(a) the term “Convention” means the Convention on International Civil Aviation, opened for signature at Chicago on 7 December 1944 and includes: (i) any amendment thereto which has entered into force under Article 94(a) thereof and has been ratified by both Contracting Parties; and (ii) any Annex or any amendment thereto adopted under Article 90 of that Convention, insofar as such amendment or Annex is at any given time effective for both Contracting Parties;

(b) the term “aeronautical authorities” means, in the case of Canada, the Minister of Transport of Canada and the Canadian Transportation Agency, and, in the case of the United Kingdom, the Department for Transport and the Civil Aviation Authority, or, in both cases, any person or body authorized to perform any functions at present exercisable by the above‑mentioned authorities or similar functions;

(c) the term “designated airline” means an airline which has been designated and authorized in accordance with Article 4 of this Agreement;

(d) the term “territory” means, for each Contracting Party, the land areas, internal waters, and territorial sea under its sovereignty, and includes the airspace above those areas;

(e) the terms “air service”, “international air service”, “airline” and “stop for non-traffic purposes” have the meanings respectively assigned to them in Article 96 of the Convention;

(f) the term “Agreement” includes the Annexes hereto and any amendments to them or to the Agreement;

(g) the terms “the agreed services” and “the specified routes” have the meanings respectively assigned to them in Article 3(2) of this Agreement;

(h) the term “ICAO” means the International Civil Aviation Organization;

(i) the term “prices” means the prices to be paid for the carriage of passengers, baggage and cargo and the conditions under which those prices apply, including prices and conditions for agency and other auxiliary services, but excluding remuneration for the carriage of mail and conditions for the carriage of mail; and

(j) the term “user charge” means a charge imposed on airlines by the competent charging authority or permitted by that authority to be imposed for the provision of airport property or facilities or of air navigation facilities (including facilities for overflights), or related services and facilities, for aircraft, their crews, passengers and cargo.

1. Each Contracting Party grants to the other Contracting Party the following rights for the conduct of international air services:

2. Each Contracting Party grants to the other Contracting Party, to the extent permitted in this Agreement, the right for the designated airlines of that other Contracting Party to operate international air services on the routes specified in Annex I to this Agreement. Such services and routes are hereinafter called “the agreed services” and “the specified routes” respectively. Each Contracting Party grants to the designated airlines of the other Contracting Party, while those designated airlines are operating an agreed service on a specified route, in addition to the rights specified in paragraph 1 of this Article, the right to make stops in its territory on the specified routes for the purpose of taking up and discharging passengers and cargo, including mail, separately or in combination.

3. Nothing in paragraph 2 of this Article shall be deemed to confer on a designated airline of one Contracting Party the right to take on board, in the territory of the other Contracting Party, passengers and cargo, including mail, destined for another point in the territory of that other Contracting Party.

4. If, because of armed conflict, political disturbances or developments or special or unusual circumstances, a designated airline of one Contracting Party is unable to operate a service on its normal routing, the other Contracting Party shall use its best efforts to facilitate the continued operation of such service through appropriate temporary rearrangements of routes.

1. Each Contracting Party shall have the right to designate by a diplomatic note to the other Contracting Party one or more airlines for the purpose of operating the agreed services on the specified routes, and to withdraw or alter such designations.

2. On receipt of such a designation and of applications from the airline or airlines so designated in the form and manner prescribed for operating authorizations, that other Contracting Party shall, subject to paragraph 3 of this Article, grant without delay to the airline or airlines so designated the appropriate operating authorizations.

3. A Contracting Party may refuse to grant the operating authorizations referred to in paragraph 2 of this Article, or may impose such conditions as it may deem necessary on the exercise by a designated airline of the other Contracting Party of the rights specified in Article 3(2) of this Agreement, in any case where:

4. When an airline has been so designated and authorized, it may begin to operate the agreed services on the specified routes, provided that the airline complies with the applicable provisions of this Agreement.

1. Each Contracting Party shall have the right, with respect to an airline designated by the other Contracting Party, to revoke an operating authorization, or to suspend the exercise of the rights specified in Article 3(2) of this Agreement or to impose such conditions as it may deem necessary on the exercise of those rights, in any of the following circumstances:

2. Unless immediate action is essential to prevent infringement of the laws and regulations referred to in paragraph 1 of this Article or unless safety or security requires action in accordance with the provisions of Article 8 or 9 of this Agreement, the rights enumerated in paragraph 1 of this Article shall be exercisable only after consultations between the aeronautical authorities of the Contracting Parties in conformity with Article 16 of this Agreement.

1. Each Contracting Party shall allow a fair and equal opportunity for the designated airlines of both Contracting Parties to compete in providing the agreed services on the specified routes.

2. Neither Contracting Party shall unilaterally limit the volume of traffic, frequency or regularity of service, or the aircraft type or types operated by the designated airlines of the other Contracting Party, except as may be required for customs or other government inspection services or for technical, operational or environmental reasons under uniform and non-discriminatory conditions consistent with Article 15 of the Convention.

3. Neither Contracting Party shall impose on the other Contracting Party’s designated airlines a first-refusal requirement, uplift ratio or no-objection fee or any other requirement with respect to capacity, frequency or traffic that would be inconsistent with the purposes of this Agreement.

4. Neither Contracting Party shall require the filing of schedules, programs for charter flights or operational plans by designated airlines of the other Contracting Party for approval, except as may be required on a non-discriminatory basis in accordance with paragraph 2 of this Article. If a Contracting Party requires filings for information purposes, it shall minimize the administrative burdens of filing requirements and procedures on air transportation intermediaries and on designated airlines of the other Contracting Party.

1. Subject to the provisions of the Convention and this Agreement, each Contracting Party shall require compliance with its laws and regulations relating to the admission to or departure from its territory of aircraft engaged in international air navigation or to the operation and navigation of such aircraft while within its territory by the designated airlines of the other Contracting Party upon entry into, departure from and while within the said territory.

2. Each Contracting Party shall require compliance with its laws and regulations relating to entry, clearance, immigration, passports, customs and quarantine by or on behalf of crews, passengers and cargo, including mail, upon entry into, departure from and while within the territory of such Contracting Party.

3. Each Contracting Party shall exempt baggage and cargo in direct transit across its territory from customs duties and other similar taxes.

1. Each Contracting Party may request consultations at any time concerning safety standards in any area relating to aeronautical facilities, aircrews, aircraft or their operation adopted by the other Contracting Party. Such consultations shall take place within thirty (30) days of that request.

2. If, following such consultations, one Contracting Party finds that the other Contracting Party does not effectively maintain and administer safety standards in any such area that are at least equal to the minimum standards established at that time pursuant to the Convention, the first Contracting Party shall notify the other Contracting Party of those findings and the steps considered necessary to conform with those minimum standards, and the other Contracting Party shall take appropriate corrective action. Failure by the other Contracting Party to take appropriate action within fifteen (15) days or such reasonable period of time as may be jointly determined by the Contracting Parties is deemed to be a situation which falls within Article 5 of this Agreement.

3. Pursuant to Article 16 of the Convention, any aircraft operated by, or on behalf of, a designated airline of one Contracting Party, may, while within the territory of the other Contracting Party, be the subject of an examination by the aeronautical authorities of the other Contracting Party, on board and around the aircraft to verify the validity of the relevant aircraft documents and those of its crew members and the apparent condition of the aircraft and its equipment (in this Article referred to as a “ramp inspection”), provided such ramp inspection does not cause an unreasonable delay in the operation of the aircraft.

4. If any such ramp inspection or series of ramp inspections gives rise to:

5. In the event that access for the purpose of undertaking a ramp inspection in accordance with paragraph 3 of this Article is denied by a representative of an airline or airlines to the aeronautical authorities of a Contracting Party, those aeronautical authorities may infer that serious concerns of the type referred to in paragraph 4 of this Article arise and draw the conclusions referred to in that paragraph.

6. Each Contracting Party has the right to suspend or vary the operating authorization of a designated airline of the other Contracting Party immediately without consultations in the event the first Contracting Party concludes, whether as a result of a ramp inspection, a series of ramp inspections, a denial of access for ramp inspection, consultation or otherwise, that immediate action is essential to the safety of an airline operation.

7. Any action by one Contracting Party in accordance with paragraph 2 or 6 of this Article shall be discontinued once the basis for the taking of that action ceases to exist.

1. Consistent with their rights and obligations under international law, the Contracting Parties confirm that their obligation to each other to protect the security of civil aviation against acts of unlawful interference forms an integral part of this Agreement.

2. Without limiting the generality of their rights and obligations under international law, the Contracting Parties shall in particular act in conformity with the provisions of the Convention on Offences and Certain Other Acts Committed on Board Aircraft, signed at Tokyo on September 14, 1963, the Convention for the Suppression of Unlawful Seizure of Aircraft, signed at The Hague on December 16, 1970, the Convention for the Suppression of Unlawful Acts Against the Safety of Civil Aviation, signed at Montreal on September 23, 1971, and the Protocol for the Suppression of Unlawful Acts of Violence at Airports Serving International Civil Aviation, signed at Montreal on 24 February 1988, the Convention on the Marking of Plastic Explosives for the Purpose of Detection, signed at Montreal on 1 March 1991 and any other multilateral agreement governing aviation security binding upon both Contracting Parties.

3. The Contracting Parties shall provide upon request all necessary assistance to each other to prevent acts of unlawful seizure of civil aircraft and other unlawful acts against the safety of such aircraft, their passengers and crew members, airports and air navigation facilities and any other threat to the security of civil aviation.

4. The Contracting Parties shall act in conformity with the aviation security provisions established by ICAO and designated as Annexes to the Convention on International Civil Aviation to the extent that such security provisions are applicable to the Contracting Parties; they shall require that operators of aircraft of their registry, operators of aircraft who have their principal place of business or permanent residence in their territory, and the operators of airports in their territory act in conformity with such aviation security provisions. Either Contracting Party may request immediate consultations with the other Contracting Party at any time to discuss any differences between its national regulations and practices and the aviation security standards of the Annexes referred to in this paragraph.

5. Each Contracting Party’s operators of aircraft may be required to observe the aviation security provisions referred to in paragraph 4 of this Article required by the other Contracting Party for entry into, departure from or while within the territory of that other Contracting Party. Each Contracting Party shall ensure that adequate measures are effectively applied within its territory to protect the aircraft and to inspect passengers, crew members, catering, carry-on items, baggage, cargo, including mail, and aircraft stores prior to and during boarding and loading.

6. Each Contracting Party shall act favourably upon any request from the other Contracting Party for reasonable special security measures to meet a particular threat. These special security measures shall remain in effect until alternative equivalent measures have been accepted by the Contracting Party requesting the measures.

7. Each Contracting Party shall, within sixty (60) days following notice (or such shorter period as may be jointly determined by the aeronautical authorities of both Contracting Parties), give sympathetic consideration to any request for the aeronautical authorities of the other Contracting Party to conduct an assessment in its territory of the security measures being carried out, or planned to be carried out, by aircraft operators in respect of flights arriving from or departing to the territory of the other Contracting Party. The administrative arrangements for the conduct of such assessments shall be jointly determined by the aeronautical authorities of both Contracting Parties and implemented without delay so as to ensure that assessments are conducted expeditiously.

8. When an incident or threat of an incident of unlawful seizure of civil aircraft or other unlawful acts against the safety of such aircraft, their passengers and crew members, airports or air navigation facilities occurs, the Contracting Parties shall assist each other by facilitating communications and taking other appropriate measures intended to terminate rapidly and safely such incident or threat.

9. When a Contracting Party has reasonable grounds to believe that the other Contracting Party has failed to comply with this Article, the first Contracting Party may request consultations. The consultations shall start within fifteen (15) days of receipt of such a request. Failure to reach a satisfactory arrangement within fifteen (15) days from the start of consultations shall constitute grounds for withholding, revoking, suspending or imposing conditions on the authorizations of the designated airlines of the other Contracting Party. When justified by an emergency, or to prevent further non-compliance with the provisions of this Article, the first Contracting Party may take interim action at any time.

10. Each Contracting Party shall take such measures as it may find practicable to ensure that an aircraft of the other Contracting Party that is subjected to an act of unlawful interference and lands in its territory is detained on the ground unless its departure is necessitated by the overriding duty to protect human life. Wherever practicable, such measures shall be taken on the basis of mutual consultations.

1. Each Contracting Party shall, to the fullest extent possible under its national laws and regulations, and on a basis of reciprocity, exempt the designated airlines of the other Contracting Party from customs duties, excise taxes, inspection fees and other fees, duties and charges (not based on costs of service provided) on aircraft, fuel, lubricating oils, consumable technical supplies, spare parts (including engines), regular aircraft equipment, aircraft stores (including liquor, tobacco and other products destined for sale to passengers in limited quantities during the flight) and other items intended for use or used solely in connection with the operation or servicing of aircraft of those designated airlines, as well as printed ticket stock, air waybills, any printed material which bears the insignia of the company and usual publicity material distributed without charge by those designated airlines.

2. The exemptions granted in this Article apply to the items referred to in paragraph 1) of this Article when those items are:

3. The regular airborne equipment, as well as the materials and supplies normally retained on board the aircraft of a designated airline of a Contracting Party, may be unloaded in the territory of the other Contracting Party only with the approval of the customs authorities of that territory. In such case, they may be placed under the supervision of the said authorities up to such time as they are re-exported or otherwise disposed of in accordance with customs regulations.

1. The Contracting Parties shall permit prices to be freely established by the designated airlines of both Contracting Parties. Neither Contracting Party shall take unilateral action against the introduction or continuation of a price for international transportation to or from its territory.

2. The Contracting Parties shall not require prices to be filed with aeronautical authorities.

3. The Contracting Parties shall permit their aeronautical authorities to discuss matters such as, but not limited to, prices which may be unjust, unreasonable or discriminatory.

(a) in accordance with its laws and regulations relating to entry, residence and employment, to bring in and maintain in its territory those members of the designated airline’s own managerial, technical, operational and other specialist staff that the designated airline reasonably considers necessary for the provision of air services;

(b) to use the services and personnel of any other organization, company or airline operating in its territory;

(c) to establish offices in its territory;

(d) to engage in the sale and marketing of air transportation in its territory, either directly or through agents or other intermediaries appointed by the designated airline. Each designated airline may sell, and any person is free to purchase, such transportation in local currency or in any freely convertible currency; and

(e) to pay for local expenses, including purchases of fuel, in its territory in local currency or in any freely convertible currency.

1. Each Contracting Party shall permit the designated airlines of the other Contracting Party, on the basis of reciprocity, to perform their own ground handling in the territory of the first Contracting Party and, at their option, to have ground handling services provided in whole or in part by any agent authorized by the competent authorities of the first Contracting Party to provide such services.

2. Each Contracting Party shall permit the designated airlines of the other Contracting Party to offer and provide ground handling services for other airlines operating at the same airport in the territory of the first Contracting Party.

3. The exercise of the rights set forth in paragraphs 1 and 2 of this Article is subject only to physical or operational constraints resulting from considerations of airport safety or security. Any constraints are applied uniformly and on terms no less favourable than the most favourable terms available to any airline engaged in similar international air services at the time the constraints are imposed.

1. Each Contracting Party shall ensure that user charges that may be imposed by the competent charging authorities or bodies of that Contracting Party on the airlines of the other Contracting Party for the use of air navigation and air traffic control services are just, reasonable and not unjustly discriminatory. In any event, any such user charges shall be assessed on the airlines of the other Contracting Party on terms no less favorable than the most favorable terms available to any other airline.

2. Each Contracting Party shall ensure that user charges that may be imposed by the competent charging authorities or bodies of that Contracting Party on the airlines of the other Contracting Party for the use of airport, aviation security, airport environmental and related facilities and services are just, reasonable, not unjustly discriminatory and equitably apportioned among categories of users. In any event, any such user charges shall be assessed on the airlines of the other Contracting Party on terms no less favorable than the most favorable terms available to any other airline at the time the charges are assessed.

3. Each Contracting Party shall ensure that user charges imposed on the airlines of the other Contracting Party may reflect, but do not exceed, the full cost to the competent charging authorities or bodies of providing the appropriate airport, airport environmental, aviation security and related facilities and services at the airport or within the airport system. Such charges may include a reasonable return on assets, after depreciation. Facilities and services for which charges are made shall be provided on an efficient and economic basis.

4. Each Contracting Party shall encourage consultations between the competent charging authorities or bodies in its territory and the airlines or their representative bodies using the services and facilities, and shall encourage the competent charging authorities or bodies and the airlines or their representative bodies to exchange such information as may be necessary to permit an accurate review of the reasonableness of the charges in accordance with the principles of paragraphs 1, 2 and 3 of this Article. Each Contracting Party shall encourage the competent charging authorities to provide users with reasonable notice of any proposal for changes in user charges to enable users to express their views before changes are made.

5. A Contracting Party shall not be held, in dispute resolution procedures pursuant to Article 17 of this Agreement, to be in breach of this Article, unless (a) it fails to undertake a review of the charge or practice that is the subject of complaint by the other Contracting Party within a reasonable amount of time; or (b) following such a review it fails to take all steps within its power to remedy any charge or practice that is inconsistent with this Article.

1. If any dispute arises between the Contracting Parties relating to the interpretation or application of this Agreement, the Contracting Parties shall in the first place try to settle it by negotiation.

2. If the Contracting Parties fail to reach a settlement of the dispute by negotiation, the Contracting Parties may refer it to such person or body as they mutually designate or, at the request of either Contracting Party, it shall be submitted for decision to a tribunal of three arbitrators, which shall be constituted in the following manner:

3. Except as hereinafter provided in this Article or as otherwise jointly determined by the Contracting Parties, the tribunal shall determine the limits of its jurisdiction and establish its own procedure. At the direction of the tribunal, or at the request of either Contracting Party, a conference to determine the precise issues to be arbitrated and the specific procedures to be followed shall be held not later than thirty (30) days after the tribunal is fully constituted.

4. Except as otherwise jointly determined by the Contracting Parties or prescribed by the tribunal, each Contracting Party shall submit a memorandum within forty‑five (45) days after the tribunal is fully constituted. Replies shall be due sixty (60) days later. The tribunal shall hold a hearing at the request of either Contracting Party, or at its discretion, within thirty (30) days after replies are due.

5. The tribunal shall attempt to give a written decision within thirty (30) days after completion of the hearing or, if no hearing is held, thirty (30) days after the date both replies are submitted. The decision shall be taken by a majority vote.

6. The Contracting Parties may submit requests for clarification of the decision to the tribunal within fifteen (15) days after it is received and such clarification shall be issued within fifteen (15) days of such a request.

7. The decision of the tribunal is final and binding on the Contracting Parties.

8. Each Contracting Party shall bear the costs of the arbitrator appointed by it. The other costs of the tribunal shall be shared equally by the Contracting Parties, including any expenses incurred by the President of the Council of ICAO in implementing the procedures in paragraph (2)(b) of this Article.

1. This Agreement enters into force on the date of the last diplomatic note, by which the Contracting Parties have notified each other that all necessary internal procedures for its entry into force have been completed. Amendments shall enter into force in the same manner.

2. On the date of entry into force of this Agreement, the Agreement between the Government of Canada and the Government of the United Kingdom of Great Britain and Northern Ireland Concerning Air Services, signed on 22 June 1988, shall terminate.

1. Routes

2. Operational Flexibility

3. Change of Gauge

Designated airlines may make a multiple change of gauge at any point or points on the specified routes, without restriction as to type of aircraft, connecting time, flight numbering, capacity or frequency.

4. Intermodal Service

5. Code-sharing

Subject to the regulatory requirements normally applied to such operations by the aeronautical authorities of the Contracting Parties, each designated airline may enter into cooperative arrangements for the purpose of:

ANNEX II

NON-SCHEDULED AIR SERVICES

Articles 7, 8, 9, 10, 12, 13, 14, 15 and 16 of this Agreement are applicable also to non-scheduled flights operated by an air carrier of one Contracting Party to or from the territory of the other Contracting Party and to the air carriers operating such flights, subject to national laws and regulations governing the right of air carriers to operate non‑scheduled flights or the conduct of air carriers or other parties involved in the organization of such operations.

ANNEX III

ADDITIONAL MATTERS RELATING TO DESIGNATION

AND AUTHORIZATION

Airlines designated by the United Kingdom