Order No. 2012-A-373

INTRODUCTION

[1] Innu Mikun Limited Partnership, by its general partner, Innu Mikun Inc. carrying on business as Innu Mikun Airlines (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 Rigolet, Newfoundland and Labrador, effective November 6, 2012.

[2] 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.

[3] The Licensee is licensed to operate a domestic service, small aircraft.

SUBMISSIONS

[4] The Licensee states that it currently operates a daily Monday through Friday and Sunday scheduled service between Goose Bay, Makkovik, Postville, Hopedale, Natuashish and Nain as well as a once a week Wednesday service to Rigolet on the route Goose Bay-Rigolet-Makkovik. The Licensee intends to discontinue its year‑round non-stop scheduled air service between Goose Bay and Rigolet and Rigolet and Makkovik effective November 6, 2012. The Agency notes that the Licensee will continue to provide a scheduled service to all of the other points on its north coast of Labrador scheduled service.

[5] The Licensee points out that Air Labrador Limited carrying on business as Air Labrador (Air Labrador) operates two scheduled daily flights Monday through Friday and one scheduled daily flight Saturday and Sunday to Rigolet using the same aircraft as the Licensee, namely a De Havilland Twin Otter on the route Goose Bay-Rigolet–Makkovik. The Licensee also states that alternative transportation is available in the form of a ferry service four times a week from June to November.

[6] The Licensee also states that it has experienced an erosion of approximately 70 percent of passenger traffic to/from Rigolet as government workers tend to use Air Labrador as NGC Nunatsiavut Inc., operating as the Nunatsiavut Group of Companies, the business arm of the Nunatsiavut Government, is now a majority shareholder in Air Labrador. The Licensee believes that its proposed discontinuance of service will have a negligible impact on the availability of an air service to and from the community, as its Wednesday air service represents only 14 percent of the weekly passenger carrying capacity on the routes.

[7] The Licensee indicates that with respect to any passengers booked to/from Rigolet as of the date of the proposed discontinuance, it will offer the passengers either a full refund or arrange for travel with Air Labrador.

[8] In addition, the Licensee states that it has contacted the Mayor of Rigolet to discuss questions about the impact of the proposed discontinuance and that it is committed to remain available to meet with elected representatives of Rigolet’s municipal government.

LEGISLATIVE FRAMEWORK

[9] Subsection 64(2) of the CTA requires, among other things, that a licensee not implement a proposal to discontinue an air service referred to in subsection 64(1) or 64(1.1) until the expiry of 120 days, or any shorter notice period that the Agency may specify by order.

[10] Subsection 14(1) of the ATR provides that, for the purposes of subsections 64(1) and 64(1.1) 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.

[11] 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

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

[13] The Agency has considered the matter and finds that the discontinuance of the Licensee’s year-round non-stop scheduled air services between Goose Bay and Rigolet and between Rigolet and Makkovik, will not 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 these points. Therefore, subsection 64(1.1) of the CTA does not apply to this portion of the application.

[14] The Agency notes that the discontinuance of the Licensee’s domestic air service between Goose Bay and Rigolet and between Rigolet and Makkovik would result in only one licensee offering at least one flight per week to the point Rigolet. Therefore, subsection 64(1) of the CTA applies in respect of the point. As the domestic service was provided by the Licensee for more than one year, it is required to provide this service for 120 days after notice is duly given unless the Agency, pursuant to subsection 64(2) of the CTA, specifies otherwise.

[15] With respect to alternative modes of public transportation (i.e., not air-related) available at Rigolet, the Licensee has indicated that the only alternative way of travelling to the nearest community is a ferry service four times per week from June to November.

[16] With respect to other means by which air service to Rigolet is to be provided, Air Labrador operates two scheduled daily flights Monday through Friday and one scheduled daily flight Saturday and Sunday.

[17] With respect to discussing its proposed discontinuance with elected officials, the Licensee has indicated that it has contacted the Mayor of Rigolet and that it is available to meet with elected representatives of Rigolet’s municipal government.

[18] The Agency notes the Licensee’s submission concerning the economic reasons for the proposed discontinuance of the air service to Rigolet effective November 6, 2012. The Agency also notes that the Licensee will continue to serve other points on its north Labrador coast scheduled service.

[19] The Agency recognizes the challenges faced by the Licensee in continuing to provide its domestic air service to Rigolet and the impact on the Licensee.

[20] The Agency also recognizes the Licensee’s commitment to protect passengers who have made reservations on flights to/from Rigolet.

[21] 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.

[22] Although the notice with respect to the discontinuance of the domestic service to/from Rigolet on November 6, 2012 is short, 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 Rigolet and seasonal ferry service from Goose Bay.

[23] Therefore, the Agency finds that a reduced period of notice is warranted.

CONCLUSION

[24] Accordingly, the Agency orders that the Licensee be permitted to implement the proposed discontinuance of its domestic service to Rigolet as of November 6, 2012, conditional on compliance with the terms set out below before that date:

1. The Licensee 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 Newfoundland and Labrador;

• elected officials of the municipal or local governments of Rigolet; and

• the local community of Rigolet, by publishing, in both official languages, a notice in the newspapers with the largest circulation in Rigolet.

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

1. The Licensee, immediately following the issuance of this Order, shall provide an opportunity for elected officials of the municipality or local government of the community of Rigolet to meet with the Licensee to discuss the impact of the proposed discontinuance.
2. The Licensee shall ensure that passengers already booked on flights beyond the date of discontinuance are protected on Air Labrador’s services to/from Rigolet or provided with refunds.
3. The Licensee 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. The Licensee shall provide the Agency with copies of the tear sheets from the publications in both official languages.