Financial Fitness

As we stated at the outset, Sea Planes is a startup company with no significant capital at present. It plans to raise more than $ 20 million in equity capital, and obtain loans or undertake lease liabilities of more than $ 36 million. Sea Planes also assumes that $ 5 million in federal grant money will be available to it. At this point receipt of the grant is uncertain, but Sea Planes is actively pursuing all avenues to obtain initial financing from these lenders, investors and the federal government, and requires operating authority from the Commission before it can obtain commitments.

We will not insist that Sea Planes have funds in hand before we grant operating authority. Adequate protection for the public interest is ensured by placing a two-year limit on Sea Planes' exercise of operating authority. This time limitation is reasonable, based on Sea Planes' representations, because it is sufficient to enable Sea Planes to capitalize the company and have its vessels constructed. Having granted Sea Planes' request for operating authority to start its coastwise services in D.00-09-021, it would make little sense for us to deny Sea Planes' present request for authority to operate complementary cross-channel service.

Sea Planes has made a sufficient showing that it probably has the ability to generate capital adequate to operate this proposed service. Its pro forma revenue and expense figures, and its proposed fares and projected load factors, are reasonable. Sea Planes' financial projections demonstrate that the company should be able to survive its projected two-year period of deficit operation.