Order No. 2012-A-35

BACKGROUND

Ethiopian Airlines Enterprise carrying on business as Ethiopian Airlines (applicant) has applied to the Canadian Transportation Agency (Agency) for an exemption to permit it to sell, cause to be sold or publicly offer for sale in Canada a scheduled international air service between Ethiopia and Canada, in the absence of a licence.

Section 59 of the Canada Transportation Act (CTA) states that no person shall sell, cause to be sold or publicly offer for sale in Canada an air service unless, if required under Part II of the CTA, the person holds a licence under that part in respect of that service and that licence is not suspended.

The applicant has applied for a scheduled international licence to operate a service between Ethiopia and Canada. However, as the application is not yet complete, an exemption from the application of section 59 of the CTA is necessary in order to allow the applicant to sell, cause to be sold or publicly offer for sale in Canada the proposed air service prior to obtaining the applied for licence.

On September 14, 2011, the applicant indicated that it intended to commence commercial activities in Canada on December 15, 2011 and that it was in the process of obtaining a Canadian foreign air operator certificate (CFAOC) issued by Transport Canada, which document is required to complete the licence application. The applicant stated that the exemption was necessary to commercialize the proposed service sufficiently in advance to achieve viability. The applicant also stated that it was likely that the CFAOC would not issue until November 2011.

The applicant subsequently confirmed delays, on several occasions, with respect to the dates of the base inspection, which is required to be undertaken by Transport Canada prior to the issuance of the CFAOC. The base inspection is now anticipated to take place during the month of April 2012, but no specific date has been set. The proposed starting date for operations is in June 2012.

ANALYSIS

The Agency deals with applications for exemptions from the application of section 59 of the CTA on a case by case basis. The Agency recognizes that section 59 is a consumer protection measure. It is intended to prevent situations in which consumers in Canada pay for a service to an entity that does not hold an Agency licence and are left out of pocket or experience any manner of inconvenience or hardship that may result if that entity does not commence operations on schedule.

Accordingly, prior to granting an exemption from the application of section 59 of the CTA, the Agency must be satisfied that the applicant is taking all the necessary steps to meet all licence issuance requirements and that a licence may be issued prior to the proposed start of operations.

Considering the intent of section 59 of the CTA, the previous delays in this application and the fact that a confirmed base inspection date has not yet been provided, the Agency finds that a time limited exemption from the application of section 59 of the CTA is appropriate in the circumstances.

Accordingly, pursuant to paragraphs 80(1)(c) and 28(1)(b) of the CTA, the Agency exempts the applicant from the application of section 59 of the CTA, effective from the date Transport Canada staff commence the applicant’s base inspection until June 30, 2012, permitting it, during this period, to sell, cause to be sold or publicly offer for sale in Canada a scheduled international air service between Ethiopia and Canada, without holding the required licence, subject to the following conditions:

1. The applicant shall advise the Agency in writing on the date the base inspection takes place.
2. All passengers shall be notified, before a reservation is made, that the scheduled international service is subject to government approval. All future advertising in any media, whether in writing, electronic or by telecommunication, shall also include this information, unless and until the section 59 exemption expires following the issuance of a licence.
3. The applicant shall apply its published tariffs, on file with the Agency and in effect, to sales of transportation.
4. The exemption does not relieve the applicant from the requirement to hold a licence in respect of the service to be provided and, accordingly, no flights shall be operated until the appropriate licence authority has been granted
5. Should the scheduled international licence not be issued, the applicant shall arrange to provide alternative air transportation by an appropriately licensed air carrier, at no additional cost for all passengers who have made reservations with the applicant. If such arrangements are not possible or acceptable to the passenger, the applicant shall arrange to provide a full refund of all monies paid by the passenger.