CTA ruling says NewLeaf is a reseller, does not require air licence

CTA ruling says NewLeaf is a reseller, does not require air license

TORONTO — The Canadian Transportation Agency issued a determination today affecting NewLeaf Travel Company, which temporarily postponed sales of airline tickets pending a review of licensing regulations for Indirect Air Service Providers.

The Agency determined that resellers – companies who purchase seats from an air carrier and resell them to the public – will not be required to hold an air licence, so long as they do not hold themselves out to the public as being an air carrier that is operating an air service.

The Agency also determined that NewLeaf Travel Company Inc., should it proceed in a manner consistent with its proposed business model, would be a reseller that is not operating an air service and therefore, would not be required to hold an air licence, as long as it does not hold itself out to the public as an air carrier operating an air service.

NewLeaf aimed to resume taking reservations in the spring. “Canadians have clearly spoken that they want this type of low-cost service. The overwhelming demand for tickets shows the need for affordable travel in Canada. Hundreds of thousands of people visited the NewLeaf website when ticket sales began. Thousands made bookings,” said NewLeaf CEO Jim Young.

In determining whether a reseller is holding itself out to the public as an air carrier, the Agency will consider whether it makes it clear through its marketing material, including on its website and tickets, that it is a reseller, while clearly identifying the air carrier that is operating the aircraft.

Air travelers will continue to be covered by the terms and conditions of carriage set out in the actual air carrier’s tariff, which will be monitored by Agency staff to ensure that legislative and regulatory requirements related to consumer protection are fully respected. In addition, the Agency will post information on its website explaining the difference between resellers and air carriers, to help Canadians make informed purchasing decisions.

The determination reflects the most reasonable interpretation of the statutory requirements related to domestic air licences, and was made after careful consideration of submissions received through a public consultation process, held in December and January.

“This is an important determination that will help create clarity and predictability for the air industry and travellers,” said Scott Streiner, Chair and CEO of the Canadian Transportation Agency. “The determination recognizes the evolution of business models, encourages innovation and consumer choice in the market, and ensures continued protection for passengers.”