Order No. 1996-A-508

December 9, 1996

File Nos. M4835-2-7
M4205/C14
M4212/P159-3-1

WHEREAS the application was received by the Canadian Transportation Agency (hereinafter the Agency) on August 9, 1996 and was complete and ready for processing on August 20, 1996;

AND WHEREAS Philippine Airlines, Inc. (hereinafter PAL) proposes to operate a Manila-Vancouver-Newark routing commencing September 18, 1996 and Canadian Airlines International Ltd. carrying on business under the firm name and style of either Canadian Airlines International or Canadi*n (hereinafter Canadi*n) intends to use its own equipment on a routing Canada-Hong Kong-Manila commencing October 27, 1996;

AND WHEREAS by facsimile dated August 20, 1996, Canadi*n clarified that both air carriers would code share on each other's flights for services between Vancouver and Manila;

AND WHEREAS by letter dated August 20, 1996, the Agency gave notice of this application to Air Canada and granted it until August 22, 1996 to file comments on the application, and granted Canadi*n and PAL until August 23, 1996 to reply to any comments;

AND WHEREAS Air Canada filed its comments with the Agency on August 22, 1996 and Canadi*n filed its reply to Air Canada's comments on August 23, 1996;

AND WHEREAS Air Canada stated in its comments that it would be premature for the Agency to proceed with the Canadi*n/PAL exemption request at this time since the underlying traffic rights governing scheduled services between Canada and the Philippines have yet to be negotiated. Air Canada also stated that by rendering a decision prior to the successful conclusion of negotiations, the Agency would impose undue constraints on Canada's ability to obtain optimal quid pro quo benefits;

AND WHEREAS Canadi*n submitted in its reply to Air Canada's comments that the request was made under exceptional circumstances and that PAL was committed to commence services immediately upon the conclusion of successful negotiations. Canadi*n also submitted that both air carriers would accommodate the passengers should negotiations prove unsuccessful;

AND WHEREAS the Agency notes that both Canadi*n and PAL have an extensive network of international services, which could be used to accommodate the passengers should negotiations prove unsuccessful;

AND WHEREAS the Agency also notes PAL's commitment to commence services on September 18, 1996 and that bilateral air negotiations between Canada and the Philippines are scheduled for the week of September 9, 1996;

AND WHEREAS the Agency has reviewed the application and all of the material received and on file and, in light of the circumstances of this case, is of the opinion that compliance by the applicants with section 59 of the Canada Transportation Act (hereinafter the CTA) is unnecessary in respect of services between Canada and the Philippines.

NOW THEREFORE, IT IS ORDERED THAT:

Pursuant to paragraph 80(1)(c) of the CTA, the Agency hereby exempts Canadi*n and PAL from the application of section 59 of the CTA, thereby permitting these air carriers to sell, cause to be sold or publicly offer for sale in Canada transportation between Vancouver and Manila in advance of acquiring licences authorizing service between Canada and the Philippines. Further, the Agency deems it appropriate to make this exemption subject to the following conditions:

1. The exemption authorized herein does not relieve either air carrier from the requirement to hold a licence in respect of the service to be provided and, accordingly, no flights shall be operated until the appropriate licence authority has been granted;
2. Each air carrier shall file a tariff prior to the commencement of selling or offering for sale the above-noted services and, in particular, such tariff shall include provisions for denied boarding applicable to flights or portions of flights originating in Canada;
3. All service schedules, timetables, electronic displays and, without limitation, any other public advertising that either air carrier controls or participates in shall identify clearly the operator of the aircraft and that all such services are subject to government approval. All passengers shall also be informed of such at the time of booking and shall be advised that alternative transportation shall be provided at no additional costs;
4. Should the flights not be performed, passengers shall be provided with alternative travel arrangements and no additional costs shall be imposed on the passengers. Should the passenger not accept the alternative arrangements proposed, the air carriers shall refund in full the passenger.

It should be noted that the exemption granted herein does not exempt Canadi*n and PAL from the requirements of other legislative acts or regulations, including those of Transport Canada.

This Order takes effect as of August 26, 1996, the date on which the decision of the Agency was communicated by letter to the parties of record.