Decision No. 236-A-2001

May 11, 2001

File No. M4835-2-5

Docket No. 010415AG

Air Canada, on behalf of itself and Lufthansa, has applied to the Canadian Transportation Agency (hereinafter the Agency) for the approval set out in the title. The application was received on April 25, 2001.

Air Canada has also requested an exemption from the application of subsection 8.2(2) of the Air Transportation Regulations (hereinafter the ATR), which requires the filing of an application for approval at least 45 days before the first planned flight.

Air Canada submits that the code share arrangements are necessary to provide and maintain the best possible competitive air services between Canada and Helsinki, Finland from the perspective of public convenience, frequency, cost and quality of service.

Under Licence No. 975047, Air Canada is authorized to operate a scheduled international service, large aircraft, on the route(s) set out in the Agreement between the Government of Canada and the Government of Finland for Air Services signed on May 28, 1990 (hereinafter the Canada-Finland Agreement).

With respect to the request for an exemption from the application of subsection 8.2(2) of the ATR, the Agency has considered the request and is of the opinion that compliance by Air Canada with subsection 8.2(2) of the ATR is impractical in this case. Accordingly, the Agency, pursuant to paragraph 80(1)(c) of the Canada Transportation Act (hereinafter the CTA), hereby orders that Air Canada be exempt from the application of subsection 8.2(2) of the ATR.

The Agency notes that under the terms of the Canada-Finland Agreement, designated airlines are permitted to offer services through code- sharing with other air carriers, including air carriers of third countries.

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

With respect to the duration of the approval, the Agency is prepared to grant an approval until the end of the 2003/2004 IATA winter season, i.e., until March 27, 2004.

Accordingly, the Agency, pursuant to paragraph 60(1)(b) of the CTA and section 8.2 of the ATR, hereby approves the use by Air Canada of aircraft and flight crew provided by Lufthansa, and the provision by Lufthansa of such aircraft and flight crew to Air Canada, to permit Air Canada, while providing its scheduled international air services between Canada and Finland, to sell transportation in its own name on flights operated by Lufthansa between Munich, Germany and Helsinki, Finland, from May 12, 2001 until March 27, 2004, subject to the following conditions:

1. Air Canada shall continue to hold the required licence authority.
2. Air transportation using Air Canada's code on Lufthansa's flights between Munich and Helsinki shall not be sold separately and shall only be available to Air Canada's traffic carried on a continuous journey between Canada and Finland. No fifth freedom traffic may be carried under Air Canada's code between Munich and Helsinki; however, stopovers for Air Canada's traffic are permitted at Munich.
3. The air services approved herein shall only be provided as long as the Code Sharing Agreement between Air Canada and Lufthansa dated March 22, 1996, amended October 19, 1999, (hereinafter Code Sharing Agreement) providing for such services remains in effect.
4. Air Canada shall apply its published tariffs, on file with the Agency and in effect, to the carriage of its traffic. In particular, 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.

Air Canada and Lufthansa are reminded of the continuing requirement to comply with sections 8.2 and 8.5 of the ATR.

Air Canada and Lufthansa are further reminded to provide the Agency with a copy of any amendments to their Code Sharing Agreement or of any new or amended annex.

The approval granted herein does not exempt Air Canada and Lufthansa from the requirements of other legislative acts or regulations, including those of Transport Canada.