SkyLink Airways
SKY-901
Application Overview
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OVERVIEW OF THE
APPLICATIONS SUBMITTED BY
SKYLINK AIRWAYS, INC.
The following is a summary of the information contained in the interstate and foreign air
transportation applications submitted by SkyLink Airways, Inc. (“SkyLink”):
The SkyLink Applications
On February 20, 2004, SkyLink filed applications in Docket Nos. OST-200417171 and OST-2004-17172 requesting certificates under 49 U.S.C. 41102 authorizing it to
provide interstate and foreign scheduled passenger air transportation. SkyLink accompanied its
applications with additional information required by Section 204.3 of the Department’s
regulations for an examination of its fitness to hold such authority.1
SkyLink Airways, Inc.
SkyLink is a non-operating Delaware corporation which has its headquarters in Dulles,
Virginia.2 Three individuals currently own its stock, with Mr. Kenneth T. Carlson (42.5%), Mr.
Joshua B. Marks (42.5%) and Mr. Kenneth T. Woolley (15%) holding 10 percent or more.3 If
issued the certificates it seeks, SkyLink plans to operate low-fare international scheduled
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SkyLink supplemented its application with additional information on March 19, May 27, July 7, August 3, 11and
17, 2004. In addition, SkyLink filed a copy of its accident plan in Docket OST-96-1960 on Friday 20, 2004, as
required by the Aviation Disaster Family Assistance Act of 1996. On February 20, 2004, SkyLink also filed, in
Docket OST-98-3305, a statement summarizing how it will collect the passenger manifest information required
by Part 243 of the Department’s rules (14 C.F.R. Part 243).
The company was incorporated in November 2003.
The remaining funds have been raised through the sale of convertible debt. This may be converted to equity at a
future date.
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SKY-901
Application Overview
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passenger services between points in the United States and points in foreign countries, with an
initial focus on services between the United States and Europe. SkyLink plans to start these
services with a fleet of Boeing 767-200ER and 767-300ER aircraft.
SkyLink’s Management
The SkyLink Board of Directors is comprised of the following five individuals:
William B. Stockbridge is the Chairman of the Board of SkyLink. Earlier in his career,
Mr. Stockbridge held responsible positions at Pan American World Airways, Seaboard World
Airlines, People Express and Presidential Airways. He then served as President of Potomac
Capital, an aircraft leasing company. Subsequently, he was the founder of Gemini Air Cargo,
Inc. and served as its President and Chief Executive Officer. In addition to his service on the
board of SkyLink, Mr. Stockbridge presently heads Centurion Air Cargo, an all-cargo airline
based in Miami, and is a director of Trans-Meridan Airlines, a charter airline. Neither Centurion
nor Trans-Meridian, however, are in the same line of business as SkyLink.
Kenneth T. Carlson is the Chief Executive Officer of SkyLink and will also serve as
Chief Marketing Officer and Treasurer during the certification period. He was a Managing
Director of the Transportation Group International (1997-2000); a Member of the Virginia
Aviation Board (1994-1999); the President and CEO of Midway Airlines II (1993-1994);
President and CEO of Jet Express, a TWA Express regional and a USAir Express regional airline
(1983-1989, 1991-1993); Senior Vice President and member of the Board of Directors of New
York Air (1980-1983); Vice President-Marketing, Midway Airlines, (1978-1980) and President,
Midway Airlines (1976-1978); Vice President in charge of the Washington Office of SH&E, an
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Application Overview
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aviation consulting firm (1970-1976); and a market strategy planner for Trans World Airlines
(1967-1970).
Joshua B. Marks is President, Chief Operating Officer and, during certification, Chief
Financial Officer of SkyLink. Mr. Marks is an expert in airline finance, technology, operations
and strategy. He is experienced in building and managing fast-growing organizations with
demanding private-equity investors. Prior to joining SkyLink, Mr. Marks was Associate
Director of the George Washington University Aviation Institute, where he was an expert in
airline finance, operations, and competitive strategy. He is the former principal of Potomac
Aviation Inc. and a partner in the Velocity Group. Both of these are airline consulting firms.
Earlier in his career, he was Chief Executive Officer of VelociGen, a San Diego-based
integration software vendor. Prior to that, he was President and CEO of Silicon Planet, Inc., a
software company, and President of Virtualis Systems, Inc., a communications and Internet
infrastructure firm.
Mr. Joe C. Farrell is a director of SkyLink. Mr. Farrell retired as Chairman, President
and Chief Executive Officer of The Pittston Company, now known as The Brinks Company
(mineral products, transportation and security services) on March 1, 1998. He is a director of
ASA Limited. Mr. Farrell is also a Director of Universal Corporation and a member of its
Executive, Executive Compensation, Nominating and Pension Investment Committees. He is
also Vice Rector of James Madison University.
Mr. Kenneth Woolley is a director of SkyLink. Mr. Woolley is a founder of Extra Space
Storage, Inc. (“Extra Space”). He has served as Chairman and Chief Executive Officer since the
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Application Overview
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inception of Extra Storage and was formerly Chief Executive Officer of its predecessor
company. He directs all strategic planning and oversees the development and acquisition
activities of Extra Space. Extra Space recently completed its public offering and its stock is now
publicly traded. Mr. Woolley has been involved in all aspects of the self-storage industry since
1977. He has been directly responsible for developing over 100 properties and acquiring over 50
self-storage properties throughout the United States. From 1982 to 1983, he worked as an inhouse acquisition broker at Public Storage, Inc. From 1983 to 1989, he acted as a preferred
developer for Public Storage, Inc. and developed 22 storage properties which were acquired by
Public Storage. From 1994 to 2002, he was an active participant on Storage USA’s Advisory
Board.
Amy Rogers, SkyLink’s Assistant General Counsel, is the company’s Secretary.
Formerly, Ms. Rogers was Assistant General Counsel of Gemini Air Cargo.
SkyLink’s FAR Part 119 Personnel
Thomas A. Kosik is Vice President-Flight Operations (Director of Operations). Mr.
Kosik holds an FAA Air Transport Pilot license. He is type rated in the Boeing 727, Boeing 737,
Boeing 757, Boeing 767, Boeing 777, the Airbus A-320 and the Lear Jet. He is also a licensed
Flight Engineer and Ground Instructor as well as a Flight Instructor in Single and Multiengine
Instrument Aircraft.
Between 1969 and the present, Mr. Kosik was employed by United Airlines as a pilot in
various management positions. Due to the vagaries of the airline industry, Mr. Kosik was
furloughed twice from United. During one of the furloughs, he was a pilot for World Airways
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Application Overview
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(1971-1972); during another furlough, he worked as the Eastern European Marketing Manager
for WJS (1974-1977) and also owned and operated an ATP Flight Operations and Ground
School. At United, Mr. Kosik has been a Training Check Airman, a Standards Captain on the
727 and 737, a Flight Manager-Operations for the 737 fleet, a Flight Manager at Dulles Airport,
a Project Manager in London for intra-European operations, an assistant Chief Pilot in Miami,
and a Line Check Airman for the 757 and 767.
In addition to these responsibilities at United, Mr. Kosik served as Chairman of the
Association of Star Alliance Pilots. This Association was created to represent 17 Star Alliance
pilot organizations. He has also served as Chairman of the Air Line Pilots Association,
Globalization Aviation Strategic Group and Chairman of the Air Line Pilots Association United
Airlines Master Executive Council Committee on Code Sharing.
J. Leslie Robinson serves as SkyLink’s Director of Safety and Security. Mr. Robinson
holds an Airline Transport Pilot license and Flight Engineer Certificate. Prior to joining
SkyLink, Mr. Robinson had completed a thirty-four year career as a captain at Eastern Air Lines,
The Trump Shuttle, and US Airways. In 2001 he opened his own airline consultancy firm,
Robinson & Associates, LLC., and served as a consultant to The Boeing Company. In this
capacity, he was lead consultant in developing advanced air traffic management operational
concepts. He also represented Boeing as its “focal point” in dealings with multi-agency,
including the FAA, DHS, and DoL, initiatives in the areas of safety and surveillance systems,
aircraft separation assurance, next-generation air/ground systems, networked information
management, and network centric air carrier operations.
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During his thirty four year airline career, Mr. Robinson served in many capacities with
the Air Line Pilots Association (ALPA) in addition to his flight duties. As Chairman of the Crew
Scheduling Committee at Eastern Air Lines, he had responsibility for pilot negotiations, contract
administration and enforcement, and assuring safe flight schedules from a human factors
perspective. He also served National ALPA as Chairman of its Computer Scheduling
Committee, researching uses of crew scheduling software. After receiving his MBA, Mr.
Robinson served as ALPA Chairman of Strategic Planning and Chairman of the International
Aviation Group. He was Chairman of the US Airways Shuttle MEC from 1989 to 2000, where
he directed pilot negotiations as well as the pilot merger with US Airways. He also served on
both the ALPA Executive Board and ALPA Board of Directors for the last twelve years of his
career.
SkyLink’s Vice President of Maintenance (Director of Maintenance) is Michael
Jefferson. Mr. Jefferson holds FAA Airframe and Powerplant license with Airframe and
Powerplant ratings, and he has more than twelve years of experience in positions responsible for
returning airplanes to service. Mr. Jefferson brings twenty years of experience in Part 121
maintenance and quality assurance to SkyLink. Prior to joining SkyLink, Mr. Jefferson served
as Vice President, Maintenance and Engineering of Midway Airlines in Raleigh, North Carolina.
Mr. Jefferson was responsible for the entire maintenance department, overseeing Airbus, Boeing
and Bombardier aircraft in the Midway fleet. Prior to becoming Vice President, Maintenance,
Mr. Jefferson served at Midway as Director of Quality Assurance, where Mr. Jefferson served as
the principal liaison to the FAA as well as other government agencies. Mr. Jefferson was
responsible for regulatory compliance, safety, training, reliability, and hazardous materials.
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Before joining Midway, Mr. Jefferson was an assistant Principal Maintenance Inspector with the
Federal Aviation Administration, where he was involved in the oversight of day-to-day
operations of numerous Part 121, 135 and 91 operators. He also served as Manager of
Maintenance at International Air Leases, Quality Assurance Inspector at Aviation Composite
Services, and CEO of Mullin and Associates, an aircraft inspection agency.
Mr. Jefferson began his maintenance career at Eastern Airlines, where he was a
supervisor and Lead Electrical Mechanic, Lead Powerplant Mechanic, Lead Non-Destructive
Testing Mechanic, and Powerplant Inspector. Mr. Jefferson has a designation pending as a
Designated Airworthiness Representative.
Mr. Charles F. Stoddart is Chief Inspector for SkyLink. Mr. Stoddart has 39 years of
experience maintaining aircraft. He has holds an FAA Airframe and Power Plant license. Most
recently, Mr. Stoddart has served as a Senior Auditor for Atlantic Coast Airlines. Prior to that,
he was Assistant Director of Quality Control at Gemini Air Cargo (2001-2003). Earlier in his
career, he served as Director of Quality Assurance (Chief Inspector) and Senior Manager Quality
Assurance (Assistant Director) at Midway Airlines (1993-2001) and as a Director of
Maintenance at Jet Express (1990-1993). He was also employed in aircraft maintenance
positions by Hutchinson Air, AVI, Ronson Aviation, the North Philadelphia Aviation Center,
Professional Air Transport, and United Airlines.
The Chief Pilot for SkyLink is Mr. Stanley L. Saunders. He holds an Air Transport Pilot
Licence from the FAA with a type rating in the DC-10-30. Captain Saunders served as Chief
Pilot for Gemini Air Cargo and as a Captain on Gemini’s DC-10-30F aircraft. He was also a
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Check Airman and an Assistant Director of Operations (1998-2004). Previously, he was an F-14
and A-4 pilot in command and instructor pilot for the U.S. Navy (1977-1998). Among other
positions, Mr. Saunders was Commanding Officer of Fighter Squadron 103, and Air Operations
Officer for Carrier Group Four operating out of Naval Air Stations Oceana and Norfolk,
Virginia. He was also an aide and Special Assistant to the Chief of Naval Personnel and
Personnel Manager for all U.S. Navy Fighter Squadrons.
In light of the experience and qualifications of these individuals (certain of whose
qualifications are also reviewed by the Federal Aviation Administration), SkyLink clearly has
the management capabilities necessary to oversee its proposed scheduled passenger air
transportation operations.
SkyLink’s Operating Plan
SkyLink seeks broad international operating authority to take advantage of the “Open
Skies” bilateral regime negotiated by the United States. SkyLink’s initial (2005) focus will be
upon transatlantic operations based on East Coast cities in the United States (with a focus on the
Baltimore/Washington International Airport) and key European cities (with a focus on the
London Stansted Airport).
SkyLink’s traffic and related financial exhibits (SKY 301-02 and 401-407) are based on a
December 1, 2004 certification date, with the assumed commencement of limited service
immediately after certification. SkyLink anticipates limited scheduled and/or charter services for
the first quarter of 2005. Full scale scheduled operations will commence with these aircraft on or
about April 1, 2005, the start of the Spring/Summer 2005 traffic season.
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Application Overview
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SkyLink is continuing to evaluate its schedule plan for the April 2005 and beyond periods
SKY-401A (Rev.). The first market remains Baltimore-London. This route will be served
through Baltimore-Washington International Airport and Stansted Airport in London. The
remaining schedules are illustrative and representative of the planned markets. There may be
additional Baltimore services in the first year as shown in the illustrative exhibits and in the
traffic forecasts submitted in SkyLink’s application. On the other hand, SkyLink may institute
additional services between other U.S. cities and Stansted. SkyLink is continuing to evaluate
this matter based on competitive considerations. The U.S.-Europe market is rapidly changing,
and SkyLink intends to remain flexible on multiple European destinations in the first year as
compared to multiple U.S. departure cities to a more limited number of European destinations in
the first year of operations. Baltimore is the key East Coast focus city for SkyLink. Stansted is
the key European focus airport in view of the multiple low fare airlines operating intra-European
services that are based there.
The services shown in SkyLink’s original exhibits remain illustrative of the early
SkyLink operation. The costs shown in these exhibits reflect transatlantic operations costs with
767 aircraft. If there were additional focus on Stansted, it is conceivable overall expenses shown
in the exhibits could decline slightly since Stansted is a slightly shorter European trip from the
United States. These expense decreases might be offset by slightly longer distances from other
East Coast airports as compared to Baltimore. On the other hand, the exhibits, which reflect
SkyLink serving several European destinations are conservative, because the average stage
lengths and therefore expenses for these European destinations would be slightly higher than a
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Application Overview
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more focused Stansted operation in year one. During the first year of operations, SkyLink’s
initial plan contemplates the operation of approximately 19,600 block hours.
SkyLink has provided a detailed forecast income statement for its first year of operation
in Exhibit SKY-402 (Rev.). SkyLink forecasts that it will incur approximately $10.9 million in
pre-operating expenses and projects that it will incur first-year expenses in the range of
approximately $129–152 million, which, SkyLink believes, are reasonable estimates of its
operating expenses during this period. SkyLink, therefore, projects that it requires between $43
and 49 million to meet the Department’s financial fitness criteria for its proposed aircraft ($10.9
million in pre-operating expenses plus an average quarter of the estimated $129-152 million in
first-year expenses).
SkyLink’s Finances
SkyLink has developed a four phase financing plan. Phase I was designed to raise seed
capital to enable SkyLink to prepare its business plan and begin the certification process at the
DOT and FAA. Phase II involved the raising of start-up funds for SkyLink, as well as the
financing of the initial aircraft. For Phase III, SkyLink retained an investment banking firm to
assist it in raising the necessary capital to meet the Department’s financial fitness test for
certification by December 1, 2004. Phase IV will be concluded after certification has been
achieved, and will support expansion in 2006 and beyond, including funds for aircraft deposits,
additional credit facilities and working capital.
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Application Overview
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Phase I of the financing plan was completed in early 2004, and $400,000 in seed capital
was raised. Phase II was completed on June 15, and consisted of $15 million in convertible debt
financing as well as $34.8 million of financing commitments for aircraft, aircraft engines and
spare parts. Phase III is under way. SkyLink anticipates closing this Phase by December 1, 2004.
In summary, SkyLink has developed a funding plan which, if successful, will provide it
with sufficient financial revenue to commence its proposed scheduled passenger operations
without posing an undue risk to consumers. SkyLink will, of course, provide updated
information demonstrating that it continues to have the financial resources needed to meet the
Department’s financial test prior to making any authority awarded to SkyLink effective.
Compliance Disposition of
SkyLink And Its Key Personnel
As discussed previously in SkyLink’s application (Exhibit SKY-501), there are no
actions or outstanding judgments against SkyLink, persons holding a substantial interest in it, or
its key personnel, and none of these parties have been the subject of any charges of unfair,
deceptive or anti-competitive business practices, or of fraud, felony or antitrust violations, or
other legal action during the past ten years. Nor are there any pending investigations,
enforcement actions, or formal complaints involving SkyLink, persons holding a substantial
interest in it, or its key personnel regarding compliance with the Transportation Code or any
regulations or orders issued pursuant to the Transportation Code in the past 10 years.
Citizenship
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Application Overview
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SkyLink is a Delaware corporation. Each of SkyLink’s shareholder directors and key
management personnel are citizens of the United States. In addition, Mr. Marks has executed an
affidavit attesting that SkyLink is a U.S. citizen. Exhibit SKY-503.
Public Convenience and Necessity
As described in greater detail in the application, the foreign scheduled air transportation
proposed by SkyLink for services between the United States and various foreign countries is
fully consistent with the public convenience and necessity. For routes on which multiple U.S.
carriers may provide service, without restriction on additional entrants, it is the Department’s
policy to issue certificates for indefinite duration. Thus, the proposed authority sought by
SkyLink to serve these routes is consistent with the aviation agreements governing air services
between the United States and those countries which allow service by multiple U.S. carriers.
Consequently, the Department should issue a certificate of unlimited duration for service
between a point or points in the U.S. and each of those countries.
With respect to SkyLink’s request for authority to serve the United Kingdom, the
bilateral agreement permits unlimited service between a point or points the United States and
London’s Stansted Airport and SkyLink, therefore, urges that this authority be included in
SkyLink’s certificate. SkyLink will, if requested by the Department, submit an exemption
application for the proposed London-Stansted authority.
Confidential Treatment Request
On August 11, 2004, the Department ruled on SkyLink’s requests for confidential
treatment. SkyLink did not seek review of the denial of its request for confidential treatment,
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and, later that day, filed in the Department’s public dockets copies of each of the documents for
which confidential treatment was denied.
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