Decision No. 624-A-2008

December 23, 2008

File No. M4385-42-7

American Airlines, Inc. (American Airlines), on behalf of itself and its affiliate American Eagle Airlines, Inc. (American Eagle) and Iberia, Lineas Aéreas de España, S.A. (Iberia Air Lines of Spain) [Iberia], has applied to the Canadian Transportation Agency (the Agency) for the approval set out in the title. The application was complete on December 17, 2008.

Under Licence No. 975112, Iberia 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 (the Agreement).

Under the terms of the Agreement, code sharing between designated airlines and third-country carriers is permitted. That is, while providing services between Canada and Spain, the designated airlines may code share on each other's flights, or on flights operated by a carrier of a third country.

The Agency has reviewed and considered the application and the material in support and is satisfied that it meets the requirements of section 8.2 of the Air Transportation Regulations (the ATR).

With respect to the duration of the approval requested, in light of the provisions of the Agreement, the Agency considers that a term of three years would be appropriate.

Accordingly, the Agency, pursuant to paragraph 60(1)(b) of the Canada Transportation Act and section 8.2 of the ATR, approves the use by Iberia 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 Iberia, to permit Iberia to provide its scheduled international services on licensed routes between Spain and Canada by selling transportation in its own name on flights operated by American Airlines and American Eagle between points in the United States of America and points in Canada, from January 11, 2009 to January 10, 2012, subject to the following conditions:

1. Iberia shall continue to hold the required licence authority.
2. Iberia shall apply its published tariffs, 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 shall only be provided as long as a code-sharing agreement providing for such services remains in effect.
4. Air transportation using Iberia's 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 Iberia's code between Spain and Canada.

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

American Airlines, American Eagle and Iberia 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.

This approval does not exempt American Airlines, American Eagle and Iberia from the requirements of other legislative acts or regulations, including those of Transport Canada.

Members

• J. Mark MacKeigan
• Jean-Denis Pelletier, ing./P. Eng.