Order No. 2010-A-667

December 31, 2010

December 31, 2010

Flugfelagid Atlanta H/F carrying on business as Air Atlanta Icelandic – Licence No. 961011.

File No. M4212/A980-2


[1] The Canadian Transportation Agency (Agency) was made aware of an advertisement on the Internet of a series of charter flights between Vancouver, British Columbia, Calgary, Alberta or Toronto, Ontario, and the United Kingdom. These flights were to be operated by Flugfelagid Atlanta H/F carrying on business as Air Atlanta Icelandic (Air Atlanta Icelandic) for Canada Extra, which is a trading name of L.A.I. Travel Limited in London, United Kingdom. While the program of charter flights advertised on the Internet emphasized the United Kingdom origin market, it appeared that bookings may also have been made for transportation originating in Canada.

[2] Air Atlanta Icelandic is licensed to operate non-scheduled international services between Iceland and Canada. The proposed operation of a series of charter flights between the United Kingdom and Canada, whether offered exclusively in the United Kingdom or in both the United Kingdom and Canada, would require a specific authority which is not contemplated under its licence. Therefore, if Air Atlanta Icelandic were to operate these flights in the absence of the proper authority, it would be doing so in contravention of subsection 74(2) of the Canada Transportation Act, S.C. 1996, c. 10, as amended (CTA) and certain provisions of the Air Transportation Regulations, SOR/88-58, as amended, with respect to charter permits. Subsection 74(2) of the CTA states that the holder of a non-scheduled international licence shall comply with every term and condition to which the licence is subject.

[3] Pursuant to section 26 of the CTA, the Agency may require a person to do or refrain from doing any thing that the person is or may be required to do or is prohibited from doing under any Act of Parliament that is administered in whole or in part by the Agency.

[4] In light of the foregoing, the Agency, by Decision No. LET-A-190-2010, provided an opportunity to Air Atlanta Icelandic and Canada Extra to show cause why the Agency should not order Canada Extra to cease and desist from selling, causing to be sold or publicly offering for sale in Canada, charter flights between Canada and the United Kingdom which may be contrary to section 59 and/or subsection 74(2) of the CTA. Air Atlanta Icelandic and Canada Extra were also required to provide information on the nature of the charter flights and on their contractual relationship.

[5] In its reply to Decision No. LET-A-190-2010, Air Atlanta Icelandic, on its behalf and on behalf of Canada Extra, states that the Web site advertisement was created and put up entirely by Canada Extra, without notice to Air Atlanta Icelandic. Air Atlanta Icelandic submits that until recently, it in fact was unaware of this advertisement. In addition, Air Atlanta Icelandic states that it has not yet entered into a contract for the services being publicized. Air Atlanta Icelandic points out that upon receipt of Decision No. LET-A-190-2010, it immediately contacted Canada Extra to request the removal of the relevant pages from the Web site. Canada Extra has now done so. Air Atlanta Icelandic states that it has undertaken no publicizing of the proposed operation.

[6] Air Atlanta Icelandic indicates that it is aware that it must obtain specific authority before such an operation may be conducted and should it decide to enter into a contract for this service, it will comply with all applicable rules and regulations and obtain any authority required.

[7] Section 59 of the CTA states that no person shall sell, cause to be sold or publicly offer for sale in Canada an air service unless, if required under Part II of the CTA, the person holds a licence under that Part in respect of that service and that licence is not suspended.

[8] The Agency has reviewed this matter and notes that Canada Extra has now removed all advertisement and booking offers on the Internet of all the said charter flights.

[9] With respect to Air Atlanta Icelandic possibly contravening section 59 of the CTA, Air Atlanta Icelandic states that the situation in which it has found itself is very similar to that described in Decision No. 439-A-2010. Although carriers may have a business relationship with tour operators, the Agency notes that carriers may have limited ability to control the advertizing of their services by tour operators. In general, the Agency must be careful not to consider that the advertizing and selling of air services by a tour operator constitute a breach of section 59 of the CTA by the carrier seeking a licence. There may be circumstances in which the advertizing of an air service by a tour operator could be considered a breach of section 59 of the CTA by the carrier, for instance, when there are indications that the licence applicant used the tour operator to circumvent the requirement of section 59 of the CTA. However, the Agency finds that it is not the case here as Air Atlanta Icelandic was unaware of this advertisement and because it has not yet entered into a contract for the services being publicized.

[10] The Agency notes that the Web site advertisement was created and put up entirely by Canada Extra, without notice to Air Atlanta Icelandic. The Agency also notes that Air Atlanta Icelandic had not entered into a contract for the services being publicized with Canada Extra. There was no mention on Canada Extra's Web site advertisement that the flights were subject to government approval. Therefore, the Agency finds that Canada Extra did contravene section 59 of the CTA. However, the Agency notes that Canada Extra has now removed all advertising and booking offers on the Internet of all the said charter flights.

[11] In light of the foregoing, the Agency concludes that there is no need to order Canada Extra to cease and desist from selling, causing to be sold of publicly offering for sale in Canada, charter flights between Canada and the United Kingdom.

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