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Updated: Friday, June 27, 2008 10:16 AM


Air Canada Cargo

http://www.aircanada.ca/


AC Cargo Limited Partnership d/b/a Air Canada Cargo

OST-2004-19021 - Exemption - Canada-US All-Cargo

August 27, 2004

Application for an Exemption

For the early part of its existence, Air Canada Cargo will not operate its own aircraft, or hold its own Air Operator Certificate. Instead, the carrier will block space on and market the cargo capacity offered by Air Canada and its affiliates. Thus, Air Canada Cargo will be using aircraft operated and maintained by Air Canada and its affiliates. Air Canada Cargo will use the "AC" IATA designator code.

Air Canada Cargo is applying for its own DOT operating authority in order to facilitate a corporate transaction designed to enhance the efficiency and smooth operations of Air Canada and its affiliated companies. Given the close ties contemplated between Air Canada and Air Canada Cargo, this Application should present the Department with no issues or concerns about the fitness or qualifications of Air Canada Cargo.

Counsel: Garfinkle Wang, Anita Mosner, 703-294-5890


OST-04-19021 - Canada-US All-Cargo

September 17, 2004

Supplement of AC Cargo Limited Partnership d/b/a Air Canada Cargo

The Canadian Transportation Agency has examined the new corporate structure of Air Canada, and all of its affiliated companies. The CTA has determined that ACE Aviation Holdings, Inc. will meet the Canadian ownership and control requirements set forth under Canadian law. The CTA also found that AC Cargo Limited Partnership will meet the Canadian ownership and control requirements as defined in subsection 55(1) of the Canada Transportation Act.

As the Department knows, the precise details of each holder of ACE Aviation Holdings stock are being finalized as the Air Canada companies prepare to emerge from CCAA protection. Air Canada Cargo believes at this time that the largest non-Canadian stakeholders of ACE Aviation Holdings will be Cerberus Capital (US) and Deutsche Bank AG (Germany). While the precise interests may change as entities decide to either keep or dispose of their interest in ACE Aviation Holdings, it is certain that at all times the exercise of rights by non-Canadian interest in ACE Aviation Holdings voting stock will comply with all applicable CTA limitations.

Air Canada Cargo anticipates blocking space on flights operated by Air Canada and on Jazz Air Limited Partnership d/b/a Air Canada Jazz. To the extent required, Air Canada Cargo requests that the DOT authority it receives in this Docket also include all necessary authority to enter into such blocked space arrangements.

Counsel: Garfinkle Wang, Anita Mosner, 703-294-5890


OST-04-19021 - Canada-US All-Cargo

September 27, 2004

Second Supplement of Air Canada Cargo Limited Partnership d/b/a Air Canada Cargo

As the Department is well aware, Air Canada Cargo is being created as part of the overall restructuring and refinancing of Air Canada, which is expected to emerge from CCAA protection at 1200 am on September 30. As a key member of the newly recapitalized Air Canada family of companies, Air Canada Cargo will have financial resources which are more than adequate to permit Air Canada Cargo to provide the services covered by this Application. As part of the restructuring, Air Canada Cargo will receive title to property and equipment previously owned by Air Canada, as well as operating capital, which will be characterized as a line of credit. Being filed under separate cover and under seal is a pro forma balance sheet for the newly created company. Pursuant to Rule 12 of the DOT Rules of Practice, Air Canada Cargo requests that this information be afforded confidential treatment.

Paul Letourneau, Vice President and Corporate Secretary of Air Canada, has been appointed as Secretary of Air Canada Cargo.

Counsel: Garfinkle Wang, Anita Mosner, 703-294-5890


OST-02-12556 - Foreign/Domestic Designation of Agent for Service of Notice, Process, Orders, Decisions and Requirements

September 24, 2004

Designation of Service

By: Claude Morin


OST-04-19021 - Canada-US All-Cargo

September 29, 2004

Third Supplement of Air Canada Cargo Limited Partnership d/b/a Air Canada Cargo

The Canadian Transportation Agency has today issued a license to AC Cargo Limited Partnership to operate scheduled transborder all-cargo services. A copy of the license is Attachment 1 hereto.

The CTA has reviewed the proposed financial structure for the entire ACE Aviation Holdings Inc. family of companies, and has issued a decision indicating that this structure will comply with Canadian law. The CTA has issued today a further decision (No. 511-A-2004) setting forth in detail the reasons for its finding. Of course, by licensing Air Canada Cargo, the CTA has determined that the carrier meets all of the applicable licensing requirements. A copy of CTA Decision No. 511-A-2004 is Attachment 2.

Counsel: Garfinkle Wang, Anita Mosner, 703-294-5890


OST-04-19021 - Canada-US All-Cargo

Filed August 27, 2004 | Supplemented September 17, 27, and 29, 2004 | Issued September 29, 2004

Notice of Action Taken

Exemption form 49 USC § 41301 to permit the applicant, Air Canada Cargo, by blocked-space arrangements with two of its affiliates, Air Canada and Air Canada Jazz, to engage in the scheduled foreign air transportation of property and mail, between any point or points in Canada and any point or points in the United States; and Statements of Authorization under 14 CFR Part 212 to permit Air Canada and Air Canada Jazz to block space to carry Air Canada Cargo’s cargo, on Air Canada and Air Canada Jazz flights between Canada and the United States.

By: Paul Gretch


October 5, 2004

Re: Petition of John Gilmore for Review of Staff Action

I would submit to you that your decision is In error and should accordingly be revisited. I would also submit to you that to certify a foreign carrier as substantially owned by the nationals of that foreign country ‑ at the very least 50% +1 of the issued shares of such airline must be owned by nationals of that country: Not as is the case here where a mere 20% are owned by Canadians.

I would further submit that a flexible interpretation of the ownership requirement is inconsistent with the interests of US airlines in that they are not permitted to source more than 50% of their equity from non national sources ‑ where, in the instant case, Air Canada has sourced 80% of its equity capital from foreign sources.

By: John Gilmore, jptgilmore@hotmail.com


October 6, 2004

Re: Email from DOT Foreign Air Carrier Licensing to John Gilmore

Re: Supplement to Petition

We are considering your email dated October 5, 2004, to be a petition for review of staff action under Subpart C of 14 CFR Part 385, and are placing your email, and this response, in Docket OST 2004‑19021. Under the provisions of 14 CFR385.31(e), persons have seven business days to file answers to the petition.

By: DOT, Foreign Air Carrier Licensing, George Wellington



October 13, 2004

Re: U.S. Reviews Complaint Regarding Air Canada Questions Its Right to Operate Transborder Flights on Foreign Ownership Grounds

The U.S. Department of Transportation is reviewing a complaint that questions Air Canada's right to operate transborder flights into the United States on the grounds that foreign investors control more than 80 per cent of the airline's parent company. The written complaint filed by John Gilmore, who worked as an Air Canada lawyer in the early 1970s, focuses on the airline's new cargo division but has broader implications for its Canada‑U.S. passenger routes.

By: Brent Jang


October 14, 2004

Re: Air Canada to Mount Ownership Defence (Newspaper Articles)

By: Brent Jang


October 15, 2004

Re: Letter Explaining the Filing Process

Department staff has received your emails of October 13 and 14, 2004, concerning the petition for review of staff action you filed in the case involving Air Canada Cargo, Docket OST 2004-19021.

We wish to caution you that such direct contacts with Department staff on a Docketed proceeding of this type are considered to be ex parte Prohibited Communications under 14 CFR 300.2 of the Departments Rules of Conduct. Since you have, by your petition for review, become a party to what is a controverted proceeding, ANY communication with the Department, with the exception of status inquiries, must be filed ONLY through the Docket section and MUST be served on all parties to the proceeding. In addition, any such submissions must be accompanied by a formal Motion for Leave to File an Otherwise Unauthorized Document, in which you must demonstrate good cause for such filing. Please refer to 14 CFR Parts 302 and 385 for the procedural requirements for submissions in Docketed proceedings.

In order that other parties to this proceeding will have a complete record, we will, in this instance, place your October 13 and 14 communications in Docket OST 2004-19021, and will serve them, and this communication, on the parties.

By: George Wellington


OST-04-19021 - Canada-US All-Cargo

October 18, 2004

Answer of AC Cargo Limited Partnership d/b/a Air Canada Cargo

From a procedural standpoint, Mr. Gilmore’s Petition is wholly inadequate. DOT’s rules concerning Petitions for Review of Staff Action do not permit third parties who did not bother to file pleadings in this Docket – such as Mr. Gilmore – to request review of DOT decisions after the fact, unless good cause can be shown for such failure to participate. Moreover, even parties who had submitted pleadings must show that they have an interest in the outcome of the decision that is substantial enough to warrant their demand for post-decision relief. As a third party who filed no comments at the Department while Air Canada Cargo’s Application was pending, and who failed to offer even a prima facie statement of his interest in this matter, Mr. Gilmore’s Petition is utterly defective on procedural grounds.

As a substantive matter, Mr. Gilmore’s comments are based upon multiple errors of law and fact. As will be shown below, DOT was fully correct in endorsing the comprehensive analysis the Canadian Transportation Agency performed in determining that the Air Canada family of companies will remain under Canadian ownership and control after those companies emerged from CCAA protection. The governance documents and ownership structure of ACE Aviation Holdings Inc. were carefully drafted to ensure that Canadians would continue to own and control at least 75% of the voting interests in the company. Mr. Gilmore’s critique of DOT’s decision rests not on the carefully-reasoned 18-page decision of the CTA, but instead on a selective misreading of some press releases and a fundamental misunderstanding of US and Canadian law. As such, this late and ill-founded attack on Air Canada Cargo’s US authority must be promptly rejected.

Counsel: Garfinkle Wang, Anita Mosner, 703-294-5890


October 18, 2004

Re: Service List

In an E-Mail response to you I inadvertently omitted to copy those on the service list. They are copied on this E-Mail with the original message below.

By: John Gilmore, jptgilmore@hotmail.com


October 19, 2004

Re: Procedural Ruling

I am treating your email as a procedural request and placing a copy in the docket. Under sec. 385.31 (e), a person has 7 business days to file an answer to the petition. Motions to extend that time must be submitted to the docket, requesting such extension for good cause, and served on the parties to the proceeding. The Department will then consider that request and any answers filed in response to the motion and issue its determination.

By: George Wellington


OST-04-19021 - Canada-US All-Cargo

October 20, 2004

Re: Answer of Air Canada Cargo

Air Canada Cargo asserts that the petition for review should be denied on the grounds of procedural irregularities.

I would point to the Decision on the Docket 19021-7 where the Department indicates that it has already made the decision that this is a Petition for Review and accordingly that matter has already been determined.

In the alternative I would submit that the Petition for Review of Staff Action was timely: the applicant is a new corporate entity whose parent only emerged from the Canadian equivalent of Chapter 11 on September 30 - creating some confusion in interested parties keeping track of developments - and therefore compromising the opportunity to participate in the initial staff action proceedings.

By: John Gilmore, jptgilmore@hotmail.com


OST-04-19021 - Canada-US All-Cargo

September 27, 2004

Motion to Withhold Information from Public Disclosure

The information requested to be withheld contains proprietary data concerning Air Canada Cargo's initial capitalization and financial structure. This information is not generally publicly available, as financial information for the Air Canada companies is reported only on a consolidated basis.

Counsel: Garfinkle Wang, Anita Mosner, 703-294-5890


October 25, 2004

Motion for Leave to File and Contingent Reply

On October 20, 2004, John P.T. Gilmore filed in this Docket an unauthorized Reply with respect to his Petition for Review of Staff Action regarding DOT’s decision to grant transborder all-cargo exemption authority to AC Cargo Limited Partnership d/b/a Air Canada Cargo. The Reply is Mr. Gilmore’s fourth unauthorized filing or communication with the Department on this matter.

Air Canada Cargo would urge that the Department refuse to accept any further unauthorized filings on this matter. DOT regulations do not provide for the filing of replies in response to answers to petitions for review of staff action. See 14 CFR 302.6, and 14 CFR 385.31. Moreover, Mr. Gilmore has not sought leave to file these documents, despite having been admonished by the Department about the need to do so. Even if Mr. Gilmore had complied with DOT regulations and sought leave to file his most recent submission, Mr. Gilmore has no basis to allege that there is good cause for DOT to accept it; his most recent filing is merely a repetition of arguments previously expressed.

However, to the extent DOT decides to accept Mr. Gilmore’s recent unauthorized filing without leave, Air Canada Cargo would respectfully request that, in the interest of procedural fairness, the Department grant its own Motion to file a brief response to Mr. Gilmore, which is set forth below.

Counsel: Garfinkle Wang, Anita Mosner, 703-294-5890


October 25, 2004

Re: Answer of John P.T. Gilmore

This is my answer to that Motion pursuant to 14CFR302.6(a).

I apologize to all involved in this matter for my lack of sophistication in procedural matters.

I have no objection to the granting of the October 25 Motion for Leave by Air Canada Cargo.

I am content to see the record stand as it is or be confined to the initial Petition for Review the initial Decision thereon and any timely replies to the Petition.

I would not wish my lack of procedural sophistication to interfere with the review of the substance of the Petition.

By: John Gilmore, jptgilmore@hotmail.com


OST-2004-19021 - Exemption - Canada-US All-Cargo

September 1, 2005

Application for Renewal of an Exemption

Air Canada Cargo holds out scheduled air transportation by blocking space on and marketing the cargo capacity offered by Air Canada and its affiliates.

Counsel: Garfinkle Wang, Anita Mosner, 703-294-5890


OST-2004-19021 - Exemption - Canada-US All-Cargo

September 6, 2005

Answer of John Gilmore

14CFR385.2 provides that “A timely petition for review filed in accordance with the provisions of this section, or notice given by the Department of review on its own motion, shall stay the staff action pending disposition by the Department…”

I would submit that 14CFR385.2 applies to preclude and renewal of the exemption granted by the staff action dated September 29, 2004 until such time as the petition for review has been determined. Accordingly, the current application for the renewal of such exemption must await determination of the petition for its review.

The staff action was by its terms effective through September 29, 2005 – by its terms irrespective of any subsequent filing of petitions for review – in effect a ‘waiver’ of a ‘stay’ under 14CFR385.2.

Since a petition for review was filed and is under consideration, the normal provisions of 14CFR 385.32 become applicable once the ‘waiver’ granted expires – that is on September 29, 2005.

At that time the exemption granted is stayed by 14CFR385.2 and as such ceases to have effect and is not legally susceptible to renewal until such time as the petition for review has been determined.

It is therefore respectfully submitted that insofar as the instant application seeks to renew an exemption that under 14CFR385.32 is stayed coincident with its original termination pending disposition of the review, the instant application cannot be granted and should be deferred pending determination of such review. In the alternative I would submit that if the instant application for a renewal of the exemption is granted, pursuant to 14CFR385.32 such renewal must be stayed pending the decision on the petition for review of the exemption it seeks to renew.


OST-2004-19021 - Exemption - Canada-US All-Cargo

September 26, 2005

Reply in Opposition to Answer of John Gilmore

Mr. Gilmore’s opposition to Air Canada Cargo’s exemption renewal application is rife with both procedural and substantive inaccuracies. There is nothing in DOT law or precedent that would support Mr. Gilmore’s view that renewal of Air Canada Cargo’s exemption should be “stayed” pending DOT action on his Petition for Review of the initial decision to grant Air Canada Cargo the authority at issue here. Indeed, the effectiveness of Air Canada Cargo’s exemption has, by operation of law, been extended past September 29, or until such time as DOT decides to act on that renewal application. Moreover, Mr. Gilmore continues to ignore affirmative findings on the part of the CTA and DOT that Air Canada Cargo is a citizen of Canada; he states nothing new in his opposition to Air Canada Cargo’s exemption renewal request, other than to note that several other Canadian carriers have followed the lead of ACE and Air Canada Cargo, and have adopted similar capital structures.


OST-2004-19021 - Exemption - Canada-US All-Cargo

September 27, 2005

Reply of John Gilmore - Confirming Election not to File Motion for Leave to File

My decision not seek leave to file further documents should close the file on this matter, the relevant time limits for other filings having expired, and should permit expedited progress to a decision “within a reasonable time” (49USC558(c)) on all matters including the Petition for Review which has been outstanding since October 2004.

By: John Gilmore
3 Rosebank Road
Edinburgh, Scotland EH5 3QW



Order 2008-6-39
OST-2004-19021 - Exemption - Canada-US All-Cargo
OST-2007-28768 - Exemption and Foreign Air Carrier Permit - US-Canada

Issued and Served June 26, 2008

Order - Bookmarked

By this order, we grant the petition of Mr. John P.T. Gilmore for review of staff action with respect to the grant of exemption authority to AC Cargo Limited Partnership d/b/a Air Canada Cargo in the above-captioned Docket, and on review, affirm the action taken by the Director, Office of International Aviation, in granting that authority. We also grant the request of Air Canada Cargo for renewal, subject to conditions, of this exemption authority and renew the statements of authorization previously granted to Air Canada and Air Canada Jazz, enabling them to conduct blocked space operations for Air Canada Cargo.

By: Michael Reynolds


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