Agency Rulings

Order No. 1999-A-198

April 26, 1999

IN THE MATTER OF the operation of transborder charter flights by Sun Country Airlines, Inc. without the necessary Agency approval.

File No. M4425/S196

Under Licence No. 977121, Sun Country Airlines, Inc. (hereinafter Sun Country) is authorized to operate a non-scheduled international air service to transport traffic on a charter basis between points in Canada and points in the United States of America. However, prior to transporting Canadian-originating charter traffic, the carrier must obtain a charter permit from the Agency, file certain documents, including the applicable contract, and have in place a means to protect the advance payments of passengers.

Subsection 95(1) of the Air Transportation Regulations, SOR/88-58, as amended (hereinafter the ATR), empowers the Canadian Transportation Agency (hereinafter the Agency) to issue a charter authorization to an air carrier, on request, that is valid for a period of up to one year, to operate a TPC (transborder passenger charter) or series of TPCs that use aircraft having an MCTOW (maximum certificated take-off weight) greater than 35,000 pounds (15,900 kg) without the requirement to obtain a program permit, provided that certain criteria are satisfied.

An investigation conducted by the staff of the Agency determined that, in respect of two charter operations involving transportation from Thunder Bay to Las Vegas on September 29 and October 5, 1997, Sun Country did not apply for and was not granted a transborder charter program permit or charter authorization. Also, there was no evidence on file that Sun Country was in compliance with the advance payment protection provisions of the ATR.

Subsection 91(1) of the ATR provides that:

An air carrier that proposes to operate a TPC or series of TPCs with aircraft having a MCTOW greater than 35,000 pounds (15,900 kg) shall apply in writing to the Agency for a program permit to operate the TPC or series of TPCs as soon as the charter contract is signed or amended by the air carrier and the charterer, or as soon as possible thereafter.

Paragraph 93(1)(a) of the ATR provides that

... no air carrier shall operate a TPC or series of TPCs that use aircraft having an MCTOW greater than 35,000 pounds (15,900 kg) unless the air carrier

(a) obtains a program permit ...

By LET-A-4-1999 dated January 6, 1999, the Agency required Sun Country to show cause within thirty (30) days from the date of receipt of the letter, why Sun Country should not be found to have acted in contravention of section 91 and paragraph 93(1)(a) of the ATR with respect to the flights in question.

By letter dated February 5, 1999, Sun Country acknowledged that it had inadvertently neglected to comply with subsection 91(1) of the ATR by failing to apply for a charter permit, and indicated that such failure was the result of an unfamiliarity with Canadian regulations by new personnel. With respect to the matter of advance payment protection and the possible contravention of subsections 91(2), 91(5), and 91(6) of the ATR, Sun Country states that, in fact, a financial guarantee did apply to the air carrier's operations of September 29 and October 5, 1997. A copy of this guarantee was provided to the Agency. Sun Country indicates that it has implemented procedures to safeguard against recurrences of this situation, including distribution of the relevant regulatory provisions to all carrier personnel involved in transborder passenger charters.

The Agency has reviewed and considered the matter and has determined that Sun Country has failed to show cause why it should not be found to have acted in contravention of section 91 and paragraph 93(1)(a) of the ATR. However, the Agency has considered Sun Country's explanations for the contravention and is satisfied that the internal remedial procedures taken by Sun Country will help to ensure that Sun Country will not contravene section 91 and paragraph 93(1)(a) of the ATR. In light of the fact that remedial action was taken in an expeditious manner, the Agency will take no action against Sun Country.

Sun Country is hereby advised that any subsequent contravention could result in the Agency imposing the full extent of the sanctions provided by the Canada Transportation Act, S.C., 1996, c. 10, up to and including licence suspension, cancellation or criminal prosecution.