Decision No. 652-A-2006

November 28, 2006

File No. M4835-2-5

Air Canada, on behalf of itself and Lufthansa, has applied to the Canadian Transportation Agency (hereinafter the Agency) for the approval set out in the title. The application was received on October 16, 2006.

The Agency notes that this application is a renewal of the approval granted by Decision No. 712-A-2003 dated December 24, 2003.

Under Licence No. 010104, Air Canada is authorized to operate, inter alia, a scheduled international service, large aircraft, in accordance with the Agreement between the Government of Canada and the Government of Spain on Air Transport signed on September 15, 1988, as amended (hereinafter 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 others' flights, or on flights operated by a carrier of a third country.

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

With respect to the duration of the approval requested, Air Canada has requested that it be approved for a period of three years or such longer period as may be approved by the Agency. 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, hereby approves the use by Air Canada of aircraft and flight crew provided by Lufthansa and its affiliates and subsidiaries, and the provision by Lufthansa and its affiliates and subsidiaries of such aircraft and flight crew to Air Canada, to permit Air Canada to provide its scheduled international service on licensed routes between Canada and Spain, by selling transportation in its own name on flights operated by Lufthansa and its affiliates and subsidiaries between points in Germany and points in Spain, from December 24, 2006 to December 23, 2009, subject to the following conditions:

1. Air Canada shall continue to hold the required licence authority.
2. Air Canada 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 Air Canada's code on flights operated by Lufthansa and its affiliates and subsidiaries between points in Germany and points in Spain shall not be sold separately and shall only be available to traffic carried on a continuous journey under Air Canada's code between Canada and Spain.

Air Canada and Lufthansa and its affiliates and subsidiaries are reminded of the continuing requirement to comply with sections 8.2 and 8.5 of the ATR.

Air Canada and Lufthansa 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 approval granted herein does not exempt Air Canada and Lufthansa and its affiliates and subsidiaries from the requirements of other legislative acts or regulations, including those of Transport Canada.

Membres

• Guy Delisle
• Mary-Jane Bennett