Decision No. 561-A-2004

October 22, 2004

File No. M4835-22-3

Qantas Airways Limited (hereinafter Qantas), on behalf of itself and American Eagle Airlines, Inc. (hereinafter American Eagle), has applied to the Canadian Transportation Agency (hereinafter the Agency) for the approval set out in the title. The application was received on September 21, 2004.

Under Licence No. 975130, Qantas is authorized to operate a scheduled international service in accordance with the Agreement between the Government of Canada and the Government of Australia relating to Air Services signed on July 5, 1988 (hereinafter the Canada - Australia Agreement).

Under the terms of the Canada - Australia Agreement and of the Air Transport Agreement between the Government of Canada and the Government of the United States of America signed on February 24, 1995 (hereinafter the Canada - U.S.A. Agreement), code-sharing between designated airlines and third-country carriers is permitted. That is, while providing services between Canada and Australia, the carriers of those two countries may put their codes on flights operated by a carrier of a third country.

The Agency notes that the application was filed less than 45 days before the first planned flight as required by subsection 8.2(2) of the Air Transportation Regulations (hereinafter the ATR), and therefore an exemption from the application of this provision is necessary. The Agency is of the opinion that compliance with subsection 8.2(2) of the ATR impractical in this case. Accordingly, pursuant to paragraph 80(l)(c) of the Canada Transportation Act (hereinafter the CTA), the Agency hereby orders that Qantas 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 approval requested, in light of the provisions of the Canada - U.S.A. Agreement, the Agency considers that a term of three years would be appropriate.

Accordingly, the Agency, pursuant to paragraph 60(1)(b) of the CTA and section 8.2 of the ATR, hereby approves the use by Qantas of aircraft and flight crew provided by American Eagle, and the provision by American Eagle of such aircraft and flight crew to Qantas, to permit Qantas to provide its scheduled international service on licensed routes between Australia and Canada by selling transportation in its own name on flights operated by American Eagle between New York and Halifax, from October 31, 2004 to October 30, 2007, subject to the following conditions:

1. Qantas shall continue to hold the required licence authority.
2. Qantas shall apply its published tariffs, 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 tariffs.
3. The air service approved herein shall only be provided as long as a code-sharing agreement providing for such services remains in effect.
4. Air transportation using Qantas' code on flights operated by American Eagle between New York and Halifax shall not be sold separately and shall only be available to traffic carried on a continuous journey under Qantas' code between Australia and Canada. No local traffic may be carried under Qantas' code between New York and Halifax.

Qantas and American Eagle are reminded of the continuing requirement to comply with sections 8.2 and 8.5 of the ATR.

Qantas and American Eagle are further 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.

The authority granted herein does not exempt Qantas and American Eagle from the requirements of other legislative acts or regulations, including those of Transport Canada.