Order No. 2018-A-127

BACKGROUND

The 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 a scheduled international service, large aircraft, between Canada and Jamaica, Mexico, Dominican Republic and Cuba, in the absence of a licence.

Section 59 of the 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, a person holds a licence issued under that Part in respect of that service and that licence is not suspended.

The applicant has applied for scheduled international licences, large aircraft, to operate services between Canada and Jamaica, Mexico, Dominican Republic and Cuba. However, as the application is not yet complete, the applicant has requested an exemption from the application of section 59 of the CTA.

The applicant indicates that it is in the process of obtaining a Canadian aviation document (CAD) from Transport Canada, which is required to complete the licence application. The applicant also indicates that it intends to commence commercial activities in Canada in late December 2018.

The applicant states that the exemption from the application of section 59 will allow it to start commercializing the new services.

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, the Agency, prior to granting an exemption from the application of section 59 of the CTA, must be satisfied that the applicant is taking all the necessary steps to meet all licence issuance requirements and that the applicant has demonstrated a high probability of obtaining the required licences prior to the proposed start of operations.

A Canadian applicant for a scheduled international licence, large aircraft, must establish that it:

1. is Canadian;
2. holds a CAD;
3. has the prescribed liability insurance coverage in respect of the services to be provided under the licence; and,
4. meets the prescribed financial requirements.

The Agency is satisfied that the applicant is Canadian.

The Agency is also satisfied that the applicant has the prescribed liability insurance coverage.

The Agency notes that the applicant expects that it will be issued a CAD in time for the proposed start-up date.

The Agency is satisfied that the applicant met the prescribed financial requirements.

Accordingly, the Agency is satisfied that there is a high probability that the licence will issue prior to the intended start-up date of late December 2018.

In the present circumstances, considering the intent of section 59 of the CTA and the fact that the applicant is taking all the necessary steps to meet all licensing issuance requirements, the Agency finds that compliance by the applicant with section 59 of the CTA is unnecessary.

Accordingly, the Agency, pursuant to paragraph 80(1)(c) of the CTA, exempts the applicant from the application of section 59 of the CTA, effective from the date of this Order, permitting it to sell, cause to be sold or publicly offer for sale in Canada, a scheduled international service, large aircraft, between Canada and Jamaica, Mexico, Dominican Republic and Cuba, without holding the required licences, subject to the following conditions:

1. All advertising in any media, whether written, electronic or telecommunications, shall include a statement that the air services are subject to government approval, unless and until the section 59 exemption expires following the issuance of a licence. All prospective clients shall be made aware, before the signature of any charter contract, that the air services are subject to government approval;

2. The applicant shall file its tariffs with the Agency, as well as publish and apply them, before marketing its services;

3. This exemption does not relieve the applicant from the requirement to hold a licence in respect of the services to be provided and, accordingly, no flights shall be operated until the appropriate licence authority has been granted; and,

4. Should the licence not be issued or not issue by the time an air service sold to a client is to be used, the applicant shall arrange to provide alternative air transportation by an appropriately licensed air carrier, at no additional cost for its clients. If such arrangements are not possible or acceptable to its clients, the applicant shall arrange to provide a full refund of all monies paid by its clients.