11/09/2012 05:01 EST | Updated 01/09/2013 05:12 EST

Sunwing's Foreign Pilots Irk Transat, Air Canada And WestJet

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MONTREAL - The Canadian Transportation Agency's decision to allow Sunwing to integrate four Czech planes into its fleet this winter has raised the ire of rivals Transat (TSX:TRZ.B), Air Canada (TSX:AC.B) and WestJet (TSX:WJ).

Sunwing asked the agency last month to approve the use of four Boeing 737 Travel Service planes and their pilots. The request came 13 days before the planned first flight.

Transat, Air Canada, WestJet and the Air Line Pilots Association, which represents Air Transat pilots, are opposed to the request, saying that resorting to foreign planes should be an exception but have become an important feature of Sunwing's business model.

The union says more than half of Sunwing's pilots and two-thirds of its planes will be supplied from abroad this winter. In addition to Travel Service, Sunwing is renting several aircraft from three subsidiaries of German travel giant TUI.

In its decision released Wednesday, the agency said that it typically approves such requests as long as all the required information is provided.

But given the strong reaction from Sunwing's competitors, the agency has now decided to consult the industry to assess the opportunity to develop a clear policy on aircraft rental agreements with crews.

The pilots association welcomed the consultation. But Transat has asked the federal government to directly intervene, noting the negative tax consequences for governments caused by foreign pilots.

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