Decision No. 156-A-2010

April 29, 2010

File No. M4835-23-1

American Airlines, Inc. (American Airlines), on behalf of itself, American Eagle Airlines, Inc. (American Eagle) and Kabushiki Kaisha Nippon Koku International (Japan Airlines International Co. Ltd.) carrying on business as Japan Airlines and JAL (Japan Airlines), has applied to the Canadian Transportation Agency (Agency) for an approval to permit Japan Airlines to provide its scheduled international service between Japan and Canada by selling transportation in its own name on flights operated by American Airlines and American Eagle between the United States of America and Canada.

As the application was filed less than 45 days before the first planned flight, as required by subsection 8.2(2) of the Air Transportation Regulations (ATR), an exemption from the application of this provision is necessary. The Agency finds that compliance with subsection 8.2(2) of the ATR is impractical in this case. Accordingly, the Agency, pursuant to paragraph 80(l)(c) of the Canada Transportation Act (CTA), exempts American Airlines from the application of subsection 8.2(2) of the ATR.

Japan Airlines is licensed to operate a scheduled international service in accordance with the Agreement between Canada and Japan for Air Service signed on January 12, 1955 (Agreement).

The Agency has considered the application and the material in support and is satisfied that it meets the remaining requirements of section 8.2 of the ATR.

With respect to the duration of the approval requested, in light of the provisions of the Agreement, the Agency considers three years to be appropriate.

Accordingly, the Agency, pursuant to paragraph 60(1)(b) of the CTA and section 8.2 of the ATR, approves the use by Japan Airlines of aircraft and flight crew provided by American Airlines and American Eagle, and the provision by American Airlines and American Eagle of such aircraft and flight crew to Japan Airlines, to permit Japan Airlines to provide its scheduled international service on licensed routes between Japan and Canada by selling transportation in its own name on flights operated by American Airlines and American Eagle between the United States of America and Canada, for a period of three years from the date of this Decision.

This approval is subject to the following conditions:

1. Japan Airlines shall continue to hold the valid licence authority.
2. Japan Airlines shall apply its published tariffs, in effect, to the carriage of its traffic. 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 shall only be provided as long as a code-sharing agreement providing for such service remains in effect.
4. Japan Airlines, American Airlines and American Eagle shall continue to comply with the insurance requirements set out in subsections 8.2(4), 8.2(5) and 8.2(6) of the ATR.
5. Japan Airlines shall continue to comply with the public disclosure requirements set out in section 8.5 of the ATR.
6. Japan Airlines and American Airlines shall provide the Agency with a copy of any new agreement or amendments to their code-sharing agreement, including any new or amended annex, without delay.
7. This approval does not apply to the carriage of cargo.

This approval does not exempt Japan Airlines, American Airlines and American Eagle from the requirements of other legislative acts or regulations, including those of Transport Canada.

On a related matter, the Agency notes that from February 5, 2010 to present, Japan Airlines provided its scheduled international service on licensed routes between Japan and Canada by selling transportation in its own name on flights operated by American Airlines and American Eagle between the United States of America and Canada without the required approval.

The Agency notes, however, that while operating without the required approval, the carriers continued to comply with the other requirements of section 8.2 of the ATR.

The Agency has considered this matter and based on the explanation given, the Agency accepts that Japan Airlines' failure to obtain an approval prior to selling its transportation services was an oversight. Therefore, the Agency will not take any action in this case. Japan Airlines should be aware, however, that the Agency considers contraventions of provisions of the CTA or the ATR to be serious and will take appropriate punitive action should any contravention occur in the future.

Members

• J. Mark MacKeigan
• Geoffrey C. Hare