Decision No. 441-A-2010

October 22, 2010

File No. M4835-2-31

Air Canada, on behalf of itself and British Midland Airways Limited carrying on business as bmi (British Midland) and its affiliates, has applied to the Canadian Transportation Agency (Agency) for extra-bilateral authority and approvals to permit Air Canada to provide its scheduled international service between Canada and Saudi Arabia by selling transportation in its own name on flights operated by British Midland and its affiliates between London, United Kingdom and each of Jeddah, Riyadh and Dammam, Saudi Arabia.

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 Kingdom of Saudi Arabia signed on November 14, 1990 (Agreement).

There is no provision in the Agreement to permit the operation of services to Riyadh and Dammam, or for operations via London as an intermediate point.

Therefore, Air Canada also requires extra-bilateral authority and its licence must be varied to allow for the provision of services not permitted under the Agreement.

With respect to the duration of the authority and the approval requested, the Agency considers one year to be appropriate.

The Agency has considered the application and the material in support and finds it appropriate to grant the authority and approval.

Accordingly, the Agency, pursuant to subsection 78(2) of the CTA, varies Air Canada's licence to the extent necessary to permit it to provide its scheduled international service between Canada and Saudi Arabia by selling transportation in its own name on flights operated by British Midland and its affiliates between London and each of Riyadh and Dammam, from October 26, 2010 to October 25, 2011.

With respect to the request for approval under section 60 of the CTA and section 8.2 of the Air Transportation Regulations (ATR), the Agency is satisfied that the application meets the 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 British Midland and its affiliates, and the provision by British Midland 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 Saudi Arabia by selling transportation in its own name on flights operated by British Midland and its affiliates between London and each of Jeddah, Riyadh and Dammam, from October 26, 2010 to October 25, 2011.

The authority and approval are 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. The authority and approval do not apply to the carriage of cargo.
5. Air Canada and British Midland 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.
6. Air Canada shall continue to comply with the public disclosure requirements set out in section 8.5 of the ATR.
7. Air transportation using Air Canada's code on flights operated by British Midland and its affiliates between London and each of Jeddah, Riyadh and Dammam 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 Saudi Arabia.
8. Air Canada and British Midland 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.

The authority and approval do not exempt Air Canada and British Midland and its affiliates from the requirements of other legislative acts or regulations, including those of Transport Canada.

Members

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