ADI Aerodynamics (Pontiac Oakland County International) has appointed F. Darrell Richardson as the new CEO, President and Chairman of the company in a bid to placate the US Department of Transportation's (DOT) concerns about outgoing CEO Scott Beale's managerial competence.

"Mr. F. Darrell Richardson will lead ADI as the new CEO, President and Chairman of the company. Darrell Richardson is a seasoned and accomplished aviation professional with over forty five years of experience," the charter specialist said in a press release. Richardson has served in 'senior executive roles' at airlines such as Continental Express, Mesaba Airlines, Pace Airlines, Piedmont Hawthorne Aviation, Piedmont Airlines, Phoenix Air Transport, InterIsland Aviation Services Group, and Silver Airways.

In a letter rejecting the carrier's application for a certificate of public convenience and necessity to operate scheduled interstate flights, the DOT also summarily threatened to revoke ADI's existing Part 121 certificates to operate interstate and foreign charter flights on the grounds that 'it does not possess the managerial competence necessary to oversee its current charter and proposed scheduled passenger operations, nor does it have the proper compliance disposition and regard for the laws and regulations governing its services.'

The DOT says its concerns about Beale, who acquired an 80% stake in ADI in 2011, pertain to a lawsuit filed against him by Flight Test Aviation, Inc. (FTA) in January last year in which he was found to have committed fraud.

"According to court documents, Beale solicited funds from FTA and made false statements to an agent of FTA to induce him to give ADI USD500,000 in investment capital, as part of an agreement to support charter flights pursuant to a guaranteed revenue contract with a third party company. Contrary to Mr. Beale’s statement, no such contract existed. On October 24, 2014, Mr. Beale appealed the July verdict, but a judge denied the appeal and reaffirmed the jury’s decision. The court awarded FTA USD500,000 in compensatory damages and USD100,000 in punitive damages," the DOT said.

South Dakota's Capital Journal says Beale filed for personal bankruptcy last autumn in Ohio, claiming USD5.9 million in liabilities and USD22,000 in assets.

The DOT says Beale's conviction for fraud indicates his 'disregard for the law' - a trait that renders him incompatible with the leadership of an airline.

"Mr. Beale’s ownership and positions of influence at the air carrier raise serious questions as to ADI’s ability to satisfy the Department’s requirements that an air carrier must possess a positive compliance disposition and the requisite competency to oversee its operations."

In addition, the DOT says ADI management failed to inform it of the outcome of the case in further violation of regulations which require the DOT to be kept updated on the progress and outcome of such cases during a licensing application.

"The Department’s review indicates that ADI does not possess the managerial competency necessary to oversee its current charter and proposed scheduled passenger operations, nor does it have the proper compliance disposition and regard for the laws and regulations governing its services with the continued involvement of Mr. Beale."

ADI executives met the DOT last week to consider their options likely leading to the announcement of Richardson's appointment and Beale's departure.

A final decision on ADI's future will be made on February 5.

The carrier currently operates a fleet of five E145s on ACMI and ad-hoc charter flights throughout the United States and had applied to operate an Essential Air Services contract covering the Nebraskan towns of Scottsbluff, Kearney, and North Platte. It also plans to launch scheduled services between Youngstown/Warren and Chicago O'Hare.