen. Monarch’s key personnel are US citizens and the company has provided an affidavit attesting that it is a citizen of the United States within the meaning of the Statute. Finally, there is no other information before us that would lead us to conclude that Monarch is not controlled by US citizens.

We direct any interested persons having objections to the issuance of an order making final any of the proposed findings, conclusions, or award of authority set forth here to file such objections with the US Department of Transportation Dockets.

By: Susan Kurland


 

June 11, 2015

Response to Order to Show Cause

On June 3, 2015, the Department of Transportation issued an Order to Show Cause Proposing Issuance of Commuter Air Carrier Authority. Comments on the Order were to have been submitted to the docket and served on Menagerie counsel by June 10, 2015. In the event comments opposing the Order were submitted, Menagerie has been afforded three days to respond to those concerns. No comments were served on Menagerie counsel and no comments have appeared in the docket. Accordingly, Menagerie believes there are no comments that require a rebuttal and is hereby submitting the documentation required to commence commuter operations.

Counsel: Jones Day, Rebecca MacPherson, 202-626-1700


 

Order 2015-6-15
OST-2014-0192
- Commuter Authority - Houston/Austin-Dallas

Issued and Served June 15, 2015

Final Order

By Order 2015-6-1, issued June 3, 2015, we directed all interested persons to show cause why we should not make final our tentative findings and conclusions that Menagerie Enterprises, Inc. d/b/a Monarch Air is a citizen of the United States and is fit, willing, and able to conduct scheduled passenger operations as a commuter air carrier using small aircraft pursuant to Part 135 of the Federal Aviation Regulations. Interested persons were given 5 days to file objections to the order.

No objections to the show cause order were received.

By: Susan Kurland


 

July 7, 2015

Response to Final Order

Menagerie estimates that the remaining pre-operating cost forecast will be slightly less than $119,000. In addition, as indicated on the spread sheet provided as Exhibit 2 to the supplemental submission to the second response for information, the first year's operating expenses are anticipated to cost a total of $6,317,469.16. A simple 25% of these costs equal $1,579,367.29. Menagerie's current negative operating capital, as determined on July 6, 2015, is $319,336.54 (current liabilities of $1,822,827 .56 and current assets of 1,503,491.02). Thus, the projected financial fitness threshold is $2,017,402.04 ($1,579,367.29 + $118,698.21+$319,336.54). As noted in the June 11, 2015 Response to Order to Show Cause, Menagerie has access to lines of credit totaling $2.25 million.

Counsel: Jones Day, Rebecca MacPherson, 202-626-1700


 

June 26, 2015

Air Carrier Certificate

By: Nicholas Reyes


 

June 29, 2015

Amended Air Carrier Certificate

Please find attached Monarch Air's amended air carrier certificate and amended Operations Specifications reflecting Monarch Air's authority to conduct commuter operations. This is the last piece of information that we owe you prior to commencing commuter operations. Unless we hear otherwise, Monarch Air intends to initiate its Rise commuter operations on Thursday, July 9, which is six business days after today. I will give you a call tomorrow to see if you have any concerns with this date.

Counsel: Jones Day, Rebecca MacPherson, 202-879-2113





Order 2015-7-15
OST-2014-0192
- Commuter Authority - Houston/Austin-Dallas

Issued and Served August 5, 2015

Order Confirming Oral Action and Issuing Effective Commuter Authorization

By this order, we confirm our oral action of July 7, 2015, making the authority of Menagerie Enterprises, Inc. d/b/a Monarch Air effective on that date. We reissue Monarch’s commuter air carrier authorization to reflect its effective date.

By: Todd Homan


 

Order 2019-2-10
OST-2014-0192
- Commuter Authority - Houston/Austin-Dallas

Issued and Served February 12, 2019

Order Revoking Commuter Air Carrier Authorization

By Order 2015-7-15, issued August 5, 2015, the Department confirmed its oral action making Monarch’s commuter authority effective and reissued to the air carrier its Commuter Air Carrier Authorization to reflect its effective date. Monarch ceased its commuter air carrier operations on or about November 7, 2017.

By letter dated August 30, 2018, the Department notified Monarch that, pursuant to section 204.7, its authority was suspended and the air carrier could not resume air transportation operations as a commuter air carrier until the Department had redetermined its fitness to do so. In that letter, we further stated that if Monarch did not resume operations within one year of its cessation, that is by November 7, 2018, the company’s commuter authority would be revoked for dormancy. It has now been more than one year since Monarch ceased operations and we have yet to receive an application from the air carrier to have its fitness redetermined.

Thus, under these circumstances, and in accordance with section 204.7 of our rules, we find it appropriate to revoke Monarch’s commuter authority for reason of dormancy. This action is without prejudice to the company’s filing for new authority in the future.

By: Todd Homan

 


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