 

			  UNITED STATES OF AMERICA

		        DEPARTMENT OF TRANSPORTATION

			  OFFICE OF THE SECRETARY

			          WASHINGTON, D.C.

	   Issued by the Department of Transportation on October 28, 2002

NOTICE OF ACTION TAKEN -- DOCKET OST-2002-13450

________________________________________________________________________
________________________________________________________

This serves as notice to the public of the action described below, taken
by the Department official indicated (no 

additional confirming order will be issued in this matter).

Joint Applicants:  Air Canada & El Al Israel Airlines				Date Filed: 
September 25, 2002

Relief requested:  (1)  Exemption from 49 U.S.C. 41301 to permit El Al
to conduct scheduled foreign air transportation of persons, property and
mail between Israel and Boston/San Francisco/Chicago, IL, on a
code-share basis only, via the intermediate point Toronto, Canada.  El
Al proposes to conduct these operations via Toronto pursuant to a
code-share arrangement with Air Canada.

(2)  Statement of authorization pursuant to 14 CFR 212 of the
Department’s regulations to permit Air Canada to display El Al’s
airline designator on flights operated by Air Canada between Toronto and
Boston/San Francisco/Chicago.

Applicant representatives:  Anita Mosner (Air Canada) 703-294-5890; 
John Gillick (El Al) 202-775-9870	

DOT analyst:  Barbara  C. Schools  202-366-2401

Responsive pleadings:  None 

	DISPOSITION

Action:  Approved							Action date:  October 28, 2002

Effective dates of exemption authority granted:  October 28, 2002  - 
October 28, 2003

Effective dates of statement of authorization granted:  October 28, 2002
- indefinite, subject to attached conditions

Basis for approval:  The authority is consistent with the provisions of
both the U.S.-Canada and U.S.-Israel air service agreements.

Except to the extent exempted/waived, this authority is subject to the
terms, conditions, and limitations indicated:

 X  Standard exemption conditions (attached)         X  Foreign air
carrier permit conditions (Order 86-3-58)

 X  Code-share conditions (attached)

Action taken by:   Paul L. Gretch, Director	

		      Office of International Aviation	

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____________________________________________________________

We found that El Al was qualified to perform its proposed operations.

Under authority assigned by the Department in its regulations, 14 CFR
Part 385, we found that  (1) our action was consistent with Department
policy; (2) grant of the authority was consistent with the public
interest; and (3) grant of the authority would not constitute a major
regulatory action under the Energy Policy and Conservation Act of 1975. 
To the extent not granted/deferred/dismissed, we denied all requests in
the referenced Docket.  We may amend, modify, or revoke the authority
granted in this Notice at any time without hearing at our discretion.

Persons entitled to petition the Department for review of the action set
forth in this Notice under the Department’s regulations, 14 CFR
§385.30, may file their petitions within seven (7) days after the date
of issuance of this Notice.  This action was effective when taken, and
the filing of a petition for review will not alter such effectiveness.

An electronic version of this document is available on the World Wide
Web at:

http://dms.dot.gov//reports/reports_aviation.asp

												        Appendix A

FOREIGN AIR CARRIER CONDITIONS OF AUTHORITY

In the conduct of the operations authorized, the holder shall:

(1)  Not conduct any operations unless it holds a currently effective
authorization from its homeland for such operations, and it has filed a
copy of such authorization with the Department;

(2)  Comply with all applicable requirements of the Federal Aviation
Administration, including, but not limited to, 14 CFR Parts 129, 91, and
36, and with all applicable U.S. Government requirements concerning
security;1

(3)  Comply with the requirements for minimum insurance coverage
contained in 14 CFR Part 205, and, prior to the commencement of any
operations under this authority, file evidence of such coverage, in the
form of a completed OST Form 6411, with the Federal Aviation
Administration’s Program Management Branch (AFS-260), Flight Standards
Service (any changes to, or termination of, insurance also shall be
filed with that office);

(4)  Not operate aircraft under this authority unless it complies with
operational safety requirements at least equivalent to Annex 6 of the
Chicago Convention;

(5)  Conform to the airworthiness and airman competency requirements of
its Government for international air services;

(6)  Except as specifically exempted or otherwise provided for in a
Department Order, comply with the requirements of 14 CFR Part 203,
concerning waiver of Warsaw Convention liability limits and defenses;

(7)  Agree that operations under this authority constitute a waiver of
sovereign immunity, for the purposes of 28 U.S.C. 1605(a), but only with
respect to those actions or proceedings instituted against it in any
court or other tribunal in the United States that are:

   (a)  based on its operations in international air transportation
that, according to the contract of carriage, include a point in the
United States as a point of origin, point of destination, or agreed
stopping place, or for which the contract of carriage was purchased in
the United States; or

   (b)  based on a claim under any international agreement or treaty
cognizable in any court or other tribunal of the United States.

In this condition, the term "international air transportation" means
"international transportation" as defined by the Warsaw Convention,
except that all States shall be considered to be High Contracting
Parties for the purpose of this definition;

(8)  Except as specifically authorized by the Department, originate or
terminate all flights to/from the United States in its homeland;

(9)  Comply with the requirements of 14 CFR Part 217, concerning the
reporting of scheduled, nonscheduled, and charter data;

(10) If charter operations are authorized, except as otherwise provided
in the applicable aviation agreement, comply with the Department's rules
governing charters (including 14 CFR Parts 212 and 380); and

(11) Comply with such other reasonable terms, conditions, and
limitations required by the public interest as may be prescribed by the
Department, with all applicable orders or regulations of other U.S.
agencies and courts, and with all applicable laws of the United States.

This authority shall not be effective during any period when the holder
is not in compliance with the conditions imposed above.  Moreover, this
authority cannot be sold or otherwise transferred without explicit
Department approval under Title 49 of the U.S. Code (formerly the
Federal Aviation Act of 1958, as amended).__________________

1  To assure compliance with all applicable U.S. Government requirements
concerning security, the holder should, before commencing any new
service (including charter flights) from a foreign airport that would be
the holder’s last point of departure for the United States, inform its
Principal Security Inspector of its plans.

 											

U.S. Department of Transportation	

Office of the Secretary of Transportation									        (41301/40109)
10/2002

									Attachment

							

Air Canada/El Al Israel Airlines Code Share - Docket OST-2002-13450

The code-share operations authorized here are subject to the following
conditions:

(a)  The statement of authorization will remain in effect only as long
as (i) Air Canada and El Al continue to hold the necessary underlying
authority to operate the code-share services at issue, and (ii) the
code-share agreement providing for the code-share operations remains in
effect.

(b)  Air Canada and/or El Al must promptly notify the Department if the
code-share agreement providing for the code-share operations is no
longer effective or the carriers decide to cease operating any or all of
the approved code-share services.   Such notices should be filed in
Docket OST-2002-13450. 1

(c)  The code-sharing operations conducted under this authority must
comply with 14 CFR 257 and with any amendments to the Department’s
regulations concerning code-share arrangements that may be adopted. 
Notwithstanding any provisions in the contract between the carriers, our
approval here is expressly conditioned upon the requirements that the
subject foreign air transportation be sold in the name of the carrier
holding out such service in computer reservation systems and elsewhere;
that the carrier selling such transportation (i.e., the carrier shown on
the ticket) accept responsibility for the entirety of the code-share
journey for all obligations established in its contract of carriage with
the passenger; and that the passenger liability of the operating carrier
be unaffected.

(d)  The authority granted here is specifically conditioned so that
neither carrier shall give any force or effect to any contractual
provisions between themselves that are contrary to these conditions.

______________________

1  We expect this notification to be received within 10 days of such
non-effectiveness or of such decision.

  American Airlines, Inc., filed an answer in opposition, which it
subsequently withdrew.

