Order No. 2016-A-52

April 11, 2016

APPLICATION by P.A.L. Airlines Ltd. (P.A.L.) for a reduction of the notice period requirement set out in subsection 64(2) of the Canadian Transportation Act, S.C. 1996, c. 10, as amended (CTA).

Case number: 
16-01585

INTRODUCTION

[1] P.A.L. has applied to the Canadian Transportation Agency (Agency) for a reduction of the notice period of the proposed discontinuance of its domestic service to Schefferville, Quebec, effective April 5, 2016.

[2] It is important to note that the 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] P.A.L. is licensed to operate a domestic service, small and medium aircraft.

SUBMISSIONS

[4] P.A.L. states that it currently operates a year-round scheduled air service three times per week between Wabush, Newfoundland and Labrador and Schefferville, using a 37 seat Dash 8 aircraft almost exclusively for subcontractors in the mining operations, Tata Steel, which has ceased operations in recent months.

[5] P.A.L. intends to discontinue the scheduled service between Wabush and Scherfferville effective April 5, 2016. In preparation of the proposed discontinuance, P.A.L. has not booked any passengers beyond April 4, 2016.

[6] As part of its application, P.A.L. submitted confidential commercial information concerning this scheduled service. P.A.L. states that due to the closure of the mining operations, it finds it financially impractical to continue the service.

[7] Air Inuit continues to offer a scheduled year-round air service between Wabush and Schefferville four times per week with two flights on Fridays, and has the capacity to fulfill the travelling needs of the community.

LEGISLATIVE FRAMEWORK

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

[9] 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.

[10] 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

[11] The proposed discontinuance would result in a reduction to only one licensee offering at least one flight per week to that point. Therefore, subsection 64(1) of the CTA applies and P.A.L. shall give notice of the proposed discontinuance of its service.

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

  • Air Inuit offers a scheduled year-round air service between Wabush and Schefferville four times per week with two flights on Fridays, and has the capacity to fulfill the travelling needs of the community.
  • P.A.L. has indicated that it is financially impractical to continue the air service to Schefferville due to the closure of the mining operations, which is the reason for the proposed discontinuance of the air service effective April 5, 2016.
  • P.A.L. has indicated that it has already discussed options with the Band Council Chief to assess the impact on the community. It has also held discussions with Air Inuit.
  • P.A.L. has also indicated its intention to contact the federal Minister of Transport, the minister responsible for transportation in the province of Quebec and the community residents of Schefferville.

[13] 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 effected 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.

[14] Although the notice with regard to the discontinuance of the domestic air service to and from Schefferville on April 5, 2016 is short, the Agency gives strong weight, in this case, to the economic argument made by P.A.L.. The Agency also notes that there is an alternative scheduled air service provider fulfilling the community’s needs.

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

CONCLUSION

[16] Accordingly, the Agency orders that P.A.L. be permitted to implement the proposed discontinuance of its domestic service between Wabush and Schefferville as of April 5, 2016, conditional on compliance with the terms set out below before that date:

  1. P.A.L. 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 government of Schefferville; and
  • the local community of Schefferville, Quebec, by publishing, in both official languages, a notice in the newspapers with the largest circulation in Schefferville, Quebec and by posting a notice on the community bulletin board.

2. P.A.L. shall ensure that any passengers already booked on flights beyond the date of discontinuance are provided with a full refund.

[17] This order takes effect on March 31, 2016, the date on which it was communicated by e‑mail to P.A.L.

Member(s)

P. Paul Fitzgerald
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