Air Canada Sues U.S.|Over NHL Flight Ban

(CN) - Air Canada has sued U.S. Transportation Secretary Ray LaHood over his decision to ban its sports team charters from making multiple stops in the United States. Canada's largest airline says LaHood's order is the result of lobbying by U.S. airlines and is "wreaking havoc" on the upcoming NHL season.

The ruling means team charters can make only one stop before heading back to Canada.

"The directive is a stark example of arbitrary and capricious action contrary to law," Air Canada said in its complaint in District of Columbia Federal Court.

In August, the Transportation Department directed Air Canada to cancel all of its season-long sports charters, citing concerns about "cabotage," a prohibition on foreign airlines carrying passengers or cargo solely between points in the United States, according to the complaint.

Before that notice, sports team charters were exempt from those rules. They were allowed to make several stops in U.S. cities because of the nature of their operations.

The airline seeks declaratory judgment vacating the directive and relief in time to salvage at least part of the upcoming NHL season.

Air Canada says time is of the essence, with the NHL's preseason beginning this months, and regular season games commencing on Oct. 1.

LaHood's arbitrary and capricious order may also "damage the National Basketball Association season, and exposes Air Canada to claims from its customers," Air Canada says.

Jetz, an Air Canada subsidiary, hold contracts to transport 10 NHL clubs, and the Milwaukee Bucks of the NBA. If the ban on multiple stops in the U.S. were to stand, Jetz would go from being a "profitable division within Air Canada to not being viable," according to the complaint.

The NHL's Anaheim Ducks already have dropped Jetz, and several other hockey teams, including the St. Louis Blues and the Boston Bruins, have indicated they may drop the charter service because of the Transportation Department decision, the complaint states.

In its Aug. 11 letter to the airline, the Transportation Department claimed that it had found several incidents of cabotage that went beyond the sports charter exemptions.

Air Canada rejected those allegations in its complaint. It said what really drove the decision were "political, lobbying, anticompetitive, and anti-free trade pressures" that "cannot form the proper basis for an agency action like this."

The airline also complains that the Department has rejected requests to meet and discuss the matter.

Air Canada is represented by Paul Kiernan with Holland & Knight in Washington, D.C.

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