DGAC GRANTS AEROCONTINENTE FLIGHT PERMISSIONS

UNCLAS LIMA 003366

SIPDIS

SENSITIVE

DEPT FOR WHA/AND, EB/TRA/AN
FAA FOR MIAMI

E.O. 12958: N/A
TAGS: EAIR ECON ETRD EINV CASC PE
SUBJECT: DGAC GRANTS AEROCONTINENTE FLIGHT PERMISSIONS

REF: A) LIMA 2796 B) LIMA 2053 C) LIMA 1987


1. (SBU) Summary. The Directorate General of Civil
Aviation (DGAC) in mid-June presented OFAC-listed Narcotics
Kingpin Fernando Zevallos documentation granting flight
permissions to Zevallos' new airline, AeroContinente EIRL.
AeroContinente, which plans to use five planes - two Fokkers
and 3 Airbuses - will service 13 domestic routes, including
Cusco, Iquitos, and Arequipa, for passengers, cargo and
mail. According to DGAC insiders, the DGAC has yet to
inspect, let alone certify, Zevallos' planes under
airworthiness requirements. AeroContinente EIRL's
maintenance staff is fixing two additional Boeing jets, part
of the former AeroContinente/NuevoContinente fleet, to sell
them to Air Guinea Cargo. End Summary.

AeroContinente Reborn
--------------


2. (SBU) On June 13, Acting Director General of the DGAC
Roberto Rodriguez officially granted flight permissions for
passenger, cargo and mail services to OFAC-designated
Narcotics Kingpin Fernando Zevallos' new company,
AeroContinente EIRL. In previous conversations with
Rodriguez, he emphasized that there is no legal impediment
to Zevallos reorganizing AeroContinente (ref B). According
to DGAC documents, the new AeroContinente fleet consists of
five planes: Fokker F28, Fokker F100, Airbus 310, Airbus
320, and an Airbus 330. AeroContinente EIRL plans on flying
to 13 cities in Peru, including flights to Cusco, Arequipa,
Iquitos and Pucallpa (all key tourist destinations.)


3. (SBU) Juan Crovetto Moreno, Director of Air Security at
the DGAC, informed us that AeroContinente needs more than
just flight permissions before becoming a viable airline.
Zevallos has not yet requested airworthiness inspections for
his planes. In previous conversations, Crovetto explained
that the two Fokkers need significant repairs, as they are
listed as "Stage 3" for sound problems (ref A).


4. (SBU) DGAC documents identify Zevallos as the legal
representative and manager of AeroContinente EIRL. The
corporate address is listed as Av. Jose Pardo 601. 16 floor,
Miraflores, Lima; telephone 51-1-241-5200. This address and
telephone number are the same ones used by the former
AeroContinente/NuevoContinente offices.

More Planes to Guinea-Bissau?
--------------


5. (SBU) During a meeting on August 3, our DGAC contact
informed us that AeroContinente maintenance staff is working
diligently on repairing two Boeing planes that were once
part of the NuevoContinente fleet. The two planes have been
repainted with the Air Guinea Cargo logo and have been
refitted with spare parts from other AeroContinente planes.
According to our contact, Zevallos plans to sell these
planes to Air Guinea, which purchased two Boeing jets from
Zevallos in January (ref A). Our contact believes that the
DGAC is likely to approve the sale of these planes within
the next two months

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


6. (SBU) Although flight permissions do not ensure that
AeroContinente EIRL will be airborne in the near future,
Zevallos is one step closer to his goal. During the
Embassy's July 4 party, Acting Director Rodriguez told
Econoff that it will take a lot of repairs and capital spent
before the DGAC will grant airworthiness certificates for
any of Zevallos' planes. The company, which listed a mere
$21,538 of initial capital on its permit requests, will need
to scrape together more money to pay for any repairs and
maintenance. We suspect the money is coming from Zevallos'
deep pockets. The DGAC continues to reassure us that all of
Zevallos' planes must meet strict standards before they are
allowed to leave the ground.

STRUBLE