WINNIPEG — Canada’s new low-cost airline is hitting a snag right out of the gate.
Winnipeg-based NewLeaf Travel Company announced Monday afternoon it has postponed sales of airline tickets pending a Canadian Transportation Agency (CTA) review of licensing regulations for indirect air service providers.
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The company also said it will refund all credit card transactions for reservations that were scheduled to begin on Feb. 12, 2016.
“During this uncertain time, we didn’t want to put anyone with existing bookings at risk, and we wanted to give customers time to make other travel arrangements,” said NewLeaf chief executive officer Jim Young.
Young said the company is postponing service mainly because of ambiguity surrounding licensing.
“The CTA says we do not need a license and is giving us an exemption while there is a conduct review,” Young said. “But we don’t know what that review is going to look like when it comes out, and whether we need a licence or can continue as we are.”
NewLeaf announced Jan. 6 it would start flying from Halifax, Hamilton, Saskatoon, Kelowna, Regina, Winnipeg and Abbotsford with prices ranging from $89 to $149.
NewLeaf Travel has partnered with Flair airlines, which will provide the aircraft and the licence.
But shortly after the announcement, there were immediate concerns brought forward regarding its licencing.
Young said the thousands of customers who booked flights with the airline will be given a refund within 72 hours. He did not give the total amount of the refund.
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Gabor Lukacs, a former assistant professor at the University of Manitoba and an airline passenger rights advocate, said without its own licence, NewLeaf doesn’t have a clear policy on how passengers are protected or compensated if their flight is delayed or cancelled or baggage is lost or damaged.
“This fully vindicates what my consistent position has been for the past two weeks, and it is a victory for consumer rights,” said Lukacs via email to Global News Monday.
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“The reason why we launched on Jan. 6 is because it was confirmed that we were in full compliance of CTA licensing regulations,” Young said. “The CTA gave us an exemption from holding a licence directly while it reviews its legislation.”
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Under a charter arrangement with Kelowna-based Flair Airlines Ltd., Flair held the CTA operating licence, while NewLeaf offered seat sales.
The CTA is reviewing whether persons who do not operate any aircraft, but market and sell air services to the public, should be required to hold agency licences. The consultations are expected to end on Jan. 22.
The company said it is aiming to resume taking reservations in the spring.