Rules and regulations

“This plane brought to you by Coke,” and other changes to Canadian air regulations

An Air Canada Rouge Boeing 767 departs Vancouver International Airport. Up to now, airlines were required to paint their own liveries on aircraft (photo: Brett Ballah).

Planes bearing the logos of your favourite brands could soon be coming to an airport near you as the Canadian Transportation Agency modernizes the rules governing aviation in Canada, some dating back 30 years or more.

A provision removing restrictions on ads painted on aircraft was one of a number of regulatory changes published Tuesday by the CTA.

“Currently, if a licensee wishes to paint a name or logo on their aircraft, other than a name included on their licences,” reads a note explaining the changes, “they must apply to the CTA for an exemption. Painting of an aircraft is a business decision, and the amendments to the ATR clearly state that the ATR is not contravened by advertising on the aircraft.”

While relatively common around the world, particularly in Europe, painting planes to reflect brands other than the airline in Canada has had a limited run.

Varied or unique liveries are not unusual in Canada, and the change is expected to open new revenue opportunities, particularly in the ultra low-cost category, where keeping fares low means squeezing revenue out of every possibility.

A Horizon Air Q400 bearing the colours and logo of the Boise State University Broncos lands at Vancouver International Airport (photo: Brett Ballah).

Other changes finalized by the CTA could have profound consequences on the charter industry. They include:

  • Removing restrictions on the sale of charter tickets, such as minimum advance purchase, tour packages, minimum stay, minimum seat price, and a prohibition on one-way travel.
  • Removing restrictions on foreign charters, so long as the operator has a licence to operate in Canada;
  • Allowing up to three groups to charter an aircraft, instead of one;
  • Allowing for cargo charters to group goods from several sources on a single flight;

In justifying the change, the CTA argues that previous requirements such as the minimum advance purchase were designed to steer people wanting last-minute flights to scheduled carriers.

“In today’s liberalized, open-skies environment, these constraints appear to no longer respond to the needs of the travelling public and impede the efficient operation of charter services without a true benefit for the operators of scheduled services.”

For scheduled carriers, the CTA is also cutting advance notice requirements for code-share services from 45 days to just five. It is also liberalizing rules on so-called wet-leases, when the lease includes both the aircraft and the crew to fly it.

“The amendments will also allow any two U.S. carriers to enter into wet-lease or code-share arrangements for a service between Canada and the U.S. without seeking the approval of the CTA,” says the regulator.

“This will align with the requirements for Canadian carriers and could facilitate the introduction of more competitive air services for Canadian travellers.”

Finally, the CTA has updated insurance requirements for Canadian airlines, where the minimum has been $300,000 for the past 30 years.

“Air travellers in Canada benefit from insurance and financial security in the event of an incident,” argues the CTA. The minimum will increase with inflation every year.

“Indexing minimum insurance requirements to inflation reverses erosion of this coverage and ensure that Canadians are protected to the same degree as when minimum coverage was implemented decades ago. The resulting increased premiums also serve as an incentive to improve safety performance as a means of avoiding the higher premiums associated with higher-risk carriers.”

The agency notes that large carriers already carry insurance well above the legal floor, though smaller carriers will likely see their costs rise by an average of $1,500 per year.