RJ FINALIZES CODESHARE WITH AMERICA WEST, BUT

UNCLAS AMMAN 007989 SIPDIS SENSITIVE USDOC 4520/ITA/MAC/ONE/PTHANOS E.O. 12958: N/A TAGS: EAIR EINV JO IZ SUBJECT: RJ FINALIZES CODESHARE WITH AMERICA WEST, BUT STILL LOOKING FOR BETTER DEAL REF: A. SECSTATE 162145 ¶B. AMMAN 7647 Sensitive but Unclassified ¶1. (SBU) On December 6, Royal Jordanian Airlines (RJ) finalized a memorandum of understanding with America West Airlines (AW) providing for a codeshare arrangement between RJ flights originating/ending in New York (Kennedy) and Chicago (O'Hare) and connecting AW flights going to Phoenix and Las Vegas airports. U.S. and Jordanian civil aviation authorities will still need to give their approvals to this document before both sides can sign, and RJ has been told by the Jordan Civil Aviation Authority to expect a 90-day wait prior to its decision. RJ Deputy President for Commercial Services Ghassan Ali estimates that the agreement is three to six months from full implementation, as the two airlines' computer systems and their flight scheduling will have to be reconciled following the signing of the codeshare. ¶2. (SBU) COMMENT: The finalization of this codesharing agreement is the most significant and concrete step so far in a long and frustrating struggle by RJ to find an American airline to partner with for a codeshare. The arrangement would allow the growing stream of American government personnel that has been entering Jordan since March to travel on RJ flights between Amman and the U.S. without violating the Fly America Act. RJ has made approaches over the past two years to American Northwest, Continental, Delta, and United Airlines, all without success (Reftel A). This has been partially because these airlines and their existing codeshare partners have worried about cannibalization of their routes by RJ. While a codeshare with a minor airline like AW, which has very limited service to U.S. cities served by RJ, avoids this obstacle, it is far from an optimal solution for RJ, which wants to hook into a large US route network. ¶3. (SBU) RJ is therefore continuing to pursue an agreement with Northwest Airlines, which RJ believes would make a better partner based on the strength of Northwest's Detroit hub, to which RJ has flights. RJ has made contact with the Detroit Airport Authority which has shown interest in backing RJ's position as Detroit positions itself as an entrepot to the Arab world. RJ also strongly hopes that it will become a more attractive partner if/when it is able to finalize a codeshare deal with a new Iraqi flag carrier (Reftel B). END COMMENT. HALE