Determination No. A-2017-163

This Determination has been varied by Determination No. A-2017-180

October 23, 2017

APPLICATIONS by Sunwing Airlines Inc. (Sunwing), Thomson Airways Limited carrying on business as Thomson Airways (Thomson Airways) and TUI Airlines Belgium NV. carrying on business as Jetairfly (Jetairfly), pursuant to section 60 of the Canada Transportation Act, S.C., 1996, c. 10, as amended (CTA), and section 8.2 of the Air Transportation Regulations, SOR/88-58, as amended (ATR).

Case number: 
17-04976
17-04995

APPLICATION

Sunwing, Thomson Airways and Jetairfly (applicants) have applied to the Canadian Transportation Agency (Agency) for approvals to permit:

  1. Sunwing to provide its non-scheduled international service between Montréal, Québec, Canada and Freeport, Bahamas; and to provide its scheduled international services between Canada and each of the following countries: Antigua, the Bahamas, Costa Rica, Cuba, Dominican Republic, Jamaica, Mexico and the United States of America using two aircraft with flight crew provided by Thomson Airways, beginning on December 9, 2017 to April 12, 2018;
  2. Sunwing to provide its scheduled international services between Canada and each of the following countries: Cuba, Dominican Republic, Jamaica and Mexico using one aircraft with flight crew provided by Jetairfly, beginning on November 16, 2017 to April 3, 2018.

Sunwing is licensed to operate a non scheduled international service to transport traffic on a charter basis between Canada and any other country. Sunwing is also licensed to operate the relevant scheduled international services.

In their applications filed on October 2, 2017, the applicants state that Sunwing had 19 aircraft on its Air Operator Certificate (AOC) at the time of application.

POLICY

When assessing wet-lease applications where Canadian carriers propose to enter into wet-lease arrangements of more than 30 days with foreign carriers to provide international passenger services, the Agency must apply a direction issued by the Minister of Transport on June 24, 2014 entitled Ministerial Direction for International Service – Canada's Policy for Wet-Leasing (2014 Wet-Lease Policy), and must specifically ensure that the 20-percent cap is respected at the time of application. The 2014 Wet-Lease Policy also states that the Agency should condition or deny an application if Canadian air carriers do not enjoy reciprocal opportunities to wet lease in the foreign jurisdiction of the lessor.

PRELIMINARY MATTER

In its guide Applying for Wet-Lease Approval, the Agency indicated that it "intends to notify the industry in Canada of an application for any wet-lease approval when it deems, at its own discretion, there to be potential issues with respect to reciprocity or other matters not yet addressed by the Agency."

On matters of international reciprocity, the Agency's general practice is that reciprocity by the authorities of the lessor's country of origin, in these cases Belgium and the United Kingdom, is assumed unless evidence is brought to the contrary. The Agency is not aware of any similar application by a Canadian carrier to the aeronautical authorities of the European Union and its Member States that has been denied.

Upon review of these applications, the Agency determined that they did not raise issues with respect to reciprocity or other matters not yet addressed by the Agency. Consequently, the Agency did not provide notice to seek comments from industry in respect of the applications.

ISSUE

Is the Agency satisfied that the applications of Sunwing, Thomson Airways and Jetairfly meet the requirements of section 8.2 of the ATR and the criteria of the 2014 Wet-Lease Policy, specifically the 20 percent cap?

ANALYSIS AND FINDINGS

Section 60 of the CTA requires that a licensee obtain, where prescribed, an approval from the Agency prior to using aircraft with flight crew provided by another person.

Section 8.2 of the ATR sets out the information to be included in an application and the requirements to be met for an approval pursuant to section 60 of the CTA.

Pursuant to the 2014 Wet-Lease Policy, for wet-leases of more than 30 days, a number of aircraft equal to 20 percent of the number of Canadian-registered aircraft on the lessee's AOC may be wet leased from foreign lessors. The Agency notes that at the time of application, i.e., October 2, 2017, Sunwing had 19 aircraft on its AOC. Therefore, these applications meet the 20 percent cap requirement of the 2014 Wet Lease Policy.

The Agency has considered the applications and the material in support and is satisfied that they meet the requirements of section 8.2 of the ATR. The Agency is also satisfied that the applications satisfy the criteria of the 2014 Wet-Lease Policy.

Accordingly, the Agency, pursuant to paragraph 60(1)(b) of the CTA and section 8.2 of the ATR, approves the use by:

  1. Sunwing of two aircraft with flight crew provided by Thomson Airways, and the provision by Thomson Airways of such aircraft and flight crew to Sunwing, to permit Sunwing to provide its non-scheduled international service between Montréal and Freeport; and to provide its scheduled international services on licensed routes between Canada and each of the following countries: Antigua, the Bahamas, Costa Rica, Cuba, Dominican Republic, Jamaica, Mexico and the United States of America, using two aircraft with flight crew provided by Thomson Airways, beginning on December 9, 2017 to April 12, 2018;
  2. Sunwing of one aircraft with flight crew provided by Jetairfly, and the provision by Jetairfly of such aircraft and flight crew to Sunwing, to permit Sunwing to provide its scheduled international services on licensed routes between Canada and each of the following countries: Cuba, Dominican Republic, Jamaica and Mexico, using one aircraft with flight crew provided by Jetairfly, beginning on November 16, 2017 to April 3, 2018.

These approvals are subject to the following conditions:

  1. Sunwing shall continue to hold the valid licence authorities.
  2. Commercial control of the flights shall be maintained by Sunwing. Thomson Airways and Jetairfly shall maintain operational control of the flights using their aircraft 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. Sunwing, Thomson Airways and Jetairfly 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. Sunwing shall continue to comply with the public disclosure requirements set out in section 8.5 of the ATR.
  5. Sunwing, Thomson Airways and Jetairfly shall advise the Agency in advance of any changes to the information provided in support of the applications.

Member(s)

P. Paul Fitzgerald
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