Order No. 2002-A-44

January 28, 2002

January 28, 2002

IN THE MATTER OF an application by Flugleidir H.F. (Icelandair) for exemptions from the application of certain provisions of the Air Transportation Regulations, SOR/88-58, as amended, where those provisions conflict with the Government of Canada's Policy for International Passenger Charter Air Services announced by the Minister of Transport on April 4, 2000.

File No. M5000/I32


On January 4, 2002, Flugleidir H.F. (Icelandair) (hereinafter Icelandair) has applied to the Canadian Transportation Agency (hereinafter the Agency) for the exemptions set out in the title.

On April 4, 2000, the Minister of Transport announced Canada's new Policy for International Passenger Charter Air Services (hereinafter the new International Passenger Charter Policy).

The Agency is in the process of amending the Air Transportation Regulations (hereinafter the ATR) to ensure that they conform with the new International Passenger Charter Policy. However, the Minister of Transport has asked the Agency to take measures to implement the new policy while the amendments to the ATR are being developed.

Pursuant to paragraph 80(1)(c) of the Canada Transportation Act, S.C., 1996, c. 10 (hereinafter the CTA), the Agency may exempt a person from the application of any of the provisions of the ATR on such terms and conditions as it deems appropriate where the Agency is of the opinion that compliance with the provision by the person is unnecessary, undesirable or impractical.

The Agency has carefully reviewed and considered the application, and all of the material filed in support thereof, and is of the opinion that, in light of the new International Passenger Charter Policy, compliance by Icelandair with certain provisions of the ATR is unnecessary in this case.

Accordingly, the Agency, pursuant to paragraph 80(1)(c) of the CTA, hereby exempts Icelandair from the application of the following provisions of the ATR with respect to each charter type operated pursuant to its non-scheduled international Licence No. 977268, from the date of this Order until such time as the amendments to the ATR are promulgated, subject to the terms and conditions set out below as well as to any terms and conditions contained in any charter program permit issued to Icelandair by the Agency in relation to this Order:

  1. In respect of international passenger charters of the Advance Booking (ABC), Inclusive Tour (ITC), Common Purpose (CPC) and Advance Booking/Inclusive Tour (ABC/ITC) types, the provisions of Part III of the ATR which require that:
    1. an ABC be sold to the public not later than a specified number of days prior to the date of departure;
    2. an air carrier provide return air transportation;
    3. tariffs filed with the Agency include rates to be charged for the charter of aircraft;
    4. return transportation not be commenced prior to a certain number of days following the day of departure from the point of origin;
    5. a minimum price per seat be charged for charter transportation (floor price rule); and
    6. Canadian air carriers be given the right of first refusal in respect of fifth freedom CPCs proposed to be operated by non-Canadian air carriers.
  2. In respect of international entity charters, the provisions of Part III of the ATR that:
    1. restrict the number of charterers to one;
    2. grant Canadian air carriers the right of first refusal in respect of fifth freedom entity charters proposed to be operated by non-Canadian air carriers;
    3. require that an affidavit of the charterer be filed with the Agency verifying the information set out in paragraph 34(1)(c) of the ATR; and
    4. require tariffs filed with the Agency to include rates to be charged for the charter of aircraft in respect of entity passenger charters.

Terms and Conditions of Exemption Order

  1. Three charterers will be permitted for entity passenger charters.
  2. The entire capacity of an aircraft must be chartered.
  3. The direct sale of charter seats by the licensee to the public is prohibited.
  4. Advance payments made for charter transportation shall be protected in accordance with the ATR.
  5. The new International Passenger Charter Policy envisages that foreign charter carriers should have the ability to operate under the same conditions as Canadian charter carriers, provided acceptable reciprocity exists for Canadian carriers.

This Order does not exempt Icelandair from the requirements of other acts or regulations, including those of Transport Canada.

In the event of any discrepancy between this Order and any terms and conditions of a charter program permit, the charter program permit shall prevail.

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