updated 9/21/2009 1:04:09 PM ET 2009-09-21T17:04:09

Air Canada and U.S. transportation officials said Friday they reached a deal to allow the airline fly National Hockey League teams within the U.S., averting the possible last-minute cancellation of flights that could have affected the NHL schedule.

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U.S. law prohibits a foreign airline from flying passengers solely between U.S. cities. The deal lets Air Canada fly between U.S. cities as long as it also flies those passengers in and out of the U.S.

The conflict had threatened to disrupt the travel schedules of NHL teams for the upcoming hockey season, which begins Oct. 1. Canada has NHL teams in Montreal, Toronto, Ottawa, Calgary, Edmonton and Vancouver.

Under the agreement, Air Canada must submit monthly reports to the Department of Transportation to demonstrate compliance. The airline will also name an official to monitor its own compliance, and it has agreed to transport only people who are affiliated with the teams that have contracts for the charter flights.

Air Canada violated the so-called cabotage laws during the 2008-09 season, the Department of Transportation said in a statement.

Air Canada offers season-long charters for sports teams whose schedules require play in the U.S. and Canada. Initially, the airline's clients were Canada-based hockey teams, but it had expanded its offering to U.S. teams in both hockey and basketball. Toronto is the lone Canadian NBA team.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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