Decision No. 410-A-2010

October 8, 2010

File No. M4835-2-5

Air Canada, on behalf of itself and Deutsche Lufthansa Aktiengesellschaft (Lufthansa German Airlines) [Lufthansa] and its affiliates and subsidiaries, has applied to the Canadian Transportation Agency (Agency) for an approval topermitAir Canadato provide its scheduled international service betweenCanadaandCroatiaby selling transportation in its own name on flightsoperated by Lufthansa and its affiliates and subsidiaries between points in Germany and points in Croatia, for a period of three years or for such longer period as may be authorized by the Agency, commencing on December 1, 2010.

Air Canada is licensed to operate a scheduled international service in accordance with the Agreement between the Government of Canada and the Republic of Croatia on Air Transport, initialled ad referendum on December 1, 2006 (Agreement).

The Agency has considered the application and the material in support and is satisfied that it meets the requirementsof section 8.2 of the Air Transportation Regulations(ATR).

With respect to the duration of the approval requested, in light of the provisions of the Agreement, the Agency considers three years to be appropriate.

Accordingly, the Agency, pursuant to paragraph 60(1)(b) of the Canada Transportation Act (CTA) and section 8.2 of the ATR, approves the use by Air Canada of aircraft and flight crew provided by Lufthansa and its affiliates and subsidiaries, and the provision by Lufthansa and its affiliates and subsidiaries 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 Croatia by selling transportation in its own name on flights operated by Lufthansa and its affiliates and subsidiaries between points in Germany and points in Croatia, from December 1, 2010 to November 30, 2013.

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 acode-share agreementproviding for such service remains in effect.
4. Air CanadaandLufthansa and its affiliates and subsidiariesshall 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 CanadaandLufthansa shall provide the Agency with a copy of any new agreement or amendments to theircode-share agreement, including any new or amended annex, without delay.
7. Air transportation using Air Canada's code on flights operated by Lufthansa and its affiliates and subsidiaries between points in Germany and points in Croatia 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 Croatia.

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

Members

• Raymon J. Kaduck
• Jean-Denis Pelletier, P. Eng.