Decision No. 114-A-2007

March 12, 2007

File Nos. M4212/A973-3-1
M4835-55-1

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Asiana, on behalf of itself and Kalitta, has applied to the Canadian Transportation Agency (hereinafter the Agency) for the approval and the authority set out in the title. The application was received on February 14, 2007.

Asiana has also requested an exemption from the application of subsection 8.2(2) of the Air Transportation Regulations (hereinafter the ATR), which requires the filing of an application for an approval at least 45 days before the first planned flight.

The Agency notes that this application is for renewal of the authority and approval granted by Decision No. 595-A-2006 dated October 27, 2006.

Under Licence No. 030130, Asiana is authorized to operate a scheduled international service 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).

Condition No. 1 of Licence No. 030130 reads as follows:

The Licensee is authorized to operate the route(s) set out in the Arrangement.

Condition No. 2 of Licence No. 030130 reads as follows:

The operation of the scheduled international service authorized herein shall be conducted subject to the provisions of the Agreement and to any applicable arrangements as may be agreed to between Canada and the Republic of Korea.

With respect to the request for an exemption from the application of subsection 8.2(2) of the ATR, the Agency has considered the request and is of the opinion that compliance by Asiana with subsection 8.2(2) of the ATR is impractical in this case. Accordingly, the Agency, pursuant to paragraph 80(1)(c) of the Canada Transportation Act (hereinafter the CTA), hereby orders that Asiana be exempt from the application of subsection 8.2(2) of the ATR.

The Agency has reviewed and considered the application and the material filed in support thereof, and notes that the proposed services are not provided for in the Agreement. Under the terms of the Agreement, designated air carriers of the Republic of Korea are authorized to operate up to two DC-8 freighters or one B-747 freighter flight per week between the Republic of Korea and Canada, and to serve Chicago as an intermediate point with in-transit and stopover rights but without fifth freedom traffic rights.

As the provision of the services not permitted in the Agreement requires extra-bilateral authority, notice of the application was given to Canadian air carriers operating large aircraft and to The Calgary Airport Authority by letter dated February 19, 2007. Interventions in support of the application were filed by The Calgary Airport Authority, The Calgary Logistics Council, The Alberta Korea Office, the Canadian Ambassador's Office in Korea and Schenker Canada Limited. No interventions opposing the granting of the application were received.

In its consideration of this application, the Agency has determined that in order to operate as proposed, Condition Nos. 1 and 2 of Asiana's Licence No. 030130 must be varied to allow for the provision of services not permitted under the Agreement.

Accordingly, the Agency, pursuant to subsection 78(2) of the CTA, hereby varies Condition Nos. 1 and 2 of Licence No. 030130 to the extent necessary to authorize Asiana to operate five weekly all-cargo flights between Seoul and Calgary and to exercise fifth freedom traffic rights at the intermediate points Chicago, Dallas and Houston, from March 25 to October 27, 2007.

Asiana is required to file with the Agency thirty (30) days after the end of each month statistics showing, on a flight by flight basis:

1. for cargo uplifted at Calgary: the flight number, date, weight of cargo carried by true origin and destination, the type and weight of oversized cargo, and the flight totals; and
2. for cargo offloaded at Calgary: the flight number, date, weight of cargo carried by origin and true destination, the type and weight of oversized cargo, and the flight totals.

With respect to the request for approval under section 60 of the CTA and section 8.2 of the ATR, the Agency is satisfied that the application meets the remaining requirements of section 8.2 of the ATR.

Accordingly, the Agency, pursuant to paragraph 60(1)(b) of the CTA and section 8.2 of the ATR, hereby approves the use by Asiana of aircraft and flight crew provided by Kalitta, and the provision by Kalitta of such aircraft and flight crew to Asiana, to permit Asiana to provide its scheduled international service between the Republic of Korea and Canada using aircraft and flight crew provided by Kalitta, from March 25 to October 27, 2007, subject to the following conditions:

1. Asiana shall continue to hold the required licence authority.
2. Commercial control of the flights shall be maintained by Asiana. Kalitta shall maintain operational control of the flights and shall receive payment based on the rental of aircraft and crew and not on the basis of the volume of traffic carried or other revenue-sharing formula.
3. The air services approved herein shall only be provided as long as a code-sharing agreement providing for such services remains in effect.

Asiana and Kalitta are reminded of the continuing requirement to comply with sections 8.2 and 8.5 of the ATR.

Asiana and Kalitta are further reminded to provide the Agency with a copy of any new agreement or any amendments to their commercial agreement, including any new or amended annexes, without delay.

The authority and approval granted herein do not exempt Asiana and Kalitta from the requirements of other legislative acts or regulations, including those of Transport Canada.

This Decision shall form part of Licence No. 030130 and shall remain affixed thereto until October 27, 2007.

Members

• Beaton Tulk
• Raymon J. Kaduck