Air Canada said Monday it has been cleared to launch its legal challenge for the right to resume flying at Billy Bishop Toronto City Airport.

The Montreal-based airline said the Federal Court has issued an order allowing Air Canada to challenge, by way of an application for judicial review, the Toronto Port Authority's allocation of available slots at Toronto Island airport.

Air Canada's court challenge to serve Toronto Island is due to begin on July 6. (CBC)

Air Canada's rival, Porter Airlines, is now the only airline allowed to operate there.

A hearing has been set for July 6 to 8.

Air Canada alleges the Toronto Port Authority has used an improper process to award slots.

"The TPA, a public authority, has provided a private business interest with virtually exclusive rights to use a public facility, conferring on Porter Airlines an anti-competitive advantage," Ben Smith, Air Canada's chief commercial officer, said in a statement.

"As a result of the TPA's non-transparent arrangement with Porter for all the available slots at the airport, Porter has enjoyed an unfair monopoly on the Island business corridor."

Air Canada wants to run 15 round trips a day to both Ottawa and Montreal and seven a day to Newark, N.J. from the Island Airport.

Air Canada has not flown into the island airport since it was evicted in 2006 and Porter gained exclusive access.

On Feb. 10, the regional partner of Air Canada — Halifax-based Jazz Air LP — announced it had signed a deal to buy 15 Bombardier Q400 NextGen aircraft. The purchase prompted speculation it would use the aircraft to provide service to Toronto Island.

With files from The Canadian Press