Decision No. 438-A-1988

November 18, 1988

File No. M4205-F43-4-1

Docket No. 88431 WR

Fond du Lac Air Ltd. (hereinafter the applicant) has applied to the National Transportation Agency for a licence to operate the service set out in the title. The application was received on July 21, 1988.

Notice of the application was posted at the local post office of Uranium City and copies of the notice were sent to selected air carriers and to others believed to be interested.

Interventions opposing the granting of the application were filed with the Agency by Uranium City Air Ltd. (hereinafter UC Air) and Kruger Air Ltd. (hereinafter Kruger). The applicant replied to the intervention of UC Air.

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.

Both interveners in opposition indicate that demand for air services at Uranium City has decreased substantially as a result of the reduction of economic activity and population at this community since the early 1980's and that even in the best of times this community had difficulty supporting three air carriers. Hence the stable, sustainable operation of the proposed service along with their own recently approved Uranium City-based charter services is questioned. In this context Kruger submits that the applicant would destabilize the market for Group A charter aircraft by reducing the rates for its proposed twin-engine IFR Group B aircraft.

Having considered the interveners' comments, the Agency finds that it is unlikely that the applicant could reduce its charter rates to compete with Group A aircraft for other than a short period of time in view of the higher cost of operating its proposed aircraft. As a consequence, the Agency agrees with the applicant that, by operating twin-engine IFR aircraft, it will be serving the needs of a market segment which differs from that served by the interveners. Based on the foregoing, the Agency is of the opinion that the interveners have not provided specific evidence to indicate that the service proposed would result in significant instability in the overall provision of air service in the Uranium City area.

The Agency notes that no independent parties such as community representatives or users of air services in the Uranium City area indicate concern that operation of the proposed service would negatively affect the level of air services provided.

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 licence to operate a Class 4 Charter domestic service from a base at Uranium City, Saskatchewan, will be issued to Fond du Lac Air Ltd. 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.

To make provision for the level of charter domestic service to be consistent with demand anticipated by the applicant and in accordance with the applicant's indicated intentions, the Agency finds it in the public interest to authorize the Licensee to use fixed wing aircraft in Group B.

Moreover, to preserve the integrity of the Class 1 Scheduled domestic services and the Class 2 Regular Specific Point domestic services in the designated area, the Agency deems it in the public interest to make the licence subject to the terms and conditions respecting route protection as set out in the attachment.

The licence to be issued pursuant to this Decision shall, in addition to the conditions prescribed by the Air Transportation Regulations, SOR 88-58, be subject to the condition respecting route protection contained in the attachment, which is hereby made a part of this Decision, and to the following condition:

The Licensee is authorized to use fixed wing aircraft in Group B.