CIVAV: ARMENIA REGISTERS AIRLINES OPERATING

C O N F I D E N T I A L SECTION 01 OF 02 YEREVAN 002565

SIPDIS

EUR/CACEN FOR SIDEREAS

E.O. 12958: DECL: 11/18/2014
TAGS: EAIR ECON PREL AM EK
SUBJECT: CIVAV: ARMENIA REGISTERS AIRLINES OPERATING
EXCLUSIVELY IN AFRICA

REF: YAOUNDE 01234

Classified By: DCM A.F. Godfrey for reasons 1.4 (b) and (d).

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SUMMARY
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1. (C) The November 26, 2004 sentencing of six Armenians (a
pilot and crew) in Equatorial Guinea for aiding the overthrow
of President Obiang's government (reftel) is a reminder about
the business-end of Armenia's "don't ask, don't tell" policy
on airline registration. Armenia's Directorate of Civil
Aviation licenses a dozen cargo airlines that operate
exclusively outside Armenia -- more than the number of
airlines that operate inside Armenia. According to the GOAM,
cargo airlines find it "convenient" to register their
companies and planes in Armenia even though they operate
between Russia and African states or solely between African
states. Not least of these conveniences is that Armenia
lacks the resources to carry out inspections or to oversee
the airlines operating abroad, letting these planes fall into
a regulatory black hole. Suddenly worried that accidents
abroad could call attention to their nonfeasance, Armenia's
Civil Aviation authorities are trying to make agreements with
aviation authorities of various African states to assume
partial regulatory oversight of the aircrafts. We see little
legitimate benefit to Armenia from licensing these airlines,
but the reputation risk could be great should too many of the
planes prove unsafe or turn up being used for criminal
purposes. End Summary.

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ARMENIA: A LIBERIA FOR AIRLINES?
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2. (C) The Director of International Relations for the
Directorate of Civil Aviation, Karen Zadoyan, told us that
many private cargo airlines operating Russian aircraft in
Africa find it easier to register their planes and businesses
in Armenia than elsewhere. This creates a problem for the
Directorate of Civil Aviation because they lack the resources
to oversee the operation of the planes, which occurs
exclusively outside Armenia. According to Zadoyan, Armenian
planes are filling an international niche, because Armenia
still has the Soviet-trained pilots and crew to operate cheap
Russian aircraft. He said that he does not believe that lack
of oversight is a factor in why these airlines choose to
register in Armenia.


3. (C) According to Zadoyan, these cargo companies have
similar origins: middle-men from United Arab Emirates find
Armenian business partners to set up airlines in Armenia.
Although Zadoyan would not specifically name the Armenian
owners of these airlines, he commented that airline companies
must have partial Armenian ownership and frequently have
Armenian pilots and crew. Zadoyan added that the planes
should periodically fly to Yerevan for servicing and
inspection. When we mentioned that the managers of
Zvartnots, Yerevan's only commercial airport, didn't know
anything about the airlines, Zadoyan replied that many of the
airlines "find it more convenient" to land at Erebuni,
Yerevan's military airport. (Comment: Among the
conveniences at Erebuni airport are the lack of customs
facilities and the denial of access to the public. End
Comment.) Although Zvartnots International Airport should
have a monopoly on all commercial cargo traffic, an airport
official at Erebuni recently told the DATT that the airport
had improved its runway for use for commercial cargo traffic.

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WHAT ARE THESE PLANES CARRYING?
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4. (C) Zadoyan said that his office doesn't ask or check
what the cargo is on these planes, but he assumes it is
mostly "clothes and food." Zadoyan said they would only
investigate the cargo in the event that something happened.
For example he mentioned that when an Armenian flagged plane
crashed in the Sudan two years ago, its cargo was two tons of
(unspecified) currency. As for the Armenian-registered AN-12
aircraft seized by the government of Equatorial Guinea
resulting in the November 26 sentencing of six Armenian crew
members to 14 - 24 years of imprisonment, Zadoyan said that
he did not know what their cargo was. Tiga Airlines'
director, Boris Avagian, has made a public statement that the
plane was carrying Russian supplies to oil companies
operating in Equatorial Guinea.

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COMMENT
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5. (C) Armenia's self-aknowledged lack of resources to
oversee these airlines risks making Armenia an attractive
country of registry for those airlines seeking to avoid
government oversight. Because these airlines do not fly
cargo to or from Armenia, the Armenian government receives
little legitimate benefit from licensing these airlines.
Doubtless, Armenia's well-developed custom of turning a blind
eye in exchange for bribes may have given it a comparative
advantage in the registration of aircraft. But Armenia's
civil aviation authorities have put their reputation and that
of other Armenian flagged airlines at risk should one of
these airlines turn out to be usafe or used for criminal
purposes.
EVANS