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