Decision No. 6-C-A-2019

SUMMARY

[1] Mr. Lukács filed an application with the Canadian Transportation Agency (Agency) alleging that Swoop has failed to identify a “basic fare” in its 2018 Domestic Tariff, CTA(A) No.1 (Tariff), contrary to paragraph 67(1)(b) of the Canada Transportation Act, S.C. 1996, c. 10, as amended (CTA), and that Swoop is unlawfully charging a baggage fee regardless of the fare paid by passengers, contrary to the definition of “basic fare” set out in section 55 of the CTA.

[2] Mr. Lukács requests that the Agency order Swoop to:

1. specifically identify the basic fare between all points for which a domestic service is offered in its Tariff; and
2. amend its Tariff by clearly stating that a carry-on and the first piece of checked baggage are included in the “basic fare.”

[3] For the reasons set out below, the Agency has determined that it will not hear Mr. Lukács’ application.

THE LAW

[4] Section 37 of the CTA provides the following:

The Agency may inquire into, hear and determine a complaint concerning any act, matter or thing prohibited, sanctioned or required to be done under any Act of Parliament that is administered in whole or in part by the Agency.

[5] Subsection 55(1) of the CTA defines “basic fare” as:

1. the fare in the tariff of the holder of a domestic licence that has no restrictions and represents the lowest amount to be paid for one-way air transportation of an adult with reasonable baggage between two points in Canada, or
2. where the licensee has more than one such fare between two points in Canada and the amount of any of those fares is dependent on the time of day or day of the week of travel, or both, the highest of those fares; (prix de base)

[6] Paragraph 67(1)(b) of the CTA states that the holder of a domestic licence shall:

in its tariffs, specifically identify the basic fare between all points for which a domestic service is offered by the licensee; […]

[7] Subsection 67.2(1) of the CTA empowers the Agency to, on complaint, address terms and conditions in a tariff which the Agency finds are unreasonable.

If, on complaint in writing to the Agency by any person, the Agency finds that the holder of a domestic licence has applied terms or conditions of carriage applicable to the domestic service it offers that are unreasonable or unduly discriminatory, the Agency may suspend or disallow those terms or conditions and substitute other terms or conditions in their place.

POSITION OF MR. LUKÁCS

[8] Mr. Lukács submits that the fares identified in the Tariff only entitle a passenger to a seat on the aircraft, and that the Tariff does not contain any fares that would meet the statutory definition of a “basic fare” within the meaning of subsection 55(1) of the CTA, thereby failing to comply with paragraph 67(1)(b) of the CTA.

[9] Mr. Lukács also claims that the Tariff is unreasonable because it permits Swoop to charge a fee for checked and carry-on baggage, regardless of the fare paid by the passenger. Mr. Lukács asserts that, while Swoop is at liberty to offer a number of different fares, including discounted ones that contain restrictions, the explicit language of subsection 55(1) of the CTA does not permit Swoop to charge a baggage fee on top of the “basic fare”.

[10] Mr. Lukács argues that Swoop’s commercial objective of being profitable does not outweigh the statutory obligations set out in the CTA. He further argues that Swoop will not suffer any commercial disadvantages by including one piece of carry-on and one piece of checked baggage in its “basic fare”, as Swoop’s main competitor in the domestic market, Air Canada, offers a number of fares that include this baggage allowance.

ANALYSIS AND DETERMINATIONS

[11] The word “may” in section 37 of the CTA indicates that there is no requirement for the Agency to hear every complaint, and that it may exercise a certain amount of discretion when deciding whether to do so.

[12] This discretion was confirmed by the Supreme Court of Canada in Delta Air Lines Inc. v. Lukács, 2018 SCC 2, which stated that the Agency can consider a range of factors when determining whether to hear a complaint, provided a non-exhaustive list of such factors, and underscored that it is for the Agency to determine how to exercise its discretion under section 37of the CTA, subject to the standard of reasonableness.

[13] Prior to receiving Mr. Lukács’ application, the Agency received an application from Swoop requesting, in part, an exemption from the requirement to identify a basic fare in its Tariff, as set out in paragraph 67(1)(b) of the CTA. In Determination No. A-2019-14 (Swoop Inc. – Determination by the Canadian Transportation Agency as to whether Swoop should be exempted from certain provisions of the CTA, and the Air Transportation Regulations, SOR/88-58, as amended [ATR]), the Agency granted Swoop a temporary exemption from paragraph 67(1)(b) of the CTA. The Agency also indicated that it would undertake consultations to ensure a comprehensive understanding of the implications of a longer-term or permanent exemption for Swoop from compliance with paragraph 67(1)(b) and, potentially, for other carriers with comparable business models.

[14] Given that the Agency has granted Swoop a temporary exemption from the obligation that is the focus of Mr. Lukács’ application, that application is moot for, at minimum, the duration of the exemption period.

[15] In respect of the longer term, adjudicating Mr. Lukács’ application would be duplicative of other, more efficient and effective processes, namely, the planned consultations on whether Swoop’s exemption should be extended or made permanent. The Agency notes that the consultations will provide Mr. Lukács with the opportunity to comment on the circumstances and factors the Agency could consider when a carrier seeks an exemption from the requirement to identify a basic fare in its tariff. The scope of the consultations is also broader than the scope of Mr. Lukács’ application, as they will involve not just Swoop, but the air industry in general. As such, Mr. Lukács, as well as any other interested parties, will have the opportunity to provide input on this issue in the context of a more comprehensive process.

[16] In light of the foregoing, the Agency will exercise its discretion not to hear the application.

[17] The Agency makes no order.