MAC DENIES REPORT ON CROSS-STRAIT CHARTER

C O N F I D E N T I A L TAIPEI 003854

SIPDIS

DEPT FOR EAP/TC
DEPT PASS AIT/W
COMMERCE FOR ITA/MAC/ASIA/MBMORGAN CABLE BOX 4431

E.O. 12958: DECL: 09/16/2015
TAGS: EAIR ECON PREL CH TW
SUBJECT: MAC DENIES REPORT ON CROSS-STRAIT CHARTER
DISCUSSIONS

REF: TAIPEI 3661

Classified By: AIT Acting Director David J. Keegan, Reason 1.4 d


1. (U) The September 16 edition of Taiwan,s United Daily
News carried a front page story citing an unnamed source
who claimed that Taiwan would soon announce progress on
cross-Strait charter flights, including an informal
agreement with the Mainland to implement charter cargo
flights first and then three months later begin passenger
charter service. The report indicated that former Taipei
Airlines Association Chairman Michael Lo had traveled to
Hong Kong several times to meet with PRC counterparts. The
report also said that President Chen might announce the new
steps toward flights around the Mid-Autumn Festival holiday
during which many Taiwan executives based in the Mainland
would return and attend meetings in Taiwan. Note: The
Straits Exchange Foundation hosts an event for returning
Taiwan executives during the Lunar New Year, Dragon Boat
Festival and Mid-Autumn Festival each year. Senior
government officials often speak at the event. End note.


2. (C) Mainland Affairs Council Economics Department
Director Fu Don-cheng told AIT/T that the reports were
"false," "completely baseless," and "manufactured."
Officially, Taiwan is still waiting for a formal PRC
response to the announcement that the Taipei Airlines
Association was designated to engage in preparatory
discussions with Mainland counterparts on this issue.
However, National Security Council (NSC) Senior Advisor
Chen Chung-hsin commented to AIT/T that there has been some
progress in TAA,s preparations for formal discussions as
the two sides exchanged opinions via informal channels.
However, Chen said problems remain to be resolved before
any formal discussions can take place. He pointed out that
Taiwan has agreed to discuss passenger and cargo flights at
the same time and at this point has only ruled out
discussing passenger flights without discussing cargo
flights at the same time.


3. (C) Comment: The United Daily News report is highly
suspect. In addition to Fu,s denial, it would be odd for
Mandarin Airlines President Michael Lo to be involved in
such an exchange because he was replaced as TAA,s Chairman
by TransAisa Airways Chairman Tony C.C. Fan in April.
However, there are some elements of the report that merit a
second look. AIT/T believes that despite the comments by
NSC,s Chen, Taiwan is still determined to implement cargo
flights first. The agreement the report describes is just
the sort of arrangement that would give the Chen
Administration the cover it needs to move forward.
Regardless of the veracity of the report, it appears that
some progress toward more formal discussions is taking
place. A Mid-Autumn Festival announcement would be
timely. Without progress soon, the election cycle will
again start to close the window of opportunity for a
cross-Strait breakthrough. As the December 3 city/county
elections near, the DPP-controlled government may find it
more difficult to announce an opening with the PRC. End
comment.
KEEGAN