Decision No. 154-A-1998

April 3, 1998

File No. M4835-2-5

Docket No. 980191AG

Air Canada and Lufthansa have applied to the Canadian Transportation Agency (hereinafter the Agency) for the approval set out in the title. The application filed by Air Canada was received on March 6, 1998 and amended on March 24, 1998. The application filed by Lufthansa was received on March 9, 1998.

Air Canada and Lufthansa have 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.

Under Licence No. 970133, Air Canada is authorized to operate a scheduled international service, medium aircraft, and a scheduled international service, large aircraft, in accordance with the Agreement between the Government of Canada and the Government of the Kingdom of Denmark on Air Transport, initialled, ad referendum, on February 17, 1989.

Under Licence No. 970132, Air Canada is authorized to operate a scheduled international service, medium aircraft, and a scheduled international service, large aircraft, in accordance with the Agreement between the Government of Canada and the Government of the Kingdom of Sweden on Air Transport initialled, ad referendum, on February 17, 1989.

Under Licence No. 970146, Air Canada is authorized to operate a scheduled international service, medium aircraft, and a scheduled international service, large aircraft, in accordance with the Agreement between the Government of Canada and the Government of the Kingdom of Norway on Air Transport, initialled, ad referendum, on February 17, 1989.

Under Licence No. 975118, Lufthansa is authorized to operate a scheduled international service in accordance with the Air Transport Agreement between the Government of Canada and the Government of the Federal Republic of Germany signed on March 26, 1973.

On March 18, 1998, the Agency gave notice of the applications to Canadian Airlines International Ltd. carrying on business under the firm name and style of either Canadian Airlines International or Canadi*n (hereinafter Canadi*n) since it is the other designated carrier to provide service to Germany, as specified in the bilateral agreement. By letter dated March 24, 1998, Canadi*n submitted that it has no objection to the proposed services.

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 Air Canada and Lufthansa 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 Air Canada and Lufthansa be exempt from the application of subsection 8.2(2) of the ATR.

The Agency has reviewed and considered the applications and the material filed in support thereof and is satisfied that they meet the remaining requirements set out in section 8.2 of the ATR. Therefore, the Agency, pursuant to paragraph 60(1)(b) of the CTA and section 8.2 of the ATR, hereby approves the use by Air Canada of aircraft and flight crew provided by Lufthansa, and the provision by Lufthansa of such aircraft and flight crew, to permit Air Canada, while providing its scheduled international services between Canada and Denmark, Sweden and Norway, to sell transportation in its own name on Lufthansa's aircraft operating beyond Frankfurt, Germany, to each of Copenhagen, Stockholm and Oslo. This approval is granted for the period from April 5, 1998 to March 30, 2000, subject to the following conditions:

1. Air Canada shall continue to hold the required licence authorities.
2. Air Canada and/or Lufthansa shall provide the Agency with a copy of any amendment to their Code Sharing Agreement dated March 22, 1996 within 30 days of such amendments coming into effect.
3. 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 two air carriers relating to limits of liability shall diminish the rights of passengers as stated in such tariffs.

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

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