Burden on business and arbitrary and capricious

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Reference no: EM131474255

The U.S. Department of Transportation (DOT)(with the Federal Aviation Administration on technical matters) has the authority to grant licenses to companies wishing to operate as scheduled airlines offering services at published rates for interstate and international air transportation). The license is known as a “Certificate of Public Convenience and Necessity”.

Under DOT guidelines, there is a requirement that the applicant company demonstrate that it has sufficient finance (operating capital) to operate flights for 90-days without selling a single ticket. In other words, operating for 90-days without revenue.

Your company, Kissair, was denied a license because the Department of Economic Analysis at the DOT determined that your company failed to demonstrate sufficient finance to operate without revenue for 90-days.

Your business plan is well-prepared and shows sufficient finance to sustain 5-years of operation and includes realistic forecasts to demonstrate steady growth during that timeframe. The management team is experienced and competent, and the view is that there is no reason for the company to fail.

How would you appeal the DOT decision? Is the 90-day rule a “burden on business” and/or “arbitrary and capricious”? Defend your position. How do you think the DOT would respond to your appeal?

Reference no: EM131474255

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