Air Canada reaches deal with U.S. to save charter flights for NHL teams

MONTREAL – Air Canada (TSX:AC.B) and the U.S. Department of Transportation reached a deal Friday that will allow the resumption of NHL sports charter flights for the 2009-10 season.

Under the agreement, Air Canada will submit monthly reports to ensure compliance with “cabotage” laws that prohibit a foreign airline from carrying passengers or cargo between points in the U.S. that it does not also carry into or out of the United States.

“The carrier also will designate an official to monitor its own compliance, and it agreed to carry only people affiliated with the teams that have contracted for the sports charters,” the U.S. Department of Transportation said in a statement.

Air Canada also agreed to implement security procedures that are comparable to those required for U.S.-airline charter flights, including screening of passengers and carry-on baggage.

Air Canada chief operating officer Duncan Dee said the issue had threatened to disrupt the travel schedules of NHL teams for the upcoming hockey season which begins Oct. 1.

“I want to take this opportunity to thank Prime Minister Stephen Harper, Transport Minister John Baird and Foreign Affairs Minister Lawrence Cannon for their critical interventions, which allowed this matter to be resolved in time for the start of the upcoming NHL season,” Dee said in a statement.

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Harper said during his visit to Washington this week that a tentative deal to resolve the dispute had been reached.

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

The department claimed the charters violated 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.

Air Canada had challenged the decision in a U.S. court.

The airline asserted in a 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.

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