Appeal court dismisses NewLeaf licence case

Both sides are TORONTO claiming victory after the Federal Court of Appeal ruled that NewLeaf Travel Co. Inc. can continue to operate without an air licence and clarified who is responsible for protecting the discount travel company’s passengers.

NewLeaf, which launched in July with flights to 11 Canadian cities, is not an airline itself but rather a reseller of seats on B.C.-based charter service Flair Airlines.

Because it’s not an airline, the Canadian Transportation Agency (CTA) ruled in March that it doesn’t have to hold an air licence. This means that, unlike other startup carriers, NewLeaf isn’t required to have 90 days worth of funding in its back pocket to protect passengers if it goes under.

This decision concerned air passenger rights advocate Gabor Lukacs, who feared that passengers would be left in the lurch if NewLeaf ran out of funds — a common plight of new airlines in Canada — and so appealed the CTA’s decision to the Federal Court of Appeal.

The court dismissed Lukacs’s appeal Thursday but also clarified that Flair is responsible for NewLeaf ’s passengers, leading both sides to declare victory.

“I was thrilled that (the court) actually saw that the CTA had got their ruling correct,” said NewLeaf chief executive Jim Young. “We weren’t worried too much about it in the past because we knew we’d prevail but I was glad to see that it’s now closed.”

Lukacs said his main goal was to ensure passengers are protected, and he was relieved to see the court’s finding that “passengers will 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 travel” — in this case, Flair.

“This is a case of losing the battle and winning the war,” Lukacs said. “I was extremely pleased with how concerned the court was about protection of passengers.”

Flair president Jim Rogers did not immediately reply to a request for comment, but he indicated in July that his airline was not responsible for passenger protection since it is only supplying the aircraft.

Young, however, said the ruling simply validates NewLeaf’s agreement with Flair, known as a tariff.