ARGENTINA OFFERS MORE FLIGHTS TO U.S. CARRIERS

UNCLAS BUENOS AIRES 001270

SIPDIS

SENSITIVE
SIPDIS

EB/TRA/AN FOR ZACHARY TEICH AND JEFF HORWITZ
FAA FOR CECELIA CAPESTANY
USDOC FOR 4322/ITA/MAC/OLAC/ANDERSEN/PEACHER

E.O. 12958: N/A
TAGS: EAIR ECON AR
SUBJECT: ARGENTINA OFFERS MORE FLIGHTS TO U.S. CARRIERS

REF: A. (05) STATE 203010

B. (05) BUENOS AIRES 2945


1. This message is sensitive but unclassified and not for
internet distribution. This is an action request: see
paragraph 6.

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Summary
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2. (U) Econoffs met with Under Secretary of Transportation
for Commercial Aviation Ricardo Cirielli on May 19 as a
follow-up discussion on Open Skies (Reftel A). Cirielli
acknowledged that Argentine carriers had done little to
operate more of the flights available under the
U.S.-Argentina Air Transport Services Agreement. He
recognized that the demand for flights between the U.S. and
Argentina remained high, but he maintained that
implementation of Open Skies would be difficult (see Reftel
B). He suggested doubling the current allotment of flights
available to carriers of both countries, from 56 to 112.
Post views this offer as a unilateral benefit to U.S.
carriers because: U.S. carriers are already operating at the
maximum allowed number of 56 flights per week; Argentine
carriers do not have plans to use the capacity already
available to them; and tourism growth is expected to generate
a rising demand for flights during the coming years. Post
requests guidance to make this offer operational. End
Summary.

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Open Skies, Revisited
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3. (U) Econoffs discussed Reftel A points on Open Skies with
Under Secretary of Transportation for Commercial Aviation
Ricardo Cirielli in November 2005. Cirielli recommended
waiting six months before taking steps to expand capcity. He
said that since the FAA had restored Argentina's Category 1
international flight safety rating in October 2005, moving
toward ratification of Open Skies so soon afterward would be
regarded as a quid pro quo. He said that he also wanted to
provide Argentine carriers the opportunity to develop plans
for using more of the country's allotment of flights under
the current bilateral air transport agreement (see Reftel B).
Econoffs met with Cirielli six months later, as previously
agreed, on May 19 to discuss the possibility of taking steps
to expand capacity.


4. (SBU) Cirielli acknowledged that neither Aerolineas
Argentinas nor LAN Argentina had taken steps to utilize more
of the frequencies allotted to Argentina under the current
bilateral air transport agreement. Conversely, he mentioned
that U.S. carriers had approached his office about the
possibilities for more flights from the U.S. (Comment:
Cirielli specifically mentioned that Delta would like to
begin a direct flight from Atlanta to Cordoba. Delta is
unable to do so, however, because U.S. carriers were already
operating the maximum number of 56 flights per week. This
would be the first direct flight from the U.S. to an
Argentine city other than Buenos Aires. End Comment.) The
Argentine carriers' inaction on this issue was a function of
their particular financial and operational conditions,
according to Cirielli. He noted that the Kirchner
administration had made continued growth in the tourism
sector a high economic policy goal, and he recognized that an
increased number of flights from the U.S. would be an
essential component of that growth.

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Moving Toward More Flights
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5. (SBU) Cirielli explained that the GOA could respond to
the demand for flights in one of three ways. First, his
office could authorize charter flights. However, individual
carriers would need to request a desired route, which would
be operational only on a short-term basis, according to
Cirielli. Second, the GOA could resume consideration of
ratifying Open Skies. Cirielli suggested that its terms
would be subject to review in large part because of "popular
mistrust" of the Menem administration that negotiated the
agreement. Third, the GOA could double the number of weekly
frequencies from 56 to 112. Cirielli commented that he
thought this option would be politically viable and would
serve as a step toward meeting the demand for additional
flights between the U.S. and Argentina.

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Action Request: Responding to Offer
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6. (U) Post supports Cirielli's offer of doubling the
frequencies available to both U.S. and Argentine carriers.
Such a measure would provide a virtually unilateral benefit
for U.S. carriers since U.S. carriers are already operating
at the maximum allowed number of 56 flights per week;
Argentine carriers do not have plans to use the capacity
already available to them; and tourism growth is expected to
generate a rising demand for flights during the coming years.
Post requests Department guidance to make this offer
operational in the near future. Once this expanded agreement
is in place, the USG will still be free to discuss the Open
Skies agreement in Reftel A whenever the GOA is willing to do

so.


7. (U) To see more Buenos Aires reporting, visit our
classified website at:
http://www.state.sgov.gov/p/wha/buenosaires.< /a>
GUTIERREZ