The Russian Federation

1. Date of Agreement

Legal Title:

Air Transport Agreement between the Government of Canada and the Government of the Russian Federation

December 18, 2000

Agreement signed

March 9, 2001

Entry into force

2. Other Instruments

March 29, 1984

Memorandum of Understanding (Gander Airport).

December 26, 1991

The Russian Federation assumed all rights and obligations formerly applicable to U.S.S.R.

June 17, 1998

Ad referendum Agreement including annexes (Route Schedule, Overflights, Code Sharing and Ground Handling).

February 11, 2000

Diplomatic Note (Canada designates Air Canada).

March 1 and 9, 2001

Exchange of letters (Definitive entry into force of the Agreement)

February 14, 2003

Diplomatic Note (Russia designates Transaero)

February 25, 2004

Agreed Minute (Revised Route Schedules and provisions on Overflights, Code Sharing and Ground Handling agreed ad referendum and brought provisionally into force.)

3. Characterization of Bilateral Agreement

A. Grant of Rights:

As specified in the Annex.

B. Designation:

Multiple, Air Canada, Skyservice, Aeroflot and Transaero.

C. Tariffs:

Single disapproval.

D. Capacity:

Pre-determination. (See Section 4 for capacity entitlements)

4. Routes and Associated Rights

RUSSIA

The following routes and associated rights reflect the Air Transport Agreement signed on December 18, 2000. Subsequent changes to the route schedules and associated rights were agreed ad referendum on February 25, 2004 and are confidential until definitively entered into force.

Points in the Russian Federation	Intermediate Points	Points in Canada	Points Beyond
Any point or points	Any point or points	Montreal, Toronto. Three additional points to be named by the Russian Federation	Two points to be selected from points in the USA and points in Central America

Notes:

1. Any Intermediate Points and Beyond Points may be omitted on any or all flights provided that all services shall originate or terminate in the Russian Federation. Points in Canada may be served on the same flight or separately.

2. In transit rights are available at Intermediate Points and at Points in Canada. Own stopover rights are available at Intermediate Points. Own stopover rights are available at Points in Canada for traffic en route to Points Beyond. Fifth freedom rights are available between Montreal and Points Beyond in the USA (excluding points in California and Florida) and between Montreal and Mexico City. The exercise of fifth freedom rights shall be limited to two flights per week in each direction and fifty percent of aircraft capacity per flight to each of the Points Beyond.

3. Points to be named may be changed each IATA season on sixty days' notice to the aeronautical authorities of Canada, or such lesser notice as may be agreed to by the aeronautical authorities of Canada. Of the three additional Points in Canada to be named by the Russian Federation, three shall be available immediately for code sharing services but only one shall be available for own aircraft services.

4. Notwithstanding Article 9 of the Agreement, the designated airlines of the Russian Federation shall in total be entitled to operate own aircraft services up to a maximum of nine (9) flights per week in each direction to Canada, provided that not more than daily flights in each direction are operated at Montreal or Toronto and not more than two (2) flights per week in each direction are operated at the one additional point to be named by the Russian Federation. A third flight per week in each direction at the point to be named by the Russian Federation shall be subject to negotiations.

   Seasonal or ad hoc increases in capacity may be agreed in accordance with the procedures set out in Article 9 of the Agreement. Such increases shall not constitute a change to the above entitlements unless specifically agreed between the Contracting Parties.

5. Should a designated airline or airlines of the Russian Federation provide a service to points behind the Russian Federation in connection with the operation of the agreed services, public advertising or other forms of promotion by such airline shall not employ the terms "single carrier" or "through service", and shall state that such service is by connecting flights, even when for operational reasons a single aircraft is used. The flight number assigned to the services between the Russian Federation and Canada shall not be same as that assigned to flights behind the Russian Federation.

6. Notwithstanding the exclusion of Gander as a point in Canada above, the designated airline(s) of the Russian Federation may operate Shannon-Gander and Gander-Havana with fifth freedom rights. During technical stops at Gander, the designated airline(s) of the Russian Federation may transfer traffic between its own flights at Gander that originate in or are destined for points in third countries.

CODE SHARING

1. Subject to the regulatory requirements normally applied by the aeronautical authorities of Canada to such joint airline operations, each designated airline of the Russian Federation shall have the right to operate the agreed service on transatlantic routings by selling transportation under its own code on flights of designated airlines of Canada or on flights of up to two airlines of its choice operating scheduled air services between up to two Intermediate Points of its choice and Points in Canada. For the purposes of code sharing arrangements, designated airlines of the Russian Federation shall only be permitted to operate code sharing services to, from and via licensed points. The code sharing partners of the designated airlines of the Russian Federation shall operate flights in accordance with licence authorities issued by Canada but no specific authorization of the code sharing partners shall be required by Canada for the purposes of permitting the designated airlines of the Russian Federation to code share on the code sharing partners' flights. For the purposes of code sharing arrangements the designated airlines of the Russian Federation shall be permitted to transfer traffic between aircraft.

2. For the code sharing services by each of the designated airlines of the Russian Federation, to each of Montreal and Toronto, each designated airline of the Russian Federation shall be entitled to operate up to daily service from each of the Points in the Russian Federation and no greater frequency of flights than that operated by the code sharing partners of the designated airlines of the Russian Federation. With respect to Note 3 of Section 2 of the Route Schedule in Annex I to the Agreement, code sharing services shall only be available at Vancouver as of October 27, 2002.

CANADA

Points in Canada	Intermediate Points	Points in the Russian Federation	Points Beyond
Any point or points	Any point or pointsFootnote 1	Moscow, St. Petersburg. Three additional points to be named by Canada	A point in the Middle East or South Asia to be named by Canada.

Notes:

1. Any Intermediate Points and Beyond Points may be omitted on any or all flights provided that all services shall originate or terminate in Canada. Points in the Russian Federation may be served on the same flight or separately

2. In transit rights are available at Intermediate Points and at the Points in the Russian Federation. Own stopover rights are available at Intermediate Points. Own stopover rights are available at points in the Russian Federation for traffic en route to Points Beyond. Fifth freedom traffic rights are available between one Intermediate Point in Europe to be named by Canada, and Moscow. The exercise of fifth freedom rights shall be limited to two flights per week in each direction and fifty percent of aircraft capacity per flight.

3. Points to be named may be changed each IATA season on sixty days' notice to the aeronautical authorities of the Russian Federation, or such lesser notice as may be agreed to by the aeronautical authorities of the Russian Federation. Of the three additional Points in the Russian Federation to be named by Canada, three shall be available immediately for code sharing services but only one shall be available for own aircraft services as of October 27, 2002.

4. Notwithstanding Article 9 of the Agreement, the designated airlines of Canada shall in total be entitled to operate own aircraft services up to a maximum of nine (9) flights per week in each direction to the Russian Federation, provided that not more than daily flights in each direction are operated at Moscow or St. Petersburg and not more than two (2) flights per week in each direction are operated at the one additional point to be named by Canada. A third flight per week in each direction at the point to be named by Canada shall be subject to negotiations.

   Seasonal or ad hoc increases in capacity may be agreed in accordance with the procedures set out in Article 9 of the Agreement. Such increases shall not constitute a change to the above entitlements unless specifically agreed between the Contracting Parties.

5. Should a designated airline or airlines of Canada provide a service to points behind Canada in connection with the operation of the agreed services, public advertising or other forms of promotion by such airline shall not employ the terms "single carrier" or "through service", and shall state that such service is by connecting flights, even when for operational reasons a single aircraft is used. The flight number assigned to the services between Canada and the Russian Federation shall not be the same as that assigned to flights behind Canada.

CODE SHARING

1. Subject to the regulatory requirements normally applied by the aeronautical authorities of the Russian Federation to such joint airline operations, each designated airline of Canada shall have the right to operate the agreed services on transatlantic routings by selling transportation under its own code on flights of the designated airlines of the Russian Federation or on flights of up to two airlines of its choice operating scheduled air services between up to two Intermediate Points of its choice and Points in the Russian Federation. For the purposes of code sharing arrangements, designated airlines of Canada shall only be permitted to operate code sharing services to, from and via licensed points. The code sharing partners of the designated airlines of Canada shall operate flights in accordance with licence authorities issued by the Russian Federation but no specific authorization of the code sharing partners shall be required by the Russian Federation for the purposes of permitting the designated airlines of Canada to code share on the code sharing partner's flights. For the purpose of code sharing arrangements the designated airlines of Canada shall be permitted to transfer traffic between aircraft.

2. For code sharing services by each of the designated airlines of Canada to each of the Points in the Russian Federation, each designated airline of Canada shall be entitled to operate up to daily service from each of the Points in Canada and no greater frequency of flights than that operated by the code sharing partners of the designated airlines of Canada.