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Interlocutory Decisions : 2002

2002-12-04

LET-A-354-2002

Transport Canada

Reference is made to your letter of May 9, 2002, requesting the Canadian Transportation Agency's (Agency) interpretation of provisions of the Air Transport Agreement between the Government of Canada and the Government of United States of America dated February 24, 1995 (the 1995 Agreement) related to stopovers and cabotage.

The 1995 Agreement applies to the operation of publicly available air services between Canada and the United States. Transportation of traffic having both point of origin and point of destination in Canada by a United States air carrier would be cabotage and is specifically excluded in the 1995 Agreement in paragraph 2 of Article 1.

In Annex III of the 1995 Agreement, there is no limitation on the number of points in either territory which may be served, nor is there a minimum or maximum duration of stopovers. In addition, while the 1974 Agreement (Annex A, Section V, Paragraph F) allowed stopovers only for traffic enplaned in the territory of the Party of which the carrier is a national and a requirement, in the case of small aircraft, for the aircraft to remain with the charter group at the point of stopover, the 1995 Agreement does not contain these restrictions. The 1995 Agreement does not include a definition of 'stopover'. The generally accepted definition of a stopover is that it is a deliberate interruption of a journey agreed to in advance. Some agreements impose time limits on stopovers, but in the absence of specific definitions, it is generally understood that a stopover is any period of time in excess of that required to make a connection.

The traffic rights granted under the 1995 Agreement are not affected by the nationality or origin of the traffic. United States and Canadian carriers have equal rights to carry United States and Canadian originating traffic and to provide stopovers at points in the United States and Canada, regardless of the nationality or place of residence of the individual travellers.

In the application of the regulations with respect to transborder charter flights, the Agency has followed an interpretation of the provisions of Annex III of the 1995 Agreement as permitting the operation of transborder charter flights or programs (series of flights) which contain multiple stops in either (or both) the United States or Canada provided that the group being transported remains the same throughout the itinerary and the charter contract is for a series of flights commencing or terminating at a point of origin or destination in the United States. In view of this interpretation, a United States air carrier may transport passengers between points in Canada provided that the entire transportation of those passengers is under a single contract with that air carrier for transportation which originates in, or is finally destined for a point in the United States. The rights of Canadian carriers to carry United States or Canadian origin charter traffic with multiple stops is equivalent.

Appendix 1

1974 Agreement on Nonscheduled Air Services Annex A section V Conditions and Interpretations.

F. A carrier of one Contracting Party may not take on board at one point in the territory of the other Contracting Party nonscheduled air service traffic destined for another point or points in the territory of such other Contracting Party. However, a carrier of one Contracting Party may provide a stopover at any such points to:

(1) Nonscheduled air service traffic in passengers carried on large aircraft which has been enplaned in the territory of the Contracting Party of which such carrier is a national and which is moving under a contract providing for nonscheduled air service transportation on the same carrier to or from a point or points in the territory of the Contracting Party of which such carrier is a national, even if a different aircraft is used; and

(2) Nonscheduled air service traffic in passengers carried on small aircraft which has been enplaned in the territory of the Contracting Party of which such carrier is a national (and subsequently will be returned to that territory) and which is moving under a contract providing for nonscheduled air service transportation on the same carrier to or from a point or points in the territory of the Contracting Party of which such carrier is a national if the same aircraft stays with the traffic throughout its journey; provided, however, that if an aircraft having a maximum authorized take-off weight on wheels of less than 18,000 pounds is to be used, the aeronautical authorities of the other Contracting Party may require that special authorization, to be justified by the needs of the traffic, be requested and obtained for such operations.

1. ARTICLE 1 Grant of Rights

1. Each Party grants to the other Party the following rights for the conduct of international air transportation by the airlines of the other Party:

(a) the right to fly across its territory without landing;
(b) the right to make stops in its territory for non-traffic purposes; and
(c) the rights otherwise specified in this Agreement.

2. Nothing in this Article shall be deemed to confer on the airline or airlines of one Party the rights to take on board, in the territory of the other Party, passengers, their baggage, cargo, or mail carried for compensation and destined for another point in the territory of that other Party.

2. Annex I (Scheduled Services provisions )Section 5 Route Flexibility/Change of Aircraft

Each designated airline may, on any or all flights and at its option:
(a) operate flights in either or both directions;
(b) combine different flight numbers within one aircraft operation;
(c) carry its own stop-over traffic;
(d) omit stops at any point or points; and
(e) transfer traffic from any of its aircraft to any of its other aircraft, at any point on the routes without limitation as to change in type or numbers of aircraft operated;without directional or geographic limitation and without loss of any right to carry traffic otherwise permissible under this Agreement; provided that the service begins or terminates in the territory of the Party designating that airline. That is, the flight number assigned to services between the United States and Canada may not be the same as that assigned to flights behind the territory of the Party designating the airline performing the service.

Designated airlines of each Party shall, in accordance with the rules of the country of origin of the charter, have the right to carry international charter traffic of passengers and cargo, separately or in combination:

(a) Between any point or points in the territory of the Party that has designated the airline and any point or points in the territory of the other Party, except that, in the case of all-cargo charters for courier services operated with aircraft having a maximum certificated take-off weight greater than 35,000 pounds, points in the territory of the other Party shall not be combined on any same plane service; and

(b) Between any point or points in the territory of the other Party and any point or points in a third country or countries, provided that such traffic is carried via the territory of the Party that has designated the airline and makes a stopover in that territory for at least two consecutive nights.

In the performance of services covered by this Annex, designated airlines of each Party shall also have the right:
(1) to make stopovers at any points whether within or outside of the territory of either Party;
(2) to carry transit traffic through the other Party's territory; and
(3) to combine on the same aircraft traffic originating in one Party's territory with traffic that originated in the other Party's territory.

Each Party shall on the basis of comity and reciprocity consider applications by airlines of the other Party to carry traffic not covered by this Annex.