Decision No. 328-A-2010

July 30, 2010

File No. M4835-2-33

Air Canada, on behalf of itself and All Nippon Airways Co., Ltd. (All Nippon) and its affiliates, has applied to the Canadian Transportation Agency (Agency) for an approval to permit Air Canada to provide its scheduled international service between Canada and Vietnam by selling transportation in its own name on flights operated by All Nippon and its affiliates between Tokyo, Japan and Ho Chi Minh City, Vietnam, for a period of three years.

As the application was filed less than 45 days before the first planned flight, as required by subsection 8.2(2) of the Air Transportation Regulations (ATR), an exemption from the application of this provision is necessary. The Agency finds that compliance with subsection 8.2(2) of the ATR is impractical in this case. Accordingly, the Agency, pursuant to paragraph 80(l)(c) of the Canada Transportation Act (CTA), exempts Air Canada from the application of subsection 8.2(2) of the ATR.

Air Canada is licensed to operate a scheduled international service in accordance with the Agreement between the Government of Canada and the Government of the of the Socialist Republic of Vietnam on Air Transport, signed ad referendum on September 28, 2004.

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

Accordingly, the Agency, pursuant to paragraph 60(1)(b) of the CTA and section 8.2 of the ATR, approves the use by Air Canada of aircraft and flight crew provided by All Nippon and its affiliates, and the provision by All Nippon and its affiliates of such aircraft and flight crew to Air Canada, to permit Air Canada to provide its scheduled international service on licensed routes between Canada and Vietnam by selling transportation in its own name on flights operated by All Nippon and its affiliates between Tokyo and Ho Chi Minh City, for a period of three years from the date of this Decision.

This approval is subject to the following conditions:

1. Air Canada shall continue to hold the valid licence authority.
2. Air Canada shall apply its published tariffs, in effect, to the carriage of its traffic. 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.
3. The air service approved shall only be provided as long as a code-sharing agreement providing for such service remains in effect.
4. Air Canada and All Nippon and its affiliates shall continue to comply with the insurance requirements set out in subsections 8.2(4), 8.2(5) and 8.2(6) of the ATR.
5. Air Canada shall continue to comply with the public disclosure requirements set out in section 8.5 of the ATR.
6. Air transportation using Air Canada' s code on flights operated by All Nippon and its affiliates between Tokyo and Ho Chi Minh City shall not be sold separately and shall only be available to traffic carried on a continuous journey under Air Canada's code between Canada and Vietnam.
7. This approval does not apply to the carriage of cargo.
8. Air Canada and All Nippon shall provide the Agency with a copy of any new agreement or amendments to their code-sharing agreement, including any new or amended annex, without delay.

This approval does not exempt Air Canada and All Nippon and its affiliates from the requirements of other legislative acts or regulations, including those of Transport Canada.

In Decision No. 56-A-2009, the Agency granted an approval to permit Air Canada to provide its scheduled international service between Canada and Vietnam by selling transportation in its own name on flights operated by All Nippon between Tokyo and Ho Chi Minh City. That Decision does not however, allow Air Canada to operate that service using aircraft and flight crew provided by affiliates of All Nippon. As a result of the approval granted in this Decision, Decision No. 56-A-2009 is now redundant.

Accordingly, the Agency, pursuant to section 32 of the CTA, rescinds Decision No. 56-A-2009.

OTHER MATTER

In a submission dated June 30, 2010, Air Canada states that it recently became aware that Air Japan Company Limited (Air Japan), an affiliate of All Nippon, had been operating flights between Tokyo and Ho Chi Minh City on behalf of All Nippon. Air Canada further indicates that it does not know when Air Japan began operating these routes on behalf of All Nippon and that as soon as this came to its attention, Air Canada removed its code on these routes.

The Agency has considered this matter and finds that Air Canada's failure to obtain an approval to sell transportation under its name on flights operated by Air Japan was not a willful attempt to avoid compliance with legislative and regulatory requirements. The Agency also notes that the requirements with respect to insurance set out in subsections 8.2(4) and 8.2(5) of the ATR were satisfied for the flights in question.

Air Canada should be aware that the Agency considers contraventions of provisions of the CTA and the ATR to be serious and may take appropriate punitive action should any such contraventions occur in the future. In light of the circumstances of this case, the Agency contemplates no action in this matter.

Members

• Raymon J. Kaduck
• J. Mark MacKeigan