Decision No. 521-A-2010

December 23, 2010

File No. M4210/J188-3

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APPLICATION

[1] Jazz Air LP, as represented by its general partner, Jazz Air Holding GP Inc. carrying on business as Air Canada Jazz, Jazz and Jazz Air (Jazz Air) has applied to the Canadian Transportation Agency (Agency) for a licence to operate a scheduled international service, large aircraft, in accordance with the Air Transport Agreement between the Government of Canada and the Government of the United States of America signed on March 12, 2007 (Agreement).

[2] Jazz Air also applied to use the trade name of "Thomas Cook Airlines Canada," and later changed it to "Thomas Cook Canada."

BACKGROUND

[3] Jazz Air is licensed to operate scheduled international services, small and medium aircraft, to operate the route(s) set out in the Agreement.

[4] In its Decision No. LET-A-173-2010, the Agency acknowledged receipt of an intervention by Sunwing Airlines Inc. (Sunwing) in Jazz Air's licence application proceedings. In that decision, the Agency determined that Sunwing's intervention, as well as Jazz Air's reply and Sunwing's response, would be accepted and form part of the record.

[5] The Agency already determined that it is satisfied that Jazz Air is Canadian as defined in subsection 55(1) of the Canada Transportation Act (CTA) and that the carrier meets the regulatory financial requirements.

SUNWING'S POSITION

[6] Sunwing alleges that Jazz Air has failed to comply with section 59 of the CTA. Sunwing supported its intervention with publications and advertizing material related to the operation of the non-scheduled international air service for which Jazz Air was seeking a licence. According to Sunwing, these documents make it clear that Jazz Air "has sold, or at the very least has offered to sell, charter air transportation to Thomas Cook Canada Inc. for which a licence is required."

[7] Sunwing also opposes Jazz Air's request to use the trade name "Thomas Cook Airlines Canada," on the basis that by operating under such a name, Jazz Air would be permitted to represent itself as another airline, more particularly the United Kingdom carrier Thomas Cook Airlines Limited. Sunwing argues that the proposed business name would cause material confusion with the travelling public.

ANALYSIS AND FINDINGS

[8] For a licence to be issued, the Agency must be satisfied, as provided for in paragraph 69(1)(a) of the CTA, that Jazz Air, pursuant to subsection 69(2) of the CTA, is eligible to hold the licence, holds a Canadian aviation document, has the prescribed liability insurance coverage in respect of the service to be provided under the licence and meets prescribed financial requirements. The Agency must also be satisfied, as provided for in paragraph 69(1)(b) of the CTA, that Jazz Air has not contravened section 59 of the CTA to the effect that no person has sold, caused to be sold or publicly offered for sale in Canada an air service within the preceding twelve months unless the person holds a licence in respect of that service and that licence is not suspended.

Requirements of paragraph 69(1)(a) of the CTA

[9] The Agency is satisfied that Jazz Air meets all the applicable requirements of paragraph 69(1)(a) of the CTA.

Requirement of paragraph 69(1)(b) of the CTA

[10] With respect to this application, Jazz Air has filed an affidavit attesting that Jazz Air had not contravened section 59 of the CTA in the preceeding twelve months. Jazz Air also filed an undertaking stating that it would not contravene section 59 of the CTA prior to the issuance of the applied for licence.

[11] The Agency notes that the publications and advertizing material field by Sunwing in support of its intervention do not relate to scheduled international services. As such, the material filed in the intervention does not refute Jazz Air's sworn statement that it has not contravened section 59 of the CTA with respect to scheduled international services.

[12] The Agency concludes that Jazz Air has not contravened section 59 of the CTA in respect of scheduled international services and is satisfied that Jazz Air meets the requirement of paragraph 69(1)(b) of the CTA.

USE OF TRADE NAME

[13] In Decision No. 439-A-2010, the Agency determined the following with respect to the operation of non-scheduled international services by Jazz Air under the trade name "Thomas Cook Canada":

The Agency notes that paragraph 18(c) of the Air Transportation Regulations, SOR/88-58, as amended (ATR) provides that air carriers are prohibited from operating an international service under a name that is not on their licence. The Agency also notes that there is no provision in the ATR imposing restrictions on the air carrier with respect to the trade name under which it operates its services.

Further, there is no restriction for domestic operations. The Agency is of the opinion that this is indicative of the legislator's intention that the Agency not interfere on the choice of the name under which the air carriers operate.

When the Agency reviews licence applications, it ensures that the applicant has applied under its legal name. However, once the licence is issued, the licensee is free to operate under any other name it may choose, on the condition that such other trade name is added to its licence. It is not uncommon for carriers to operate under more than one trade name, including that of another corporation with which it has business relations authorizing the licensee to use that other corporation's trade name.

[...]

While the Agency will not as a general rule interfere in a licensee's business decision with respect to trade names, the Agency reminds Jazz Air of its ongoing obligation to meet the requirement of paragraph 18(b) of the ATR that a licensee shall not make publicly any statement that is false or misleading with respect to the licensee's air service or any service incidental thereto. The Agency is of the opinion that false or misleading statements referred to in paragraph 18(b) of the ATR could in certain circumstances capture those made through the use of a given trade name. However, in these circumstances, that is not the case.

[14] The Agency considers that the reasoning applied in Decision No. 439-A-2010 in the context of the operation of non-scheduled international services applies mutatis mutandis to Jazz Air's scheduled services. The Agency finds that given the statutory framework described in Decision No. 439-A-2010, the choice of the trade name under which a carrier decides to operate its scheduled international services does not, in and of itself, raise any concern which would warrant intervention of the Agency, even where such trade name is also used by or associated to a tour operator.

CONCLUSION

[15] The Agency concludes that Jazz Air meets the requirements of subsection 69(1) of the CTA.

[16] Accordingly, the Agency approves the application for a licence to operate a scheduled international service, large aircraft.

Operation of the air service

[17] Paragraph 57(a) of the CTA provides that no person shall operate an air service unless, in respect of that service, the person holds a licence issued under part II of the CTA.

[18] The Agency notes that the Flight Services Agreement entered into by Jazz Air and the tour operator Thomas Cook Canada on file with the Agency is with respect to commercial arrangements for the provision of non-scheduled international services. However, there is indication in the documentation that additional arrangements were contemplated between Jazz Air and Thomas Cook Canada for the provision of scheduled international services. This, and the fact that Jazz Air has asked authority to use "Thomas Cook Canada" as a trade name for operating its scheduled international services between Canada and the United States of America, strongly suggest that business arrangements are already in place or could be put in place between Jazz Air and Thomas Cook Canada with respect to these services.

[19] Considering the far-reaching nature of the Flight Services Agreement that the Agency has reviewed, and the possibility that similar arrangements were or could be contemplated by Jazz Air and Thomas Cook Canada with respect to scheduled international services, the Agency finds it necessary to examine the arrangements having regard to the requirement of paragraph 57(a) of the CTA.

[20] Therefore, the Agency requires that Jazz Air file with the Agency a copy of any agreement or arrangement that it has entered into or will enter into the future with Thomas Cook Canada with respect to scheduled international services.

Members

• Raymon J. Kaduck
• J. Mark MacKeigan
• Jean-Denis Pelletier, P. Eng.