Determination No. A-2021-13

January 20, 2021

APPLICATION by WestJet (applicant) for an exemption from the application of section 59 of the Canada Transportation act, SC 1996, c 10, as amended (CTA).

Case number: 
21-00114

BACKGROUND

The applicant has applied to the Canadian Transportation Agency (Agency) for an exemption from the application of section 59, pursuant to section 80 of the CTA, to permit it to sell, cause to be sold or publicly offer for sale in Canada, an international air service on a scheduled basis, using large aircraft, between Canada and Honduras, beyond June 30, 2021, the date its licence is to terminate.

Section 59 of the CTA states that no person shall sell, cause to be sold or publicly offer for sale in Canada an air service unless, if required under Part II of the CTA, a person holds a licence issued under that Part in respect of that service and that licence is not suspended.

ANALYSIS

The Agency deals with applications for exemptions from the application of section 59 of the CTA on a case-by-case basis. Section 59 is a consumer protection measure intended to prevent situations in which consumers in Canada pay for a service to an entity that does not hold an Agency licence and are left out of pocket or experience any manner of inconvenience or hardship that may result if that entity does not commence operations on schedule.

Accordingly, the Agency, prior to granting an exemption from the application of section 59 of the CTA, considers whether the applicant is taking all the necessary steps to meet all licence issuance requirements and whether the applicant has demonstrated a high probability of obtaining the required licence prior to the proposed date for commencing operations.

In particular, a Canadian applicant for a scheduled international licence must establish that it:

  1. has been designated by the Minister of Transport as eligible to hold a scheduled international licence;
  2. meets the prescribed financial requirements;
  3. has the prescribed liability insurance coverage in respect of the service to be provided under the licence; and
  4. holds a Canadian aviation document (CAD) issued by Transport Canada, which includes the service to be provided under the licence.

In this case the applicant meets all the requirements to hold a scheduled international licence and was granted a licence to operate an air service between Canada and Honduras.

However, as there is no bilateral agreement in force between Canada and Honduras the licence was issued, pursuant to subsection 78(2) of the CTA, on a temporary basis, and will terminate on June 30, 2021.

The applicant applied for an exemption from section 59 of the CTA arguing that the success and commercial viability of its proposed service would be jeopardized if it were not able to sell tickets beyond the licence's expiry date.

The Agency recognizes that for the services to be viable, the applicant must be able to sell seats without interruption beyond the expiry date of the licence. The Agency also recognizes that the applicant continues to meet all of the requirements to hold a licence or to be granted a new licence on an extra‑bilateral basis between Canada and Honduras. Therefore, considering the circumstances, the Agency finds that compliance by the applicant with section 59 of the CTA is impractical.

In the present circumstances, the Agency, pursuant to paragraph 80(1)(c) of the CTA, exempts the applicant from the application of section 59 of the CTA, effective from the date of this Order, permitting it to sell, cause to be sold or publicly offer for sale in Canada, a scheduled international service, large aircraft, between Canada and Honduras, beyond the expiry date of their temporary licence, subject to the following conditions:

  1. All advertising in any media, whether written, electronic or by telecommunications, shall include a statement that the air service is subject to the Agency's approval, and all prospective passengers shall be informed, before a reservation is made or a ticket issued, that the air service is subject to the Agency's approval; and
  2. Should the licence not be renewed in time for the service that has been sold to be operated, the applicant shall arrange to provide alternative air transportation by an appropriately licensed air carrier, at no additional cost, for all passengers who have made reservations with the applicant. If such arrangements are not possible or acceptable to the passenger, the applicant shall arrange to provide a full refund of all monies paid by the passenger.

This exemption will be automatically revoked should the applicant cease to hold a valid licence for these services.

For clarification, this exemption from the application of section 59 of the CTA does not relieve the applicant from the requirement to hold a licence in respect of the service to be provided, and, accordingly, no flights shall be operated until the appropriate licence authority has been granted.

Member(s)

J. Mark MacKeigan
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