Decision No. 475-A-2012

APPLICATION

Caribbean Airlines Limited carrying business as Air Jamaica (Caribbean Airlines), on behalf of itself and Atlas Air Inc. (Atlas Air), has applied to the Canadian Transportation Agency (Agency) for an approval to permit Caribbean Airlines to provide its scheduled international service between Port of Spain, Trinidad and Tobago and Toronto, Ontario, Canada via Georgetown, Guyana, using aircraft and flight crew provided by Atlas Air, from December 4, 2012 to January 6, 2013.

Caribbean Airlines is licensed to operate a scheduled international service in accordance with the Agreement between the Government of the Republic of Trinidad and Tobago and the Government of Canada on Air Services, initialled ad referendum on July 20, 1988.

EXEMPTION REQUESTED

Caribbean Airlines has also requested an exemption from the application of subsection 8.2(2) of the Air Transportation Regulations (ATR), which requires the filing of an application for an approval at least 45 days before the first planned flight.

In Decision No. 426-A-2012 dated November 7, 2012, the Agency advised that the 45-day filing requirement will be strictly enforced for any new applications made after the date of issuance of that Decision, unless the applicant can demonstrate to the Agency that the requirements for a wet lease resulted from an unexpected or unforeseeable situation.

Caribbean Airlines states that it is seeking to provide as a benefit to the travelling public additional capacity during this peak travel period. Caribbean Airlines explains that scheduled services were previously approved using its Boeing 737 fleet and it hoped to upgauge to Boeing 767 fleet to satisfy the increased demand; however, due to unforeseen operational constraints, it is only able to meet this demand through a wet-lease arrangement.

The Agency has considered the submission and is satisfied that the application was filed late as a result of an unexpected or unforeseeable situation.

Therefore, the Agency finds that compliance with subsection 8.2(2) of the ATR is impractical in this case. Accordingly, the Agency, pursuant to paragraph 80(1)(c) of the Canada Transportation Act (CTA), exempts Caribbean Airlines from the application of subsection 8.2(2) of the ATR.

WET-LEASE APPLICATION

In Decision No. 426-A-2012, the Agency found that the issues raised in Sunwing Airlines Inc.’s application for a wet lease suggest that it would be both timely and beneficial to clarify the Agency’s approach to wet-lease applications. In that regard, the Agency advised that it will initiate a consultation to seek the views of the industry and other interested parties regarding the intent of the wet lease approval requirements. This consultation would include information required by the Agency for its assessment of necessity under paragraph 8.2(3)(j) of the ATR.

The Agency also ruled that until it provides further clarification on wet-lease application requirements, the current approach will be maintained.

The Agency notes that Caribbean Airlines provided an explanation for the wet-lease application; however, as set out in Decision No. 426-A-2012, the Agency will continue with its current approach until it has conducted a consultation. Following its consultation, the Agency will establish specific criteria that will apply in the future.

The Agency is satisfied that the application meets the remaining requirements of section 8.2 of the ATR.

Accordingly, the Agency, pursuant to paragraph 60(1)(b) of the CTA and section 8.2 of the ATR, approves the use by Caribbean Airlines of aircraft and flight crew provided by Atlas Air, and the provision by Atlas Air of such aircraft and flight crew to Caribbean Airlines, to permit Caribbean Airlines to provide its scheduled international service on licensed routes between Port of Spain and Toronto via Georgetown using aircraft and flight crew provided by Atlas Air, from December 4, 2012 to January 6, 2013.

This approval is subject to the following conditions:

1. Caribbean Airlines shall continue to hold the valid licence authority.
2. Commercial control of the flights shall be maintained by Caribbean Airlines. Atlas Air shall maintain operational control of the flights and shall receive payment based on the rental of aircraft and crew and not on the basis of the volume of traffic carried or other revenue-sharing formula.
3. Caribbean Airlines and Atlas Air shall continue to comply with the insurance requirements set out in subsections 8.2(4), 8.2(5) and 8.2(6) of the ATR.
4. Caribbean Airlines shall continue to comply with the public disclosure requirements set out in section 8.5 of the ATR.
5. Caribbean Airlines and Atlas Air shall advise the Agency in advance of any changes to the information provided in support of the application.

FUTURE REQUESTS

Caribbean Airlines is reminded that in any future wet-lease application, it must provide an explanation, as required by paragraph 8.2(3)(j) of the ATR. Further, the Agency will continue to enforce the requirement to file such applications 45 days before the first planned flight. In this regard, the exemption granted in this Decision should not be relied upon for any future requests for an exemption.

This Decision takes effect on December 4, 2012, the date on which it was verbally communicated to Caribbean Airlines.