Agency Rulings

Decision No. 135-A-2004

March 19, 2004

APPLICATION by Quikair Inc. carrying on business as Quikair pursuant to section 61 of the Canada Transportation Act, S.C., 1996, c. 10, for a licence to operate a domestic service, small aircraft.

File No. M4120/Q26-1

Quikair Inc. carrying on business as Quikair (hereinafter Quikair) has applied to the Canadian Transportation Agency (hereinafter the Agency) for a licence to operate the service set out in the title. The application was received on March 1, 2004 and was complete and ready for processing on March 17, 2004.

In order to meet the requirement to hold a valid Canadian aviation document set out in subparagraph 61(a)(ii) of the Canada Transportation Act (hereinafter the CTA), Quikair submitted a document issued to it by the Minister of Transport dated March 5, 2004 which indicates that the aircraft operated under Quikair's proposal will, in fact, be operated by Bar XH Air Inc., under Air Operator Certificate No. 3484, and by 650584 Alberta Inc., under Air Operator Certificate No. 8758.

The Agency has carefully examined the document and is satisfied that it is a Canadian aviation document within the meaning of the CTA.

The Agency has reviewed the application and is satisfied that Quikair meets the requirements of paragraph 61(a) of the CTA.

In order for a licence to be issued, the Agency must also be satisfied, as provided for in paragraph 61(b) of the CTA, that the applicant has not contravened section 59 of the CTA to the effect that no person has sold, caused to be sold or publicly offered for sale in Canada an air service within the preceding twelve months unless the person held a licence in respect of that service.

In addition, paragraph 57(a) of the CTA provides that no person shall operate an air service unless that person holds a licence issued in respect of that service.

On February 7, 2004, an enforcement officer designated by the Agency pursuant to section 178 of the CTA advised Quikair, inter alia, that it was required to submit an application to the Agency for a domestic licence to operate an air service in Canada. This advice was provided on the fact that although Quikair is chartering the aircraft of holders of domestic service, small aircraft licences, all reservations, payments, passenger boarding procedures, aircraft scheduling and marketing functions carried out by Quikair were consistent with a publicly available air service.

The Agency has considered this matter and finds that in operating a domestic service without holding a licence in respect of that service, Quikair, until March 12, 2004, operated in contravention of paragraph 57(a) of the CTA which provides that no person shall operate an air service unless that person holds a licence issued in respect of that service and section 59 of the CTA which provides that no person shall sell, cause to be sold or publicly offer for sale in Canada an air service unless the person holds a licence in respect of that service.

The Agency notes, however, that upon being advised of its obligations under the CTA, Quikair took action to comply with the CTA by applying for the required licence.

The Agency also notes that by Order No. 2004-A-104 which took effect March 12, 2004, Quikair was granted an exemption from the application of paragraph 57(a) of the CTA, to allow Quikair to operate a domestic service, small aircraft, without holding a licence, in respect of that service, until March 19, 2004 at 11:59 p.m. (EST) or until the Agency issues the required licence to Quikair, whichever is the earlier. Further, the Agency notes that the exemption was granted on the basis of its opinion that "in this case, compliance with paragraph 57(a) of the CTA is impractical and that due to the particular circumstances of Quikair, it is appropriate to provide the applicant with a limited opportunity to submit the additional information required by the Agency to complete the processing of Quikair's application".

In light of the foregoing, it appears to the Agency that Quikair's failure to obtain a licence before operating the service was not a wilful attempt to avoid compliance with legislative and regulatory requirements. Further, the Agency notes that the flights in question are to be operated by holders of domestic service licences. As such, in this particular case and pursuant to subsection 79(2) of the CTA, the Agency will not refuse to issue a licence to Quikair even though there has been a contravention of section 59 of the CTA.

As such, the Agency will issue to Quikair a licence to operate a domestic service, small aircraft.

Further the Agency will not take action with respect to the contravention of paragraphs 57(a) of the CTA noted above.

With respect to the contraventions set out above, the issuance of this licence does not in any way preclude any actions that may be taken against Quikair pursuant to the Canadian Transportation Agency Designated Provisions Regulations.

Further, in order to ensure continued compliance with subparagraph 61(a)(ii) of the CTA, the Agency will issue an order pursuant to sections 25 and 28 of the CTA, requiring the applicant to provide the Agency with any documentation that has the effect of altering or proposing to alter the agreement between Quikair and Bar XH Air Inc. or 650584 Alberta Inc. or would indicate that Quikair has entered into or is proposing to enter into a similar arrangement with one or more other parties. That order shall form part of the licence to be issued pursuant to this Decision.