Decision No. 101-A-2004

March 5, 2004

File Nos. M4835-2-26
M4820-A5
M1820/A1/04

APPLICATION

Air Canada has applied to the Canadian Transportation Agency (hereinafter the Agency) for a ruling concerning the matter set out in the title. The application was received on July 25, 2003 and was subsequently amended on August 12, on August 29, on October 2 and on December 10, 2003, and on January 20, 2004.

Pursuant to subsection 29(1) of the Canada Transportation Act, S.C., 1996, c. 10 (hereinafter the CTA), the Agency is required to make its decision no later than 120 days after the application is received unless the parties agree to an extension. In this case, Air Canada has agreed to an indefinite extension of the deadline.

BACKGROUND

Air Canada has applied to the Agency for a ruling on whether the disclosure of the name "Austrian Airlines Group" in connection with its code-sharing flights operated by Austrian Airlines Öesterreichische Luftverkehrs AG (hereinafter Austrian Airlines) and Tyrolean Airways Tiroler Luftfahrt GmbH (hereinafter Tyrolean) would be in compliance with the requirements of section 8.5 of the Air Transportation Regulations (hereinafter the ATR).

Air Canada indicates that given the crucial need to reduce costs significantly, "Austrian Airlines Group" will be removing, in its standard schedule information manual, the preassigned flight number ranges which currently identify a flight as being operated by either Austrian Airlines, Tyrolean or Lauda Air Luftfahrt AG (hereinafter Lauda), as the case may be. For example, the series ranging from 0 to 100 refers to Austrian Airlines and the series ranging from 101 to 200 refers to Tyrolean. Air Canada advises that its internal reservation system (ResIII), which is used by Air Canada employees and travel agencies with direct links, currently recognizes these preassigned flight number ranges. As a result of the change, "Austrian Airlines Group" will be the name shown in Air Canada's ResIII system, on its Web site and in the computer reservation systems used by travel agencies. Air Canada adds that Austrian Airlines, Tyrolean and Lauda cannot be separately identified unless substantial modifications are made to Air Canada's ResIII system.

LEGISLATIVE REFERENCES

Section 60 of the CTA states:

No person shall provide all or part of an aircraft, with flight crew, to a licensee for the purpose of providing an air service pursuant to the licensee's licence and no licensee shall provide an air service using all or part of an aircraft, with flight crew, provided by another person except

(a) in accordance with regulations made by the Agency respecting disclosure of the identity of the operator of the aircraft and other related matters; and

(b) where prescribed, with the approval of the Agency.

Subsection 8.5(2) of the ATR states:

The licensee shall give notification that the air service referred to in subsection (1) is being operated using an aircraft and a flight crew provided by another person, and shall identify that person and specify the aircraft type

(a) on all service schedules, timetables, electronic displays and any other public advertising of the air service; and

(b) to travellers

(i) before reservation, or after reservation if the arrangement for the air service has been entered into after a reservation has been made; and

(ii) on check-in.

Subsection 8.5(3) of the ATR states:

A licensee shall identify the person providing the aircraft and specify the aircraft type for each segment of the journey on all travel documents, including, if issued, itineraries.

ANALYSIS AND FINDINGS

In making its findings, the Agency has considered all of the evidence submitted by Air Canada.

At the outset, the Agency finds that Air Canada's proposed option to disclose the name "Austrian Airlines Group" in connection with its code-sharing flights to be operated by Austrian Airlines and Tyrolean does not comply with the provisions of the ATR. However, the Agency, pursuant to subsection 27(1) of the CTA, has determined that this matter should be dealt with as an application for an exemption from the application of subsections 8.5(2) and 8.5(3) of the ATR.

The Agency is of the opinion that the term "person" used in section 60 of the CTA and subsections 8.5(2) and 8.5(3) of the ATR refers to those carriers, corporations or affiliates identified in the code-sharing arrangements and as approved by the Agency. Based on the information provided by Air Canada, Tyrolean and Lauda are wholly owned subsidiaries of Austrian Airlines, and the carriers collectively describe their affiliation worldwide as "Austrian Airlines Group" in advertisements and on public documents, including their Annual Report and their Web site. However, the "Austrian Airlines Group" is not a legal entity.

Air Canada made reference to several Agency approvals for specific code-sharing arrangements with Austrian Airlines and Tyrolean. The Agency, however, has not granted any approval with respect to code-sharing arrangements between Air Canada and the "Austrian Airlines Group", either as a corporate entity or a "person" pursuant to section 60 of the CTA and its regulatory provisions.

Under the circumstances, the Agency finds that the "Austrian Airlines Group" is not a "person" for the purposes of section 8.5 of the ATR and is not the "operator of the aircraft" as set out in section 60 of the CTA.

Air Canada advised that it was prepared to take the following steps to ensure that customers are informed prior to reservations that all flights within Austria under the Air Canada code are operated only by Tyrolean:

1. Air Canada call centre agents and airport customer sales agents will be informed through internal communication.
2. Travel agents in Canada will be informed through Air Canada flashes sent by facsimile and/or other forms of communication.
3. A "pop up" or similar notice will be displayed on Air Canada's Web site stating that all flights within Austria are operated by Tyrolean, provided that such notice can be developed with minimal delay and reasonable cost.

Regarding point 3 above, Air Canada advised that a "pop up" screen can be developed and implemented on Air Canada's Web site within two months from the date of the Agency's ruling with respect to this matter. The "pop up" screen would be displayed after a customer selects a domestic point in Austria as part of his or her itinerary. The screen would state that "all flights between Vienna and other points in Austria are operated by Tyrolean". The customer would not be able to proceed further unless he or she clicks "OK".

With respect to Air Canada's ResIII system, as this reservation system is only an internal one, the public disclosure requirements of section 8.5 of the ATR would not apply and the exemption process would only be required with respect to public display such as timetables, service schedules and Web sites, pending the implementation of the "pop up" screen. The Agency has carefully considered this matter and is of the opinion that the measures proposed by Air Canada to ensure that travel agents and Air Canada's call centre agents are informed of which carrier is operating the aircraft seem appropriate.

Pursuant to paragraph 80(1)(b) of the CTA, the Agency may, by order, on such terms and conditions as it deems appropriate, exempt a person from the application of any of the provisions of this Part or of a regulation or order made under this Part where the Agency is of the opinion that an action taken by the person is as effective as actual compliance with the provision.

Based on the above, the Agency is of the opinion that the following actions proposed by Air Canada with respect to its Web site would be as effective as actual compliance with the provisions of subsections 8.5(2) and 8.5(3) of the ATR:

1. Air Canada will develop and implement a "pop up" screen on its Web site within two months from the date of the Agency's Decision on this matter;
2. The screen would state that "all flights between Vienna and other points in Austria are operated by Tyrolean"; and
3. Air Canada call centre agents and airport customer service sales agents will be informed through internal communications that all "AC" code-sharing flights within Austria are operated by Tyrolean and that all other code-sharing flights displayed under the name of "Austrian Airlines Group" are operated by Austrian Airlines. The same information will also be communicated to travel agencies in Canada.

CONCLUSION

In light of the foregoing, the Agency, pursuant to paragraph 80(1)(b) of the CTA, hereby orders that Air Canada be exempt from the application of subsections 8.5(2) and 8.5(3) of the ATR with respect to the specific identify of "the person" operating the aircraft in its publicly accessible electronic reservation system, provided that the proposed modifications to Air Canada's Web site be developed and implemented within a period of two months from the date of this Decision.

Further, Air Canada's Web site currently indicates that international connecting flights are operated by Austrian Airlines. If Air Canada modifies its Web site to substitute "Austrian Airlines Group" for Austrian Airlines, Air Canada must establish a similar "pop up" message to identify Austrian Airlines as the operator of the aircraft.

The exemption granted herein does not exempt Air Canada from the other requirements of subsections 8.5(2) and 8.5(3) of the ATR, namely that the identity of the person providing the aircraft and the type of aircraft be identified on all travel documents, including itineraries, at the time of reservation and on check-in.