Air Canada sues US over charter flights

By HARRY R. WEBER

The Associated Press

ATLANTA — Air Canada says the United States' insistence that the carrier cancel all of its season-long sports charter flights would wreak havoc on the upcoming professional hockey and basketball seasons if it is upheld.

Teams could have difficulty playing back-to-back games in the U.S. if they are forced to return to their home country between each game.

"The urgency of this matter cannot be minimized," Air Canada said in court papers.

The National Hockey League's regular season starts Oct. 1. Six of the 30 NHL teams are based in Canada. The NBA regular season starts in late October.

A hearing in the case is currently scheduled for Monday.

The airline, which flies numerous sports teams between points inCanada and the U.S., seeks in a federal lawsuit filed in Washington on Wednesday to prevent Secretary of Transportation Ray LaHood from enforcing his department's decision.

The agency claims that the sports charters violate U.S. law because they last for an entire season and sometimes involve travel between U.S. cities rather than solely between one point in Canada and one point in the U.S.

The U.S. prohibits carriage of passengers or cargo for compensation or hire by a foreign airline solely between points in the U.S.

But Air Canada asserts in its lawsuit that the ban does not apply to the carriage of stopover traffic since stopovers, by definition, include an international segment. For example, the airline said, the Toronto Maple Leafs may have games scheduled in Toronto, then Anaheim, Calif., then Dallas, and then back in Toronto.

"The charter would therefore have to move the team and coaches from California to Texas without an intervening stop in Canada," Air Canada said. "But because the entire charter contract and the season-long itinerary is treated as a single journey with stopovers for purposes of the permit," there would be no violation.

Air Canada said in court papers that there was never any problem voiced about their charter flights until U.S. carriers complained. A DOT spokesman declined to comment on the lawsuit Friday. A spokesman for the Air Transport Association, a trade group that represents U.S. airlines, said he had no additional comment beyond a 2008 letter from the ATA and several other groups to the DOT that asserted that Air Canada's charter flights that operate between U.S. cities should be deemed unlawful.

Air Canada said it has a foreign air carrier permit issued by the U.S. that allows it to operate both scheduled and charter air service between any point or points in Canada and any point or points in the U.S. The carrier has a unit called Jetz that provides business-class level charter service.

Jetz offers season-long charters for sports teams whose schedules require play in the U.S. and Canada. Initially, Jetz' clients were Canada-based hockey teams, but it has since expanded its offering to U.S. teams in both hockey and basketball. Air Canada said that's when opposition started.

"That pushback was plainly driven by domestic airline competitors who did not want to see their business impacted by Jetz," Air Canada said in its lawsuit.

Air Canada said it was told last month by the DOT that it must cancel all of its season-long sports charters regardless of the point of origin.

"We believe that such an operation would place Air Canada in violation of U.S. law," the DOT said in a recent letter to Air Canada cited in the lawsuit.

The DOT's position on the charter flights has already had ramifications in baseball. Canada responded by enforcing the rule on its side of the border.

The Toronto Blue Jays recently changed the destination of one flight in one of their final road trips of the season to comply.

The Blue Jays fly with Miami Air International, a Florida company that also provides charter service to five U.S.-based NHL teams, including the Stanley Cup champion Pittsburgh Penguins.

Unable to use an American carrier for a domestic flight in Canada, the Blue Jays changed their destination to Detroit and were granted approval.

The standoff could also affect NHL teams based in the U.S.

The Dallas Stars are wondering if the standoff will affect road trips to Canada on the club's plane.

"We used to fly from Edmonton to Vancouver no problem," said Stars spokesman Rob Scichili. "Now we're looking at all our options, and we hope the issue is resolved before the start of the regular season."

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AP Airlines Writer David Koenig in Dallas contributed to this report.

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September 11, 2009 06:50 PM EDT

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