TRAVEL AGENCY COMMISSIONS REFORM REMAINS ON HOLD

UNCLAS BOGOTA 001210 SIPDIS E.O. 12958: N/A TAGS: EAIR CO SUBJECT: TRAVEL AGENCY COMMISSIONS REFORM REMAINS ON HOLD REF: 05 BOGOTA 10204 ¶1. (SBU) Summary. Colombia's Civil Aviation Authority (CAA) has drafted a resolution that requires an eventual reduction to a 3 percent commission, but asserts it has insufficient political leverage to issue the resolution in the face of continuing opposition from the travel agency association's (ANATO) lobbying efforts with the Colombian Congress. CAA does not expect further action on the issue until after the Colombian Congressional election season concludes in mid-March. ¶2. (SBU) As reported reftel, CAA Director General Fernando Sanclemente committed to reducing the commission rates from the current level of 8 percent to between 2 to 3 percent over the next two years. In a meeting with the Ambassador on January 31, American Airlines (AA) officials reported DG Sanclemente had obtained that authority and was ready to issue a resolution setting commissions at an initial rate of 6 percent followed by one percent decreases every six months until a final target of 3 percent is reached by the end of ¶2007. According to AA officials, Sanclemente would have issued the resolution before the holidays but Vice President Santos took interest and asked for a delay while he reviewed the language. AA is concerned the delay may have come via political pressure from ANATO, and the forward movement on the issue may be at risk. Other U.S. carriers operating in Colombia such as Delta and Continental support their opposition to the commissions. ¶3. (SBU) In separate meetings with CAA, Deputy Director Carlos Montealegre and Air Transport Chief Juan Carlos Salazar told econoffs that while there was a draft resolution, the details and timing for its release remain under review. They confirmed the goal of the resolution was to reduce commission rates to 3 percent but the starting point and timing for subsequent reductions was still under review. Both officials emphasized the difficulty of issuing a new resolution due to the strength of ANATO's lobbying efforts with the Colombian Congress and the difficulty of making changes during the ongoing congressional election season. (Comment: ANATO members are major campaign contributors and are well-represented in Congress). ¶4. (SBU) Comment. DG Sanclemente has made some progress in resolving the issue within the GOC but all players acknowledge ANATO connections may continue to prevent reform. End Comment. WOOD