Decision No. 55-A-2015

APPLICATION

Air Canada also carrying on business as Air Canada rouge (Air Canada), on behalf of itself and Türk Hava Yollari Anonim Ortakligi (Turkish Airlines Inc.) carrying on business as Turkish Airlines (Turkish Airlines), has applied to the Canadian Transportation Agency (Agency) for extra-bilateral authorities and approvals to permit:

1. Air Canada to provide its scheduled international service between Canada and Izmir, Turkey by selling transportation in its own name on flights operated by Turkish Airlines between points in Turkey; and
2. Turkish Airlines to provide its scheduled international service between Turkey and each of the following cities: Vancouver, British Columbia; Calgary, Alberta; Edmonton, Alberta; Ottawa, Ontario; Halifax, Nova Scotia; St. John’s, Newfoundland and Labrador; Fredericton, New Brunswick; Moncton, New Brunswick; Saint John, New Brunswick; Bathurst, New Brunswick; Québec, Quebec; Rouyn‑Noranda, Quebec; Val-d’Or, Quebec; Sept-Îles, Quebec; and Bagotville, Quebec, by selling transportation in its own name on flights operated by Air Canada, Jazz Aviation LP, as represented by its general partner, Aviation General Partner Inc. carrying on business as Air Canada Jazz, Jazz and Jazz Air (Jazz) and Sky Regional Airlines Inc. carrying on business as Sky Regional and Air Canada Express (Sky Regional) between points in Canada.

These authorities and approvals are requested for such period as may be authorized by the Agency, beginning on March 28, 2015.

Air Canada is licensed to operate a scheduled international service, large aircraft, in accordance with the Agreement between the Government of Canada and the Government of the Republic of Turkey on Air Transport initialled ad referendum on March 13, 2009 (Agreement).

Turkish Airlines is licensed to operate a scheduled international service in accordance with the Agreement.

Under the terms of the Agreement, Canadian carriers may operate services to two points in Turkey, and Turkish carriers may operate services to two points in Canada. Istanbul and Ankara have been selected by the Government of Canada, and Toronto, Ontario and Montréal, Quebec have been selected by the Government of Turkey. There is no provision for additional points to be served through code sharing. Therefore, Air Canada and Turkish Airlines require extra-bilateral authorities to offer services through code sharing to the additional points.

ANALYSIS AND FINDINGS

Authority under subsection 78(2) of the Canada Transportation Act (CTA)

The Agency may, pursuant to subsection 78(2) of the CTA, vary the terms and conditions of a licence on a temporary basis for international air services which are not permitted in an agreement.

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

Accordingly, the Agency, pursuant to subsection 78(2) of the CTA, varies Condition No. 1 of Air Canada’s Licence No. 100103 to the extent necessary to permit it to provide service to Izmir, through code sharing, and Condition No. 1 of Turkish Airlines’ Licence No. 090063 to the extent necessary to permit it to provide service to each of the following cities: Vancouver; Calgary, Edmonton, Ottawa, Halifax, St. John’s, Fredericton, Moncton, Saint John, Bathurst, Québec, Rouyn-Noranda, Val-d’Or, Sept-Îles and Bagotville, through code sharing, for one year beginning on March 28, 2015.

Application under section 60 of the CTA and section 8.2 of the Air Transportation Regulations (ATR)

The Agency has considered the application and the material in support and is satisfied that it 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:

1. Air Canada of aircraft with flight crew provided by Turkish Airlines, and the provision by Turkish Airlines of such aircraft and flight crew to Air Canada, to permit Air Canada to provide its scheduled international service between Canada and Izmir by selling transportation in its own name on flights operated by Turkish Airlines between points in Turkey; and
2. Turkish Airlines of aircraft with flight crew provided by Air Canada, Jazz and Sky Regional, and the provision by Air Canada, Jazz and Sky Regional of such aircraft and flight crew to Turkish Airlines, to permit Turkish Airlines to provide its scheduled international service between Turkey and each of the following cities: Vancouver, Calgary, Edmonton, Ottawa, Halifax, St. John’s, Fredericton, Moncton, Saint John, Bathurst, Québec, Rouyn-Noranda, Val‑d’Or, Sept-Îles and Bagotville, by selling transportation in its own name on flights operated by Air Canada, Jazz, and Sky Regional between points in Canada.

These approvals are granted beginning on March 28, 2015 to March 27, 2016, and are subject to the following conditions:

1. Turkish Airlines and Air Canada shall continue to hold the valid licence authorities.
2. Turkish Airlines and Air Canada 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. Turkish Airlines, Air Canada, Jazz and Sky Regional 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. Turkish Airlines and Air Canada shall continue to comply with the public disclosure requirements set out in section 8.5 of the ATR.
6. Turkish Airlines and Air Canada 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.
7. Air transportation using Turkish Airlines’ code on flights operated by Air Canada, Jazz and Sky Regional between points in Canada shall not be sold separately and shall only be available to traffic carried on a continuous journey under Turkish Airlines’ code between Turkey and Canada. No local traffic may be carried under Turkish Airlines’ code between points in Canada.