Decision No. 442-A-2014

December 8, 2014

APPLICATION by Sunwing Airlines Inc. and Travel Service, a.s. pursuant to section 60 of the Canada Transportation Act, S.C., 1996, c. 10, as amended and section 8.2 of the Air Transportation Regulations, SOR/88 58, as amended.

Case number: 
14-06016

APPLICATION

On April 14, 2014, Sunwing Airlines Inc. (Sunwing) and Travel Service, a.s. (Travel Service) applied to the Canadian Transportation Agency (Agency) for approvals to permit Sunwing to provide its non-scheduled international service between Ottawa, Ontario, Canada and Freeport, Bahamas; and to provide its scheduled international services on licensed routes between Canada and each of: Bahamas, Cuba, Dominican Republic, Jamaica, Mexico, Netherlands Antilles and United States of America, using four aircraft with flight crew provided by Travel Service, beginning November 13, 2014 to April 26, 2015.

On September 12, 2014, the Agency issued 340-A-2014">Decision No. 340-A-2014, as varied by 401-A-2014">Decision No. 401-A-2014 (Decision). In the Decision, the Agency approved the use by Sunwing of three aircraft with flight crew provided by Travel Service, and the provision by Travel Service of such aircraft and flight crew to Sunwing, to permit Sunwing to provide its non-scheduled international service between Ottawa and Puerto Vallarta; and to provide its scheduled international services on licensed routes between Canada and each of: Bahamas, Cuba, Dominican Republic, Jamaica, Mexico, Netherlands Antilles and United States of America, using three aircraft with flight crew provided by Travel Service, beginning November 13, 2014 to April 26, 2015.

In the Decision, the Agency ruled that it would render its decision with respect to the fourth aircraft only when it receives a complete application because documents for the fourth requested aircraft would only be available after approval for the first three aircraft was required.

On December 2, 2014, Sunwing and Travel Service filed the required supporting documents for the fourth requested aircraft, and the application is now complete.

Sunwing is licensed to operate the relevant non-scheduled international and scheduled international services. 

POLICY

When assessing wet-lease applications where Canadian carriers propose to enter into wet-lease arrangements of more than 30 days with foreign carriers to provide international passenger services, the Agency must apply a direction issued by the Minister of Transport on June 24, 2014 entitled Ministerial Direction for International Service – Canada’s Policy for Wet-Leasing (2014 Wet-Lease Policy), and must specifically ensure that the 20-percent cap is respected at the time of application.

ISSUE

Is the Agency satisfied that the application of Sunwing and Travel Service, in respect of the fourth aircraft, meets the requirements of section 8.2 of the Air Transportation Regulations (ATR) and the criteria of the 2014 Wet-Lease Policy, specifically the 20‑percent cap?

ANALYSIS AND FINDINGS

Section 60 of the Canada Transportation Act (CTA) requires that a licensee obtain, where prescribed, an approval from the Agency prior to using aircraft with flight crew provided by another person.

Section 8.2 of the ATR sets out the information to be included in an application and the requirements to be met for an approval pursuant to section 60 of the CTA.

Pursuant to the 2014 Wet-Lease Policy, for wet-leases of more than 30 days, a number of aircraft equal to 20 percent of the number of Canadian-registered aircraft on the lessee’s Air Operator Certificate (AOC) may be wet leased from foreign lessors. The Agency notes that at the time of application, i.e., April 14, 2014, Sunwing had 23 aircraft on its AOC. Therefore, Sunwing’s application for the fourth aircraft meets the 20-percent cap requirement of the 2014 Wet-Lease Policy.

On matters of international reciprocity, the Agency’s general practice is that reciprocity by the authorities of the lessor’s country of origin, in this case the Czech Republic, is assumed unless evidence is brought to the contrary. The Agency is not aware of any similar application by a Canadian carrier to the aeronautical authorities of the European Union and its Member States that has been denied. Therefore, the Agency finds that international reciprocity is not a concern in this case.

The Agency has considered the application and the material filed in support and is satisfied that it meets the requirements of section 8.2 of the ATR. The Agency is also satisfied that the application satisfies the criteria of the 2014 Wet-Lease Policy.

Accordingly the Agency, pursuant to paragraph 60(1)(b) of the CTA and section 8.2 of the ATR, approves the use by Sunwing of a fourth aircraft with flight crew provided by Travel Service, and the provision by Travel Service of such aircraft and flight crew to Sunwing, to permit Sunwing to provide its non‑scheduled international service between Ottawa and Puerto Vallarta; and to provide its scheduled international services on licensed routes between Canada and each of: Bahamas, Cuba, Dominican Republic, Jamaica, Mexico, Netherlands Antilles and United States of America, using a fourth aircraft with flight crew provided by Travel Service, beginning December 11, 2014 to April 26, 2015.

These approvals are subject to the following conditions:

  1. Sunwing shall continue to hold the valid licence authorities.
  2. Commercial control of the flights shall be maintained by Sunwing. Travel Service shall maintain operational control of the flights and shall receive payment based on the rental of aircraft and crew and not on the basis of the volume of traffic carried or other revenue sharing formula.
  3. Sunwing and Travel Service shall continue to comply with the insurance requirements set out in subsections 8.2(4), 8.2(5) and 8.2(6) of the ATR.
  4. Sunwing shall continue to comply with the public disclosure requirements set out in section 8.5 of the ATR.
  5. Sunwing and Travel Service shall advise the Agency in advance of any changes to the information provided in support of the application.

Member(s)

Geoffrey C. Hare
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