BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C. _________________________________________ ) Application of ) ) EASTERN AIR LINES GROUP, INC. ) DOCKET OST-2014- ) for a Certificate of Public Convenience ) and Necessity (Interstate Passenger ) Charter Service) ) _________________________________________ ) APPLICATION OF EASTERN AIR LINES GROUP, INC. FOR A CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY Communications with respect to this document should be sent to: Edward J. Wegel President and CEO EASTERN AIR LINES GROUP, INC. Building 5A, Miami Int’l Airport Miami, FL 33142 (305) 869-4249 [email protected]Edward P. Faberman Wiley Rein LLP 1776 K Street, NW Washington, DC 20006 (202) 719-7402 [email protected]John R. Mietus, Jr. Law Office of John Mietus, LLC 6701 Democracy Blvd., Suite 300 Bethesda, MD 20817-7500 (202) 747-5212 [email protected]Counsel for EASTERN AIR LINES GROUP, INC. APPLICANT REQUESTS THAT THIS APPLICATION BE PROCESSED THROUGH EXPEDITED, NON-HEARING PROCEDURES PURSUANT TO SUBPART B OF THE DEPARTMENT’S PROCEDURAL REGULATIONS. NOTICE: Any person may support or oppose this application by filing an answer no later than February 18, 2014 and serving a copy of the answer on counsel for Applicant and upon persons served with this application. January 28, 2014
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BEFORE THE
DEPARTMENT OF TRANSPORTATION
WASHINGTON, D.C.
_________________________________________
)
Application of )
)
EASTERN AIR LINES GROUP, INC. ) DOCKET OST-2014-
)
for a Certificate of Public Convenience )
and Necessity (Interstate Passenger )
Charter Service) )
_________________________________________ )
APPLICATION OF EASTERN AIR LINES GROUP, INC.
FOR A CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY
Communications with respect to this document should be sent to:
William Arthur Owens Professional Experience AEA Investors (Asia) Limited, Chairman 11/2009 - Present
AEA Holdings Asia, Executive Chairman & CEO 11/2005 -11/2009
Global private equity investment firm focusing on control buyouts in value-added industrial products, specialty chemicals, consumer products and services industries Nortel Networks Corporation, CEO & Vice Chairman 6/2004 - 11/2005
Multinational telecommunications and data networking equipment manufacturer Teledesic, CEO & Chairman 10/1998 - 6/2004
Developer of a worldwide broadband satellite communications network Science Applications International Corp., President, COO & Vice Chairman 3/1997 - 10/1998
Vice President for Government 6/1996 - 3/1997
Leading provider of scientific, engineering, and technology applications and solutions to security, energy, environmental, health and infrastructure markets throughout the world Board Representation Beginning 1996, served(s) as director on the boards of many public and private companies including Daimler, British American Tobacco, Telstra, Nortel, Polycom, Wipro, Viasystems and CenturyLink, of which last four are current. Professional Government Experience 1994 – 1996: Joint Chiefs of Staff, Vice Chairman 1990 – 1992: U.S. Sixth Fleet, Commander 1991 – 1993: Naval Ops for Resources, Warfare Requirements & Assessments, Deputy Chief 1998-1991: Office of the Secretaries of Defense, Sr. Military Assistant 1998: Office of Program Appraisal for the Secretary of the Navy, Director 1987: Submarine Group Six, Commander Awards/Achievements Intrepid Salute Award, recognition of business achievements and support of philanthropic activities Legion d’Honore Award, highest award given to foreign citizens by the countries of Indonesia and Sweden No. Dakota Citizen of the Year “Roughrider” & David Sarnoff Award for contribution to advanced technology Distinguished Graduate of George Washington University in recognition as one of “The 50 Most Powerful People in Networking” by Network World 100 Best Board Member in the United States for 2011 awarded by NACD Education B.S., mathematics from the U.S. Naval Academy M.S., politics, philosophy and economics from Oxford University M.S., management from George Washington University Publications Author of two books, "High Seas" and "Lifting the Fog of War", publ. in 2000 and in Mandarin in 2009 Wrote more than 50 articles on national security
Edward J. Wegel Seasoned senior airline executive with over 28 years of experience in increasingly responsible positions from operations and finance executive to airline COO, airline CEO, and board member. Also possess extensive airline investment banking experience with a major Wall Street firm. Extensive corporate governance experience having served on the boards of several publicly traded as well as privately held companies. Served on the Board of Directors of four (4) airlines. Served as an airline merger/ acquisition advisor to major private equity and investment funds. Major Airline Management Experience
Senior Vice President/ Finance- Atlantic Coast Airlines (United Express) President and Chief Operating Officer- BWIA International Airways President and Chief Executive Officer- Chautauqua Airlines (USAirways Express)
Major Airline Merger and Acquisition Experience (Highlights):
1991- Co-Negotiated acquisition of assets of West Air to create Atlantic Coast Airlines/ United Express at Washington-Dulles. Negotiated launch order for the BAe J-41 turboprop aircraft.
1993- Negotiated acquisition of MartinAire, Dallas, a major feeder carrier for FedEx and UPS. Acquired 35 aircraft from Cessna as part of transaction
1994- Negotiated and raised financing for the privatization of BWIA, the national airline of Trinidad and Tobago. Created new alliances with American Airlines and British Airways. Renegotiated major bi-lateral agreements with 10 countries.
1996- Conceived and developed business plan for PeoplExpressII. Negotiated potential major alliance with American Airlines
1997- Conceived, developed and financed, then led the acquisition of Chautauqua Airlines and an order for Embraer RJs which became the platform for Republic Airways
2000- Negotiated sale of Tower Air to Icahn and Associates
2001- Negotiated potential acquisition of ATA Airlines, Indianapolis for major investment fund
2003/2004- Lead negotiator for acquisition of Midway Airlines out of bankruptcy in an auction on behalf of a major US regional airline.
2007- Negotiated and closed acquisition of final remaining assets of the Eastern Air Lines estate
Major Positions Held:
2008-Present Founder/President/CEO, Aviation Capital Partners Group, LLC
and Founder, Eastern Air Lines Group, Inc (a development company) Acquired the intellectual property of the estate and developed a plan to launch the new Eastern Air Lines
One Travel Holdings, Inc. Led the restructuring thru bankruptcy and subsequent re-financing of a publicly traded travel company with over $350 million in gross revenues - Negotiated new deals with all major US and foreign airlines and hotel groups - Negotiated new deals with WorldSpan, Travelport and Sabre - Raised $25 million in new equity to complete the restructuring
1993- Founder and Managing Partner, Aviation Capital Partners LLC Present- Led acquisition team to acquire Martinaire, a cargo airline in Dallas, TX
- Adviser to Air Jamaica, Cayman Airways and eight other airlines on their restructuring plans - Adviser to major investment fund on possible acquisitions of North American Airlines
During this time also served (from December 2003- Feb 2005) as
EVP-Corporate Planning and Development Mesa Air Group, Inc. - Led a ten member planning team that oversees all aspects of marketing, strategic, route and fleet planning and corporate acquisitions - Negotiated and closed the acquisition of Midway Airlines with ten CRJ-200 aircraft - Opened discussions for potential new partnerships with Delta, Northwest, and ATA
1999-2002 SVP , New York, SH&E (aviation consulting firm)
- Adviser to Clayton Dubilier on acquisition of Fairchild Dornier Aircraft - Adviser to Apollo Management on possible acquisition of American Trans Air - Adviser to the Board and Trustee of Tower Airlines on restructuring
1997-1999 President and CEO, Member of the Board
USAirways Express, Indianapolis - Negotiated, raised $25 mm in equity and closed the acquisition of the airline - Signed new agreements with USAirways, acquired 30 regional jets valued at over $600 mm. - Record profits in 1998 of $12 mm on $85 mm in revenue
1995-1997 President and COO, Member of the Board BWIA International Airways, Trinidad - Raised $20mm in equity to privatize this national airline- operating (5) L1011-500 and (8) MD-83 aircraft to 12 international destinations including London, Toronto and Frankfurt - Developed the new business plan and grew the company, with major alliances with American and British Airways.
1991-1995 Co-Founder , Member of the Board and SVP-Finance
Atlantic Coast Airlines (United Express) - Helped grow the company from launch to $300 mm in revenues, - Coordinated the initial public offering in 1993 (Alex Brown), raised $25 mm in equity and $250 mm in debt financings
Shearson Lehman Brothers - Managed over $1 billion of the firm’s and limited partnership investments. - Served on the boards of Polaris Industries (publicly traded snowmobile manufacturer) Houston Biotech (publicly traded) and MicroPalm Computers (private). - Managed two aircraft limited partnerships with over $500 million of commercial jet aircraft
1985-1987 Operations / Finance– Northeast Division Eastern Air Lines, Inc
/ Pan American World Airways 1980-1985 US Army Officer
- Attained Rank of Captain- Two awards of Army Commendation Medal - Battalion Adjutant / Company Executive Officer in M1 Tank Battalion in Germany
Education: 1980- BS-Engineering- United States Military Academy (West Point) 1982- MBA-Finance- University of Northern Colorado, Greeley, CO
Stanley L. Saunders, Jr.
SUMMARY Accomplished aviation industry leader with a record of superior performance in managing and leading complex, high technology organizations. Extensive experience in all aspects of Part 121 Air Carrier management including: exercising operational control; regulatory compliance; budget development and execution; and, establishing and maintaining effective relationships with the Federal Aviation Administration. Recognized industry expert in Part 121 Air Carrier Certification. Demonstrated ability to recognize, assess, and address end-to-end operational and support requirements and lead teams in bringing complex concepts to reality.
PROFESSIONAL EXPERIENCE LOCKED ON, INCORPORATED January 2010 – Present
Locked On, Inc. is a FAA Qualified Certification Consultant company.
Vice President Operations: Lead a team of industry experts providing consulting services to the Aviation industry with a specialization in Part 121 Air Carrier Certification and regulatory compliance.
Major Clients: Spirit Airlines. Project Manager for the comprehensive overhaul of the airline’s manual system. Virgin Galactic. Provide principal consulting services for the creation of initial operating practices and manuals for the Spaceline. People Express Airlines. Project Manager for the Part 121 Certification effort for the startup Air Carrier.
Advisor to the FAA Center of Excellence for Commercial Space Transportation
AC3S, INCORPORATED March 2005 – Present
President: Provide critical leadership in coordinating and synchronizing business development activities with certification requirements to ensure optimum utilization of all resources and maximum reduction of startup costs. AC3S is a Service Disabled Veteran Owned Small Business.
Major Clients:
Hawaiian Airlines. Principal consultant for the addition of Airbus A330 Aircraft to the Operating Certificate.
NetJets . Provide critical support and consulting services to facilitate transition to a new Maintenance Information System. Provide services to establish and validate baseline maintenance program requirements for sixteen aircraft fleet types deployed in US and European operations.
Skybus Airlines: Certification Program Manager responsible for coordinating, scheduling and managing all aspects of the airline’s certification. Synchronization of business build out activities with certification requirements reduced start up costs in
excess of 10 million dollars. Interim Director of Training creating pilot initial new hire, recurrent, upgrade and transition training curricula.
MAXJET AIRLINES May 2004 – March 2005
Director of Operations/Chief Pilot: Duties include direct oversight of all operational aspects in the certification of a Part 121 Flag Air Carrier. Provide direction in the development of operating procedures that foster a positive working environment while meeting strategic business objectives and guaranteeing regulatory compliance. Manage vendor/supplier selection process for a myriad of critical products and services including Flight Crew Training, Electronic Flight Bag and multiple aircraft equipment and avionics upgrades.
Initial Cadre Check Airman: Duties include creation and execution of Initial Cadre Check Airman training program.
GEMINI AIR CARGO February 1998 – May 2004
Chief Pilot: Duties include management of 300 aircrew operating 12 DC-10 and 4 MD-11 aircraft in worldwide ACMI, Charter and Wet Lease Operations. Principally responsible for the development and management of an $18 million Flight Operations Department personnel budget. Principal consultant to the executive management team for developing strategic manning plans and work rules to fit the business model. Responsible for the interviewing and hiring of all aircrew. Provided critical leadership and hands-on involvement in dealing with the myriad operational and security demands in the aftermath of 9-11. In the economic downturn following 9-11, designed and implemented work rule changes resulting in a 14% decrease in block hour operating costs without imposing a base wage reduction.
Check Airman DC-10-30F
Captain DC-10-30F
UNITED STATES NAVY June 1973 – February 1998
Air Operations Officer, Commander, Carrier Battle Group FOUR. Responsible for the Air Operations Training, Evaluation and Certification of all Atlantic Fleet Carrier Battle Groups and their embarked Carrier Air Wings. Principal adviser to the Battle Group Commander, responsible for assessing the efficiency and safety of all carrier flight operations. Provided in-depth assessment in the air and on the ground of all Carrier and Air Wing integration and operational issues critical to the combat readiness of all Atlantic Fleet Carrier Battle Groups. Gained extensive experience in “tooth-to-tail” assessment and critical node identification in the intricacies of supporting a combat fighting team. Instrumental in the successful development and implementation of a Joint Forces Air Component Commander (JFACC) afloat capability in U.S. Navy aircraft carriers and command and control vessels. Developed comprehensive plans and orchestrated all aspects of incorporating a JFACC aboard carriers and command and control vessels including hardware, Information Technology, personnel and all logistic support requirements
Commanding Officer, Fighter Squadron One Hundred Three. Responsible for the operational readiness of the Atlantic Fleet’s first, 14-plane, F-14B Squadron. Directly responsible for the safety, welfare and professional development of over 400 aviators, maintenance, ground support and administrative personnel assigned to the squadron. Managed an annual flight hour operating budget in excess of $6M meeting or exceeding all operational requirements without ever exceeding a budget limitation. Devised and
conducted the first fleet demonstration of precision guided munitions delivery from the F-14B. Overwhelming success of the demonstration accelerated the fleet introduction of a fully integrated precision-guided munitions delivery capability.
Aide and Special Assistant to the Chief of Naval Personnel/Combat Placement Officer, Bureau of Naval Personnel. Principal assistant to the Chief of Naval Personnel. Personnel manager for all U.S. Navy Fighter Squadrons. Responsible for ensuring proper fleet-wide officer manning levels and for managing the career-path development for over 900 aviators and aviation support officers.
Landing Signal Officer (LSO): Staff, Training, Wing, and Squadron qualified LSO. Responsible for the safe and expeditious landing of fixed-wing aircraft aboard the aircraft carrier, training of squadron and air wing pilots in preparation for extended deployment, and the initial carrier qualification of student Naval Aviators and F-14 replacement pilots.
F-14 Pilot: Duties include Operations Officer, Maintenance Officer, Air Wing Strike Team leader, Division Lead, Fleet Model Manager, F-14 Fleet Replacement Instructor Pilot, Adversary Pilot, Strike Flight Instructor Pilot.
Operational Tours: Six extended and numerous shorter deployments encompassing 8.5 cumulative years deployed to the Mediterranean Sea, Adriatic Sea, North Atlantic Ocean and Indian Ocean embarked in 16 different US Navy Aircraft Carriers. Logged in excess of 1000 carrier arrested landings.
Honors and Awards: Meritorious Service Medal (two awards), Strike Flight Air Medal, Navy Commendation Medal, Navy Achievement Medal, 1990 Atlantic Fleet Carrier Aviator of the Year, 1990 Fighter Pilot of the Year, US Navy Fighter Weapons School (TOPGUN) graduate, US Air Force Air Command and Staff College Air Power Projection graduate.
PROFESSIONAL QUALIFICATIONS
Airline Transport Pilot: Airplane Multiengine Land, Type Ratings: DC-10, B767/757
Consulting services for third party MRO, Airlines and Aircraft Leasing Companies.
Projects included creation of General Engineering Maintenance Manual, Quality manuals
and advisement in obtaining Airline Operating Certificate (AOC) for start up International
airline. Direction to MRO Company in expanding their third party Line Maintenance
business and developing processes to control cost at their Heavy Maintenance division.
Evaluations for lease returns, maintenance program development, managing heavy
checks, performed surveys for potential equipment purchases. Project Management of:
Passenger to Cargo Door Conversions, Damage Restoration, Interior Upgrade projects.
Partial list of Cliental: ASL Leasing, Safair Airlines, CAS, Jet Lease, Aurora Leasing, Trans
Caribbean Airlines, RPK Leasing, Delta Airlines, GO GO, Certified Aviation Services, Top
Tech Aviation.
EADS, Airframe Services, USA
Executive Vice President and Chief Operating Officer 2004-2006
Responsible for the direct management and administration of an airframe MRO
maintenance facility. Lead a staff of three hundred plus work force, with focus on
quality, turn around time and P & L responsibility.
Kitty Hawk Air Cargo Inc.
Vice President Maintenance an Engineering 2003-2004
Company’s Chief Aircraft Maintenance Officer responsible for the direct management and
administration of all aircraft maintenance activities related to the Kitty Hawk Airline fleet.
Functions included: oversight of Engines, Line Maintenance, Planning, Engineering,
Purchasing, Stores and contract negotiations for heavy maintenance of airframe and
engine work scopes.
Air Jamaica Airline, Jamaica W. I. 2001-2003
Vice President Technical Services
Leader of this Caribbean airline maintenance organization with operating budget of $80M
dollars and 400 related employees. Activities include aircraft operations, line
maintenance and engineering, out-sourcing of heavy maintenance checks, contract
negotiations, and facilities maintenance system wide.
Fairchild Dornier Aerospace, San Antonio, TX 1999-2001
Vice President Fairchild Aerospace, Maintenance and Field Support
Recruited to this privately owned regional jet manufacturer, as Vice President
Maintenance and Field Support, to provide technical and commercial assistance to
Fairchild Dornier aircraft customers. Lead teams from eight countries, with a budget in
excess of $16 million dollars with major operations in Germany, China, and MRO
operation in the USA.
Northwest Airlines 1989-1999
Director, Aircraft Line Maintenance
Director of Northwest Airlines’ Memphis hub, with 130 maintenance employees.
Responsible for maintaining an operation to support 125 daily flights.
Improved Memphis performance and became the No. 1 on-time hub operation.
Won the NWA 1998/1999 Maintenance Station of the Year Award.
Fleet Reliability Manager
Responsible for MD 80/DC9 fleet reliability, identifying and prioritizing fleet reliability
issues that impacted on-time performance, completion factor, air turn backs and reduced
maintenance cost.
Initiated required maintenance program changes, managed changes in processes
and procedures for engines, components, engineering and line maintenance
organizations.
Made recommendations to Senior Management, along with presentations to the
Reliability Control Board for enhancements of fleet performance.
Program Manager, Aircraft Commissioning
Managed the operational program to standardize the purchase of used aircraft to be
integrated into the Northwest fleet. This program involved management of NWA teams
and engineering in five separate MRO modification centers throughout the U.S. and
Canada to produce production results to meet an aggressive schedule. Schedule was
completed in established time frame and finishing under proposed budget.
LEAD PROJECT MANAGER (1992-1994)
Managed the integration of twenty-one used aircraft into the Northwest fleet within site budget.
Partnered with vendors to enhance relationships improving the quality of work. Coordinated vendor training to ensure vendor met or exceeded Northwest Airlines policies, procedures
and standards.
Aircraft Technician (1989-1992)
Eastern Airlines 1968-1989
Lead Aircraft Mechanic (1985-1989) Aircraft Technician (1968-1985)
.
DAVID W. NEITHARDT
EXPERIENCE: 2003-Present 1848 CAPITAL PARTNERS LLC
Founding Partner Miami, FL
Co-founded and presently co-manage this private equity firm focused on making investments in the middle market,
primarily though backing strong management teams in buyout situations or launch mode.
Since inception, invested and managed over $250 million in personal and investor and portfolio company capital.
Major businesses include:
Heartland Food Corp. – Burger King Franchisee.
Jet Support Services, Inc. – Largest independent provider of hourly cost maintenance programs to the business
aviation industry.
Big Apple Entertainment Partners, LLC – Owner/operator of the Ripley’s Believe It or Not! Attraction in Times
Square.
Brazil Tower Company, LP – Communications tower developer focused on the rapidly-growing Brazilian
communications industry.
2001-2003 CLOUD 9 CONSULTING LLC Miami Beach, FL
Managing Member
Founder and controlling member of hospitality development and restaurant holding company.
Dolce Vita Gelato Café – managed the financing, build out and concept development of this original-concept gelato
café in Miami Beach; sold minority ownership interest one year after opening.
Novecento Bistro – purchased existing bakery-café to secure prime real estate, arranged financing and managed the
conversion/build out of this popular Miami Beach restaurant; sold minority ownership interest.
2000-2001 CIRCLE 5 TECHNOLOGY, INC. Miami Beach, FL
President
Founder and controlling shareholder of software development company focused on the development of information
technology solutions for the hospitality industry.
Responsible for new client development, the formulation of project requirements with clients, strategy formulation
and general administration of the business.
1999-2000 MAPLEWOOD PARTNERS LP Miami, FL
Associate
Participated in the start up of this first-time private equity fund focused on middle market buyouts in the southeast
U.S.; final closing of $145 million occurred in May 2000.
Work included due diligence; market research; returns, sensitivity, and add-on acquisition valuation analysis; LBO
and merger modeling; coordination of transaction teams; portfolio company monitoring; and preliminary analysis
and screening of investment opportunities.
1998-1999 GLOBAL ENVIRONMENT FUND LP Washington, DC
Strategy Consultant
Developed a business plan for this private equity firm’s expansion into the U.S. market.
Created a financial model to project returns for the Atlantis Water Fund LP, one of the firm’s five private equity
funds.
1997 WILLIAM E. SIMON & SONS Morristown, NJ
Summer Associate, Private Equity Group Worked with six professionals in the firm’s Private Equity Group, which manages the equivalent of a $250 million
fund.
Conducted extensive industry research; created LBO and merger models; performed return, sensitivity and valuation
analysis.
Created a database of business intermediaries to increase deal flow.
SMITH BARNEY INC. Los Angeles, CA
1994-1996 Associate, Corporate Finance Division
One of three analysts promoted to associate firm-wide in 1994.
Managed equity and debt financing projects in the public and private markets; supported the execution of mergers
and acquisitions.
Represented the firm in due diligence meetings, prospectus drafting sessions and an array of client presentations;
created and coordinated the execution of business solicitation presentations.
Completed a $75 million public equity offering for K2 Corporation, a leading sporting goods manufacturer.
Executed approximately ten transactions with aggregate dollar proceeds of over $1.5 billion.