Order No. 2019-A-33

March 1, 2019

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

Case number: 
19-00822

BACKGROUND

[1] The applicant has applied to the Canadian Transportation Agency (Agency) for an exemption pursuant to section 80 of the CTA to permit it to sell, cause to be sold or publicly offer for sale in Canada international air services on a scheduled basis between Canada and Ecuador, using medium, large and all-cargo aircraft, in the absence of a licence.

[2] 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, a person holds a licence issued under that Part in respect of that service and that licence is not suspended.

[3] The applicant has applied to the Agency for a licence to operate international air services on a scheduled basis between Canada and Ecuador.

[4] The applicant intends to commence operations on December 1, 2019.

[5] The applicant states that it would like to sell, cause to be sold or publicly offer for sale in Canada the associated international air services on a scheduled basis as soon as possible in order to gain momentum in all sales channels to maximize bookings and ensure the viability of this new route. Consequently, the applicant requests an exemption from section 59 for sales in the Canada‑Ecuador air transport market pending the completion of all formalities.

ANALYSIS

[6] The Agency deals with applications for exemptions from section 59 of the CTA on a case-by-case basis. Section 59 is a consumer protection measure 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.

[7] Accordingly, the Agency, prior to granting an exemption from section 59 of the CTA, considers whether the applicant is taking all the necessary steps to meet all licence issuance requirements and whether the applicant has demonstrated a high probability of obtaining the required licence prior to the proposed date for commencing operations.

[8] In particular, a Canadian applicant for a scheduled international licence must establish that it:

    1. has been designated by the Minister of Transport as eligible to hold a scheduled international licence;
    2. meets the prescribed financial requirements;
    3. has the prescribed liability insurance coverage in respect of the service to be provided under the licence; and,
    4. holds a Canadian aviation document (CAD) issued by Transport Canada.

[9] In this case:

    1. the applicant has been designated by the Minister of Transport as eligible to hold a licence to operate a scheduled international service;
    2. the applicant already meets the financial requirements because it already holds licences to operate large aircraft;
    3. the applicant has the prescribed liability insurance coverage in respect of the proposed service; and
    4. the Agency has considered the steps the applicant has taken to obtain a revised CAD from Transport Canada, and is satisfied that the CAD will likely be issued on time for the Agency to issue a licence before the proposed start-up date of operations (December 1, 2019).

[10] In these circumstances, considering the intent of section 59 of the CTA and the fact that the applicant is taking all the necessary steps to meet all licensing issuance requirements, the Agency, pursuant to paragraph 80(1)(c) of the CTA, exempts the applicant from section 59 of the CTA, effective from the date of this Order until such time as a decision is made to either issue or not issue a licence, permitting it to sell, cause to be sold or publicly offer for sale in Canada a scheduled international service, medium, large and all‑cargo aircraft, between Canada and Ecuador, without holding the required licence, subject to the following conditions:

    1. All advertising in any media, whether written, electronic or telecommunications, shall include a statement that the air service is subject to government approval, and all prospective passengers shall be informed, before a reservation is made or a ticket issued, that the air service is subject to government approval;
    2. Should the licence not be issued or not be issued by the time an air service sold to a passenger is to be used, the applicant shall arrange to provide alternative air transportation by an appropriately licensed air carrier, at no additional cost, for all passengers who have made reservations with the applicant. If such arrangements are not possible or acceptable to the passenger, the applicant shall arrange to provide a full refund of all monies paid by the passenger.

[11] For clarity, this exemption does not relieve the applicant from the requirement to hold a licence in respect of the service to be provided and, accordingly, no flights shall be operated until the appropriate licence authority has been granted. Nor does this exemption relieve the carrier from the requirement to apply its published tariffs, on file with the Agency and in effect, to sales of transportation for each scheduled point.

Member(s)

Scott Streiner
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