News


Will Surf Air soon stop flying?

Commuter airline facing millions in tax liens and lawsuit

In 2017 protesters picketed the San Carlos Airport to protest Surf Air's noisy flights. Here the picketers greet a Surf Air flight. (Photo by Ana Sofia Amieva-Wang/The Almanac)

Surf Air's distinctive blue and white planes may soon disappear from Peninsula skies, but not because of continuing noise complaints from local residents or measures San Mateo County has imposed on the commuter airline at the San Carlos Airport.

The company that has been operating the airline's planes says Surf Air owes it $3.1 million, and county officials say the company has also been slapped with bills for $2.33 million in unpaid taxes.

On June 19, just after Surf Air announced it had hired a new company to operate its planes, the previous operator, Encompass Aviation LLC, filed a lawsuit in United States District Court for the Southern District of New York. Several business news outlets have reported Surf Air is in serious financial trouble and the Encompass lawsuit says that by June 14, Surf Air owed it more than $3.1 million.

While Surf Air did not respond to requests for a comment on the lawsuit, it sent out a press release on June 20 saying: "The Encompass claims are not accurate, the lawsuit is without merit and Surf Air intends to defend itself vigorously. Surf Air is also considering counterclaims."

Also on June 19, San Mateo County Public Works Director Jim Porter said in an email sent to the Board of Supervisors that the number of flights Surf Air flies in and out of the San Carlos Airport would be temporarily reduced as the airline transitions to a new operator, Advanced Air LLC.

"Surf Air is facing liens imposed by the I.R.S. for a total of $2.33 million in unpaid taxes," Mr. Porter said in the email.

He said the county is working with attorneys "to discuss how this announcement impacts operations at the San Carlos Airport."

In a statement, Encompass president and CEO Steve Harfst, said: "We have been happy to serve as Surf's primary carrier in the state of California. But we've come to the breaking point. Surf has repeatedly allocated its revenue on things other than paying in full for flight operations and aircraft maintenance."

In the past year Surf Air has announced a number of acquisitions, the purchase of several aircraft and expanded service to Texas and Europe. Surf charges $1,950 per month for an individual membership within California for "unlimited" flights that are limited only by how many reservations may be held at one time. An individual membership that also includes flights in Texas is $2,450 per month. The company also sells group memberships and by-the-flight memberships.

The Encompass lawsuit says that within four months of taking over the operation of Surf Air's fleet of turbo-prop PC-12 planes, the airline stopped paying its bills.

"Despite collecting revenue from its members, Surf failed to pay the contracted costs for flight operations and related maintenance responsibilities undertaken by Encompass," the statement from Encompass says.

Surf Air announced that Advanced Aviation LLC, based in Hawthorn, California, would take over from Encompass on June 14. The suit says that action also violates the agreement Encompass has with Surf Air.

Complaints about airport-related noise began pouring in to the county-owned San Carlos Airport soon after Surf Air began using San Carlos for scheduled flights in June 2013. The airline offers unlimited flights for a monthly fee and has had as many as 45 scheduled flights a day to or from the airport.

Because Surf Air's planes carry fewer than nine passengers, under FAA regulations the company may operate out of the San Carlos Airport even though it is a general aviation -- not a commercial -- airport. The airport is considered a "reliever airport," keeping small planes out of busy regional airports such as San Jose, San Francisco International and Oakland.

Those who live and work under Surf Air's flight path claim the PC-12s are extraordinarily loud and annoying, and the complaints became so frequent that San Mateo County hired several employees and contractors to deal with them.

In June 2017, the San Mateo County Board of Supervisors voted to budget more than $1 million in spending over three years as part of a multi-pronged plan crafted in response to the wave of complaints. The board approved hiring an airport communications specialist to work with the public and pilots; hiring a contractor to investigate new air routes that avoid residences; and putting in place an automated flight tracking system tied to the noise complaint system.

Complaints fell after Encompass started routing many of the planes over San Francisco Bay, although residents of Sunnyvale and nearby areas said that strategy moved more noise over their homes. But residents say Surf Air flights still wake them up many days.

The Encompass lawsuit says that in the last six months of 2017, Surf "continued to demand full performance from Encompass in exchange for little to no payments." It says the company "pleaded with Encompass time and again beginning in mid-2017 to continue to provide flight operations and maintenance of the aircraft so that Surf's business would not come to a screeching halt."

The lawsuit says that "Surf made and broke promises over and over again, and imposed on Encompass to be patient and allow, among other things, Surf to grow its cash balances to make its business seem more profitable."

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Comments

5 people like this
Posted by Resident
a resident of Menlo Park: Felton Gables
on Jun 22, 2018 at 8:27 pm

If I were a Surf Air customer, I would start looking for alternative arrangements and finding out how to recoup any prepaid membership fees before they declare a possible bankruptcy. After bankruptcy, it becomes much harder.


16 people like this
Posted by gwen
a resident of Menlo Park: Fair Oaks
on Jun 23, 2018 at 9:06 am

I am thrilled by this news, each short lived CEO of Surf Air lied to the community and was never interested in 'working ' with the public.

I also read on a chat board that there is a high turnover of pilots...would you want to fly with this 'scheduled airline' - shifting management, high pilot turnover, how safe is Surf Air?

The county needs to be better monitors of allowing a 'scheduled airline' into San Carlos Airport...don't let this happen again..


10 people like this
Posted by DJ
a resident of Woodside: other
on Jun 23, 2018 at 12:33 pm

The ethics and integrity of the people behind this airline are certainly in question here. If I was a customer the claim that they don't want to spend money on (or pay for) maintenance on their planes would be alarming. If that is the case then it is best for everyone if they shut down before something really bad happens.


18 people like this
Posted by Mmmorse
a resident of Menlo Park: Fair Oaks
on Jun 23, 2018 at 4:09 pm

Bye bye noisy Surfair turboprops flying low and loud over homes, interrupting conversation, causing noise pollution and stress to animals and people for benefit the of a few. Let's hope this model of exploiting small municipal airports is unsustainable.


12 people like this
Posted by see ya
a resident of Menlo Park: other
on Jun 24, 2018 at 12:24 am


Surfs up guys grab your boards


15 people like this
Posted by MaryAnnMP
a resident of Menlo Park: Fair Oaks
on Jun 24, 2018 at 3:09 pm

MaryAnnMP is a registered user.


Good riddance.


9 people like this
Posted by Byebye Surf Air
a resident of another community
on Jun 24, 2018 at 3:42 pm

extremely excited about the news.


12 people like this
Posted by Jetman
a resident of another community
on Jun 24, 2018 at 4:47 pm

The article describes a "reliever airport" as an airport that keeps "small planes out of busy regional airports such as San Jose, San Francisco International and Oakland"

A better description of a reliever airport would be an airport that "relieves" very profitable major airports like San Francisco owned and operated SFO of unprofitable air traffic.

Also, not sure "reliever airport" belongs in quotes since "reliever airport" is an official FAA designation for airports like SCO and PAO.

Surf Air looks like it is going away, but SCO is still a "reliever airport" to the FAA and the aviation industry... and they'll be back.


9 people like this
Posted by Gwen
a resident of Menlo Park: Fair Oaks
on Jun 25, 2018 at 7:34 am

When safetyand maintenance are issues of discussion, they shouldn’t be allowed to pass over our homes
Web Link


Like this comment
Posted by Menlo Voter.
a resident of Menlo Park: other
on Jun 25, 2018 at 9:57 am

Menlo Voter. is a registered user.

"Surf has repeatedly allocated its revenue on things other than paying in full for flight operations and aircraft maintenance."

What that says to me is that Surfair has been having the maintenance done, they just haven't been paying in full for said maintenance.


2 people like this
Posted by fwiw
a resident of Woodside: other
on Jun 25, 2018 at 11:41 am

> What that says to me is that Surfair has been having the maintenance done, they just haven't been paying in full for said maintenance.

This strikes me as an optimistic take. Certainly there are minimum legal and ethical standards that I am sure Encompass strived to meet, but how many companies will go beyond the questionable margins while knowing that they are unlikely to be paid for their services?


7 people like this
Posted by Peter Carpenter
a resident of Atherton: Lindenwood
on Jun 25, 2018 at 12:06 pm

Peter Carpenter is a registered user.

No commercial pilot would risk her/his license by flying an airplane that has not been properly maintained.


And remember that the pilots always arrive at the scene of an accident first.


3 people like this
Posted by Final Approach
a resident of Menlo Park: The Willows
on Jun 25, 2018 at 12:48 pm

"No commercial pilot would risk her/his license by flying an airplane that has not been properly maintained."

How would they know? Do they shadow the APs?


"pilots always arrive at the scene of an accident first."

Pilot error.


2 people like this
Posted by Final Approach
a resident of Menlo Park: The Willows
on Jun 25, 2018 at 12:49 pm

"No commercial pilot would risk her/his license by flying an airplane that has not been properly maintained."

How would they know? Do they shadow the APs?


"pilots always arrive at the scene of an accident first."

Pilot error?


1 person likes this
Posted by Menlo Voter.
a resident of Menlo Park: other
on Jun 25, 2018 at 2:43 pm

Menlo Voter. is a registered user.

Final:

they would know because they do a walk around and any pilot worth his salt also reviews the maintenance logs of the aircraft he flies. Could the logs be falsified? Yes, but I don't think there are very many, if any, AP's out there willing to risk their license by doing so.


Like this comment
Posted by Final Approach
a resident of Menlo Park: The Willows
on Jun 25, 2018 at 3:41 pm

"any pilot worth his salt also reviews the maintenance logs of the aircraft he flies."

Are you sure they do? Is that what they're doing up front before a flight? Where do they sign off on each item?


6 people like this
Posted by Sybille
a resident of Menlo Park: Fair Oaks
on Jun 25, 2018 at 3:45 pm

Wouldn't that be a dream come true if they'd stop flying here! 2 nights ago at 12.10 a.m. (= just after midnight) one of their planes flew very low over my house. NOT nice, putting it mildly.


4 people like this
Posted by John Slater
a resident of another community
on Jun 25, 2018 at 4:03 pm

The 'Bay Approach' has increased the noise in Friendly Acres. Most Surfair planes now approach over 101, the proper Bay Approach is inconvenient. So the noise has been moved to a different neighborhood, not reduced. The San Mateo County Board of Supervisors voted to spend $1 million dollars so it looks like something is being done. And filing endless complaints is not accomplishing anything.

Its sad that it takes a bankruptcy to get some peace and quiet again.


2 people like this
Posted by New Operator coming
a resident of Menlo Park: Fair Oaks
on Jun 25, 2018 at 4:26 pm

Don’t get too excited as a new SoCal operator, Advanced Air is taking over the Surf Air routes.

The San Carlos airport is only for the wealthy. Why do we need it? There is such a need in this county for transit villages, new schools and affordable housing. Perhaps the supervisors should look into that and relieve themselves of this headache.


3 people like this
Posted by Michael
a resident of Woodside: Mountain Home Road
on Jun 25, 2018 at 6:07 pm

Surf Air ceased operations.

Don't buy into the bull of a new operator taking over. Surf Air is bones up.


4 people like this
Posted by gwen
a resident of Menlo Park: Menlo Oaks
on Jun 25, 2018 at 6:14 pm

Surf has a Part 135 certificate which is used by air taxi and charter operations. Part 121 certification is for scheduled passenger service, used by commercial airlines like UAL, AA, Delta, etc. Read all about it in calmtheskies.org FAQs. Surf provides scheduled passenger service so they should be Part 121 which would force them to use TSA and fly elsewhere.
Their great con was to get the FAA to give them Part 135. This con occurred in 2013- This was a 2 year effort from the Surf founder to someone in the FAA until they agreed. One of the original founders worked for Cheney..assume he might have had a hand in it, but I don't know for sure...


Like this comment
Posted by Menlo Voter.
a resident of Menlo Park: other
on Jun 25, 2018 at 6:59 pm

Menlo Voter. is a registered user.

Final:

yes I'm sure. Do they sign off? If they choose to fly the aircraft, yes. They put their butt on the line.


Like this comment
Posted by Menlo Voter.
a resident of Menlo Park: other
on Jun 25, 2018 at 7:02 pm

Menlo Voter. is a registered user.

gwen:

If you bothered to read the actual regulations you would understand that due to the number of passengers carried by Surfair, they qualify as a part 135 carrier. No conspiracy here.


Like this comment
Posted by Final Approach
a resident of Menlo Park: The Willows
on Jun 25, 2018 at 8:51 pm

"Do they sign off? If they choose to fly the aircraft, yes. They put their butt on the line."

So they personally sign off that each bolt was tightened to spec torque, that fasteners are properly secured against vibration, that the right compression collars were installed in fuel lines, and so forth? Where do they find time to fly the aircraft?


Like this comment
Posted by Menlo Voter.
a resident of Menlo Park: other
on Jun 26, 2018 at 8:41 am

Menlo Voter. is a registered user.

Final:

you missed my point. They "sign off" by putting their butt on the line.


Like this comment
Posted by Winston C.
a resident of another community
on Jun 26, 2018 at 11:24 am

Hi Sybille,
I don't think that was a Surf Air plane. The plane you heard was most likely N345BS. The Cirrus SR20 took off toward the southeast from Palo Alto Airport at around 12:03AM just past midnight on June 23. The plane then turned northbound over the bay and circled back south. The plane made landfall near the Ravenswood Open Space then turned northwest flying over EPA and Belle Haven at 12:09AM at an altitude between 800 and 1200ft. The plane followed 101 and landed at San Carlos Airport around 12:13AM.

There is a lot of animosity toward Surf Air but well must make sure arguments for or against the service are fact based. I am ambivalent and do not have an opinion on Surf Air's future. However, I am willing to help verify whether a plane that caused excessive noise was or was not a plane operating on behalf of Surf Air. If I am incorrect on the date, please let me know and I can see if I can help you track down the offending plane.


2 people like this
Posted by Winston C.
a resident of another community
on Jun 26, 2018 at 12:00 pm

Whoops! Misread the data. The plane in question in my previous post took off toward the northwest and made a right 360 degree turn. Apologies.

For further clarification, N345BS flew over the following neighborhoods:
Suburban Park/Lorelei Manor, Menlo Park
Friendly Acres, Redwood City
Redwood Village, Redwood City
Staumbaugh Heller, Redwood City
Bair Island, Redwood City


4 people like this
Posted by Menlo Facts
a resident of Menlo Park: Belle Haven
on Jun 26, 2018 at 1:28 pm

Why so much vitriol about Surf? Other San Carlos planes are acceptable, yet Surf is a loud nuisance. Some like MP Voter seem to enjoy belittling others. Please keep it constructive.


6 people like this
Posted by Winston C.
a resident of another community
on Jun 26, 2018 at 2:30 pm

Menlo Facts,
I have noticed the same. Based on information I have gathered, Surf Air takes the blame whenever a "noisy" plane flies into San Carlos. The PC-12 is a popular plane for airports like SQL due to it's excellent short field performance relative to it's capabilities. I have logged at many as a dozen non-Surf Air operated PC-12s operating in and out of San Carlos on a single day. I have also seen planes that are visually similar to the PC-12 such as the Socata TBM and Piper Meridian be attributed to Surf Air. They also sound similar as all three use the Pratt and Whitney PT6 engine (although the PC-12 is rated at twice the horsepower) and mated to the same type of propeller. On a few occasions, late night and early morning medivac/lifeguard flights have also been wrongly pinned on Surf Air.


Like this comment
Posted by Menlo Voter.
a resident of Menlo Park: other
on Jun 26, 2018 at 3:53 pm

Menlo Voter. is a registered user.

Menlo Facts:

who did I belittle?


Like this comment
Posted by Jim T.
a resident of Menlo Park: Fair Oaks
on Jun 26, 2018 at 3:56 pm

Not so fast...Surf Air is simply moving operators to a more reliable one. Advanced Air flies both Pilatus PC12's and King Air's (which can't land in San Carlos due to runway length), so it sounds like they'll still have a presence in San Carlos that will pick back up the more they use Pilatus PC12's.


Like this comment
Posted by Winston C.
a resident of another community
on Jun 26, 2018 at 4:31 pm

Jim,
King Airs can and do operate in and out of San Carlos.


Like this comment
Posted by Surfearth
a resident of another community
on Jun 27, 2018 at 12:11 am

They are simplying changing operating firms this time. Really hope that they could go bankruptcy. They have no respect to the neighbors.

Sad to see that San Mateo county allowed them to operate like that and disrupting neighbors, procrastinate, and let the noise get worse.


Like this comment
Posted by Menlo Voter.
a resident of Menlo Park: other
on Jun 27, 2018 at 7:48 am

Menlo Voter. is a registered user.

Surfearth:

The county had and has nothing to say about it. The FAA allows it. The county has to allow it because the FAA allows it. Because the county took FAA money for the airport.


4 people like this
Posted by gwen
a resident of Menlo Park: Fair Oaks
on Jun 27, 2018 at 11:07 am

RE Posted by Menlo Voter.
a resident of Menlo Park: other
on Jun 25, 2018 at 7:02 pm
Menlo Voter. is a registered user.
gwen:

If you bothered to read the actual regulations you would understand that due to the number of passengers carried by Surfair, they qualify as a part 135 carrier. No conspiracy here.

Not only have we read the regulations, the airport has admitted that they got in under a loophole...they are a SCHEDULED airline, but they sell themselves as a non scheduled airline...which would prevent them from landing...I've been at this table for 5 years and had the original founders in my garden to hear the immense noise- he admitted to us that he worked for Cheney and was evasive in his responses in how he managed the loophole ...Im mentioning facts, not suggesting a conspiracy... We have also been supported at community meetings by San carlos airport professional pilots who fly same aircraft in and out of San Carlos and over our homes who KNOW how to land without the disruption...NONE of us had every complained to the airport about noise until Surf Air arrived...the local pilots who fly Pilatus are skilled at landing without annoying a large community of local residents. Surf Air execs were dishonest and never had a sincere interest in working with the community..I've sat through every meeting with them.


Like this comment
Posted by Menlo Voter.
a resident of Menlo Park: other
on Jun 27, 2018 at 12:13 pm

Menlo Voter. is a registered user.

Gwen:

the FAA considers Surfair a Part 135 carrier. If they didn't, the FAA would shut them down.


2 people like this
Posted by fwiw
a resident of Woodside: other
on Jun 27, 2018 at 1:17 pm

> you missed my point. They "sign off" by putting their butt on the line.

That's a reasonable point, but if they did happen to cut corners on maintenance they wouldn't be the first airline to ever do so in the face of fiscal challenges. If the "pilots won't fly an unsafe plane" maxim was absolute, we wouldn't have the Allegiant Air counterexample:

Web Link

I happen to know that Nathaniel Lash peronsally spent more than a year putting together this story, but found gaining access to the documentation to be an almost overwhelming obstacle. 60 Minutes discovered the same thing when they picked up the story.


Like this comment
Posted by Menlo Voter.
a resident of Menlo Park: other
on Jun 27, 2018 at 3:32 pm

Menlo Voter. is a registered user.

fwiw:

interesting article. Fortunately we are talking about PC-12 and not MD-80's. I think Surfair's flying stock is a lot younger too. I haven't heard of or seen reported any mechanical emergencies with Surfair, but I haven't checked the NTSB data base recently either.


2 people like this
Posted by Final Approach
a resident of Menlo Park: The Willows
on Jun 27, 2018 at 6:49 pm

"you missed my point. They "sign off" by putting their butt on the line."

Plus the butt of every passenger, plus the butt of everyone in their potential swath of destruction on the ground. You got to offer better assurance than that.

Personally, I'd rather rely on certified competent APs working in a properly managed/funded maintenance program.


Like this comment
Posted by Menlo Voter.
a resident of Menlo Park: other
on Jun 27, 2018 at 6:58 pm

Menlo Voter. is a registered user.

final:

like I said before, the way I read it, proper maintenance is being done, Surfair has just failed to pay for it.

As to your other point, do you really think pilots are suicidal? They spend far more time in the air than their passengers. You really think they're going to take off in aircraft they don't think they will be able to fly and land safely? Really? You're not a pilot are you?


2 people like this
Posted by Final Approach
a resident of Menlo Park: The Willows
on Jun 27, 2018 at 7:33 pm

"the way I read it, proper maintenance is being done, Surfair has just failed to pay for it."

In our market economy, one gets what one pays for. At best.


"You're not a pilot are you?"

Why not? But my livelihood doesn't depend on it. One takes certain risks for pay that one would not take on one's own time, you know.


Like this comment
Posted by Menlo Voter.
a resident of Menlo Park: other
on Jun 27, 2018 at 7:37 pm

Menlo Voter. is a registered user.

"One takes certain risks for pay that one would not take on one's own time, you know."

Not when one's life depends on it. Pilots aren't like bus drivers. They can't just pull to the side of the highway if their plane breaks down. The risks are far higher. Only a stupid pilot knowingly takes that kind of risk. I don't know any professional pilots that would choose to risk their life that way.


2 people like this
Posted by Final Approach
a resident of Menlo Park: The Willows
on Jun 27, 2018 at 11:24 pm

"I don't know any professional pilots that would choose to risk their life that way."

How many of the professional pilots flying the airliners you ride do you know? How many have you asked if they've ever flown an aircraft with tagged inoperable components because they had a schedule to meet? Have you flown on World Airways in its later days, or on Allegiant these days?

Airlines value your life at about one million dollars for settlement purposes, and they set their risks based on that. It is tough to realize you are not infinitely precious to them, but that's business.


Like this comment
Posted by Menlo Voter.
a resident of Menlo Park: other
on Jun 28, 2018 at 7:54 am

Menlo Voter. is a registered user.

"Airlines value your life at about one million dollars for settlement purposes, and they set their risks based on that. "

What value do you think the pilot puts on his or her life? It's trite, but the pilot is the first person to the scene of the accident. And they don't usually survive.


Like this comment
Posted by Final Approach
a resident of Menlo Park: The Willows
on Jun 28, 2018 at 12:28 pm

Never mind. It's probably best not to think about it.


7 people like this
Posted by Ben
a resident of another community
on Jun 29, 2018 at 8:56 am

Hope this rat airline surf air will go bankruptcy soon. Finger crossed.


3 people like this
Posted by Josh
a resident of another community
on Jun 30, 2018 at 10:55 am

This is a good news for the tens of thousands of the affected bay area families.


Like this comment
Posted by gwen
a resident of Menlo Park: Fair Oaks
on Jun 30, 2018 at 5:09 pm

County Has taken on $131,000 in unpaid fees by Surf Air...
Who is the county supporting, its Citizens or Surf Air?


Surf Air owes one creditor $3.1 million and the IRS has slapped $2.3 million in tax liens on the Santa Monica-based company.

San Mateo County has also imposed a tax lien of $131,000 on Surf Air, said county spokeswoman Michelle Durand. Surf Air is current on all other payments to the county, Durand confirmed.

If Surf Air doesn’t pay the liens, some of its assets — such as its Pilatus PC-12 aircraft — could be seized.

Surf Air did not return a request for comment from the Post. But CEO Sudhin Shahani told the Los Angeles Times that the company is working with the IRS to pay down the owed t
Web Link


Like this comment
Posted by Josh
a resident of another community
on Jul 1, 2018 at 11:01 am

gwen

agree. The county should punish them way much harder for that. not just for the tax liens but also the tremendous amount of noise. The bay area citizens should file a class sue against surf air, FAA, and the county.

Being compliant with the FAA doesn't mean they can run at large.


2 people like this
Posted by Menlo Voter.
a resident of Menlo Park: other
on Jul 1, 2018 at 6:59 pm

Menlo Voter. is a registered user.

"Being compliant with the FAA doesn't mean they can run at large"

Actually, it means as long as they comply with FAA regulations they can do whatever they want. The county can't do anything beyond enforcing their lien which has nothing to do with noise.


Like this comment
Posted by AYCF vs. NIMBYs
a resident of another community
on Jul 17, 2018 at 2:07 am

All these comments celebrating the possible end of Surf Air are silly. Now that regional business people understand the "reliever airport" business plan, there isn't going to be an end to your claimed pain. Surf Air got the pricing wrong. That's all. There will be more planes. Get used to it.


Like this comment
Posted by Wrong Pricing?
a resident of another community
on Jul 17, 2018 at 10:58 am

@AYCF vs. NIMBYs

Surf Air didn't get the pricing wrong. It was never a viable business to begin with. You believe that if they charged more, they could cover taxes and pay their primary aviation service provider. That could only happen if demand were inelastic. But the aviation passenger market is very elastic, meaning high prices lead to lower demand.

If your theory is correct, Surf Air would raise prices today for all renewing and new customers. But they won't because most of those customers would leave.

Moreover, the aviation business is absolutely booming in this economy....but Surf Air can't even pay the basic costs of doing business?!?! If it loses money during one of the best boom times in aviation history, it will never survive the inevitable downturn in the next business cycle.


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