Order No. 2006-A-573

November 3, 2006

File No. M4110/I107-1

On October 19, 2006, Icelandair ehf (hereinafter Icelandair) filed with the Canadian Transportation Agency (hereinafter the Agency) the application set out in the title. On the same date, Icelandair advised that "Icelandair, ehf is diligently preparing for filing a properly completed and executed Charter Tariff and said document will be filed as quickly as possible, under the exercise of due diligence, for Agency consideration."

Under Licence No. 977268, Icelandair is authorized to operate a non-scheduled international service to transport traffic on a charter basis between points in Iceland and points in Canada.

On September 29, 2006, the Agency issued Order No. 2006-A-503 wherein it exempted Icelandair from the application of subsection 110(1) of the Air Transportation Regulations (hereinafter the ATR), to permit it to operate a one-time, continuous, around-the-world charter flight, commencing on October 2, 2006, without having an international charter tariff on file and in effect with the Agency. During the period of the exemption, Icelandair proposed to apply the terms and conditions of carriage appearing in its scheduled service tariff on file and in effect with the Agency, namely the International Passenger Rules and Fares Tariff No. FI-1, NTA(A) No. 447, published by the Airline Tariff Publishing Company (hereinafter its scheduled service tariff). Furthermore, in that Order, the Agency advised Icelandair that should it plan to operate charter flights originating in Canada in the future, it must file an international charter tariff, acceptable to the Agency, for effect prior to any such operation.

The purpose of the application is to allow Icelandair to continue to operate charter flights from Canada until January 1, 2007, without having an international charter tariff on file and in effect with the Agency, or until such time as an acceptable tariff takes effect, whichever date is the earliest. Icelandair has verbally advised Agency staff that the carrier is currently developing an international charter tariff, but will not be able to complete the tariff prior to conducting further charter operations.

During the period of the exemption, Icelandair proposes to apply the terms and conditions of carriage appearing in its scheduled service tariff on file and in effect with the Agency.

Subsection 110(1) of the Air Transportation Regulations (hereinafter the ATR) reads as follows:

Except as provided in an international agreement, convention or arrangement respecting civil aviation, before commencing the operation of an international service, an air carrier or its agent shall file with the Agency a tariff for that service, including the terms and conditions of free and reduced rate transportation for that service, in the style, and containing the information, required by this Division.

Paragraph 80(1)(c) of the Canada Transportation Act, S.C., 1996, c. 10 (hereinafter the CTA) provides that the Agency may, by order, on such terms and conditions as it deems appropriate, exempt a person from the application of any of the provisions of Part II of the CTA or of a regulation or order made under that Part where the Agency is of the opinion that compliance with the provision by the person is unnecessary, undesirable or impractical.

The Agency has carefully reviewed and considered the application and, given that Icelandair will file a completed and executed Charter Tariff as quickly as possible and that Icelandair has agreed to, in the interim, be bound by the general terms and conditions of carriage appearing in its scheduled services tariff on file and in effect with the Agency, and in order not to inconvenience the passengers of Icelandair, the Agency is of the opinion that compliance by Icelandair with subsection 110(1) of the ATR is impractical in this case.

Accordingly, the Agency hereby orders, pursuant to paragraph 80(1)(c) of the CTA, that Icelandair be exempt from the application of subsection 110(1) of the ATR, in order to permit it to operate charter flights from Canada as of the date of this Order until January 1, 2007. For the period of the exemption, that is until January 1, 2007 or until such time as an acceptable tariff takes effect, whichever date is the earliest, Icelandair shall be bound by the general terms and conditions of carriage appearing in its scheduled services tariff on file and in effect with the Agency.

It should be noted that the authority granted in this Order is based on the merits of the present application and should not be relied upon as justification for similar applications in the future as the Agency assesses each application on a case-by-case basis.

This Order takes effect on November 1, 2006, the date on which it was verbally communicated to Icelandair.