Decision No. 59-A-2005

February 4, 2005

February 4, 2005

APPLICATION by Flugleidir H.F. (Icelandair) for extra-bilateral authority pursuant to subsection 78(2) of the Canada Transportation Act, S.C., 1996, c. 10, to allow it, while operating a once weekly scheduled international all-cargo flight between Keflavik, Iceland and Halifax, Nova Scotia, Canada to serve New York (John F. Kennedy International Airport), New York, United States of America as an intermediate point from February 6 to June 1, 2005.

File No. M4212/I32-4


Flugleidir H.F. (Icelandair) (hereinafter Icelandair) has applied to the Canadian Transportation Agency (hereinafter the Agency) for the authority set out in the title. The application was received on January 24, 2005.

Under Licence No. 010006, Icelandair is authorized to operate a scheduled international service in accordance with the Memorandum of Understanding between the Government of Canada and the Government of Iceland on Scheduled Air Services signed on February 2, 2001 (hereinafter the Memorandum of Understanding).

Condition Nos. 1 and 2 of Licence No. 010006 read as follows:

The Licensee is authorized to operate the route(s) set out in the Memorandum of Understanding.

The operation of the scheduled international service authorized herein shall be conducted subject to the provisions of the Memorandum of Understanding and to any applicable arrangements as may be agreed to between Canada and Iceland.

Under the terms of the Memorandum of Understanding, Icelandair may operate once weekly scheduled international all-cargo air services in both directions between Iceland and any point or points in Atlantic Canada, separately or in combination, using aircraft not exceeding the capacity of a B757 aircraft. Boston is specified as the only intermediate point that Icelandair may serve. Therefore, the proposed flights are not permitted under the Memorandum of Understanding.

Due to the extra-bilateral nature of Icelandair's requested authority, by Decision No. LET-A-39-2005 dated January 28, 2005, Air Canada was given notice of the application with a deadline of January 31, 2005 to provide comments. No comments were received.

The Agency may grant temporary authority pursuant to subsection 78(2) of the Canada Transportation Act (hereinafter the CTA) for a service which is not permitted in a bilateral air transport agreement.

The Agency has reviewed and considered the application and the material filed in support thereof. The Agency notes that the request involves a temporary rerouting of flights and that no local traffic would be carried between New York and Halifax. The Agency is prepared at this time to permit the proposed routing which necessitates a variance of Condition Nos. 1 and 2 of Icelandair's licence.

Accordingly, the Agency, pursuant to subsection 78(2) of the CTA, hereby varies Condition Nos. 1 and 2 of Licence No. 010006 in order to allow Icelandair, while operating a once weekly scheduled international all-cargo flight between Keflavik and Halifax, to serve New York as an intermediate point from February 6 to June 1, 2005 using aircraft not exceeding the capacity of a B757 aircraft.

The temporary authority is also subject to the following condition:

No local cargo may be carried between New York and Halifax.

In all other aspects, the service shall be operated in accordance with the Memorandum of Understanding.

It should be noted that the Agency is not bound by its previous decisions. Accordingly, this approval should not be relied upon for justification for similar applications in the future.

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

This Decision shall form part of Licence No. 010006 and shall remain affixed thereto until June 1, 2005.

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