Decision No. 802-A-2000

December 28, 2000

December 28, 2000

APPLICATION by Air Canada, on behalf of itself and Air Canada Regional Inc. carrying on business as Air Nova, Air Alliance, Air Ontario, AirBC and/or Canadian Regional (hereinafter Air Canada Regional), Air BC Limited carrying on business as AirBC and Canadian Regional Airlines (1998) Ltd. carrying on business as Canadian Regional, for cancellation of Licence Nos. 972229, 977380, 975148, 962583 and 965013 in their entirety and Licence No. 967554 in respect of the authority to operate a non-scheduled international service, medium aircraft; and for an exemption from the application of the provisions of section 58 of the Canada Transportation Act, S.C., 1996, c. 10, in order to allow the issuance of a licence to operate a non-scheduled international service, small aircraft to Air Canada Regional.

File Nos. M4210/A66-1
M4210/A66-2
M4210/A66-3
M4210/C473-1
M4210/C473-2
M4210/C473-3


Air Canada, on behalf of itself and Air Canada Regional, Air BC Limited carrying on business as AirBC (hereinafter AirBC) and Canadian Regional Airlines (1998) Ltd. carrying on business as Canadian Regional (hereinafter Canadian Regional), has applied to the Canadian Transportation Agency (hereinafter the Agency) for the cancellation and the exemption set out in the title. The application was received on November 22, 2000.

Under Licence No. 972229, AirBC is authorized to operate a domestic service, medium aircraft and a domestic service, large aircraft.

Under Licence No. 977380, AirBC is authorized to operate a non-scheduled international service, medium aircraft, and a non-scheduled international service, large aircraft, to transport traffic on a charter basis between Canada and any other country.

Under Licence No. 975148, AirBC is authorized to operate a scheduled international service, medium aircraft, and a scheduled international service, large aircraft, between points in Canada and points in the United States of America in accordance with the Air Transport Agreement between the Government of Canada and the Government of the United States of America signed on February 24, 1995.

Under Licence No. 962583, Canadian Regional is authorized to operate a domestic service, small aircraft and a domestic service, medium aircraft.

Under Licence No. 967554, Canadian Regional is authorized to operate a non-scheduled international service, small aircraft and a non-scheduled international service, medium aircraft, to transport traffic on a charter basis between Canada and any other country.

Under Licence No. 965013, Canadian Regional is authorized to operate a scheduled international service, small aircraft and a scheduled international service, medium aircraft, between points in Canada and points in the United States of America in accordance with the Air Transport Agreement between the Government of Canada and the Government of the United States of America signed on February 24, 1995.

Air Canada submits that it is in the process of restructuring the commercial air services of its regional air carriers. As part of its restructuring, Air Canada indicates that AirBC and Canadian Regional will be amalgamating with Air Canada Regional effective January 1, 2001.

By Order No. 2000-A-462 dated November 30, 2000, Licence Nos. 972097, 975055 and 977160 held by Air Nova Inc. also carrying on business as Air Alliance were transferred to Air Canada Regional. As the services authorized under the licences held by AirBC and Canadian Regional are, with the exception of the authority to operate a non-scheduled international service, small aircraft, identical to the services authorized under the licences that were transferred, the licences held by AirBC and Canadian Regional, other than the exception set out above, are no longer required.

Pursuant to paragraph 63(2)(b) of the Canada Transportation Act (hereinafter the CTA), the Agency may, subject to section 64, suspend or cancel a domestic licence in accordance with a request from the Licensee for the suspension or cancellation. Subsection 64(2) of the CTA requires that the Licensee give notice of the proposal to discontinue a domestic service and that the Licensee shall not implement the proposal until the expiration of 120 days, or 30 days if the service has been in operation for less than one year, after the notice is given or until the expiry of any shorter period that the Agency may, on application by the Licensee, specify by order.

Air Canada submits that Air Canada Regional will continue to provide all of the domestic air services to points and between points in Canada provided by AirBC and Canadian Regional. The Agency is therefore of the view that compliance by AirBC and Canadian Regional with section 64 of the CTA is unnecessary in this case. Accordingly, pursuant to paragraph 80(1)(c) of the CTA, the Agency hereby exempts AirBC and Canadian Regional from the application of section 64 of the CTA.

In addition, pursuant to paragraphs 72(2)(b) and 75(2)(b) of the CTA, the Agency may suspend or cancel scheduled international licences and non-scheduled international licences in accordance with a request from the Licensee for the suspension or cancellation.

The Agency has reviewed the application and, in accordance with the request of the Licensees, hereby cancels Licence Nos. 972229, 977380, 975148, 962583 and 965013 in their entirety and Licence No. 967554 in respect of the authority to operate a non-scheduled international service, medium aircraft pursuant to paragraphs 63(2)(b), 72(2)(b) and 75(2)(b) of the CTA.

With respect to the application for an exemption from the application of section 58 of the CTA, the Agency has carefully reviewed all of the material submitted by Air Canada in support of its application and is satisfied that the proposed corporate reorganization of Air Canada's regional carriers is in the nature of an internal restructuring.

Accordingly, the Agency is of the opinion that compliance by Canadian Regional with section 58 of the CTA is unnecessary in the present circumstances.

The Agency, pursuant to paragraph 80(1)(c) of the CTA, hereby exempts Canadian Regional from the application of section 58 of the CTA.

The Agency also notes that Air Canada Regional holds a valid Canadian aviation document and has prescribed liability insurance coverage.

In light of the above, Licence No. 967554 in respect of the authority to operate a non-scheduled international service, small aircraft, is hereby transferred from Canadian Regional to Air Canada Regional Inc. carrying on business as Air Nova, Air Alliance, Air Ontario, AirBC and/or Canadian Regional.

Under Licence No. 977160, Air Canada Regional Inc. carrying on business as Air Nova, Air Alliance, Air Ontario, AirBC and/or Canadian Regional is authorized to operate a non-scheduled international service, medium aircraft and a non-scheduled international service, large aircraft. A new document of licence, bearing Licence No. 977160, will be issued to Air Canada Regional Inc. carrying on business as Air Nova, Air Alliance, Air Ontario, AirBC and/or Canadian Regional, authorizing it to also operate a non-scheduled international service, small aircraft.

Pursuant to paragraph 28(1)(a) of the CTA, the Agency directs that the cancellation of licences and the transfer of Licence No. 967554 in respect of the authority to operate a non-scheduled international service, small aircraft, shall come into force on January 1, 2001.

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