Order No. 2013-A-98

March 25, 2013

APPLICATION by Air Canada also carrying on business as Air Canada rouge for an exemption from the application of section 59 of the Canada Transportation Act, S.C., 1996, c. 10, as amended.

File No.: 
M4210/A74-4-117

Air Canada also carrying on business as Air Canada rouge (Air Canada) has applied to the Canadian Transportation Agency (Agency) for an exemption to permit it to sell, cause to be sold or publicly offer for sale in Canada international air services operated, through code sharing, on a scheduled basis between Canada and Tanzania, in the absence of a licence.

Section 59 of the Canada Transportation Act (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, a person holds a licence issued under that Part in respect of that service and that licence is not suspended.

Air Canada is licensed to operate, through code sharing, international air services on a scheduled basis, using large and all-cargo aircraft, between Canada and Tanzania.

Condition No. 2 of the licence states:

This licence shall terminate on February 20, 2014.

The extension of the validity period of the licence is subject to approval by the Agency, on application.

Air Canada is requesting this exemption to allow it to sell seats beyond the termination date of its licence.

The Agency deals with applications for exemptions from the application of section 59 on a case by case basis. The Agency recognizes that section 59 is a consumer protection measure. It is intended to prevent situations in which consumers in Canada pay for a service to an entity that does not hold an Agency licence and are left out of pocket or experience any manner of inconvenience or hardship that may result if that entity does not commence operations on schedule.

Accordingly, prior to granting an exemption from the application of section 59 of the CTA, the Agency must be satisfied that the applicant is taking all the necessary steps to meet all licence issuance requirements and that the licence will be issued prior to the proposed start of operations.

In this case, Air Canada meets the requirements to hold a licence to operate, through code sharing, international air services on a scheduled basis, using large and all-cargo aircraft, between Canada and Tanzania, and has confirmed its intent to file an application to extend the validity period of its licence beyond February 20, 2014.

The Agency finds that an exemption from the application of section 59 of the CTA is appropriate in the circumstances.

Accordingly, the Agency, pursuant to paragraph 80(1)(c) of the CTA, exempts Air Canada from the application of section 59 of the CTA, effective from the date of this Order, permitting it to sell, cause to be sold or publicly offer for sale in Canada international air services operated, through code sharing, on a scheduled basis between Canada and Tanzania, for travel beyond the termination date of its licence.

This exemption is subject to the following conditions:

  1. The exemption does not relieve Air Canada from the requirement to hold a licence in respect of the services to be provided and, accordingly, no flight shall be operated if the appropriate licence authority has not been granted and is not in effect as at the date of any flight.
  2. Should Air Canada, pursuant to this exemption order, sell seats on flights requiring the extension of the validity period of the current licence or an alternative licence and the extension has not been approved or the alternative licence has not been granted as at the date of any applicable flight, Air Canada shall arrange to provide alternative air transportation by an appropriately licensed air carrier, at no additional costs for all passengers who have made reservations with Air Canada. If such arrangements are not possible or acceptable to the passenger, Air Canada shall arrange to provide a full refund of all monies paid by the passenger.

This exemption will be automatically revoked should Air Canada cease to hold a valid licence for these services.

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