TORONTO - Air Canada has been ordered to clear pets for takeoff on its domestic passenger flights after a ruling by the Canadian Transportation Agency.

The agency has ruled Air Canada (TSX:AC.A) must resume carrying small animals in the baggage compartment on flights within Canada as of May 5, and also on international flights.

Jadrino Huot, a spokesman for the agency in Ottawa, said the revisions were considered "unreasonable'' as they exposed pet owners to "many significant disadvantages''.

The ruling came in response to a complaint filed by Peter Griffiths who argued that shipping his six-kilogram dog on a cargo flight from Canada to Mexico, instead of by passenger plane, would cost him an extra $115.

Griffiths also said his dog might be required to stop over during a trip, and that it was inconvenient for him to deliver and pick up his pet at cargo terminals.

In Toronto, Air Canada spokesman Peter Fitzpatrick said the airline is reviewing the ruling and had no further comment. No immediate change was made to the airline's pet policy on its website.

Air Canada stopped allowing pets on domestic passenger planes last July, forcing travellers to put their pets on cargo flights. Its plan to do the same for international flights was suspended by the agency last summer.

The airline said it had made the change so it could carry more checked luggage -- a need that had increased due to higher passenger loads and security measures that limited what passengers could carry on board. The policy did not apply to guide dogs for the blind.

In its ruling, the agency said the airline's policy to ban pets and kennels weighing less than 31.7 kilograms (70 pounds) was unreasonable as it created too many difficulties for pet owners.

It said cargo flights carry a lower priority and, due to the uncertainty of scheduling cargo, a pet owner may not know when a pet is to arrive at its destination.<

Huot said the airline must comply with the ruling, although the decision could be appealed to Federal Court.

In September 2006, Air Canada banned pets from its airline cabins but the agency's ruling does not apply to pets in cabins.