Decision No. 11-A-2013

Polskie Linie Lotnicze LOT SA (LOT Polish Airlines SA) [LOT] and Cargojet Airways Ltd. also carrying on business as Cargojet Regional (Cargojet) have applied to the Canadian Transportation Agency (Agency) for an approval to permit LOT to provide its scheduled international service between Poland and Canada, using aircraft and flight crew provided by Cargojet, from January 12 to March 17, 2013.

LOT is licensed to operate scheduled international services in accordance with the Agreement on Air Transport between Canada and the European Community and its Member States, signed on December 18, 2009.

EXEMPTION REQUESTED

LOT and Cargojet 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.

In Decision No. 426-A-2012 dated November 7, 2012, the Agency advised that the 45-day filing requirement will be strictly enforced for any new applications made after the date of issuance of that Decision, unless the applicant can demonstrate to the Agency that the requirements for a wet lease resulted from an unexpected or unforeseeable situation.

LOT and Cargojet submit that compliance with subsection 8.2(2) of the ATR is impractical in this case due to the fact that the parties were just able to negotiate and enter into the Memorandum of Understanding on December 11, 2012.

The Agency has considered the submission and is satisfied that the application was filed late as a result of an unexpected or unforeseeable situation.

Therefore, 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 LOT and Cargojet from the application of subsection 8.2(2) of the ATR.

WET-LEASE APPLICATION

In Decision No. 426-A-2012, the Agency found that the issues raised in Sunwing Airlines Inc.’s application for a wet lease suggest that it would be both timely and beneficial to clarify the Agency’s approach to wet-lease applications. In that regard, the Agency advised that it will initiate a consultation to seek the views of the industry and other interested parties regarding the intent of the wet-lease approval requirements. This consultation would include information required by the Agency for its assessment of necessity under paragraph 8.2(3)(j) of the ATR.

The Agency also ruled that until it provides further clarification on wet-lease application requirements, the current approach will be maintained.

The Agency notes that LOT and Cargojet provided an explanation for the wet-lease application; however, as set out in Decision No. 426‑A‑2012, the Agency will continue with its current approach until it has conducted a consultation. Following its consultation, the Agency will establish specific criteria that will apply in the future.

The Agency is satisfied that the application 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 LOT of aircraft and flight crew provided by Cargojet, and the provision by Cargojet of such aircraft and flight crew to LOT, to permit LOT to provide its scheduled international service on licensed routes between Poland and Canada using aircraft and flight crew provided by Cargojet, from January 12 to March 17, 2013.

This approval is subject to the following conditions:

1. LOT shall continue to hold the valid licence authority.
2. Commercial control of the flights shall be maintained by LOT. Cargojet 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. LOT and Cargojet 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. LOT shall continue to comply with the public disclosure requirements set out in section 8.5 of the ATR.
5. LOT and Cargojet shall advise the Agency in advance of any changes to the information provided in support of the application.
6. This approval applies to the carriage of cargo only.

FUTURE REQUESTS

LOT is reminded that in any future wet-lease application, it must provide an explanation, as required by paragraph 8.2(3)(j) of the ATR. Further, the Agency will continue to enforce the requirement to file such applications 45 days before the first planned flight. In this regard, the exemption granted in this Decision should not be relied upon for any future requests for an exemption.