UNCLAS ROME 003990

SIPDIS


SENSITIVE

E.O. 12958: N/A
TAGS: EAIR KTIA IT AVIATION FAA
SUBJECT: CIVAIR: ITALY STAYS FIRM ON LINATE CODESHARE
RESTRICTIONS

REF: A. SECSTATE 213659

B. ROME 3262

C. ROME 1846

Sensitive but Unclassified--Not for Internet Publication


1. (U) Acting Ecmin, Econoff and Econ FSN met October 8 with
Aldo Sansone, Director General for Civil Aviation in the
Ministry of Transportation, to deliver Ref A follow-on
demarche regarding Italian refusal to allow U.S. carriers to
conduct third-country code-share operations between the U.S.
and Milan's Linate Airport. Despite the arguments laid out
in the nonpaper (which we delivered to Sansone in advance of
the meeting), Sansone stuck firmly to Italy's previous
position (ref B).


2. (U) Sansone maintained that a U.S. codeshare arrangement
via a third European city would violate the ban on
intercontinental traffic at Linate Airport. He argued that
this ban on codesharing in and out of Linate for one leg of
an inter-continental flight does not conflict with the
U.S.-Italy bilateral Open Skies agreement because, according
to Sansone, the accord only guarantees access to individual
"points" (cities) rather than specific airports. However, he
admitted that the wording in the bilateral agreement on this
question is confusing and could be open for review.


3. (U) A/Ecmin pointed out that Alitalia and Air France had
advertised their codeshare arrangement from Linate via Paris
as a trans-Atlantic service of exactly the kind Italy was
denying to U.S. carriers. Sansone said his office would once
again examine how Alitalia and Air France were advertising
these flights, but underscored that the Ministry considered
the Alitalia-Air France arrangement to be simply a code-share
on an intra-EU Milan-Paris flight.


4. (U) Sansone had no substantive comment when A/Ecmin noted
that the continued existence of a discriminatory regime at
Linate could lead the U.S. to take countermeasures. We
emphasized that the U.S. continued to hope that such a
development could be avoided.


5. (SBU) Comment: We believe the GOI is sticking by its guns
(despite the double standard on the Alitalia-Air France code
share) because Italian authorities fear that more codesharing
will further drain traffic from Milan's Malpensa airport, the
designated airport for inter-continental traffic (and also
much farther from Milan than Linate Airport). The GOI also
has an interest in maintaining Alitalia's competitive
advantage in Milan at a time when Italy's flag carrier is
restructuring after a brush with bankruptcy last month. Given
the GOI's currently intransigent position, Washington
officials may wish to consider a face-to-face meeting with
Sansone to attempt to reach an understanding on the issue.
End comment.


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2004ROME03990 - Classification: UNCLASSIFIED