Decision No. 116-A-2007

March 13, 2007

File Nos. M4212-C575-4
M4820-F3

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Corsair has applied to the Canadian Transportation Agency (hereinafter the Agency) for the authority set out in the title. The application was received on January 16, 2007.

Under Licence No. 975149, Corsair is authorized to operate a scheduled international service between France and Canada in accordance with the Agreement between the Government of Canada and the Government of the French Republic on Air Transport signed on June 15, 1976, as amended (hereinafter the 1976 Agreement).

Condition No. 1 of Licence No. 975149 states:

The Licensee is authorized to operate a scheduled international service on Route 1 of the French Route Schedule of the 1976 Agreement, between Paris, France and Montréal, Quebec/Toronto, Ontario, Canada.

Condition No. 2 of Licence No. 975149 states:

The operation of the scheduled international service authorized herein shall be conducted subject to the provisions of the Agreement and to any arrangements related thereto as may be agreed to between Canada and France.

Corsair is requesting the extra-bilateral authority to serve the point Moncton as service at this point is not provided for in the 1976 Agreement. Under the terms of the 1976 Agreement, Corsair is authorized to serve Route 1 of the French Route Schedule which permits own aircraft services to only the Canadian points Montréal and/or Toronto.

Due to the extra-bilateral nature of Corsair's requested authority, the Agency, by letter dated January 17, 2007, gave notice of the application to parties that may have an interest, namely Air Canada, Air Transat A.T. Inc. carrying on business as Air Transat (hereinafter Air Transat), Zoom Airlines Incorporated (hereinafter Zoom), Aéroports de Montréal and Greater Moncton International Airport Authority Inc. (hereinafter Moncton Airport).

An intervention in support of the application was received from Moncton Airport. Air Transat filed an intervention indicating that it is prepared to support Corsair's application conditional on favourable reciprocal treatment by the French authorities of its own application for an extra-bilateral authority.

ISSUE

The issue to be addressed is whether to authorize Corsair to operate a scheduled international service to and from Moncton on an extra-bilateral basis.

POSITIONS OF THE PARTIES

Corsair indicates that for the 400th anniversary celebrations of the founding of Acadia during the summer of 2004, the Government of New Brunswick had expressed the wish to see the operation of a once-weekly service between Moncton and Paris from June to September 2004. Corsair states that the service proposal was the result of a partnership between the Government of New Brunswick, Moncton Airport, the European Bureau of the Canadian Tourism Commission and the municipal governments of Moncton and Dieppe. To this end, Corsair indicates that the Agency issued a favourable decision and permitted Corsair to operate the proposed flights.

Corsair maintains that in light of the success of the program and the economic contributions for the tourist activities of New Brunswick, the different partners had asked Corsair to repeat the series of flights for the summers of 2005 and 2006, which was done. For these reasons, Corsair requests, pursuant to subsection 78(2) of the Canada Transportation Act (hereinafter the CTA), a special permission to again operate the flights Paris/Montréal/Moncton/Paris on a scheduled basis during the tourist summer season of 2007.

Moncton Airport is fully supportive of the proposed service by Corsair. It indicates that the 2006 summer service Paris/Moncton was very successful in bringing French visitors to New Brunswick and that New Brunswick's partners, the small communities, Moncton Airport and Tourism New Brunswick have been aggressively promoting and advertising in the French market since 1997 to increase French tourism to Canada and the province of New Brunswick. Moncton Airport adds that the increased tourism and economic impact generated by the Corsair flights are very important to the Greater Moncton community and the province of New Brunswick. Moncton Airport also notes that in preparation for the "2009 World Acadian Congress" to be held in Caraquet, New Brunswick in August 2009, it is important to continue to develop its connection with the French and international markets.

Air Transat indicates that it is in the process of filing a request for extra-bilateral authority with the French Civil Aviation Authority to operate a series of 12 Montréal-Marseille-Montréal flights during the upcoming peak summer season on a scheduled service basis.

Air Transat submits that as both the Corsair and Air Transat proposals offer enhanced fare and service options to the travelling public in the highly restrictive Canada-France air transport regulatory regime, both programs should be afforded favourable consideration and that the Agency should include a similar reciprocity condition as per last year's decision in order to ensure appropriate follow-up by the French Civil Aviation Authority.

Corsair acknowledges Air Transat's position; however, Corsair submits that it has no control over the decisions taken by the French Civil Aviation Authority.

Corsair maintains that an unfavourable decision would not help the objectives of Canadian carriers. Further, Corsair has not opposed nor does it normally oppose the requests of Air Transat.

ANALYSIS AND FINDINGS

The Agency may grant temporary authority pursuant to subsection 78(2) of the CTA for a service which is not permitted in a bilateral air transport agreement.

The Agency has reviewed and considered the application and the interventions filed by Air Transat and Moncton Airport.

Corsair seeks extra-bilateral authority to operate its Paris/Montréal scheduled service via Moncton, a point not provided for in the 1976 Agreement. The service would be provided once a week from June 28 to September 13, 2007, for a total of 12 flights.

In its review of Corsair's application, the Agency has considered the economic interests of the communities to be served. In this respect, the Agency recognizes Moncton Airport's submission that the tourism and economic impact of the proposed service is very important to the Greater Moncton community and the province of New Brunswick.

However, the Agency must also consider the economic interests of Canadian air carriers, as well as the impact its decisions may have on the balance to be struck between the advantages stemming from the bilateral agreement and the bilateral relations with France.

The Agency notes that an application by Air Transat to operate, on an extra-bilateral basis, a series of 12 scheduled flights between Montréal and Marseille from June 22 to September 6, 2007 has been filed with the French Civil Aviation Authority and that Air Transat is awaiting a decision.

In light of the above, and in accordance with the principles of reciprocity and mutual benefits, the Agency deems it appropriate to approve this application insofar as it would provide for adequate reciprocity.

Consequently, the Agency is of the opinion that approval by the French Civil Aviation Authority on an extra-bilateral basis of Air Transat's application to operate 12 regular flights to Marseille from June 22 to September 6, 2007 would provide reciprocity in support of the approval of Corsair's application.

Consequently, pursuant to subsection 78(2) of the CTA, the Agency hereby varies Condition Nos. 1 and 2 of Licence No. 975149 to permit Corsair to provide an international scheduled service on the route Paris/Montréal/Moncton/ Paris from June 28 to September 13, 2007.

Pursuant to paragraph 28(1)(b) of the CTA, the variance of Conditions Nos. 1 and 2 of Corsair's Licence No. 975149 referred to above will only come into force on the date the French Civil Aviation Authority approve the extra-bilateral authority requested by Air Transat to operate 12 scheduled flights between Montréal and Marseille from June 22 to September 6, 2007.

In all other respects, the service authorized herein shall be operated in accordance with the 1976 Agreement.

The authority granted herein does not exempt Corsair from the requirements of other legislative acts or regulations, including those of Transport Canada.

This Decision shall form part of Licence No. 975149 and shall remain affixed thereto as long as the said Decision is in force.

Members

• Raymon J. Kaduck
• Baljinder Gill