# Air Transat - Investigation Report

Case No. 17-05835

File: OP-012-0345-005/17-05835

November 30, 2017

SUBJECT: Air Transat A.T. Inc. doing business as Air Transat - Targeted Investigation into Air Transat A.T. Inc.'s flight Nos. TSC157 and TSC507 tarmac delay at the Ottawa MacDonald-Cartier International Airport (Ottawa Airport) on July 31, 2017

## LEGISLATIVE REFERENCE

### Regulatory obligation

Pursuant to subsection 110(4) of the Air Transportation Regulations,

Where a tariff is filed containing the date of publication and the effective date and is consistent with these Regulations and any orders of the Agency, the tolls and terms and conditions of carriage in the tariff shall, unless they are rejected, disallowed or suspended by the Agency or unless they are replaced by a new tariff, take effect on the date stated in the tariff, and the air carrier shall on and after that date charge the tolls and apply the terms and conditions of carriage specified in the tariff.

### Disposition establishing the violations

Pursuant to subsection 179(1) of the Canada Transportation Act,

Every person who contravenes a provision, requirement or condition designated under section 177 commits a violation and is liable to a penalty fixed pursuant to that section.

### Issuance of notice of violation

Pursuant to section 180 of the Canada Transportation Act,

If a person designated as an enforcement officer under paragraph 178(1)(a) believes that a person has committed a violation, the enforcement officer may issue and serve on the person a notice of violation that names the person, identifies the violation and sets out

(a) the penalty, established in accordance with the regulations made under section 177, for the violation that the person is liable to pay; and

(b) the particulars concerning the time for paying and the manner of paying the penalty.

### Agency's jurisdiction with respect to compliance with tariffs

Pursuant to section 113.1 of the Air Transportation Regulations:

If an air carrier that offers an international service fails to apply the fares, rates, charges or terms and conditions of carriage set out in the tariff that applies to that service, the Agency may direct it to

(a)   take the corrective measures that the Agency considers appropriate; and

(b)   pay compensation for any expense incurred by a person adversely affected by its failure to apply the fares, rates, charges or terms and conditions set out in the tariff.

Pursuant to section 26 of the Canada Transportation Act:

The Agency may require a person to do or refrain from doing any thing that the person is or may be required to do or is prohibited from doing under any Act of Parliament that is administered in whole or in part by the Agency.

### Appeal of Agency Decisions

Pursuant to subsection 41(1) of the Canada Transportation Act:

An appeal lies from the Agency to the Federal Court of Appeal on a question of law or a question of jurisdiction on leave to appeal being obtained from that Court on application made within one month after the date of the decision, order, rule or regulation being appealed from, or within any further time that a judge of that Court under special circumstances allows, and on notice to the parties and the Agency, and on hearing those of them that appear and desire to be heard.

### Agency fact finding is conclusive

Pursuant to section 31 of the Canada Transportation Act,

The finding or determination of the Agency on a question of fact within its jurisdiction is binding and conclusive.

## BACKGROUND FACTS

On November 22, 2017, Designated Enforcement Officer Carole Girard (DEO Girard) was informed of her appointment as the Designated Enforcement Officer of record on the Air Transat matter.

On November 22, 2017 DEO Girard was provided with a copy of the Agency Panel determination in case 17-03788, including the panel's reasons for determination in their version before final editing. As the Agency determined that Air Transat failed to apply its tariff, contrary to subsection 110(4) of the Air Transportation Regulations, a provision that is prescribed on the Canadian Transportation Agency's Designated Provisions Regulations, DEO Girard was requested to investigate matters within her capacity as DEO in accordance with Part VI of the Canada Transportation Act.

On November 30, 2017, DEO Girard was provided with the Agency panel's determination and finalized reasons for determination number A-2017-194 (Determination), in which the Agency found, inter alia, that on July 31, 2017 during the tarmac delay experienced at the Ottawa International Airport, Air Transat failed to properly apply its tariff as required by subsection 110(4) of the Air Transportation Regulations (Appendix 1).

The Determination includes a finding that Air Transat A.T. Inc. contravened subsection 110(4) and section 111 of the Air Transportation Regulations. As section 111 is not designated under the Canadian Transportation Agency Designated Provision Regulations, this investigation only addresses the violation of subsection 110(4), which is designated for a monetary penalty of up to $10,000 in case of a corporation. For the reasons set out in the Determination, the Agency found that with respect to Flight Nos. 157 and 507, Air Transat failed to properly apply the terms and conditions set out in Rule 5.2 d) and Rule 21.3 c) of its Tariff in respect of offering drinks and snacks to passengers (paragraph 93) and in respect of disembarking passengers (paragraph 122), thereby contravening subsection 110(4) of the Air Transportation Regulations. DEO Girard notes that the Agency is an expert tribunal and a regulator mandated under the Canada Transportation Act and the Air Transportation Regulations toconduct inquiries on whether an air carrier has complied with the terms and conditions of its tariff, and make final and binding determinations in this respect. DEO Girard notes that the Agency's decision may be appealed to the Federal Court of Appeal on questions of law or of jurisdiction, but not on its findings of fact and that section 31 of the Canada Transportation Act states that "the finding or determination of the Agency on a question of fact within its jurisdiction is binding and conclusive". DEO Girard further notes that the Agency conducted an inquiry into the tarmac delay experienced by passengers of flight Nos. 157 and 507 at Ottawa's MacDonald Cartier International Airport on July 31, 2017 and determined that Air Transat had failed to apply its tariff, contrary to subsection 110(4) of the Air Transportation Regulations DEO Girard concludes, on the basis of the Agency's November 30, 2017 determination, that on July 31, 2017, Air Transat contravened subsection 110(4) of the Air Transportation Regulations. ## CONCLUSION Pursuant to section 180 of the Canada Transportation Act, DEO Girard believes that Air Transat has committed a violation of subsection 110(4) of the Air Transportation Regulations on the basis of the Agency's finding and for the reasons set out in the Determination. ## ADMINISTRATIVE MONETARY PENALTY (AMP) While the Agency has found that Air Transat has failed to properly apply the terms and conditions of its tariff in respect of offering drinks and snacks and in respect of disembarking passengers, DEO Girard will impose a single AMP for Air Transat's non-application of its tariff. However, the tariff forms part of the air carrier's contract with each individual passenger. Therefore, Air Transat is in violation of subsection 110(4) vis-à-vis each passenger on board flight Nos. 157 and 507 on July 31, 2017. DEO Girard notes that, pursuant to the Canadian Transportation Agency Designated Provisions Regulations, a violation of subsection 110(4) may result in an AMP of up to$10,000 per violation. According to the Agency's enforcement policy, subsection 110(4) of the Air Transportation Regulations is a Level 3 violation which is subject to a warning for first violation, progressing to the full $10,000 on fourth violation. However, the enforcement policy states that designated enforcement officers can issue a fine for a first violation if it's serious enough (Appendix 2 and 3). DEO Girard is of the view that the nature of the violation in question, the number of passengers affected and the extreme conditions that existed on board flight Nos. 157 and 507, as described in the Agency's determination, are serious enough to warrant the imposition of an AMP and not a warning. DEO Girard is of the view that an AMP in the amount of$500 for every passenger on board flight Nos. 157 and 507 is warranted. Given the number of violations, applying the first amount on the Level 3 penalty scale ($2,500) for each violation would be excessive whereas$500 is reasonable in light of the fact that this is a first violation. It is also more comparable to the amount of compensation that Air Transat offered to the passengers of flight No. 157 (Appendix 4). While a monetary penalty of $295,000 is the highest penalty issued by an Agency DEO under section 180 of the Canada Transportation Act, it is proportionate to the circumstances of the events and their impacts on the passengers affected. Flight No. TSC157: 340 passengers times 500$

Flight No. TSC507: 250 passengers times 500$Total AMP:$295,000

Prepared by:

Carole Girard
Designated Enforcement Officer

## Evidence is contained in the attached appendix

Appendix 1: Agency determination No. A-2017-194

Appendix 2: Website excerpt entitled "Types of enforcement actions and contraventions"

Appendix 3: Website excerpt entitled "Overview of compliance monitoring and enforcement activities"

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