Rulings by the Canadian Transportation Agency on the use in Canada of foreign aircraft and pilots

Transat says “Canadian policies need to be reviewed”

Transat A.T. Inc., one of the largest integrated tourism companies in the world and Canada's holiday travel leader, says the rulings issued on November 6 and 7 by the Canadian Transportation Agency (CTA), which uphold the absence of restrictions on the systematic importing of aircraft flown by foreign pilots to serve the Canadian market, clearly show the immediate need for the applicable Canadian policies to be reviewed.

“We are not aware of any other jurisdiction that allows companies to operate systematically in their market with a majority of foreign pilots, who generally pay no taxes in the country, thus tolerating the market distortions and unemployment that this can lead to,” stated Jean-Marc Eustache, President and Chief Executive Officer of Transat A.T. Inc. “The CTA rulings, the November 7 decision in particular, following representations from Transat, WestJet, Air Canada and the Air Line Pilots Association (ALPA), show that the departments of Transport, Infrastructure and Communities, Human Resources and Skills Development, and Citizenship and Immigration urgently need to join forces to speed up the review of applicable Canadian policies they have already embarked on.”

Pursuant to the November 6 and 7 rulings, a Canadian company can subcontract its aviation operations, in part or even in whole, to a foreign airline that provides it with aircraft and pilots under short-term lease. Is this the way of the future? If so, this will deprive the Canadian economy of jobs and, possibly, tax revenues, with part of the country’s industrial activity and the resulting spinoffs being effectively delocalized. Transat finds this interpretation of the regulations disturbing because, within a seasonal business model, it allows a supposedly Canadian carrier to use a very substantial majority of foreign pilots and aircraft, to the detriment of Canadian workers and of a coherent industry.

“In a relatively small market like Canada, this reading of things may have a dramatic impact on the aviation industry, which is already under threat from the growing challenges posed by international competition,” Mr. Eustache noted. “This administrative ruling essentially reveals holes in the regulations. We call upon the government to plug them, and we are confident of being heard. We feel that Canadian fleets should always consist of a very substantial majority of Canadian pilots and crews and Canadian aircraft.”

Transat A.T. Inc. is an integrated international tour operator with more than 60 destination countries and that distributes products in over 50 countries. A holiday travel specialist, Transat operates mainly in Canada and Europe, as well as in the Caribbean, Mexico and the Mediterranean Basin. Montreal-based Transat is also active in air transportation, accommodation, destination services and distribution. (TSX: TRZ.B, TRZ.A).