AIR FRANCE CEO ON AVIATION SECURITY AND

UNCLAS SECTION 01 OF 03 PARIS 007216

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: EAIR ETRD ASEC CVIS FR EU
SUBJECT: AIR FRANCE CEO ON AVIATION SECURITY AND
TRANSATLANTIC OPEN SKIES

REF: Paris 4921

--------------
SUMMARY
--------------


1. (SBU) During a wide-ranging discussion with the
Ambassador over breakfast October 20, Air France CEO Jean-
Claude Spinetta called for enhanced cooperation and greater
efficiency in the operation of international aviation
security programs, and highlighted Air France's strong
interest in successful US-EU Transatlantic Aviation Area
negotiations. Spinetta reviewed his frustrations with the
No Fly system, but offered Air France as a possible pilot
program partner for overseas testing of the proposed Secure
Flight advance name check system.


2. (SBU) Spinetta sees as "extremely important" the
successful conclusion in the next few months of
transatlantic Open Skies talks, a vital element in his view
of providing stability to the current international airline
alliance system. While Air France understands that the U.S.
will offer little new on ownership and control issues, it is
important that an agreement "go beyond the June 2004 text"
in the areas of competition, state aids and security.

AVIATION SECURITY
--------------


3. (U) The Ambassador hosted Air France President Jean-
Claude Spinetta for breakfast at the residence October 20.
Joining Spinetta were Dominique Patry, AF Executive VP for
International Affairs, and Guy Tardieu, Spinetta's Chief of
Staff. DCM and Econ M/C also attended.


4. (SBU) Without referring specifically to recent
correspondence with the Ambassador over a July 2005 No Fly
case (reftel),Spinetta indicated that flight diversions and
cancellations impose considerable costs on Air France, and
can have a negative impact on Air France's reputation among
the traveling public. Spinetta expressed again particular
concern that, in the July No Fly case, a DHS official made a
public statement placing blame on Air France for the
incident. He hoped that we could avoid dealing with these
issues in the press and focus on ensuring that the systems
in place operate as efficiently as possible. (Comment.
While Air France claims that it was not at fault in the July
case, it does accept fault for missing a No Fly passenger on
a subsequent August flight. Its software failed to catch a
one-letter difference in a passenger's surname. End
Comment.)


5. (SBU) Spinetta stated that Air France is committed to
making the No Fly system work. Air France will be fully
operational on APIS-plus (Automated Passenger Information
System) passenger data by January 26, 2006, and he hoped
that the USG could accommodate Air France's timetable for
putting in place the necessary software and procedures.
Notably, Spinetta volunteered to have Air France serve as an
overseas pilot airline in testing the proposed new Secure
Flight system, which would have airlines provide passenger
data to Washington 60 minutes prior to departure time, with
Washington, rather than the airlines, performing the No
Fly/Selectee name checks. The Ambassador welcomed Air
France's interest, and emphasized the importance of making
the No Fly system work efficiently.


6. (U) Spinetta and Tardieu outlined continuing problems
that Air France is having with its unions over U.S. visa
requirements. Air France has some 18,000 crew members
(cabin and cockpit),the majority of whom need visas for
possible service on U.S.-bound flights. Unions argue that
the minimum half-day required to appear at the Embassy
should be compensated as time worked. Air France has
resisted, and has asked the Embassy whether off-site (i.e.,
airport) applications could be taken on a periodically
scheduled basis. Econ M/C reiterated earlier explanation
that the personal appearance requirement (including to
collect biometric fingerprint data) could not be waived. As
yet, no portable technology exists to collect such data off-
site. Both sides speculated that, in the future, mutual
recognition of identity authentication might permit
governments to recognize/accept secure biometric data
collected by other governments, but that is unlikely to be a
near-term solution.


7. (SBU) In a side conversation with Econ M/C, Patry and
Tardieu reiterated that Air France is ready to implement
fully the Selectee List emergency amendment, but awaits GOF
authorization to do so in France. (Air France already uses
the Selectee List actively for its U.S.-origin flights, but
insists it can only do so for France-origin flights when
authorized by the GOF.) The GOF has hesitated in providing
authorization, following questions over No Fly-related
diversions of Air France flights this summer. Econ M/C
noted, as efforts to overcome this hesitation, the recent
visit of a GOF delegation to Washington to consult with DHS
on the No Fly/Selectee system, and the visit to Paris this
week of Terrorism Screening Center Director Donna Bucella.

TRANSATLANTIC AVIATION NEGOTIATIONS
--------------

8. (SBU) Spinetta emphasized the importance Air France
attaches to successful conclusion of transatlantic aviation
negotiations. International airlines are coalescing around
three great alliances: Skyteam, OneWorld and Star. A
liberal aviation regime between the U.S. and Europe is
fundamental to the long-term stability of this system. In
addition, Air France, recently merged with KLM, would like
to extend its current cooperation with Delta Air Lines to
KLM's partner Northwest Air Lines. (Comment. Spinetta made
no mention of DOJ recent negative opinion on Air France's
antitrust immunity application, but implicit in his
statements was recognition that transatlantic Open Skies was
a precondition to such cooperation. End Comment.)


9. (SBU) British Air's stranglehold over Heathrow Airport
remains the tough nut to crack. In order to achieve this,
Spinetta argued that a new agreement must include "more than
the June 2004 package". Dominique Patry noted that Air
France understands that the USG presently can offer little
on ownership and control, not even the offer included in the
June 2004 package (up to 49% foreign ownership). European
carriers also are prepared to forego "symbolic" points, such
as cabotage. If EU Transport Ministers are to bring the
British along, however, they will have to be able to point
to specific progress in areas such as competition, state
aids, and security. A mere commitment to future talks on
these issues will not in itself be sufficient. There must
be some agreement on basic concepts. On competition, for
example, there must be greater convergence between
Washington and Brussels in anti-trust immunity cases,
particularly on procedural timeframes and basic market
concepts.


10. (SBU) Spinetta stated that Dutch authorities, with whom
he meets regularly, are strong proponents of a new
agreement, like KLM. Germany will also be on board,
although the present governmental situation renders the
German voice quiet at the moment. On the question of
Heathrow slots, Spinetta indicated that alliance carriers
could help one another, perhaps reducing the scale of needed
slot divestiture by BA. Air France, for example, could give
a Heathrow-Paris slot to Delta for use on a transatlantic
flight, substituting London-Paris Eurostar train service.
The Heathrow situation will be helped considerably by the
completion of BA's new Heathrow Terminal in 2008.

U.S. AIRLINE HEALTH
--------------


11. (SBU) Spinetta seemed relatively optimistic that U.S.
airlines will be able to reorganize and emerge from the
threat of bankruptcy. He noted that USAir, which recently
emerged from Chapter 11, is now a lower-cost carrier than
even Southwest Airlines. Spinetta met recently with
Northwest's CEO, and came away impressed with that airline's
cost-cutting plans. He noted wistfully that in Europe
managers of failing enterprises get fired; they don't get
the chance to reorganize. Also, unlike in the U.S.,
European judges cannot redefine worker/retiree entitlements,
as is sometimes the case in Chapter 11 proceedings.


COMMENT
--------------


12. (SBU) Spinetta continues to voice frustration with the
burdens of the No Fly system, and the costs it often imposes
on Air France. However, Air France remains committed to
making the system work, and the airline's willingness to be
a testbed for Secure Flight procedures should be encouraged.

13. (SBU) On aviation liberalization, Air France will be one
of our best allies in Europe. The nightmare scenario for
Air France is a collapse of talks, and a successful
Commission challenge next year to bilateral Open Skies
agreements in the European Court of Justice. With so much
riding on the Skyteam alliance and its recent merger with
KLM, a US/EU negotiation failure could end quickly what has
been a succession of good years for Air France.
STAPLETON