Order No. 2004-A-528

With Decision No. 310-A-2005

November 29, 2004

File No. M4210/Q26-1

On November 19, 2004, Quikair Inc. carrying on business as Quikair (hereinafter Quikair) filed with the Canadian Transportation Agency (hereinafter the Agency) the application set out in the title.

Under Licence No. 040031 issued March 19, 2004, Quikair is authorized to operate a domestic service, small aircraft.

Quikair submits that it intends to withdraw its services between Waterloo and Ottawa and Dorval due to the high operating costs and the low number of passengers.

Quikair advises that scheduled air service to Ottawa is available from Hamilton, which is approximately 45 minutes away from Waterloo, and scheduled air service to both Montréal and Ottawa is available from the Toronto Lester B. Pearson International Airport, which is approximately one hour away from Waterloo.

Quikair further submits that there are a number of alternatives available to passengers in the Waterloo area. VIA Rail Canada Inc. and Greyhound Lines of Canada Ltd. provide daily service to both Montréal and Ottawa.

In addition, Quikair advises that it has had a number of discussions with the Region of Waterloo and with local businesses of Waterloo.

Further, Quikair advises that the manager at the Region of Waterloo International Airport is in discussion with a number of other licensees regarding the possibility of commencing services at Waterloo.

In light of the foregoing, Quikair requests the Agency to grant its request for a reduction in the notice period requirement set out in subsection 64(2) of the Canada Transportation Act (hereinafter the CTA).

Subsection 64(1) of the CTA provides that where a licensee proposes to discontinue a domestic service or to reduce the frequency of such a service to a point to less than one flight per week and, as a result of the proposed discontinuance or reduction, there will be only one licensee or no licensee offering at least one flight per week to that point, the licensee shall give notice of the proposal in prescribed form and manner to such persons as are prescribed.

Pursuant to subsection 64(1.1) of the CTA, if a licensee proposes to discontinue its year-round non-stop scheduled air service between two points in Canada and that discontinuance would result in a reduction, as compared to the week before the proposal is to take effect, of at least 50 percent of the weekly passenger-carrying capacity of all licensees operating year-round non-stop scheduled air services between those two points, the licensee shall give notice of the proposal in the prescribed form and manner to the prescribed persons.

Subsections 64(1.2) and 64(2) of the CTA state, inter alia, that as soon as practicable after giving notice, an opportunity must be given to elected officials of the municipal or local government of the community of the point or points, as the case may be, to meet and discuss with the licensee the impact of the proposed discontinuance, and the proposal to discontinue the service must not be implemented until the expiry 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.

Section 14 of the Air Transportation Regulations, SOR/88-58, as amended (hereinafter the ATR) states that, for the purposes of section 64 of the CTA, a licensee shall give notice of a proposal to discontinue or reduce the frequency of a service to the Agency, to the Minister of Transport of Canada, and to the minister responsible for transportation in the province where the area to be affected is located. Additionally, the licensee is required to advise holders of domestic licences operating in the area to be affected by the proposal and to the persons resident therein by publishing a notice in local newspapers.

The Agency has considered the matter and finds that as a result of the discontinuance of domestic service at Waterloo, there will be no licensee offering at least one flight per week at this point. Also, the Agency notes that Quikair has been operating the domestic service for less than one year. Therefore, the Agency finds that subsection 64(1) of the CTA applies.

Pursuant to subsection 64(3) of the CTA, the Agency, in considering whether to specify a shorter notice period, shall have regard to the adequacy of alternative modes of public transportation available at or in the vicinity of the point in question or between the points concerned; other means by which air service to the point or between the points is likely to be provided; whether the licensee has complied with subsection (1.2); and the particular circumstances of the licensee.

The Agency has carefully considered the application and the factors identified in subsection 64(3) of the CTA, as they apply to this particular case.

The Agency notes that I.M.P. Group Limited, carrying on business as, inter alia, Canjet Airlines, offers one daily flight between Hamilton, which is an approximate 45-minute drive from Waterloo, to Ottawa and there are a number of domestic services offered between the Toronto Lester B. Pearson International Airport and Ottawa and Montréal.

The Agency also notes that VIA Rail Canada Inc. offers two departures per day from Kitchener to Ottawa, with connections in Toronto, and four departures per day from Kitchener to Montréal, also with connections in Toronto. Greyhound Lines of Canada Ltd. offers five trips a day between Waterloo and Ottawa and ten trips a day between Waterloo and Montréal.

Further, the Agency notes that Quikair issued a press release on November 18, 2004, wherein it stated its intention to discontinue its services between Waterloo and Ottawa and Montréal. The Agency notes that the press release also indicated that the manager of the Region of Waterloo International Airport is in discussion with a number of other licensees regarding the possibility of commencing services at Waterloo.

Further, Quikair submitted documentation indicating that it had been in contact with local businesses and the Region of Waterloo regarding the viability of the domestic service and discussed marketing initiatives. In this regard, the Agency notes that, unfortunately, these efforts did not sufficiently improve the viability of the domestic service for it to be continued by Quikair.

In light of the particular circumstances of this case, including the lack of viability of the service, the Agency finds that an abridged period of 4 days notice of the proposal to discontinue services as set out in the application is sufficient.

Accordingly, the Agency hereby orders Quikair to not implement its proposal to discontinue its domestic services between Waterloo, Ontario, Ottawa, Ontario and Montréal, Quebec until November 30, 2004, subject to the following conditions:

1. Quikair is required to advise the following parties of its proposed discontinuance of services:
   • the Minister of Transport of Canada;
   • the minister responsible for transportation in the province of Ontario;
   • elected officials of the municipal or local government of Waterloo, Ontario;
   • the local community of Waterloo, Ontario.
2. Quikair is requested to provide the Agency with copies of the notices provided to the Minister of Transport of Canada and the minister responsible for transportation in Ontario, and the notices in the prescribed format in both official languages, published in the newspapers showing the names of the newspapers in which the notice was given and the date on which the notice was published.
3. Quikair shall, before November 30, 2004, provide an opportunity for elected officials of the municipal or local government of Waterloo to meet and discuss with them the impact of the proposed discontinuance of services.
4. Quikair shall reimburse customers who have purchased Quikair tickets for flights beyond November 30, 2004. Quikair shall also provide confirmation to the Agency that this reimbursement has been completed.

This Order takes effect as of November 25, 2004, the date on which its content was verbally communicated to Quikair.