Air Regulator Taken To Court
Dale Smith, www.blacklocks.ca
A federal judge will review a decision by regulators to allow airline ticket sales by unlicensed companies. A passengers’ advocate was granted go-ahead from the Court of Appeal to challenge the ruling of the Canadian Transportation Agency.
“The issue here is really the risk for the traveling public in terms of the financial fitness of the company,” said Dr. Gábor Lukács of Air Passenger Rights. “We don’t want a company that goes belly-up and leaves passengers stranded.”
The Transportation Agency in a March 30 decision reversed a 20-year policy that all companies selling commercial airline tickets be federally licensed. The Agency ruled firms carrying on business as “tour operators” could sell tickets without a license for travel on third-party carriers.
“By not having a license they circumvent federal requirements that protect passengers,” Lukács said. “What if they cancel flights? Who is held liable?”
Justice Mary Gleason ruled Lukács is entitled to a hearing in Federal Court. “It is undisputed that Dr. Lukács is an air passenger rights advocate, who has frequently brought applications to this Court in respect of Agency decisions, and therefore does have a genuine interest in the issue raised in this appeal,” wrote Gleason. “An appeal by someone like Dr. Lukács is an effective way for the issues raised in this appeal to be brought before the Court.”
The Agency ruling came in the case of NewLeaf Travel Co. of Winnipeg. The company was grounded last January 21 after advertising discount flights. NewLeaf is not federally licensed, and does not own or lease aircraft. Tickets were sold for travel aboard planes operated by a third-party licensee, Flair Airlines Ltd. of Kelowna.
“Flare Airlines cannot be held liable under normal circumstances for something NewLeaf does, and NewLeaf controls the schedule,” Lukács said. “If NewLeaf has a good business model, why did they not get a license from the Transportation Agency like everybody else?”
The Transportation Agency said NewLeaf was mistaken in promoting itself as an airline rather than tour operator, but could sell tickets as a reseller providing it does “not hold themselves out to the public as an air carrier operating an air service,” regulators wrote in Agency Decision No. 100-A-2016.
Under the Canada Transportation Act section 57, “no person shall operate an air service unless, in respect of that service, the person holds a license.” The law grounded discount start-up Greyhound Airlines in 1996.