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


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2005ROME02991 - Classification: UNCLASSIFIED