Order No. 2012-A-107

INTRODUCTION

Air Creebec Inc. (Licensee) has applied to the Canadian Transportation Agency (Agency) for a reduction of the notice period of the proposed discontinuance of its domestic service to La Grande, Quebec, effective March 23, 2012.

It is important to note that the Canada Transportation Act (CTA) and the Air Transportation Regulations, SOR/88-58, as amended (ATR) do not empower the Agency to reject a notice of discontinuance of service. The Agency may only determine whether to allow a reduction in the period of notice to be given for such discontinuance.

The Licensee is licensed to operate domestic services, small and medium aircraft.

SUBMISSIONS

The Licensee states that it currently operates a daily Monday through Friday scheduled service between La Grande and Montréal, Quebec with intermediate stops at Chisasibi, Wemindji, Eastmain, Waskaganish, Nemaska and Chibougamau, Quebec (La Grande scheduled service). The Licensee intends to discontinue the scheduled service to/from La Grande only, effective March 23, 2012. The Agency notes that the Licensee will continue to provide a scheduled service to all of the other points on the La Grande scheduled service.

The Licensee states that Air Inuit Ltd. operates a daily Monday through Friday scheduled service between La Grande and Montréal. The Licensee also states that the distance by road between La Grande and Chisasibi, the latter being the closest point to La Grande that will continue to be served on the La Grande scheduled service, is 104 km and about a 90-minute drive. However, the Licensee indicates that there is no public ground transportation between La Grande and Chisasibi.

As part of its application, the Licensee has submitted confidential commercial information concerning the La Grande scheduled service. The Licensee states that during these difficult economic times, it cannot continue to sustain the losses being incurred in serving La Grande.

The Licensee indicates that with respect to any passengers booked to/from La Grande as of the date of the proposed discontinuance, it will offer the passengers either a full refund or protection on an Air Inuit Ltd. flight to Montréal, the choice to be that of the passenger.

The Licensee states that it will comply with the appropriate provisions of section 64 of the CTA and section 14 of the ATR. Also, the Licensee states that it will contact the Municipality of La Grande upon the issuance of the Agency’s ruling.

LEGISLATIVE FRAMEWORK

Subsection 64(2) of the CTA requires, among other things, that a licensee not implement a proposal to discontinue a domestic service referred to in subsection 64(1) until the expiry of 120 days, or any shorter notice period that the Agency may specify by order.

Subsection 14(1) of the ATR provides that, for the purposes of subsection 64(1) of the CTA, a licensee proposing to discontinue or to reduce the frequency of a domestic service shall give notice of the proposal to the Agency, to the Minister of Transport of Canada and to the minister responsible for transportation in the province or territory 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 newspapers with the largest circulation in that area in each official language.

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 or is likely to be provided; whether the licensee has complied with subsection 64(1.2); and the particular circumstances of the licensee.

ANALYSIS AND FINDINGS

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

With respect to alternative modes of public transportation (i.e., not air-related) available at La Grande to communities currently served on the La Grande scheduled service, the Licensee has indicated that the only alternative way of connecting to the nearest community (i.e., Chisasibi), which provides air access to the other communities, is to travel by car.

With respect to other means by which air service to La Grande is to be provided, Air Inuit Ltd. operates a daily Monday through Friday scheduled service both ways between La Grande and Montréal.

With respect to discussing its discontinuance with elected officials, the Licensee has indicated its intention to contact the Municipality of La Grande upon the issuance of the Agency’s ruling.

The Agency notes the Licensee’s submission concerning the economic difficulties arising out of the operation of the air service to/from La Grande which is the reason for the proposed discontinuance of the air service effective March 23, 2012. The Agency also notes that the Licensee will continue to serve the other points of the La Grande scheduled service.

The Agency recognizes the challenges faced by the Licensee on this route and the impact on the Licensee.

The Agency also recognizes the Licensee’s commitment to protect passengers who have made reservations on flights between La Grande and Montréal.

The notice provisions required by the CTA are intended to ensure that communities with limited air service, usually remote communities, are made aware enough in advance of reductions in or discontinuances of air services in their community. Once advised, the elected officials and the general population of the affected communities may choose to seek a replacement carrier. Carriers of the affected area are also made aware of the situation by the notice and can take advantage of an opportunity to enter that market.

Although the notice with regard to the discontinuance of the domestic air service to/from La Grande on March 23, 2012 would appear to be short, and perhaps negate some of the reasons for a more lengthy notice period, the Agency gives strong weight, in this case, to the economic argument made by the Licensee. The Agency also notes that there is an alternative air service to Montréal and there is road connection, albeit not served by public transit, between La Grande and Chisasibi which would allow passengers to access by air from Chisasibi other communities on the La Grande scheduled service.

Therefore, the Agency finds that an abridged period of notice is warranted.

CONCLUSION

Accordingly, the Agency orders that the Licensee be permitted to implement the proposed discontinuance of its domestic service to/from La Grande as of March 23, 2012, conditional on compliance with the terms set out below before that date:

1. Air Creebec Inc. is required to provide notice in the prescribed form to the following parties of its proposed discontinuance of service and file proof of all notifications with the Agency:

• the federal Minister of Transport;
• the minister responsible for transportation in the province of Quebec;
• elected officials of the municipal or local governments of La Grande; and
• the local community of La Grande, by publishing, in both official languages, a notice in the newspapers with the largest circulation in La Grande.

In addition, this Order is subject to the following conditions:

1. Air Creebec Inc., immediately following the issuance of this Order, shall provide an opportunity for elected officials of the municipality or local government of the community of La Grande to meet with Air Creebec Inc. to discuss the impact of the proposed discontinuance.
2. Air Creebec Inc. shall ensure that passengers already booked on flights beyond the date of discontinuance are protected on Air Inuit Ltd.’s services to/from Montréal or provided with refunds.
3. Air Creebec Inc. shall provide the Agency with copies of the notices sent to the parties, as set out above, and confirmation that an opportunity was provided to the elected officials to meet.
4. Air Creebec Inc. shall provide the Agency with copies of the tear sheets from the publications in both official languages.