Identifier
Created
Classification
Origin
05CARACAS1974
2005-06-29 19:55:00
CONFIDENTIAL
Embassy Caracas
Cable title:  

LIMIT ON AMERICAN AIRLINES' FLIGHTS ROLLED BACK,

Tags:  EAIR PREL VE 
pdf how-to read a cable
This record is a partial extract of the original cable. The full text of the original cable is not available.
C O N F I D E N T I A L CARACAS 001974 

SIPDIS


STATE PASS TO DEPARTMENT OF TRANSPORTATION
NSC FOR BARTON

E.O. 12958: DECL: 06/29/2015
TAGS: EAIR PREL VE
SUBJECT: LIMIT ON AMERICAN AIRLINES' FLIGHTS ROLLED BACK,
FOR NOW

REF: CARACAS 1833

Classified By: Economic Counselor Richard M. Sanders. Reason: 1.4(b)
and (d).

-------
Summary
-------

C O N F I D E N T I A L CARACAS 001974

SIPDIS


STATE PASS TO DEPARTMENT OF TRANSPORTATION
NSC FOR BARTON

E.O. 12958: DECL: 06/29/2015
TAGS: EAIR PREL VE
SUBJECT: LIMIT ON AMERICAN AIRLINES' FLIGHTS ROLLED BACK,
FOR NOW

REF: CARACAS 1833

Classified By: Economic Counselor Richard M. Sanders. Reason: 1.4(b)
and (d).

--------------
Summary
--------------


1. (C) The decision by civil aviation authorities to
reduce American Airlines' (AA) flights on the Miami-Caracas
route has been suspended at least through the summer. This
follows vigorous representations by the Ambassador on AA's
behalf (including with the office of GOV Executive Vice
President Jose Vicente Rangel),as well as AA's lobbying
effort. We would not be surprised, however, if the issue
arises again. End summary.

--------------
GOV Move Leads to Embassy Effort
--------------


2. (C) As reported reftel, on June 13 AA received a letter
from the National Civil Aviation Institute (INAC)
unilaterally reducing the number of flights on its
Caracas-Miami route from four to three per day and directing
it to advise INAC of what flights it would retain. (Note:
the 1953 civil aviation agreement does not impose any
quantitative restrictions on flights, but merely establishes
routes. End note.)


3. (C) After being briefed by AA local manager Omar
Nottaro on the issue, the Ambassador raised it with three
senior GOV officials: Rene Arreaza, chief of staff to
Executive Vice President Jose Vicente Rangel, GOV Ambassador
in Washington Bernardo Alvarez_ (by telephone),and Jose
Gregorio Vielma Mora, head of SENIAT, the Venezuelan tax and
customs authority. To all three he stressed that the embassy
was prepared to engage in dialogue regarding the operation of
the civil aviation agreement if the GOV thought it useful,
but that he would not recommend to the USG that it allow any
Venezuelan carrier to add frequencies on the Caracas-Miami
route to take advantage of the one taken away from AA. He
also made it clear that he thought it would be difficult to
recommend that the FAA engage in any expedited review of
Venezuela's effort to regain "Category 1 status" in terms of
its civil aviation safety regime, while this issue was
unresolved.

--------------
Decision Rolled Back for Now
--------------


4. (C) AA undertook its own efforts, including making

written submissions and meeting twice with Rangel chief of
staff Arreaza and with other officials. On June 22, AA's
Senior Vice President for Latin America Peter Dolara was told
by Arreaza and INAC head Col. Giuseppe Yoffreda that there
would be no changes to flight schedules at least until
September, the end of the busy season. However, they made it
clear that the GOV would continue to study the matter. And
in a June 27 meeting with the Ambassador SENIAT head Vielma
Mora also said that the AA route issue was resolved for the
time being. Vielma added that after talking earlier with the
Ambassador, he had raised it with Rangel, stressing the
inadvisability of taking this step as the summer season
begins, and, also, immediately before the GOV's much
ballyhooed trade event ("macro-rueda") with U.S. exporters
and importers in Caracas, scheduled for June 30.

--------------
Further Fall-Out
--------------


5. (C) In his conversation with the Ambassador, Vielma
predicted that INAC chief Yoffreda would lose his position
over this un-coordinated action. Later that day, an AA
executive confirmed to econcouns that Yoffreda had indeed
left, and was being replaced by his deputy Air Force Colonel
Francisco Paz Fleitas. The executive also advised that the
GOV had asked AA to purchase a stand (for USD 10,000) at the
trade "macro-rueda" as a sign of good will. AA had declined
to pay, but did agree to sell heavily discounted tickets for
participants in the trade event, which seemed to satisfy the
GOV.

--------------


Comment
--------------


6. (C) AA is the preferred carrier on the Caracas-Miami
route with more flights, as well as better connections and
service. Local carriers, which do compete on price, still
have trouble filling their planes. Thus we can expect that
they will try again to get the GOV to use regulatory power to
favor them. We suspect that they will learn from their
mistake of relying on mid-level officials, and will lobby at
higher levels next time unless some kind of amicable
arrangement to grow the market, rather than to try to
restrict it, can be found (which we doubt).


7. (C) This aviation mini-crisis also provides an
interesting look at the GOV decision-making process. For
this kind of decision, to reverse the ruling of an
over-reaching bureaucrat, Executive Vice President Rangel
remains the one man (other than Chavez himself) with real
power. Customs and tax chief Vielma Mora's engagement was
also noteworthy. A rising star in the Chavista firmament, he
was confident enough in himself to play outside of his own
lane. We do not want to attribute the either Rangel or
Vielma's roles to any great sympathy for U.S. interests. The
fact that the decision to go after AA was made without
political level clearance (and was so poorly timed) made it
ripe for reversal, following ours and AA's lobbying.
Brownfield


NNNN
2005CARACA01974 - CONFIDENTIAL