Agency Rulings

Decision No. 513-A-1998

October 23, 1998

APPLICATION by Iberia, Lineas Aereas de Espana, S.A. (Iberia Air Lines of Spain) (hereinafter Iberia) on behalf of itself and Air Europa Lineas Aereas, S.A. (hereinafter Air Europa), for an approval pursuant to section 60 of the Canada Transportation Act, S.C., 1996, c. 10, and section 8.2 of the Air Transportation Regulations, SOR/88-58, as amended, to permit Iberia while providing its scheduled international service between Montréal, Quebec, Canada and Madrid, Spain to use aircraft with flight crew provided by Air Europa from October 25, 1998, to October 23, 1999.

File No. M4835-12

Docket No. 980881AG

Iberia, on behalf of itself and Air Europa, has applied to the Canadian Transportation Agency (hereinafter the Agency) for the approval set out in the title. The application was received on September 24, 1998.

By Decision No. LET-A-256-1998 dated September 29, 1998, the Agency gave notice of the application to Aéroports de Montréal and to Canadian carriers capable of providing international passenger services to and from Spain. No comments were received.

Under Licence No. 975112, Iberia is authorized to operate a scheduled international service between Canada and Spain, in accordance with the Agreement between the Government of Canada and the Government of Spain on Air Transport signed on September 15, 1988.

By Decision No. 209-A-1998 dated May 6, 1998, the Agency approved the use by Iberia of aircraft and flight crew belonging to Air Europa, and the provision by Air Europa of such aircraft with flight crew to Iberia, to permit Iberia to provide its scheduled international service between Montréal, Quebec, Canada and Madrid, Spain from May 6, 1998 to October 24, 1998, subject to certain conditions.

In its application, Iberia advises the Agency that it proposes to use aircraft and flight crew provided by Air Europa while it awaits the delivery of its own long range aircraft. The Agency is of the opinion that the use by a carrier of aircraft and flight crew provided by another carrier should be for short periods only, and under unforeseen and exceptional circumstances. The Agency notes that the approval for the one-year period requested in this application, when combined with the previous approval granted from May 6, 1998 to October 24, 1998, would result in a 17 month period during which Iberia would provide its scheduled international service between Montréal and Madrid using aircraft and flight crew provided by Air Europa in circumstances which are not unforeseen. In addition, the Agency notes that Iberia's General Schedule CTA(A)(GS) No. 98 reflects the use by Iberia of Air Europa B-767 aircraft in providing its scheduled international service between Montréal and Madrid from October 25, 1998 to March 27, 1999. The Agency is of the opinion that any approval of the application should cover this time period only, which also coincides with the IATA winter season.

The Agency notes that the application was not filed at least 45 days before the first planned flight, as required by subsection 8.2(2) of the ATR. However, the Agency is of the opinion that compliance by Iberia and Air Europa with subsection 8.2(2) of the ATR is unnecessary in this case. Accordingly, the Agency, pursuant to paragraph 80(1)(c) of the Canada Transportation Act (hereinafter the CTA), hereby orders that Iberia and Air Europa be exempt from the application of subsection 8.2(2) of the ATR.

The Agency has reviewed and considered the application and the material filed in support thereof and is satisfied that it meets the remaining requirements set out in 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 Iberia of aircraft with flight crew belonging to Air Europa, and the provision by Air Europa of such aircraft with flight crew to Iberia, to permit Iberia to provide its scheduled international service between Montréal, Quebec, Canada and Madrid, Spain, from October 25, 1998 to March 27, 1999 only, subject to the following conditions:

1. Air services shall be operated under the scheduled international licence of Iberia (Licence No. 975112).
2. Commercial control of the flights shall be maintained by Iberia. All ticketing, including boarding passes, shall clearly indicate that the service is provided by Iberia.
3. Operational control of the flights shall be maintained by Air Europa which shall receive payment based on the rental of aircraft and crew and not on the basis of the volume of traffic carried.
4. Iberia 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 two air carriers relating to limits of liability shall diminish the rights of passengers as stated in such tariffs.
5. Iberia shall provide the Agency, within thirty (30) days from the date of this Decision, with a report advising of its plans with respect to the acquisition of its own aircraft, including expected delivery date, and proposed date of entry into service of such aircraft on its Canada-Spain international scheduled service.

It should be noted that the Agency is not bound by its previous Decisions and, accordingly, this approval should not be relied upon for justification for similar applications in the future.

Iberia and Air Europa are reminded of the continuing requirement to comply with sections 8.2 and 8.5 of the ATR.

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