EXEMPTION FROM SUBSECTION 700.02(1) OF THE CANADIAN AVIATION REGULATIONS (CARs)

From: Transport Canada

Pursuant to Subsection 5.9(2) of the Aeronautics Act, and after having determined that the exemption is in the public interest and is not likely to affect aviation safety, I hereby exempt Morningstar Partners Ltd., Box 14, 29 Airport Road, Edmonton, Alberta, T5G 0W6, operating Canadian aircraft that are used for the transport of passengers, where the aircraft are turbine-powered pressurized aeroplanes or large aeroplanes and are operated under a fractional ownership program, from the requirements of subsection 700.02(1) of the Canadian Aviation Regulations (CARs).

Subsection 700.02(1) of the CARs states that no person shall operate an air transport service unless the person holds and complies with the provisions of an air operator certificate that authorizes the person to operate that service.

This exemption is granted subject to the following conditions.

PURPOSE

The purpose of this exemption is to permit Morningstar Partners Ltd. to operate aircraft of the type and for the purpose described in the application section below in a fractional ownership program, with a Private Operator Certificate issued under the authority of the Canadian Business Aviation Association (CBAA), pending the proposed amendments to the Aeronautics Act (AA) that will specifically exclude fractional ownership programs from the current definition of “commercial air service”.  

APPLICATION

This exemption applies to Morningstar Partners Ltd., while operating Canadian registered aircraft used for the transport of passengers, where the aircraft is a turbine-powered pressurized aeroplane, or a large aeroplane and is operated pursuant to a fractional ownership program as described in the conditions below and in which two or more aircraft are available subject to conditions, for use by the participants in the program, who each own at least a part of one aircraft.

The terms as defined in Appendix A hereinafter attached apply to this exemption.

CONDITIONS

This exemption is subject to the following conditions:

  1. The fractional ownership program (“program”) shall consist of all of the following elements:
    1. The provision for fractional ownership program management services by a single fractional ownership program manager on behalf of the fractional owners.
    2. Two or more airworthy aircraft.
    3. One or more fractional owners per program aircraft, with at least one program aircraft having more than one owner.
    4. Possession of at least a minimum fractional ownership interest in one or more program aircraft by each fractional owner.
    5. An aircraft interchange agreement amongst all of the fractional owners.
    6. Multi-year program agreements covering the fractional ownership, fractional ownership program management services, and aircraft interchange agreement aspects of the program.
  2.  The fractional ownership program aircraft shall be registered in Canada in the name of the fractional ownership program manager (“program manager”), who shall maintain legal custody and control of all program aircraft.
  3. The Program Manager shall manage the fractional ownership program in compliance with the Canadian Business Aviation Association Private Operator Certificate Program established pursuant to CAR 604.  
  4. Non-financial arrangements of the multi-year program agreements covering the fractional ownership, fractional ownership program management services, and aircraft interchange agreement aspects of the program shall be readily available to the CBAA, and/or Transport Canada Civil Aviation on demand.
  5. In the case of an aircraft included in the program and conducting demonstration flights for the purpose of soliciting new sales of fractional aircraft, the fees charged to the potential customer shall not exceed the direct operating cost of the flight(s).
  6. A copy of this exemption shall be carried on board the aircraft at all times that the aircraft is operating pursuant to the program.

VALIDITY

This exemption is in effect until the earliest of the following:

  1. the date on which any one of the conditions set out in this exemption is breached; 
  2. the date on which an amendment to the appropriate provisions of the Canadian Aviation Regulations and the Aeronautics Act comes into effect; or 
  3. the date on which this exemption is cancelled in writing by the Minister, where he is of the opinion it is no longer in the public interest, or is likely to have an adverse affect on aviation safety.

Dated at Ottawa, Canada this 21st day of  November, 2007, on behalf of the Minister of Transport, Infrastructure and Communities.

OSB Merlin Preuss on November 21, 2007

Merlin Preuss
Director General
Civil Aviation

 

APPENDIX A

The following terms referenced in this exemption are to be interpreted as follows:

Interpretation – In this exemption

  1.  “aircraft interchange agreement” - means an arrangement, documented by the written program agreements, under which the program aircraft are available, on an as needed basis, to each fractional owner.
  2.  “fractional owner” or “owner” - means an individual or entity that possesses a minimum fractional ownership interest in a program aircraft and that has entered into the applicable program agreements.
  3.  “fractional ownership interest” - means the ownership of an interest or holding of a multi-year leasehold interest and/or a multi-year leasehold interest that is convertible into an ownership interest in a program aircraft.
  4.  “minimum fractional ownership interest” – means
    1.  A fractional ownership interest equal to, or greater than, one-sixteenth (1/16) of at least one subsonic, fixed-wing or powered-lift program aircraft; or
    2. A fractional ownership interest equal to, or greater than, one-thirty-second (1/32) of at least one rotorcraft program aircraft.
  5.   “fractional ownership program aircraft” or “program aircraft” - means:
    1. A Canadian registered aircraft in which a fractional owner has a minimal fractional ownership interest and that has been included in the aircraft interchange agreement pursuant to the program agreements, or
    2. A Canadian registered aircraft owned in whole or in part by the program manager that has been included in the aircraft interchange agreement and is used to supplement program operations.
  6.   “Fractional ownership program management services” or “program management services” - mean administrative and aviation support services furnished in accordance with the applicable requirements of this exemption or provided by the program manager on behalf of the fractional owners, including, but not limited to, the
    1. Establishment and implementation of program safety guidelines;
    2. Employment, furnishing, or contracting of pilots and other crewmembers;
    3. Training and qualification of pilots and other crewmembers and personnel;
    4. Scheduling and coordination of the program aircraft and crews;
    5. Maintenance of program aircraft;
    6. Satisfaction of recordkeeping requirements;
    7. Development and use of a program operations manual and procedures; and
    8. Application for and maintenance of management agreements and other authorizations and approvals.
  7.  “fractional ownership program manager” or “program manager” means the entity that offers fractional ownership program management services to fractional owners, and is designated in the multi-year program agreements referenced in condition (1)(vi)of this exemption to fulfill the requirements of this  exemption applicable to the manager of the program containing the aircraft being flown.
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