ITALY: CODESHARING ON FLIGHTS TO THE RUSSIAN

UNCLAS ROME 002991 SIPDIS STATE FOR EB/TRA/AN; DOT FOR HATLEY E.O. 12958: N/A TAGS: EAIR ETRD IT RS AVIATION SUBJECT: ITALY: CODESHARING ON FLIGHTS TO THE RUSSIAN FEDERATION, A SIGN OF STRONG AVIATION TIES? REF: SECSTATE 153814 ¶1. Summary and comment. In response to reftel request, Econoffs met September 2 with GOI chief aviation negotiator Aldo Sansone, who described the Italy-Russia Air Services Agreement as "liberal." The Agreement includes a key third-country code-share provision; Sansone believed American carriers might also put their codes on Russia-U.S. flights via Italy, provided the U.S.-Russia agreement includes a similar third-country code-share provision. Alitalia representatives have told us, however, that this third-country code-share agreement is not yet operational. In a larger sense, the Italy-Russia aviation agreement may have foreshadowed PM Berlusconi and President Putin's end-August discussions on economic initiatives in, inter alia, aviation and avionics. End summary and comment. ¶2. Italy's March 2005 bilateral aviation agreement with the Russian Federation increased flight frequencies from 18 to ¶70. Sansone told us it took four months to negotiate with the very professional and extremely well-prepared Russian negotiators. While Italy does have third-country code-share rights, neither Sansone, nor an Alitalia contact, could tell us why Alitalia has not yet placed third-country codes on Russian Federation-bound flights. ¶3. The civil aviation talks foreshadowed recent press reports of discussions between Prime Minister Berlusconi and Russian Federation President Putin in late August on economic initiatives in aeronautics, energy, telecommunications and mobile security systems. Separately, just before the leaders met in Soci, Italian state-controlled defense/aerospace conglomerate Finmeccanica announced a commercial MOU with Russian firm Sukhoi. The 1.1 billion euro deal reportedly would finance the construction of 700 aircraft over the next twenty years. ¶4. Comment: While the new Italy-Russia air services agreement seems generous, it (a) does not seem to have been put to the third-country code-share test, and (b) may be part of a quickly-progressing and ambitious economic agenda. It will be interesting to see if Russia is equally generous with the United States when the U.S.-Russia civil aviation talks commence in October. End comment. SPOGLI NNNN 2005ROME02991 - Classification: UNCLASSIFIED