Decision No. 77-A-2011

March 16, 2011

File No. M4835-2-5

Air Canada, on behalf of itself and Deutsche Lufthansa Aktiengesellschaft (Lufthansa German Airlines) [Lufthansa] and its affiliates and subsidiaries, has applied to the Canadian Transportation Agency (Agency) for an approval topermitAir Canadato provide its scheduled international service betweenIsraelandCanadaby selling transportation in its own name on flightsoperated by Lufthansa and its affiliates and subsidiaries between Germany and Israel.

Air Canadahas also requested an exemption from the application of subsection 8.2(2) of the Air Transportation Regulations (ATR), which requires the filing of an application for an approval at least 45 days before the first planned flight. The Agency finds that compliance with subsection 8.2(2) of the ATR is impractical in this case. Accordingly, the Agency, pursuant to paragraph 80(1)(c) of the Canada Transportation Act (CTA), exempts Air Canada from the application of subsection 8.2(2) of the ATR.

Air Canada is licensed to operate a scheduled international service in a manner consistent with the Agreed Minute between Canada and Israel signed on February 4, 2011 (Agreed Minute).

The Agency has considered the application and the material in support and is satisfied that it meets theremaining requirementsof section 8.2 of theATR.

With respect to the duration of the approval, the Agency is of the view that as the licence expires on March 25, 2012, concurrently with the entitlements for scheduled air services in the Agreed Minute, it would be inappropriate to consider approval of the application beyond the expiry date of the licence.

Accordingly, the Agency, pursuant to paragraph 60(1)(b) of theCTA and section 8.2 of the ATR, 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 Israel by selling transportation in its own name on flights operated by Lufthansa and its affiliates and subsidiaries between Germany and Israel, from March 28, 2011 to March 25, 2012.

This approval is subject to the following conditions:

1. Air Canada shall continue to hold the valid licence authority.
2. Air Canada shall apply its published tariffs, in effect, to the carriage of its traffic. 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 acode-sharing agreementproviding for such service remains in effect.
4. Air CanadaandLufthansashall continue to comply with the insurance requirements set out in subsections 8.2(4), 8.2(5) and 8.2(6) of the ATR.
5. Air Canada shall continue to comply with the public disclosure requirements set out in section 8.5 of the ATR.
6. Air CanadaandLufthansashall provide the Agency with a copy of any new agreement or amendments to theircode‑sharing agreement, including any new or amended annex, without delay.

This approval does not exempt Air Canada and Lufthansa from the requirements of other legislative acts or regulations, including those of Transport Canada.

Members

• Raymon J. Kaduck
• J. Mark MacKeigan