Decision No. 9-A-2006

January 5, 2006

File No. M4212/M99-3-1

Compania Mexicana de Aviacion, S.A. de C.V. carrying on business as Mexicana Airlines (hereinafter Mexicana) has applied to the Canadian Transportation Agency (hereinafter the Agency) for the authority set out in the title. The application was received on December 22, 2005.

By Decision No. LET-A-2-2006 dated January 3, 2006, Canadian air carriers operating scheduled international services to Mexico were advised of the application. No objections were received. Comments were received by Air Transat A.T. Inc. carrying business as Air Transat (hereinafter Air Transat).

Under Licence No. 975000, Mexicana is authorized to operate a scheduled international service in accordance with the Air Transport Agreement between the Government of Canada and the Government of the United Mexican States signed on December 21, 1961, as amended (hereinafter the Agreement).

Condition No. 1 of Licence No. 975000 states:

The Licensee is authorized to operate a scheduled international service between points in Mexico and points in Canada as designated in accordance with the Agreement.

Under the terms of the Agreement, Mexicana is designated to operate services between Toronto and Mexico City, but not between Acapulco and Toronto. Thus, the operation of the flights proposed is not permitted by the Agreement.

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.

Mexicana states that the demand for the proposed flights arises from a group booking of passengers travelling to Acapulco.

Air Transat submits that, while it does not oppose the granting of the Mexicana application, it has concerns with the recent refusal by the Civil Aviation Directorate of Mexico (hereinafter DGCA) to allow Air Transat to operate flights using aircraft and flight crew provided by another carrier.

The Agency has reviewed and considered the application and the material filed in support thereof.

The Agency recognizes that, under these circumstances, non-stop flights to Acapulco would be preferable to connecting flights operated via Mexico City. The Agency also notes that under its existing authority, Mexicana could operate connecting flights between Toronto and Acapulco via Mexico City or it could obtain a designation from its government to establish non-stop service to Acapulco under the terms of the Agreement. The Agency has previously pointed this out to Mexicana in Decision No. 8-A-2005 dated January 10, 2005 and Decision No. 112-A-2005 dated March 2, 2005.

The Agency notes Air Transat's concerns and is also aware of DGCA refusals of similar requests by other Canadian air carriers. The Agency is also concerned with the lack of reciprocity shown by DGCA to Canadian air carriers. Nonetheless, the Agency finds that the granting of temporary extra-bilateral authority in this case would be in the interests of the travelling public.

Accordingly, the Agency, pursuant to subsection 78(2) of the CTA, hereby varies Condition No. 1 of Licence No. 975000 to the extent necessary to permit Mexicana to operate two (2) flights from Toronto to Acapulco on January 6 and 10, 2006 with return flights from Acapulco to Toronto on March 7 and 11, 2006.

In all other respects, the services shall be operated in accordance with the Agreement.

It should be noted that the authority granted in this Decision is based on the merits of the present application and should not be relied upon as justification for similar applications in the future as the Agency assesses each application on a case-by-case basis.

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

This Decision shall form part of Licence No. 975000 and shall remain affixed thereto as long as this Decision is in force.

Members

• Mary-Jane Bennett
• Beaton Tulk