GOI OPEN TO U.S. SUGGESTIONS ON MILAN/LINATE

UNCLAS ROME 000372

SIPDIS


SENSITIVE

EB/TRA FOR LJONES
DOT FOR OST

E.O. 12958: N/A
TAGS: EAIR KTIA IT AVIATION
SUBJECT: GOI OPEN TO U.S. SUGGESTIONS ON MILAN/LINATE
AIRPORT

REF: A. 04 ROME 3990

B. 04 ROME 3262

C. 04 ROME 1846

Sensitive But Unclassified -- Not For Internet Publication

Summary
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1. (SBU) On January 20, the MFA hosted an inter-ministerial
meeting to coordinate U.S.-Italy consultations on the Linate
code-sharing issue. Italy has proposed February 15-16
consultations in Washington. The GOI delegation is interested
in USG views, yet remains convinced after the MFA meeting
that the GOI has adequately responded to the American
Airlines/United Airlines complaint by withdrawing Alitalia
code-sharing rights at Linate, so that neither U.S. carriers
nor Alitalia have such rights. End Summary.

Italy,s Goals: Restrict Access to Linate; No Alitalia
Penalties
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2. (SBU) On January 11, Dr. Aldo Sansone, Italy,s lead
civil aviation negotiator at the Transport Ministry, told
Embassy Officers that his objective is to restrict traffic
into Linate, a view post also has heard from the Italian
National Civil Aviation Agency (ENAC). According to Sansone,
restricted Linate access benefits Alitalia by encouraging it
to develop its many Malpensa-U.S. routes. Sansone and ENAC
officials have repeatedly expressed the view that Alitalia,s
efforts to increase its transatlantic market share with
Linate-U.S. flights only cannibalize passengers from
Alitalia,s own Malpensa-U.S. flights. Separately, MFA,s
North America Director, Francesco Tafuri, told us that
cash-strapped Alitalia is very concerned about penalties with
financial implications related to Linate. According to
Tafuri, one or two ENAC officials, a representative from
Alitalia, a representative from the Italian Embassy, and
perhaps Sansone would take part in the Washington talks.
Post will provide the final delegation list septel.

Sansone: Linate Resolved
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3. (SBU) Sansone had no new ideas on how to address the
Linate code sharing issue. He said that from his point of
view the Linate code-share issue was largely resolved
already, since Alitalia has been prohibited from advertising
flights between Linate and the United States. The airline
has made a technical fix to ensure that travel agents and
passengers will not view a direct flight option when
attempting a reservation between Linate and the United States
on Alitalia. According to Sansone, even with this fix, any
other airline could theoretically still route a passenger
from Linate to another European destination, even for a
legitimate rest stop, then ticket the passenger to an onward
inter-continental destination. Therefore, the issue does not
appear to be completely resolved. Sansone is optimistic,
however, that the talks will convince the USG and U.S.
carriers that the complaint should be dropped. In that
regard, Sansone expressed interest in an informal meeting
with U.S. negotiators in advance of the formal Washington
bilaterals to clarify the goals of the talks.

European Commission Role in Upcoming Consultations
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4. (SBU) Sansone confided that expanded Commission
competency in civil aviation ties Italy,s hands somewhat.
He explained that as a result of the European Court of
Justice decision in 2002, the GOI must notify the Commission
thirty days prior to engaging in aviation negotiations with
non-EU member states. Italy,s EU Mission in Brussels
advised Sansone that the Commission need not be notified in
this case, since the proposed Linate talks were
consultations, not formal negotiations. (Tafuri in the MFA
also assured post that the Commission cannot derail the
planned Washington discussions.)

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



5. (SBU) GOI lead negotiator Sansone takes a somewhat narrow
view of the Linate code-share issue and he does not seem to
believe that his solution has deleterious effects on U.S. and
national carriers. In Washington, and beyond, the GOI will
continue to fight for restricted Linate access (especially as
new EU Member States seek entry into the Linate club). If
Washington agencies seek a systemic solution for U.S.
carriers' access to Linate, Sansone (and his delegation) must
be disabused of the view that his Ministry,s one-off
prohibition on Alitalia,s advertising and code-share listing
resolves the issue. End Comment.

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2005ROME00372 - Classification: UNCLASSIFIED