COLOMBIA: CIVAIR'S RESPONSE TO TECHNICAL

UNCLAS BOGOTA 003076 SIPDIS E.O. 12958: N/A TAGS: EAIR CO SUBJECT: COLOMBIA: CIVAIR'S RESPONSE TO TECHNICAL DISCUSSIONS REF: A. A: 05 STATE 54317 ¶B. B: 04 BOGOTA 8515 ¶C. C: 04 BOGOTA 8906 ¶D. D: 04 BOGOTA 8907 ¶1. Sensitive but unclassified. Please protect accordingly. ¶2. (U) Summary. Per ref A, post delivered talking points to Colonel Montealegre, acting director for Aeronautica Civil (CAA),and Carlos Salazar, CAA's Chief of Air Transport. The meeting focused on Avianca's waiver request to the Department of Transportation, the GOC's policy on travel agent commission rates, and the bilateral Air Transport Agreement. CAA responded favorably to the request for technical discussions and suggested the end of April or early May for talks in Bogota. On April 5, Fernando Sanclemente was selected as the new Director for CAA. End Summary. ¶3. (SBU) On March 31, econoff met with CAA representatives to deliver talking points and arrange a meeting between the Department of State, Department of Transportation and CAA officials for technical discussions related to Avianca's request for a foreign ownership waiver. The CAA accepted our request and offered to host the meeting at the CAA's office in Bogota either the last week of April or the first week of May. ¶4. (SBU) Upon delivering the talking points, a CAA representative claimed no relationship exists between Avianca's request for a waiver and the GOC's practice of regulating travel agent commission rates. The CAA official further stated that if the Department of Transportation refused Avianca's waiver request, the GOC could possibly terminate the current Air Transport Agreement and immediately ask to negotiate a new one. Colombia's rationale is based on Law 9 of 1991, which is a national treatment law that assures foreign and national investments the same legal and administrative treatment. The CAA added that a new air transport agreement between Canada and Colombia remains dormant due to the foreign ownership clause. ¶5. (SBU) Our CAA contacts asserted that the issue surrounding the travel agent commission rates was purely political (ref B, C). They added that ANATO, Colombia's national travel agency association, has considerable political influence (and some business ties) with the Colombian Congress and is a great financial supporter of political campaigns. ¶6. (SBU) On a brighter note, CAA officials said they would be happy to discuss the possibility of negotiating Open Skies for cargo aircraft (ref D). When asked about a general Open Skies agreement, CAA officials fell back to their standard position concerning general Open Skies, stating that Colombia is not ready for such stiff competition (even though the majority of Avianca is Brazilian-owned, the Colombian Coffee Growers Federation owns 25 percent of the company). ¶7. (U) Fortunately, CAA will now have a new director to focus on these issues. On April 5th, the Minister of Transportation signed Decree 998, which establishes Fernando Augusto Sanclemente Alzate, the current director of Ports and Transportation, as the new CAA Director, (it is not known when exactly he will assume the duties of Director of CAA, however). ¶8. (SBU) Comment. It is hard to believe the CAA would see benefit in terminating the Air Transport Agreement, especially since it was extended at CAA request. The threat, however empty, is a good indication of CAA frustration. The CAA's acting director understands that the technical discussions will be informal, but added that the meeting should occur after the new CAA Director is in place. Regarding travel agent commission rates, the CAA continues to implement a 1999 Colombian law, which authorizes the CAA to regulate travel agency commissions. End Comment. WOOD