Decision No. 712-A-2003

December 24, 2003

File No. M4835-2-5

Air Canada, on behalf of itself and Lufthansa and its affiliates and subsidiaries, has applied to the Canadian Transportation Agency (hereinafter the Agency) for the approval set out in the title. The application was received on December 15, 2003.

Air Canada submits that the code-sharing arrangements are necessary to provide and maintain the best possible competitive air services between Canada and Spain from the perspective of public convenience, frequency, cost and quality of service.

Under Licence No. 010104, Air Canada is authorized to operate 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).

With respect to the duration of the subject approval, Air Canada and Lufthansa and its affiliates and subsidiaries have requested that it be approved for a period of three years, or such longer period as the Agency considers appropriate. The Agency notes that, under the terms of the Agreement, designated air carriers are permitted to offer services through code sharing with other air carriers, including air carriers of third country. Therefore, the Agency considers it appropriate to grant the subject approval for a period of three years.

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 ATR.

Accordingly, the Agency, pursuant to paragraph 60(1)(b) of the CTA 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 aircraft and flight crew to Air Canada, to permit Air Canada, while providing its scheduled international service between Canada and Spain, to sell transportation in its own name on flights operated by Lufthansa and its affiliates and subsidiaries between points in Germany and points in Spain from the date of this Decision for a period of three years, subject to the following conditions:

1. Air Canada shall continue to hold the required licence authority.
2. The air services approved herein shall only be provided as long as the code-sharing Agreement between Air Canada and Lufthansa providing for such services remain in effect.
3. 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 carriers relating to limits of liability shall diminish the rights of passengers as stated in such tariffs.
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 an international journey under Air Canada's code between Canada and Spain.

Air Canada and Lufthansa and its affiliates and subsidiaries are reminded of the requirement to provide the Agency with a copy of any new or amended annexes and/or appendices to the code-share agreement.

Air Canada and Lufthansa and its affiliates and subsidiaries are reminded to advise the Agency in advance of any changes to the information provided in support of the subject application.

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

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.