Order No. 2007-A-73

IN THE MATTER OF an application by Angel Flight of British Columbia Society for an exemption from the requirement to hold a domestic licence, small aircraft.

February 27, 2007

Application

[1] Angel Flight of British Columbia Society (hereinafter Angel Flight), a charitable organization, has applied to the Canadian Transportation Agency (hereinafter the Agency) for an exemption from the application of paragraph 57(a) of the Canada Transportation Act, S.C., 1996, c. 10 (hereinafter the CTA) as set out in the title. The application was received on January 11, 2007.

[2] Section 57 of the CTA provides, in part, that no person shall operate an air service unless, in respect of that service, the person holds a licence issued under Part II of the CTA.

[3] Pursuant to paragraph 80(1)(c) of the CTA, the Agency may, by order, on such terms and conditions as it deems appropriate, exempt a person from the application of any of the provisions of Part II or of a regulation or order made under Part II where the Agency is of the opinion that compliance with the provision by the person is unnecessary, undesirable or impractical.

[4] Pursuant to subsection 80(2) of the CTA, however, no exemption shall be granted under subsection (1) that has the effect of relieving a person from any provision of Part II that requires a person to be a Canadian and to have a Canadian aviation document and prescribed liability insurance coverage in respect of an air service.

[5] In its Order No. 2006-A-671 in effect on December 19, 2006, the Agency noted, among other things, that Angel Flight provided free air transportation for people requiring medical services at hospitals and centralized medical care facilities in Vancouver, Victoria and other medical centres, utilizing a network of volunteer pilots and aircraft owners.

[6] The Agency found that Angel Flight was operating a publicly available air service within the meaning of subsection 55(1) of the CTA, in contravention of paragraph 57(a) of the CTA. Accordingly, the Agency ordered Angel Flight to cease and desist from operating a publicly available air service without holding a licence for that service.

[7] However, given the nature of Angel Flight's activities, the Agency stated that it would expeditiously process an application made by Angel Flight that would result in it being allowed to resume its operations. In this perspective, and as the operation of an air service using aircraft and flight crew provided by another person is governed by the CTA and the Air Transportation Regulations, SOR/88-58, as amended (hereinafter the ATR), the Agency must be satisfied that the legislative and regulatory requirements are met at all times while Angel Flight conducts its activities. Therefore, while the Agency may grant an exemption from the requirement to hold a licence, certain conditions must also be imposed in order to ensure continued compliance with those requirements for which no exemption may be granted, that is, the requirement to be Canadian, the requirement to hold a valid Canadian aviation document and the requirement to have prescribed liability insurance coverage while at the same time limiting as much as possible the administrative burden of such conditions on Angel Flight.

Canadian status

[8] With respect to the requirement to be Canadian, the Agency is satisfied that Angel Flight is Canadian within the meaning of subsection 55(1) of the CTA. If an exemption from holding a licence is issued to Angel Flight, in order to ensure continued compliance with the requirement to be Canadian, it is necessary that Angel Flight be required to advise the Agency of any change that affects, or is likely to affect, Angel Flight's status as a Canadian.

Canadian aviation documents

[9] The CTA provides that a licence shall be issued when an applicant establishes to the satisfaction of the Agency that the applicant holds a Canadian aviation document in respect of the service to be provided under the licence. In addition, section 60 of the CTA provides that no person shall provide all or part of an aircraft, with a flight crew, to a licensee for the purpose of providing an air service pursuant to the licensee's licence and no licensee shall provide an air service using all or part of an aircraft, with a flight crew, provided by another person except in accordance with regulations made by the Agency respecting disclosure of the identity of the operator of the aircraft and other related matters; and where prescribed, with the approval of the Agency. If an exemption from holding a licence is issued to Angel Flight, in order to ensure continued compliance with the requirement to hold a Canadian aviation document, an arrangement between Angel Flight and the provider of aircraft and flight crew shall be in place and both shall be required to hold a valid Canadian aviation document at any time a flight is operated.

Canadian aviation document - Angel Flight

[10] In order to meet the requirement to hold a valid Canadian aviation document, a copy of a document dated December 22, 2006 issued to Angel Flight by the Minister of Transport was submitted. The document indicates that flights are only assigned to persons who hold an appropriate pilot licence to operate an aircraft in Canada, therefore, ensuring that such flights are governed by the Canadian Aviation Regulations. The Agency notes that aircraft operated under Angel Flight's air service will, in fact, be operated by persons on behalf of Angel Flight pursuant to an arrangement between them. Where the persons hold a valid Canadian aviation document (see next paragraph) and the arrangement is in place, the Agency is satisfied that the December 22, 2006 document issued to Angel Flight constitutes a Canadian aviation document within the meaning of the CTA.

Canadian aviation document - person providing the aircraft with flight crew

[11] With respect to the requirement that persons acting on behalf of Angel Flight hold a valid Canadian aviation document, these persons are responsible to operate in accordance with the Canadian Aviation Regulations as outlined in Angel Flight's Operations Manual. In this regard, the Agency notes that the flights conducted by these persons that provide aircraft and flight crew to Angel Flight are conducted under the purview of an exemption issued by the Minister of Transport dated May 1, 2006 entitled EXEMPTION TO SUBSECTION 700.02(1) OF THE CANADIAN AVIATION REGULATIONS (hereinafter the Minister's exemption). The Agency finds that when the persons agree to the procedures outlined in Angel Flight's Operations Manual, and the operation of the aircraft is in conformity with the Minister's exemption, the persons hold a Canadian aviation document within the meaning of the CTA.

Liability insurance coverage

[12] With respect to the prescribed liability insurance coverage, the Agency acknowledges receipt of specific certificates of insurance naming Angel Flight as an additional insured under the policy of some volunteer pilots and other aircraft owners. The certificates contain the following:

  1. passenger and third party liability insurance coverage pursuant to section 7 of the ATR;
  2. an acknowledgment by the insurer that it is aware that the volunteer pilot has entered into an arrangement with Angel Flight;
  3. Angel Flight included as an additional insured in respect of the insurance coverage for passenger and third party liability; and
  4. a provision that the additional insurance afforded to Angel Flight is primary and without right of contribution from any other insurance policy held by Angel Flight.

[13] In addition, Angel Flight filed agreements whereby the volunteer pilots agree to indemnify, protect and keep harmless Angel Flight from and against any and all passenger and third party liabilities incurred by or asserted against Angel Flight, in any way, either directly or indirectly, relating to, arising out of or connected with the services provided, except to the extent that any such loss arises directly or indirectly as a result of willful misconduct or gross negligence of Angel Flight.

[14] Angel Flight also submits that no aircraft that will be used for the flights operated by volunteer pilots and aircraft owners will carry more than five passenger seats nor will any such aircraft have an MCTOW (MCTOW has the same meaning as in section 2 of the ATR) of more than 7,500 pounds.

[15] In light of the above noted documentation and statements made by Angel Flight, the Agency is satisfied that Angel Flight has the adequate liability insurance in place to satisfy the requirements of subsections 8.2(4) and 8.2(5) of the ATR and has passenger and third party liability insurance coverage as required by section 7 of the ATR.

Conclusion

[16] In light of the foregoing, with respect to Angel Flight's air service, the Agency is satisfied, subject to Angel Flight complying with the conditions set out below, that Angel Flight is Canadian, holds a valid Canadian aviation document and has prescribed liability coverage. Further, given the unique and particular circumstances of this case and taking into account the nature of the service, the Agency is of the opinion that compliance by Angel Flight with paragraph 57(a) of the CTA is impractical and undesirable.

[17] Accordingly, the Agency, pursuant to paragraph 80(1)(c) of the CTA, hereby exempts Angel Flight from the application of paragraph 57(a) of the CTA.

[18] This exemption is subject to the following conditions:

  1. Angel Flight shall notify the Agency without delay, in writing, if any change occurs that affects, or is likely to affect, its status as a Canadian.
  2. Angel Flight shall advise the Agency without delay of any changes in its operations that may have an effect on the validity of the applicable Canadian aviation documents.
  3. For each flight operated, Angel Flight must maintain passenger and third party liability insurance coverage by being named as an additional insured under the policy of the volunteer pilots and other aircraft owners and have a certificate of insurance that contains the following:

    1. passenger and third party liability insurance coverage pursuant to section 7 of the ATR;
    2. an acknowledgment by the insurer that it is aware that the volunteer pilot has entered into an arrangement with Angel Flight;
    3. Angel Flight included as an additional insured in respect of the insurance coverage for passenger and third party liability; and
    4. a provision that the additional insurance afforded to Angel Flight is primary and without right of contribution from any other insurance policy held by Angel Flight;

[19] In addition, each volunteer pilot operating flights on behalf of Angel Flight must enter into an agreement with Angel Flight which must state that: the volunteer pilots agree to indemnify, protect and keep harmless Angel Flight from and against any and all passenger and third party liabilities incurred by or asserted against Angel Flight, in any way, either directly or indirectly, relating to, arising out of or connected with the services provided, except to the extent that any such loss arises directly or indirectly as a result of willful misconduct or gross negligence of Angel Flight.

4. The form and substance of any future agreements entered into between Angel Flight and any additional volunteer pilots, as well as any certificates of insurance, shall not be altered from the form and substance of the agreements and certificates submitted for this application, without prior Agency approval.

5. Any person that provides aircraft and flight crew to Angel Flight and that acts on its behalf shall hold a Canadian aviation document in the form of the Minister's exemption.

[20] This Order shall remain in effect until further order of the Agency.

[21] In light of the exemption granted herein, Order No. 2006-A-671 is no longer in effect.

[22] This Order takes effect on January 24, 2007, the date on which it was communicated verbally to Angel Flight.