Focus On

Transportation Law - Air transportation - Regulation - Federal - Airline licensing

Thursday, January 26, 2017 @ 7:00 PM  


Appeal by Lukacs from a decision by the Canadian Transportation Agency (Agency). Those who purchased the seating capacity of an air carrier and subsequently resold the seats to the public were referred to as “resellers”. The Agency determined that resellers did not operate an “air service” as that term was defined in subsection 55(1) of the Canada Transportation Act (Act) so long as they did not hold themselves out to the public as an air carrier operating an air service. It followed from this conclusion that resellers were not required to hold an air licence and that, based on its proposed business model, NewLeaf Travel Company Inc. would not operate an air service. Lukacs submitted that the decision was unreasonable and that in reaching its decision the Agency exceeded its jurisdiction.

HELD: Appeal dismissed. The Agency based its interpretation of subsection 55(1) of its home statute on a textual, contextual and purposive analysis. The Agency particularly noted that while s. 57 of the Act prohibited a person from operating an air service unless the person held a licence in respect of that service, s. 59 did not require a person selling an air service to be a licensee. This was a reasonable interpretation of the Act. The decision was not unreasonable by virtue of the Agency’s failure to provide a comprehensive exposition of all of the indicia of what it meant to operate an air service. It was not unreasonable for the Agency to interpret the Act to the effect that remedial provisions were directed to the licensee in a reselling arrangement, even if the reseller controlled things such as fares and schedules. Lukacs’ submission that because of the absence of any contractual relationship between the licensee and the passengers, the licensee in a reselling arrangement owed no obligations to the passengers was not accepted. As the Agency found, passengers would still be covered, and so protected, by the terms and conditions of carriage set out in the tariff issued by the licensed air carrier operating the aircraft on which the passengers traveled. There was no jurisdictional issue.