Decision No. 444-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: 
14-06040

APPLICATION

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 Montréal, Quebec, Canada and La Ceiba, Honduras; and to provide its scheduled international services on licensed routes between Canada and each of: Bahamas, Cuba, Dominican Republic, Mexico and United States of America, using one aircraft with flight crew provided by Travel Service, beginning December 9, 2014 to May 18, 2015.

Sunwing and Travel Service have also requested an exemption from the application of subsection 8.2(2) of the Air Transportation Regulations (ATR), which requires the filing of an application for an approval at least 45 days before the first planned flight. The Agency finds that compliance with subsection 8.2(2) of the ATR is impractical in this case. Accordingly, the Agency, pursuant to paragraph 80(1)(c) of the Canada Transportation Act (CTA), exempts Sunwing and Travel Service from the application of subsection 8.2(2) of the ATR.

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

In their application filed on December 3, 2014, Sunwing and Travel Service state that this application is for one additional aircraft, beyond the four aircraft already approved by the Agency, for a total of five aircraft to be wet-leased by Sunwing. They also state that, at the time of application, Sunwing had 26 aircraft on its Air Operator Certificate (AOC).

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 meets the requirements of section 8.2 of the ATR and the criteria of the 2014 Wet-Lease Policy, specifically the 20‑percent cap?

ANALYSIS AND FINDINGS

Section 60 of the 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 AOC may be wet leased from foreign lessors. The Agency notes that Sunwing is presently approved to use four aircraft with flight crew provided by Travel Service, and that this application is for a fifth aircraft. The Agency also notes that at the time of application, i.e., December 3, 2014, Sunwing had 26 aircraft on its AOC. Therefore, the application of Sunwing and Travel Service for the fifth 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 in support and is satisfied that it meets the remaining 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 fifth 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 Montréal and La Ceiba; and to provide its scheduled international services on licensed routes between Canada and each of: Bahamas, Cuba, Dominican Republic, Mexico and United States of America, using a fifth aircraft with flight crew provided by Travel Service, beginning December 9, 2014 to May 18, 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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