Decision No. 479-A-2012
December 19, 2012
APPLICATION by Air Transat A.T. Inc. carrying on business as Air Transat, on behalf of itself and 1263343 Alberta Inc. carrying on business as EnerJet, pursuant to section 60 of the Canada Transportation Act, S.C., 1996, c. 10, as amended, and section 8.2 of the Air Transportation Regulations, SOR/88-58, as amended.

File No.: M4835-5-14

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APPLICATION

Air Transat A.T. Inc. carrying on business as Air Transat (Air Transat), on behalf of itself and 1263343 Alberta Inc. carrying on business as EnerJet (EnerJet), has applied to the Canadian Transportation Agency (Agency) for an approval to permit Air Transat to provide its scheduled international service between Canada and Mexico using aircraft and flight crew provided by EnerJet, from December 23, 2012 to April 28, 2013.

Air Transat is licensed to operate a scheduled international service in accordance with the Arrangement between the Government of Canada and the Government of the United Mexican States contained in an Agreed Minute signed on July 28, 2011.

EXEMPTION REQUESTED

Air Transat 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.

Air Transat submits that it recently discovered that due to a scheduling error, the aircraft it had planned to use for service between Edmonton, Alberta, Canada and Puerto Vallarta, Mexico was not available and the service could not be provided under existing arrangements. Air Transat and EnerJet concluded a wet-lease agreement on November 20, 2012, and Air Transat seeks an exemption from the filing time requirement to allow for the commencement of services as planned on December 23, 2012.

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 Air Transat 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 Air Transat 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 it 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 Air Transat of aircraft and flight crew provided by EnerJet, and the provision by EnerJet of such aircraft and flight crew to Air Transat, to permit Air Transat to provide its scheduled international service on licensed routes between Canada and Mexico using aircraft and flight crew provided by EnerJet, from December 23, 2012 to April 28, 2013.

This approval is subject to the following conditions:

1. Air Transat shall continue to hold the valid licence authority.
2. Commercial control of the flights shall be maintained by Air Transat. EnerJet 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. Air Transat and EnerJet 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. Air Transat shall continue to comply with the public disclosure requirements set out in section 8.5 of the ATR.
5. Air Transat and EnerJet shall advise the Agency in advance of any changes to the information provided in support of the application.

FUTURE REQUESTS

Air Transat 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.