Order No. 1993-A-14

January 18, 1993

January 18, 1993

IN THE MATTER OF a complaint filed by Air Canada concerning an upgrade programme applicable to Canadian Airlines International Ltd. carrying on business under the firm name and style of either Canadian Airlines International or Canadi*n1.

File Nos. D2230-A74-6
D2230-C14-6


WHEREAS on October 15, 1992, Air Canada filed a complaint with the National Transportation Agency (hereinafter the Agency), alleging that Canadian Airlines International Ltd. carrying on business under the firm name and style of either Canadian Airlines International or Canadi*n (hereinafter Canadi*n) had failed to file tariffs with the Agency and to obtain the concurrence of other designated carriers under bilateral air transport agreements, where such concurrence was required, for a programme permitting passengers paying an applicable one way, round trip, circle trip or an open jaw Economy Class fare, bearing a fare class code of Y, YR, Y1, Y2, YL2, YH2, YO2, YO2R, Y3 or Y4, to be seated, without additional charge, in the Business Class cabin of intercontinental flights operated by Canadi*n;

AND WHEREAS Canadi*n had filed a tariff with the Agency applicable to the upgrade programme on October 13, 1992, and for effect on October 15, 1992; however, this tariff was not accepted by the Agency for reasons relating to the period of notice provided before the tariff took effect. Canadi*n was advised of the non-acceptance of the tariff on November 16, 1992;

AND WHEREAS Canadi*n filed a tariff with the Agency applicable to the upgrade programme on October 21, 1992 for effect on December 5, 1992, thereby respecting the period of notice required for such a tariff;

AND WHEREAS the Agency considered the matter and, by letter dated November 20, 1992 addressed to Canadi*n, noted that the valid tariff applicable to the upgrade programme was to take effect on December 5, 1992; offers pertaining to the programme up to November 20, 1992, as evidenced by advertisements and displays in Computer Reservations Systems, had not indicated that that programme was "subject to government approval", as was normal practice for offers made prior to the effective date of a tariff; and a test telephone call conducted on November 4, 1992 by the Agency to a reservations office of Canadi*n revealed that the programme was available for immediate travel;

AND WHEREAS the Agency advised that the actions of Canadi*n may be in contravention of subsection 110(5) of the Air Transportation Regulations, SOR/88-58 and Condition No. 2 of the scheduled international licences applicable to Canadi*n and, consequently, of subsection 91(2) of the National Transportation Act, 1987, R.S.C., 1985, c. 28 (3rd Supp.) (hereinafter the NTA, 1987);

AND WHEREAS the Agency, in view of the actions of Canadi*n, ordered the carrier to show cause, within ten (10) days of the Agency letter dated November 20, 1992, why:

Canadi*n should not be ordered, pursuant to subsection 35(4) of the NTA, 1987, to cease and desist from:

  1. offering the upgrade programme where the concurrence of other designated carriers had not been obtained under bilateral air transport agreements;
  2. if such concurrence had been obtained, offering the upgrade programme prior to December 5, 1992 (the effective date of the tariff filed by the carrier), without indicating that such programme is subject to government approval; and
  3. transporting passengers under the terms of the programme prior to that date.

AND WHEREAS the Agency further ordered Canadi*n, on an interim ex parte basis, pursuant to subsection 40(3) of the NTA, 1987, for the time the Agency deemed necessary to rule on the show cause order, to cease and desist immediately from the activities relating to the show cause order;

AND WHEREAS the Agency also ordered Canadi*n to provide evidence, within three (3) business days of the Agency letter dated November 20, 1992, that it had satisfied the requirements of the interim ex parte cease and desist order;

AND WHEREAS by letter dated November 24, 1992, Canadi*n filed its reply to the orders of the Agency, indicating that it had advised other designated carriers of its intention to file an upgrade programme and that none of these carriers expressed any objections to that programme. With respect to Canada-France, it did not attempt to obtain the concurrence of Air Canada because of its belief that that carrier would never agree to the initiative;

AND WHEREAS Canadi*n further indicated that confusion would be created should, prior to December 5, 1992, the upgrade programme be identified as being "subject to government approval" in advertisements and displays in Computer Reservations Systems;

AND WHEREAS since Canadi*n did not address the question of whether passengers were being transported, contrary to the interim ex parte cease and desist order of the Agency, Agency staff conducted a test telephone call on November 25, 1992 to a reservations office of Canadi*n and learned that the upgrade programme was available for immediate travel;

AND WHEREAS the Agency has considered the matter and is of the opinion that Canadi*n has contravened the interim ex parte cease and desist order, and has failed to show cause why it should not be ordered to cease and desist from engaging in the aforementioned activities;

AND WHEREAS the tariff containing the upgrade programme has now taken effect, rendering moot the matters of attaching the proviso "subject to government approval" to any offers associated with the programme and the transportation of passengers under the terms of the programme prior to December 5, 1992;

AND WHEREAS the Agency views very seriously the actions of Canadi*n in relation to these matters, and cautions the carrier against further contraventions of this nature;

AND WHEREAS the Agency is of the opinion that Canadi*n should be required to cease and desist from transporting passengers under the terms of the upgrade programme, where the concurrence of other designated carriers has not been obtained.

NOW THEREFORE, IT IS ORDERED THAT:

Canadian Airlines International Ltd. carrying on business under the firm name and style of either Canadian Airlines International or Canadi*n is hereby required to immediately cease and desist from offering the upgrade programme where the concurrence of other designated carriers has not been obtained in accordance with bilateral air transport agreements.

1. 1 The Company's symbol appears between the "i" and the "n" in the trade name.

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