Decision No. 451-A-2011

Atlantic Southeast Airlines, Inc. (ASA) and the existing ExpressJet Airlines, Inc. (ExpressJet) [the applicants] have applied to the Canadian Transportation Agency (Agency) to vary Decision Nos. 205‑A‑2010, 114-A-2009, 346-A-2009, 274-A-2010, 162-A-2011, 413‑A-2011, 414-A-2011 and 245-A-2011 (the Decisions) to reflect that code-share approvals issued in respect of services operated by the applicants will be operated by the new ExpressJet Airlines, Inc. once ExpressJet merges into ASA.

The applicants state that on December 31, 2011 at 11:59 p.m., the existing ExpressJet (a wholly-owned subsidiary of ASA) will be merged into ASA and at 12:01 a.m. on January 1, 2012, ASA will change its name to ExpressJet Airlines, Inc.

ASA is licensed to operate a scheduled international service in accordance with the Air Transport Agreement between the Government of Canada and the Government of the United States of America signed on March 12, 2007.

The Agency notes that the approvals set out in the Decisions are conditional on, among others, the code-share partners’ continued compliance with the requirement of subsection 8.2(5) of the Air Transportation Regulations, SOR/88-58, as amended (ATR).

As part of its application, ASA provided copies of written communications it has sent to its code-share partners, in which ASA confirmed its intention that the code-share agreements referred to in the Decisions remain effective and binding on the parties upon completion of the merger. ASA also states in its written communications that it considers itself bound by and that it will continue to honour the hold-harmless and indemnification provisions contained in the code-share agreements.

The Agency finds that, as ASA has obligated itself to its code-share partners to remain bound by and to continue to honor the hold-harmless and indemnification provisions of the code-share agreements, the requirement of subsection 8.2(5) of the ATR has been substantially complied with. Accordingly, the Agency, pursuant to section 28 and paragraph 80(1)(a) of the Canada Transportation Act (CTA), exempts ASA from the application of subsection 8.2(5) of the ATR for a period of 30 days from the issuance of this Decision.

The Agency has considered the application and the material in support and finds, pursuant to section 32 of the CTA, that there has been a change in the facts or circumstances pertaining to the Decisions since they issued and that they should be varied.

Accordingly, the Agency, pursuant to section 32 of the CTA, varies the Decisions as follows:

1. Decision Nos. 205-A-2010, 114‑A‑2009, 346-A-2009 and 274‑A‑2010 are amended by replacing all reference to “Atlantic Southeast Airlines, Inc. carrying on business as ASA, Atlantic Southeast Airlines and Delta Connection” with “ExpressJet Airlines, Inc. carrying on business as Atlantic Southeast Airlines, Delta Connection, Continental Express, United Express and ExpressJet Airlines Inc.”; and
2. Decision Nos. 413-A-2011, 245‑A‑2011, 414-A-2011 and 162‑A‑2011 are amended by adding the following paragraph at the end of these Decisions:

This Decision applies to the corporation renamed ExpressJet Airlines, Inc. carrying on business as Atlantic Southeast Airlines, Delta Connection, Continental Express, United Express and ExpressJet Airlines Inc., following the merger described in Decision No. 451‑A-2011.

The Agency finds that for the purpose of the Decisions’ code-share approval conditions, during the period of validity of this 30-day exemption, subsection 8.2(5) of the ATR will be deemed to have been complied with.

All other conditions set out in the Decisions apply.

Pursuant to section 28 of the CTA, the Agency orders that these variances shall only take effect if and when the merger of ExpressJet with ASA is completed. Further, these variances, with the exception of Decision No. 274-A-2010, will only remain in effect on the condition that ASA or, following the merger, the new ExpressJet Airlines, Inc., file with the Agency a confirmation from each of its code-share partners that the applicable code-share agreements will remain effective and binding on the code-share partners after the merger is completed, including the hold harmless and indemnification provisions.