Decision No. 484-A-2010

November 25, 2010

File No. M4835-35-1

Lan Airlines S.A. carrying on business as Lan Airlines (Lan Airlines), on behalf of itself and American Airlines, Inc. (American Airlines) and American Eagle Airlines, Inc. (American Eagle), has applied to the Canadian Transportation Agency (Agency) for approvals to permit:

1. Lan Airlines to provide its scheduled international service between Chile and Canada by selling transportation in its own name on flights operated by American Airlines and American Eagle between points in Chile and points in the United States of America and between points in the United States of America and points in Canada; and
2. American Airlines to provide its scheduled international service between Chile and Canada by selling transportation in its own name on flights operated by Lan Airlines between Santiago, Chile and Toronto, Ontario, Canada, via New York, New York, United States of America and between New York and Toronto.

These approvals are requested for an indefinite period.

Lan Airlines has also requested an exemption from the application of subsection 8.2(2) of the Air Transportation Regulations (ATR), which requires the filing of an application for an approval at least 45 days before the first planned flight. 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(1)(c) of the Canada Transportation Act (CTA), exempts Lan Airlines from the application of subsection 8.2(2) of the ATR.

Lan Airlines is authorized to operate a scheduled international service in accordance with the Agreement between the Government of Canada and the Government of the Republic of Chile on Air Transport signed on December 4, 2003 (Canada - Chile Agreement).

American Airlines is authorized 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. American Airlines is also authorized to provide services from Canada to, among others, Chile via the United States of America.

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.

With respect to the duration of the approvals requested, in light of the provisions of both Agreements, the Agency considers three years to be appropriate.

Accordingly, the Agency, pursuant to paragraph 60(1)(b) of the CTA and section 8.2 of the ATR, approves the use by:

1. Lan Airlines of aircraft and flight crew provided by American Airlines and American Eagle, and the provision by American Airlines and American Eagle of such aircraft and flight crew to Lan Airlines, to permit Lan Airlines to provide its scheduled international service on licensed routes between Chile and Canada by selling transportation in its own name on flights operated by American Airlines and American Eagle between points in Chile and points in the United States of America and between points in the United States of America and points in Canada; and
2. American Airlines of aircraft and flight crew provided by Lan Airlines, and the provision by Lan Airlines of such aircraft and flight crew to American Airlines, to permit American Airlines to provide its scheduled international service on licensed routes between the United States of America and Canada by selling transportation in its own name on flights operated by Lan Airlines between Santiago and Toronto via New York and between New York and Toronto.

These approvals are granted from November 28, 2010 to November 27, 2013, and are subject to the following conditions:

1. Lan Airlines and American Airlines shall continue to hold the valid licence authorities.
2. Lan Airlines and American Airlines shall apply their published tariffs, in effect, to the carriage of their 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 services approved shall only be provided as long as a code-sharing agreement providing for such services remains in effect.
4. Lan Airlines, American Airlines and American Eagle 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. Lan Airlines and American Airlines shall continue to comply with the public disclosure requirements set out in section 8.5 of the ATR.
6. Air transportation using Lan Airlines' code on flights operated by American Airlines and American Eagle between points in the United States of America and points in Canada shall not be sold separately and shall only be available to traffic carried on a continuous journey under Lan Airlines' code between Chile and Canada, unless fifth freedom rights are available in accordance with the Canada – Chile Agreement.
7. Lan Airlines and American Airlines 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.

These approvals do not exempt Lan Airlines, American Airlines and American Eagle from the requirements of other legislative acts or regulations, including those of Transport Canada.

Members

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