Decision No. 116-A-2008

March 17, 2008

File Nos. M4212/K45-4
M4210/A74-4-23

Korean Air Lines Co. Ltd.(Korean Air) and Air Canada have applied to the Canadian Transportation Agency (the Agency) for the authorities set out in the title. The applications were received February 29, 2008 and March 5, 2008, respectively.

The Agency notes that the applications are a renewal of the authorities granted by Decision No. 543-A-2007 dated October 26, 2007.

Under Licence Nos. 975147 and 975048, respectively, Korean Air and Air Canada are authorized to operate scheduled international services 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 (the Agreement).

Condition No. 1 of Licence Nos. 975147 and 975048 states:

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

Condition No. 2 of Licence Nos. 975147 and 975048 states:

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.

Under the terms of the Agreement, Korean Air and Air Canada 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. Anchorage is not named as an intermediate point on the Route Schedules. Thus, there is no provision permitting the operation of two flights per week from Toronto to Seoul using a B-747 freighter aircraft in the manner proposed.

The Agreement also provides that the aeronautical authorities of both Contracting Parties may authorize temporary increases in capacity as agreed between the designated airlines.

In its application dated March 5, 2008, Air Canada submits that it supports Korean Air's application.

The Agency may grant temporary authority pursuant to subsection 78(2) of the Canada Transportation Act (the CTA) for a service which is not permitted in a bilateral air transport agreement.

The Agency has reviewed and considered the applications and the material filed in support thereof and is satisfied that the provision of an additional all-cargo flight per week from Toronto to Seoul and a temporary authority for both Air Canada and Korean Air to add Anchorage as an intermediate point between Toronto and Seoul, including for Korean Air to exercise fifth freedom traffic rights in both directions between Anchorage and Toronto would be beneficial to both designated airlines and consumers.

Accordingly, the Agency, pursuant to section 77 of the CTA and as provided for in the Agreement, hereby authorizes the operation by Korean Air of one additional all-cargo flight per week between Toronto and Seoul using a B-747 aircraft, from March 30 to October 25, 2008.

With respect to the request for extra-bilateral authority, the Agency, pursuant to subsection 78(2) of the CTA, hereby varies Condition Nos. 1 and 2 of Licence Nos. 975147 and 975048 to the extent necessary to permit Korean Air and Air Canada to serve Anchorage as an intermediate point between Toronto and Seoul, including the exercise by Korean Air of fifth freedom traffic rights between Anchorage and Toronto on its all-cargo flights, from March 30 to October 25, 2008.

In all other respects, the services shall be operated in accordance with the Agreement.

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

This Decision shall form part of Licence Nos. 975147 and 975048 and shall remain affixed thereto as long as this Decision is in force.

Members

• Raymon J. Kaduck
• John Scott