Determination No. A-2017-52

APPLICATION

South African Airways has applied to the Canadian Transportation Agency (Agency) for extra-bilateral authority to permit it to provide its scheduled international service between South Africa and Canada by selling transportation in its own name on flights operated by Ethiopian Airlines Enterprise carrying on business as Ethiopian Airlines (Ethiopian Airlines) between Ethiopia and Canada, from May 15, 2017 to May 14, 2018.

South African Airways is licensed to operate, though code sharing, a scheduled international service in accordance with the Arrangement between the Government of Canada and the Government of the Republic of South Africa set out in an Agreed Minute, signed on July 8, 2009 (Arrangement).

ANALYSIS AND FINDINGS

Authority under subsection 78(2) of the CTA

The Agency has considered the application and the material on file, and notes that the provision of services through code-sharing with the airline of a third country is not provided for in the Arrangement. Therefore, South African Airways requires extra‑bilateral authority, and its licence must be varied to allow for the provision of a service that is not permitted under the Arrangement.

The Agency may, pursuant to subsection 78(2) of the CTA, vary the terms and conditions of a licence on a temporary basis for an international air service that is not permitted in an arrangement.

Condition No. 2 of Licence No. 120108 reads as follows:

The scheduled international service is to be conducted in accordance with the Arrangement and any applicable arrangements agreed to between Canada and South Africa.

The Agency finds it appropriate to permit South African Airways to operate its service through code sharing with Ethiopian Airlines.

Accordingly, the Agency, pursuant to subsection 78(2) of the CTA, varies Condition No. 2 of South African Airways’ licence to the extent necessary to permit it to provide its scheduled international service between South Africa and Canada by selling transportation in its own name on flights operated by Ethiopian Airlines between Ethiopia and Canada, for one year from the date of this Determination.

In all other respects, the service shall be operated in accordance with the Arrangement.

The Agency notes that, in accordance with the principle of reciprocity, a non-favourable consideration by South African authorities of any similar request by a Canadian carrier would call for a review, rescission or variance of the determination.

Application under section 60 of the CTA and section 8.2 of the ATR

As the application was filed less than 45 days before the first planned flight, as required by subsection 8.2(2) of the ATR, an exemption from the application of this provision is necessary. 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(l)(c) of the CTA, exempts South African Airways from the application of subsection 8.2(2) of the ATR.

The Agency has considered the application and the material in support and is satisfied that it meets the remaining 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, approves the use by South African Airways of aircraft with flight crew provided by Ethiopian Airlines, and the provision by Ethiopian Airlines of such aircraft and flight crew to South African Airways, to permit South African Airways to provide its scheduled international service on licensed routes between South Africa and Canada by selling transportation in its own name on flights operated by Ethiopian Airlines between Ethiopia and Canada, for one year from the date of this Determination.

This approval is subject to the following conditions:

1. South African Airways shall continue to hold the valid licence authority.
2. South African Airways 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 a code-sharing agreement providing for such service remains in effect.
4. South African Airways and Ethiopian Airlines shall 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. South African Airways shall continue to comply with the public disclosure requirements set out in section 8.5 of the ATR.
6. South African Airways and Ethiopian Airlines shall provide the Agency with a copy of any new agreement or amendments to their code-sharing agreement, including any new or amended annex, without delay.
7. Air transportation using South African Airways’ code on flights operated by Ethiopian Airlines between Ethiopia and Canada shall not be sold separately and shall only be available to traffic carried on a continuous journey under South African Airways’ code between South Africa and Canada.

As a result of the approval granted in this Determination, Decision No. 340-A-2016 is now redundant.

Accordingly, the Agency, pursuant to section 32 of the CTA, rescinds Decision No. 340-A-2016.