Determination No. A-2019-12

An erratum was issued on February 1, 2019.

January 30, 2019

APPLICATION by Flair Airlines Ltd. (Flair), on behalf of itself and Travel Service, a.s. (Travel Service), pursuant to section 60 of the Canada Transportation Act, S.C., 1996, c. 10, as amended (CTA), and section 8.2 of the Air Transportation Regulations, SOR/88-58, as amended (ATR).

Case number: 
19-00313

APPLICATION

Flair, on behalf of itself and Travel Service, has applied to the Canadian Transportation Agency (Agency) for an approval to permit Flair to provide its scheduled international service between Canada and the United States of America using one aircraft with flight crew provided by Travel Service, beginning on January 31, 2019 to April 30, 2019.

Flair is licensed to operate a scheduled international service in accordance with the Air Transport Agreement between the Government of Canada and the Government of the United States of America signed on March 12, 2007.

In its application filed on January 21, 2019, Flair states that it had eight aircraft on its Air Operator Certificate (AOC) at the time of application.

Flair has also requested an exemption from the application of subsection 8.2(2) of the 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 CTA, exempts Flair from the application of subsection 8.2(2) of the ATR.

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. The 2014 Wet-Lease Policy also states that the Agency should condition or deny an application if Canadian air carriers do not enjoy reciprocal opportunities to wet lease in the foreign jurisdiction of the lessor.

ISSUE

Is the Agency satisfied that the application of Flair 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 at the time of the application, on January 21, 2019, Flair had eight aircraft on its AOC. Therefore, the application of Flair meets the 20 percent cap requirement of the 2014 Wet Lease Policy.

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.

Accordingly, the Agency, pursuant to paragraph 60(1)(b) of the CTA and section 8.2 of the ATR, approves the use by Flair of one aircraft with flight crew provided by Travel Service, and the provision by Travel Service of such aircraft and flight crew to Flair, to permit Flair to provide its scheduled international service on licensed routes between Canada and the United States of America using one aircraft and flight crew provided by Travel Service, beginning on January 31, 2019 to April 30, 2019.

This approval is subject to the following conditions:

  1. Flair shall continue to hold the valid licence authority.
  2. Commercial control of the flights shall be maintained by Flair. 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. Flair 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. Flair shall continue to comply with the public disclosure requirements set out in section 8.5 of the ATR.
  5. Flair and Travel Service shall advise the Agency in advance of any changes to the information provided in support of the application.

Member(s)

J. Mark MacKeigan
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