Decision No. 447-A-2013

November 29, 2013

APPLICATION by Air Transat A.T. Inc. carrying on business as Air Transat for a stay of Decision No. 429‑A-2013 pursuant to paragraph 29(1)(b) of the Canadian Transportation Agency General Rules, SOR/2005-35, as amended.

File No.: 
M4835/S527-D180

[1] On November 19, 2013, Air Transat A.T. Inc. carrying on business as Air Transat (Air Transat) filed a request with the Canadian Transportation Agency (Agency) for a stay of Decision No. 429‑A‑2013 dated November 13, 2013 (Decision).

[2] In the Decision, the Agency granted approvals to Sunwing Airlines, Inc. (Sunwing), Travel Service, a.s. and Thomson Airways Limited to permit Sunwing to provide its non-scheduled and scheduled international services using aircraft with flight crew provided by Travel Service a.s. and Thomson Airways Limited.

[3] To decide whether a stay should be granted, the Supreme Court of Canada applied a three-part test in Manitoba (Attorney General) v. Metropolitan Stores Ltd., [1987] 1 S.C.R. 110, and in RJR ‑ MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311 (RJR - MacDonald).

[4] The first part of the test is whether there is a serious question to be tried. In RJR - MacDonald, the Court held that there were no specific requirements to be met to satisfy this test, but that the threshold was a low one and entailed a preliminary assessment of the merits of the case. In the case before the Agency, considering that a petition to the Governor in Council (GIC) pursuant to section 40 of the Canada Transportation Act, S.C., 1996, c. 10, as amended has been filed with the GIC to rescind or vary Decision No. 429-A-2013, the Agency finds this issue to be a serious one and accordingly, Air Transat has met the first part of the test.

[5] The second part of the test is whether the litigant who seeks the stay would, unless the stay is granted, suffer irreparable harm. In RJR - MacDonald, the Court held that, under this part of the test, the only issue to be decided is whether a refusal to grant the relief could so adversely affect the applicant’s own interests that the harm could not be remedied if the eventual decision on the merits did not accord with the result of the interlocutory application. The Court held that “irreparable” refers to the nature of the harm suffered rather than its magnitude. It is harm which either cannot be quantified in monetary terms or which cannot be cured, usually because one party cannot collect damages from the other.

[6] The examination of the second part of the test is closely related to the analysis of the third part of the test, which is the balance of inconvenience test. At this stage, it is necessary to determine which of the two parties would suffer the greater harm from the granting or refusal of the request. The factors to be considered vary in each individual case.

[7] If the Agency grants the stay, this would, in effect, nullify a decision that has been rendered based on a proper inquiry and the Agency’s interpretation of Canada’s Policy for Wet-Leasing of Aircraft announced August 30, 2013 (Wet-Lease Policy). Further, granting the stay would mean that Sunwing would be deprived of the ability to use five aircraft that it is authorized to operate in accordance with the Agency’s approval. Sunwing would thus need to reapply to the Agency for urgent approval to maintain some of its services using aircraft that even Air Transat recognizes Sunwing is entitled to wet lease based on the AOC-registered aircraft fleet at the time of the application. The consequence of a stay would be unrecoverable revenue losses on an approved operation combined with unavoidable costs associated with the idling of the aircraft and crews. This would cause a serious disruption in the market, which would negatively affect consumers.

[8] On the other hand, if the stay is not granted, the harm to Air Transat would be that it will face increased competition until the GIC makes its decision. No customers will be impacted and as Sunwing’s application was only with respect to this winter season, the harm to Air Transat would only be relevant to this period of time, not long term.

[9] Air Transat incorrectly claims that the stay would result in a permanent market loss and falls into one of the categories cited by the Supreme Court of Canada in RJR - MacDonald. The matter before the Agency is whether the Decision should be stayed until the GIC rules on the petition. Air Transat conflates the result of the Decision, and its effect in coming years, with the result of the stay, claiming that it will suffer permanent loss “if the Decision is allowed to stand.”

[10] In addition, Air Transat attempts to reargue the merits of the Decision. That is a matter, in this case, for GIC consideration. It is not a rationale for a stay of the Decision. A request for a stay is not the appropriate vehicle for requesting a policy change or to have the Decision varied. Finally, Air Transat incorrectly claims that the Agency has made assumptions about the operation of the Temporary Foreign Workers Program (TFWP). The allegations with respect to Sunwing’s hiring plans and practices are potentially a matter for Air Transat to raise in its petition to the GIC. However, the Agency has not made any assumptions with respect to the hiring of foreign crews by Sunwing. Approval of the hiring of foreign pilots or crews is outside the Agency’s jurisdiction and the crewing of dry or wet-leased aircraft has never been considered by the Agency, nor is it a factor dealt with in the Wet-Lease Policy. If the use of foreign crews is required by Sunwing and is not granted under TFWP or the reciprocity provisions of the Immigration and Refugee Protection Regulations, SOR/2002-277, Sunwing will not be able to operate aircraft beyond those that it has the capacity to operate with Canadian pilots and crews.

[11] For these reasons, the Agency finds that Sunwing would suffer greater harm from the granting of the stay application.

[12] Accordingly, the Agency dismisses Air Transat’s application.

Member(s)

Geoffrey C. Hare
Raymon J. Kaduck
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