Order No. 2009-A-528

October 29, 2009

File No. M4210/A74-4-38

Air Canada has applied to the Canadian Transportation Agency (Agency) for an exemption to permit it to sell, cause to be sold or publicly offer for sale in Canada an international air service between Canada and Taipei, in the absence of a licence.

Section 59 of the Canada Transportation Act (CTA) states that no person shall sell, cause to be sold or publicly offer for sale in Canada an air service unless, if required under Part II of the CTA, the person holds a licence under that part in respect of that service and that licence is not suspended.

Under Licence No. 990050, Air Canada is authorized to operate a scheduled international service, medium aircraft, a scheduled international service, large aircraft and a scheduled international service, all-cargo aircraft in a manner consistent with the Supplementary Confidential Memorandum on Air Services between the Canadian Trade Office in Taipei and the Civil Aeronautics Administration of the Ministry of Transportation and Communications in Taipei, signed on February 25, 1999, as amended.

Condition No. 2 of the said licence states:

The authority granted herein shall terminate on March 31, 2010.

Pursuant to Decision No. 38-A-2009 dated February 9, 2009, Air Canada is required to submit a request for another authority to the Agency by no later than February 26, 2010.

Air Canada states that compliance with section 59 of the CTA is undesirable if the travelling public is to be able to take advantage of its services between Canada and Taipei.

The Agency finds that for the service to be viable, Air Canada must be able to continue selling seats without interruption. Therefore, the Agency finds that compliance by Air Canada with section 59 of the CTA is impractical in the present circumstances.

Accordingly, the Agency, pursuant to paragraph 80(1)(c) of the CTA, exempts Air Canada from the application of section 59 of the CTA, effective from the date of this Order, permitting Air Canada to sell, cause to be sold or publicly offer for sale in Canada, a scheduled international service, medium aircraft, a scheduled international service, large aircraft and a scheduled international service, all-cargo aircraft, between Canada and Taipei, for travel beyond March 31, 2010, without holding the required licence, subject to the following conditions:

1. The exemption does not relieve Air Canada 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. Should the scheduled international licence not be issued by March 31, 2010, Air Canada shall arrange to provide alternative air transportation by an appropriately licensed air carrier, at no additional costs for all passengers who have made reservations with Air Canada or, if such arrangements are not possible or acceptable to the passenger, to provide a full refund of all monies paid by the passenger.

This exemption is valid until March 31, 2010.

This exemption does not exempt Air Canada from the requirements of other legislatives act or regulations, including those of Transport Canada.