Decision No. 384-A-2002

July 16, 2002

File No. M4835-2-5Docket No. 0208521AG

Air Canada, on behalf of itself and Deutsche Lufthansa Aktiengesellschaft (Lufthansa German Airlines) (hereinafter Lufthansa), has applied to the Canadian Transportation Agency (hereinafter the Agency) for the approval set out in the title. The application was received on June 26, 2002.

Under Licence No. 990067, Air Canada is authorized to operate a scheduled international service, medium aircraft, and a scheduled international service, large aircraft, in accordance with the Agreement between the Government of Canada and the Government of the Socialist Republic of Romania on Civil Air Transport signed on October 27, 1983.

The Agency notes that by the 1999 exchange of letters between Romania and Canada, Air Canada is permitted to operate third country carrier code-sharing services.

The Agency also notes that the application was not filed at least 45 days before the first planned flight, as required by subsection 8.2(2) of the Air Transportation Regulations (hereinafter the ATR). However, the Agency has considered the matter 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 has reviewed and considered the application and the material filed in support thereof and is satisfied that it meets the remaining requirements set out in 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, 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 service between Canada and Romania, to sell transportation in its own name on Lufthansa's aircraft operating beyond Frankfurt to Bucharest, from August 4, 2002 to August 3, 2005, subject to the following conditions:

1. Air Canada shall continue to hold the required licence authority.
2. The air services approved herein shall only be provided as long as the 1999 exchange of letters between Romania and Canada, by which Air Canada is permitted to operate third country carrier code-sharing services, and the Commercial Agreement between Air Canada and Lufthansa dated March 22, 1996 providing for such services, remain in effect.
3. Air Canada and Lufthansa shall apply their published tariffs, on file with the Agency and in effect, to the carriage of their 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 to provide the Agency with a copy of any amendments to the Code Share Agreement or any new or amended annex, upon signature.

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

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