AIREUROPE SUBSIDIARY OF BANKRUPT VOLARE GROUP

UNCLAS ROME 004915 SIPDIS C O R R E C T E D C O P Y (PARAS RENUMBERED) EB/TRA FOR LAURENCE JONES AND MEGAN WALKLET FAA PASS TO ROY BARNETT (NEW YORK FIELD OFFICE),MIKE E. DANIEL (AFS-50),AIA-1, AIA-300 AMEMBASSY BRUSSELS PASS TO FAA REP. PAUL FELDMAN E.O. 12958: N/A TAGS: EAIR IT AVIATION FAA SUBJECT: AIREUROPE SUBSIDIARY OF BANKRUPT VOLARE GROUP GRANTED PROVISIONAL OPERATING LICENSE Italy Shuts Down Volare Group Airlines. -------------- ¶1. On November 19, Italian authorities shut down the insolvent Volare Group Airlines, including the regional budget carrier VolareWeb and the charter carrier AirEurope. On December 27, the National Civil Aviation Authority (ENAC) granted AirEurope a provisional license to commence international flights immediately, valid through May 6, 2005. The provisional license was granted upon completion of a satisfactory aircraft inspection and subsequent issuance of the Certificate of Airworthiness (COA) for the sole aircraft remaining in AirEurope's possession. Flights Authorized, But More Delays. -------------- ¶2. AirEurope experienced delays in commencing flights, as Volare Group also had to negotiate a financial agreement with Sea, Malpensa Airport administrator and Volare Group creditor, before any Volare aircraft would be permitted to land at Malpensa. (Volare Group has also made a similar arrangement with creditor and Rome Fiumicino airport administrator ADR.) With the provisional license, AirEurope hopes to serve Mauritius, Zanzibar and Dominican Republic destinations from Milan Malpensa and Rome Fiumicino airports. ENAC contacts report that for now, AirEurope has no intent to fly to the United States. USG Agencies Are Monitoring Safety/Security Certifications. -------------- ¶3. Post's Federal Aviation Administration (FAA) rep reports FAA is monitoring the situation and could revoke AirEurope's U.S. safety certifications if ENAC were to revoke the Air Europe aircraft certificates of airworthiness later. (Comment. Post has no information that ENAC intends to revoke any certificate.) The FAA decision has been pending while a workout plan for Volare Group is completed. If ENAC retains all safety certifications for AirEurope aircraft, the FAA would likely maintain U.S. certifications. As for the Transportation Security Administration (TSA),post's TSA rep reports that the Department of Homeland Security,s regional International Primary Safety and Security Inspector has decided to retain security certifications for the next six months to allow Volare Group time to restructure. ¶4. Post will continue to monitor Volare developments and will report more details septel as they become available. SEMBLER NNNN 2004ROME04915 - Classification: UNCLASSIFIED