Air Transportation Regulations (SOR/88-58)

Regulations are current to 2017-11-20 and last amended on 2017-02-13. Previous Versions

Financial Requirements

  •  (1) In this section, “applicant” means a Canadian who applies for

    • (a) a domestic licence, non-scheduled international licence or scheduled international licence that authorizes the operation of an air service using medium aircraft, or for the reinstatement of such a licence that has been suspended for 60 days or longer; or

    • (b) a domestic licence, non-scheduled international licence or scheduled international licence that authorizes the operation of an air service using large aircraft, or for the reinstatement of such a licence that has been suspended for 60 days or longer.

  • (2) Subject to subsection (3), an applicant shall

    • (a) in respect of the air service specified in the application, provide the Agency with a current written statement of the start-up costs that the applicant has incurred in the preceding 12 months, with written estimates of start-up costs that the applicant expects to incur and with written estimates of operating and overhead costs for a 90-day period of operation of the air service, and establish that

      • (i) in respect of the start-up costs, the statement is complete and accurate and the estimates are reasonable,

      • (ii) in respect of the operating and overhead costs, the estimates are reasonable and are based on utilization of the aircraft solely on the specified air service under conditions of optimum demand, which utilization shall be no less than that which is necessary for the air service to be profitable,

      • (iii) subject to subparagraph (b)(i), the applicant has acquired or can acquire funds in an amount at least equal to the total costs included in the statement and in the estimates,

      • (iv) the funds are not encumbered and are comprised of liquid assets that have been acquired or that can be acquired by way of a line of credit issued by a financial institution or by way of a similar financial instrument,

      • (v) the terms and conditions under which those funds have been acquired or can be acquired are such that the funds are available and will remain available to finance the air service,

      • (vi) subject to paragraph (b), where the applicant is a corporation, at least 50% of the funds required by subparagraph (iii) have been acquired by way of capital stock that has been issued and paid for and that cannot be redeemed for a period of at least one year after the date of the issuance or reinstatement of the licence, and

      • (vii) subject to paragraph (b), where the applicant is a proprietorship or partnership, at least 50% of the funds required by subparagraph (iii) have been acquired by way of the proprietor’s or partners’ capital that has been injected into the proprietorship or partnership and that cannot be withdrawn for a period of at least one year after the date of the issuance or reinstatement of the licence;

    • (b) where the applicant is or has been in operation,

      • (i) increase the amount of funds required by subparagraph (a)(iii) by the amount of any shareholders’, proprietor’s or partners’ deficit that is disclosed in the applicant’s current audited financial statements which are prepared in accordance with generally accepted accounting principles in Canada, and those additional funds shall be acquired by way of capital stock that has been issued and paid for in the case of a corporation, or by way of the proprietor’s or partners’ invested capital in the case of a proprietorship or partnership, which capital stock or invested capital is to be subject to the condition prescribed in subparagraph (a)(vi) or (vii), and

      • (ii) decrease the amount of the capital stock that is required by subparagraph (a)(vi) to be issued and paid for in the case of a corporation, or the amount of the proprietor’s or partners’ capital that is required by subparagraph (a)(vii) to be invested in the case of a proprietorship or partnership, by the amount of any shareholders’, proprietor’s or partners’ equity that is disclosed in the applicant’s current audited financial statements which are prepared in accordance with generally accepted accounting principles in Canada; and

    • (c) file with the Agency, on request, any information that the Agency requires to determine whether the applicant has complied with the requirements of paragraphs (a) and (b).

  • (3) Subsection (2) does not apply to

    • (a) an applicant that, at the proposed time of the issuance or reinstatement of the licence, operates an air service using medium or large aircraft in the case of an applicant referred to in paragraph (1)(a), or using large aircraft in the case of an applicant referred to in paragraph (1)(b), pursuant to

      • (i) a non-scheduled international licence or a scheduled international licence, or

      • (ii) a domestic licence in respect of which the applicant has, within 12 months before the proposed time of issuance or reinstatement of the licence, complied with subsection (2); and

    • (b) an applicant for the renewal of a licence referred to in paragraph (1)(a) or (b).

  • SOR/96-335, s. 4.

Provision of Aircraft with Flight Crew

  •  (1) For the purposes of section 60 of the Act and subject to section 8.3, approval of the Agency is required before a person may provide all or part of an aircraft, with a flight crew, to a licensee for the purpose of providing an air service pursuant to the licensee’s licence and before a licensee may provide an air service using all or part of an aircraft, with flight crew, provided by another person.

  • (2) The person who provides an aircraft to a licensee and the licensee shall apply to the Agency for an approval referred to in subsection (1) at least 45 days before the first planned flight.

  • (3) The application shall include the following:

    • (a) in respect of the proposed air service, evidence that the appropriate licence authority, charter permit and Canadian aviation document and the liability insurance coverage referred to in subsection (4) and, where applicable, subsection (5) are in effect;

    • (b) the name of the licensee;

    • (c) if applicable, the name of the charterer or charterers and the charter program permit or authorization number;

    • (d) the name of the person providing the aircraft with flight crew;

    • (e) the aircraft type to be provided;

    • (f) the maximum number of seats and the cargo capacity of the aircraft to be provided and, where applicable, the maximum number of seats and the cargo capacity to be provided for use by the licensee;

    • (g) the points to be served;

    • (h) the frequency of service;

    • (i) the period covered by the proposed air service; and

    • (j) an explanation of why the use by the licensee of all or part of an aircraft with a flight crew provided by another person is necessary.

  • (4) The licensee shall maintain passenger and third party liability insurance coverage for a service for which another person provides an aircraft with flight crew, at least in the amounts set out in section 7,

    • (a) by means of its own policy; or

    • (b) subject to subsection (5), by being named as an additional insured under the policy of the other person.

  • (5) Where the licensee is named as an additional insured under the policy of the person referred to in subsection (4), there must be a written agreement between the licensee and the person to the effect that, for all flights for which the person provides aircraft with flight crew, the person will hold the licensee harmless from, and indemnify the licensee for, all passenger and third party liabilities while passengers or cargo transported under contract with the licensee are under the control of the person.

  • (6) The licensee and the person who provides the aircraft with flight crew shall notify the Agency in writing forthwith if the liability insurance coverage referred to in subsection (4) and, where applicable, subsection (5) has been cancelled or altered in any manner that results in failure by the licensee or the person to maintain the coverage.

  • SOR/96-335, s. 4.
  •  (1) The approval referred to in section 8.2 is not required if, in respect of the air service to be provided, the appropriate licence authority, charter permit and Canadian aviation document and the liability insurance coverage referred to in subsection 8.2(4) and, where applicable, subsection 8.2(5), are in effect and

    • (a) both the person providing an aircraft to the licensee and the licensee are Canadian, the person is a licensee and the air service to be provided is a domestic service or an air service between Canada and the United States; or

    • (b) where the air service to be provided is an international service, a temporary and unforeseen circumstance has transpired within 72 hours before the planned departure time of a flight or the first flight of a series of flights that has forced the use of all or part of an aircraft, with a flight crew, provided by another person for a period of not more than one week, and the licensee

      • (i) has notified the Agency of the proposed flight or the first flight of a series of flights covering a period of not more than one week in accordance with subsection (2), and

      • (ii) has received an acknowledgement that the conditions of this paragraph have been met.

  • (2) The notification referred to in paragraph (1)(b) shall be given before the proposed flight or flights and shall contain

    • (a) a description of the temporary and unforeseen circumstance and an explanation of why it requires the use of all or part of an aircraft with a flight crew provided by another person;

    • (b) in respect of the air service to be provided,

      • (i) a statement that the appropriate licence authority, charter permit and Canadian aviation document and the liability insurance coverage referred to in subsection 8.2(4) and, where applicable, subsection 8.2(5) are in effect and that the liability insurance coverage is available for inspection by the Agency on request, or

      • (ii) where use of the aircraft and flight crew does not require an Agency licence, a copy of the Canadian aviation document and the certificate of liability insurance;

    • (c) where the aircraft to be used is larger than that authorized in the charter permit, a statement that the number of seats sold will not be greater than the number authorized in the charter permit;

    • (d) the name of the licensee;

    • (e) the name of the person providing the aircraft with a flight crew;

    • (f) the aircraft type to be provided;

    • (g) the number of seats and the cargo capacity of the aircraft to be provided;

    • (h) the date of each flight; and

    • (i) the routing of each flight.

  • SOR/96-335, s. 4.
 
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