Decision No. 5-A-2006

January 5, 2006

File No. M4835-2-41

Air Canada, on behalf of itself and Spanair S.A. (hereinafter Spanair), has applied to the Canadian Transportation Agency (hereinafter the Agency) for the approval set out in the title. The application was received on December 7, 2005.

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

The Agency notes that this application is a renewal of the approval granted by Decision No. 23-A-2004 dated January 15, 2004.

Under Licence No. 010104, Air Canada is authorized to operate a scheduled international service in accordance with the Agreement between the Government of Canada and the Government of Spain on Air Transport signed on September 15, 1988.

Air Canada submits that the code-sharing arrangements are necessary to provide and maintain the best possible competitive air services between Canada and Spain from the perspective of public convenience, frequency, cost and quality of service.

The Agency notes that, under the terms of the Agreement, designated air carriers are permitted to offer services through code sharing with other air carriers, including air carriers from Spain.

With respect to the request for an exemption from the application of subsection 8.2(2) of the ATR, the Agency has considered the request 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 of section 8.2 of the ATR.

With respect to the duration of the subject approval, Air Canada has requested that it be approved for a period of two years, or such longer period as the Agency considers appropriate. In this case, the Agency considers it appropriate to grant the subject approval for a two-year period.

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 Spanair, and the provision by Spanair of such aircraft and flight crew to Air Canada, to permit Air Canada to provide its scheduled international air service between Canada and Spain, by selling transportation in its own name on flights operated by Spanair between Madrid and Frankfurt, from January 16, 2006 to January 15, 2008, subject to the following conditions:

1. Air Canada shall continue to hold the required licence authority.
2. Air transportation using Air Canada's code on flights operated by Spanair between Madrid and Frankfurt shall not be sold separately and shall only be available to traffic carried on an international journey under Air Canada's code between Canada and Spain.
3. Air Canada shall apply its published tariff, on file with the Agency and in effect, to the carriage of its 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 tariff.
4. The air services approved herein shall only be provided as long as a code-share agreement between Air Canada and Spanair providing for such services remains in effect.

Air Canada and Spanair are reminded to provide the Agency with a copy of any new agreement or amendments to their commercial agreement, including any new or amended annex, without delay.

Air Canada and Spanair are further 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 and Spanair from the requirements of other legislative acts or regulations, including those of Transport Canada.

Members

• Mary-Jane Bennett
• Beaton Tulk