The United States and Air Canada appeared on Friday to have settled a spat over charter flights, which had threatened to disrupt the upcoming National Hockey League season.

The U.S. Department of Transportation said Air Canada, which provides charter flights for Canadian teams in the NHL, had agreed to step up its monitoring to make sure it was not violating rules that limit foreign-owned carriers' operations within the United States.

U.S. officials, acting on a complaint, said the airline appeared to have violated rules about flying people between stops within the United States who it had not carried into the United States from Canada.

During the NHL season, Canadian teams making long road trips often visit several U.S. cities before returning home.

The United States had threatened in August to sanction Air Canada, prompting the Canadian government to warn it would retaliate against U.S. carriers that transport U.S.-based teams to games within Canada.

The issue was even on the agenda of this week's White House meeting between U.S. President Barack Obama and Canadian Prime Minister Stephen Harper.

Air Canada said it was pleased by the settlement, and its Jetz sports charter unit would address the issues raised by the United States.

(Reporting by Allan Dowd; editing by Rob Wilson)

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