Decision No. 113-A-2005

March 2, 2005

File No. M4212/K45-3-1

Korean Air Lines Co. Ltd. (hereinafter Korean Air) has applied to the Canadian Transportation Agency (hereinafter the Agency) for the authority set out in the title. The application was received on February 7, 2005.

Under Licence No. 975147, Korean Air is authorized to operate a scheduled international service between Korea and Canada in accordance with the Agreement between the Government of Canada and the Government of the Republic of Korea for Air Services signed on September 20, 1989 (hereinafter the Agreement).

The Agreement provides that the total capacity to be operated by the designated airline(s) of each Contracting Party using its own equipment shall not exceed a combined total of 2,000 seats per week in each direction during the summer season.

Korean Air submits that the additional capacity is required to permit the use of B747-400 aircraft (383 seats) for service to Toronto three times per week, combined with the use of B777-200 aircraft (300 seats) for service to Vancouver three times per week.

Under the terms of the Agreement, the aeronautical authorities may approve temporary increases in capacity agreed between the designated airlines.

Air Canada was advised of the application and confirmed that it agreed to the increased capacity.

The Agency has reviewed and considered the application and the material filed in support thereof, and considers that the proposed additional capacity would benefit consumers.

Accordingly, pursuant to section 77 of the Canada Transportation Act, S.C., 1996, c. 10 and as provided for in the Agreement, the Agency hereby authorizes Korean Air to provide additional capacity by using a combination of B747 and B777 aircraft in the operation its regular scheduled service between Korea and Canada to operate three (3) round-trip flights per week between Seoul and Toronto and three (3) round-trip flights per week between Seoul and Vancouver, from March 26 to October 29, 2005.

The authorization granted herein does not exempt Korean Air from the requirements of other legislative acts or regulations, including those of Transport Canada.