Decision No. 405-A-1988

October 21, 1988

File No. 2-F222-5A

Docket No. 88368

Bradley Air Services Limited carrying on business under the firm name and style of First Air (hereinafter the applicant) has applied to the National Transportation Agency for the amendment set out in the title. The application was received on June 23, 1988.

Under Licence No. 880315, the applicant is authorized to operate a Class 2 Regular Specific Point domestic service using fixed wing aircraft in Groups B, C, D, E, F and G, serving the points Iqaluit (Frobisher Bay), Hall Beach, Cape Dorset, Coral Harbour, Clyde River, Pangnirtung, Broughton Island, Pond Inlet, Nanisivik, Igloolik, Pelly Bay, Spence Bay, Gjoa Haven, Cambridge Bay, Yellowknife, Rankin Inlet, Baker Lake and Eskimo Point, Northwest Territories; Goose Bay, Newfoundland; Montreal, P.Q.; Ottawa, Ontario; Churchill and Winnipeg, Manitoba.

Notice of the application was published on July 20, 29 and August 2, 1988 in the newspapers of the areas concerned and copies of the notice were sent to selected air carriers and to others believed to be interested. An intervention opposing the granting of the application was filed with the Agency by Canadian Airlines International Ltd. carrying on business under the firm name and style of either Canadian Airlines International or Canadian (hereinafter CAIL). The applicant replied to the intervention.

Seven interventions were filed in support of the application.

The pleadings form part of the public files and may be consulted in the Agency's offices by anyone who so desires. In addition, copies will be provided by the Secretary of the Agency on request.

The Agency has considered the application, the material in support thereof and the interventions referred to.

CAIL states that there is insufficient traffic to warrant competition and that the proposed service would reduce, rather than enhance, competition in the Eastern Arctic. However, many of the supporting interveners submitted that the quality of service provided by CAIL has deteriorated substantially due to a lack of competition and expressed the view that a return of competitive air service would improve the level of service provided to them and to their customers. It is unlikely that operation of the proposed service would result in a decrease or instability in the overall level of service provided to the area in view of the applicant's intention to operate the same number of flights from Val-d'Or to Iqaluit and from Iqaluit to Resolute Bay (two flights per week) as are operated by CAIL. Moreover, as noted by the applicant, CAIL indicates that the proposed service could lead to a reduction, not elimination, of its service. In this context, CAIL's submission that only 14% of its passenger traffic to Resolute Bay originates from Ottawa suggests that passenger demand for CAIL's service between Montreal and Resolute Bay would not be significantly affected by the applicant's proposal to serve Resolute Bay from Ottawa. Hence, the combined services of First Air and CAIL would probably lead to an overall increase in the level of air services provided.

The Agency also notes that no community representatives or users of air services oppose the proposed service. On the other hand, most of the interveners in support are users of air services which depend on the efficient and effective provision of these services to and from the points proposed to be served.

CAIL makes reference to the principles used in denying an application by Frontier Air and suggests that these same principles should lead the Agency to deny this application; however, the Agency is of the view that the circumstances of this case as noted and discussed above are so different as to not support CAIL's submission.

Accordingly, the Agency is satisfied that the issuance of a licence for the proposed service would not lead to a significant decrease or instability in the level of domestic service provided between points or to or from any point in the designated area. The application is hereby approved.

A new document of licence, bearing Licence No. 880315, to operate a Class 2 Regular Specific Point domestic service serving the points Iqaluit (Frobisher Bay), Hall Beach, Cape Dorset, Coral Harbour, Clyde River, Pangnirtung, Broughton Island, Pond Inlet, Nanisivik, Igloolik, Pelly Bay, Spence Bay, Gjoa Haven, Cambridge Bay, Yellowknife, Rankin Inlet, Baker Lake, Eskimo Point and Resolute Bay, Northwest Territories; Goose Bay, Newfoundland; Montreal and Val-D'Or, P.Q.; Ottawa, Ontario; Churchill and Winnipeg, Manitoba, will be issued to Bradley Air Services Limited carrying on business under the firm name and style of First Air upon the applicant establishing to the satisfaction of the Agency that it meets the requirements set out in paragraph 72(2)(a) of the National Transportation Act, 1987, S.C. 1987, c. 34.