Order No. 2014-A-31

On October 18, 2013, Aeroflot – Russian Airlines (Aeroflot) applied to the Canadian Transportation Agency (Agency) for an exemption from section 135.91 of the Air Transportation Regulations (ATR), which prohibits a person from setting out in an advertisement an air transportation charge as if it were a third party charge or use the term “tax” in an advertisement to describe an air transportation charge.

Aeroflot has indicated that the exemption is necessary as it must continue to display a fuel surcharge as a third party charge until it has addressed its system limitations to permit compliance with the regulations. The Agency notes that Aeroflot’s system updates will be made in March 2014.

Subsection 80(1) of the Canada Transportation Act, S.C., 1996, c. 10, as amended (CTA) provides that the Agency may, by order, on such terms and conditions as it deems appropriate, exempt a person from the application of any of the provisions of Part II of the CTA or of a regulation or order made under this Part where the Agency is of the opinion that:

1. the person has substantially complied with the provision;
2. an action taken by the person is as effective as actual compliance with the provision; or
3. compliance with the provision by the person is unnecessary, undesirable or impractical.

The Agency has carefully considered Aeroflot’s request for an exemption and has weighed all the evidence filed as well as all applicable legislation, regulations and legal principles.

The Agency notes the action that Aeroflot is taking to achieve compliance; however, these efforts considered in relation to paragraphs 80(1)(a) and (c) of the CTA do not indicate that “substantial” or “actual compliance” with section 135.91 of the ATR has been achieved.

Additionally, the Agency notes that the amendments to the ATR respecting air services price advertising came into effect in December 2012. These amendments have two key objectives: (1) to enable consumers to readily determine the total price of an advertised air service; and (2) to promote fair competition between all advertisers in the air travel industry.

The Agency finds that granting the exemption sought by Aeroflot would undermine the two objectives of the amendments to the ATR. Therefore, the Agency, in consideration of paragraph 80(1)(c) of the CTA, does not find that requiring Aeroflot’s compliance with section 135.91 of the ATR is “unnecessary or undesirable.”

With respect to whether compliance with the regulations is “impractical” as per paragraph 80(1)(c) of the CTA, the Agency notes that it communicated its expectations regarding the advertisement of fuel surcharges in its Air Services Price Advertising Interpretation Note, which was released in December 2012. The Interpretation Note states that “Canadian navigation surcharges, fuel surcharges and travel agent fees are considered to be air transportation charges and must not appear under third party charges.” Further, the Agency issued a Notice to Industry on May 21, 2013, regarding the Agency’s updated enforcement approach respecting ATR air services price advertising requirements.

The Agency also notes that many other carriers have taken timely actions to ensure that they are in conformity with the new regulatory requirements.

The Agency finds that Aeroflot has had sufficient time to work with its service providers to make system changes in order to meet the requirements of section 135.91 of the ATR and the objectives of the regulations.

Accordingly, the Agency, pursuant to subsection 80(1) of the CTA, denies Aeroflot’s request for an exemption from section 135.91 of the ATR.