Order No. 2010-A-597

November 23, 2010

APPLICATION by China Airlines Limited carrying on business as China Airlines for an exemption from the application of section 59 of the Canada Transportation Act, S.C., 1996, c. 10, as amended.

File No. M4212/C506-4

China Airlines Limited carrying on business as China Airlines (China Airlines) 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, a scheduled international 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. 000042, China Airlines is authorized to operate a scheduled international service 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. 3 of Licence No. 000042 states:

The authority granted herein shall terminate on March 31, 2011.

China Airlines states that it intends to sell, cause to be sold or publicly offer for sale in Canada its service under Licence No. 000042 for travel beyond March 31, 2011. China Airlines submits that its application for a one-year extension of the authority granted under Licence No. 000042 will be filed with the Agency at least thirty days before the March 31, 2011 termination date.

The Agency is of the opinion that, for the service to be viable, China Airlines must be able to continue selling seats without interruption. Therefore, the Agency finds that compliance by China Airlines 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 China Airlines from the application of section 59 of the CTA, effective from the date of this Order, permitting China Airlines to sell, cause to be sold or publicly offer for sale in Canada a scheduled international service between Taipei and Canada, for travel beyond March 31, 2011, without holding the required licence, subject to the following conditions:

1. The exemption does not relieve China Airlines 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, 2011, China Airlines 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 China Airlines 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, 2011.

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