Decision No. 140-A-2007

March 23, 2007

File No. M4835-2-5-7

Air Canada, on behalf of itself and Lufthansa and its affiliates and subsidiaries, has applied to the Canadian Transportation Agency (hereinafter the Agency) for the approval set out in the title. The application was received on January 24, 2007.

The Agency notes that part of this application is for the renewal of the authority granted by Decision No. 171-A-2006 dated March 23, 2006.

Under Licence No. 070021, Air Canada is authorized to operate a scheduled international service in accordance with the Agreed Minute between Canada and Israel signed on March 14, 2007 (hereinafter the Agreed Minute).

Condition No. 3 of Licence No. 070021 states:

This licence, unless cancelled at an earlier date, shall be in effect until March 29, 2008.

The Agreed Minute was renewed on March 14, 2007 for a further period of one year. Under the terms of the Agreed Minute, code-sharing between designated airlines and third-country carriers is again permitted. That is, while providing services between Canada and Israel, the designated airlines may code share on flights operated by a carrier of a third country.

The Agency has reviewed and considered the application and the material filed in support thereof and is satisfied that it meets the requirements of section 8.2 of the Air Transportation Regulations (hereinafter the ATR).

With respect to Air Canada's request that the approval be renewed until March 24, 2008 or such longer period as may be approved by the Agency, the Agency notes that the new Licence No. 070021 issued to Air Canada is in effect until March 29, 2008, the end of the 2007-2008 IATA winter season. Therefore, the Agency considers it appropriate that the approval of Air Canada's request be renewed until March 29, 2008.

Accordingly, the Agency, pursuant to paragraph 60(1)(b) of the Canada Transportation Act and section 8.2 of the ATR, hereby approves the use by Air Canada of aircraft and flight crew provided by Lufthansa and its affiliates and subsidiaries, and the provision by Lufthansa and its affiliates and subsidiaries of such aircraft and flight crew to Air Canada, to permit Air Canada to provide its scheduled international service on licensed routes between Canada and Israel by selling transportation in its own name on flights operated by Lufthansa and its affiliates and subsidiaries between points in Germany and points in Israel, from March 25, 2007 to March 29, 2008, subject to the following conditions:

1. Air Canada shall continue to hold the required licence authority.
2. Air Canada shall apply its published tariffs, on file with the Agency and in effect, to the carriage of its traffic. In particular, nothing in any commercial agreement between the air carriers relating to limits of liability shall diminish the rights of passengers as stated in such tariffs.
3. The air service approved herein shall only be provided as long as a code-sharing agreement providing for such services remains in effect.
4. Air transportation using Air Canada's code on flights operated by Lufthansa and its affiliates and subsidiaries between points in Germany and points in Israel shall not be sold separately and shall only be available to traffic carried on a continuous journey without stopover under Air Canada's code between Canada and Israel. No local traffic may be carried under Air Canada's code between points in Germany and points in Israel.

Air Canada and Lufthansa and its affiliates and subsidiaries are reminded of the continuing requirement to comply with sections 8.2 and 8.5 of the ATR.

Air Canada and Lufthansa are further reminded to provide the Agency with a copy of any new agreement or amendments to their commercial agreement, including any new or amended annex, without delay.

The authority granted herein does not exempt Air Canada and Lufthansa and its affiliates and subsidiaries from the requirements of other legislative acts or regulations, including those of Transport Canada.

Members

• Raymon J. Kaduck
• Baljinder Gill