Identifier
Created
Classification
Origin
06DAMASCUS1952
2006-04-30 13:31:00
CONFIDENTIAL
Embassy Damascus
Cable title:  

AIRLINES IN SYRIA SEEKING TO OBTAIN AIRCRAFT

Tags:  EAIR ECON ETTC SY SANC 
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VZCZCXRO9173
PP RUEHAG
DE RUEHDM #1952/01 1201331
ZNY CCCCC ZZH
P 301331Z APR 06
FM AMEMBASSY DAMASCUS
TO RUEHC/SECSTATE WASHDC PRIORITY 8628
INFO RUEHTV/AMEMBASSY TEL AVIV PRIORITY 0934
RHEHNSC/NSC WASHDC PRIORITY
RUMICEA/USCENTCOM INTEL CEN MACDILL AFB FL PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RHEHAAA/WHITE HOUSE WASHDC PRIORITY
RUCNDT/USMISSION USUN NEW YORK PRIORITY 0097
RUCNMEM/EU MEMBER STATES COLLECTIVE
C O N F I D E N T I A L SECTION 01 OF 02 DAMASCUS 001952 

SIPDIS

SIPDIS

NEA/ELA
NSC FOR ABRAMS/DORAN/SINGH
TREASURY FOR GLASER/LEBENSON
EB/ESC/TFS FOR SALOOM

E.O. 12958: DECL: 04/26/2016
TAGS: EAIR ECON ETTC SY SANC
SUBJECT: AIRLINES IN SYRIA SEEKING TO OBTAIN AIRCRAFT

REF: DAMASCUS 1811

Classified By: CDA Stephen Seche for reasons 1.4 b/d

C O N F I D E N T I A L SECTION 01 OF 02 DAMASCUS 001952

SIPDIS

SIPDIS

NEA/ELA
NSC FOR ABRAMS/DORAN/SINGH
TREASURY FOR GLASER/LEBENSON
EB/ESC/TFS FOR SALOOM

E.O. 12958: DECL: 04/26/2016
TAGS: EAIR ECON ETTC SY SANC
SUBJECT: AIRLINES IN SYRIA SEEKING TO OBTAIN AIRCRAFT

REF: DAMASCUS 1811

Classified By: CDA Stephen Seche for reasons 1.4 b/d


1. (C) Summary: According to a recently commissioned
International Civil Aviation Organization (ICAO) report, only
four to six of Syrian Arab Airlines' 16 airplanes are
currently fit to fly. As a result of U.S. sanctions,
SyrianAir is facing difficulty obtaining U.S. or
European-sourced aircraft, and is considering purchasing
Russian airframes to update its fleet. In an effort to
ameliorate the problems associated with SyrianAir's flight
capabilities, the SARG recently licensed 12 private airlines.
At least three of the new licensed private airlines - Al
Sharqiya Airlines, Eagle Airlines, and Global Express
Airlines - are exploring wet and dry lease options with a
number of aircraft companies in order to begin charter
flights, which their owners hope will ultimately lead to the
development of full-fledged commercial airlines. While the
airline representatives were seemingly nonplussed about the
challenges posed by U.S. sanctions, they admitted that the
establishment of private airlines in Syria posed a
significant threat to the viability of SyrianAir. End
summary.


2. (U) An article in government-controlled al-Thawra
newspaper reported that on April 28 a delegation from Russian
Ilyushin company met with Syrian Minister of Transportation
Yarob Sulieman Bader to provide samples and specifications of
Russian aircraft. The visit succeeds previous press reports
that the Ministry of Transportation is considering the
purchase of new Russian aircraft as one possible option in
updating the fleet operated by SyrianAir. According to the
articles, Bader believes that U.S. trade sanctions will
continue to inhibit Syrian Air from obtaining new Boeing or
Airbus airframes or spare parts for existing planes. Bader's
statements follow recent meetings held with the ICAO to
evaluate the safety of SyrianAir's current fleet and explore
possible options - such as leasing aircraft (reftel) or
purchasing sanctions-compliant airframes - to improve

SyrianAir's flight capabilities.


3. (C) In addition to SyrianAir, several newly licensed
private airlines are also exploring options for purchasing or
leasing aircraft. At least twelve licenses for private
airplanes have been approved under Investment Law number 10
since June 2005. The first license was granted to Abou Shaar
Group, which will invest approximately USD 40 million to
extablish Al Sharqiya Airlines. Owner Bourhan Abou Shaar
says that while Gulf investors are interested in investing in
his airline project, he does not believe that they will
commit funds until Al Sharqiya aircraft receive certification
from the Syrian Civil Aviation Directorate. Initially Abou
Shaar wants to lease to buy two turbo-prop planes: one with a
30-passenger capacity and the other with a 75-passenger
capacity to fly both domestic and regional routes. He is
currently exploring options with Stork Aerospace (Fokker),
Air Desert Pacific, Empresa, and Saab. In the first phase of
the project, Al Sharqiya Airlines will operate as a private
charter airline catering to foreign oil companies, Syrian
expatriates returning for the holidays, and Muslim travelers
making the annual hajj pilgrimage. Additionally, Abou Shaar
is exploring the possibility of partnering with SyrianAir in
a code-share agreement in order to allow for more domestic
flight options. Abou Shaar told us that for the second phase
of his airline project (which he believes will begin in a
year or two),he wants to obtain a Boeing 737 or Airbus 320
to provide more regional flight options for Syrian travelers,
and utlimately hopes to be approved for regular flight routes
and maintenance facilities. However he admits that the
regime has historically viewed private airlines in Syria as
competition to state-owned SyrianAir, and thus has
deliberately created obstacles to prevent them from
succeeding.


4. (C) Anas al Madani, owner of one of the only private FM
radio and TV channels in Syria, holds a license for recently
established Eagle Airlines. Madani and an unnamed Syrian MP
own Eagle Airlines and originally planned to invest USD 250
million, which Madani says was reduced to USD 100 million
once he and his business partner decided to lease instead of

DAMASCUS 00001952 002 OF 002


purchase aircraft. Madani claims that Eagle Airlines, along
with all other private airlines in Syria, must wait for a
determination on whether used aircraft can be imported into
Syria duty-free under Investment Law number 10. (Note: The
law currently only allows duty-free import for new equipment
and otherwise the equipment must be imported and taxed under
Syria's Commercial Law. End note.) Madani is seeking to
lease up to four Boeing and Airbus mid-size passenger jets
from companies in India, Ukraine, Turkey, and Cyprus, and
plans to initially offer charter flights both regionally and
to Europe and Southeast Asia. Ultimately he plans to develop
his project into a commercial airline. Madani told us that
he would like to pursue both "dry lease" and "wet lease"
agreements for Eagle Airlines aircraft, and indicated that a
wet lease was more likely under U.S. sanctions. Unlike
SyrianAir, Madani stated that he does not believe that a wet
lease (which specifies that the aircraft remains under the
full control of the leasing company) would threaten his
company's national identity.


5. (C) Saleh Al Aroud, Managing Director of RusAviation,
believes that Global Express Airlines is likely to be the
most successful private airline in Syria because, unlike his
competitors, Al Aroud has significant experience operating
RusAviation - a Kyrgyzstan charter and cargo airline based in
Dubai that allegedly contracts with the U.S. military in
Iraq. Though Global Express Airlines is licensed to Muafaq
Hosni Alhabashi, Al Aroud (a Syrian-Russian dual national) is
assisting with the establishment of the airline. Aroud said
that Global Express Airlines has not yet opened an office in
Damascus and has thus far only invested about USD 50,000, as
it is waiting on the Syrian Civil Aviation Directorate to
determine the rules and regulations for used aircraft before
it proceeds. Aroud is pursuing investment from Syria, Turkey
and Dubai, and is looking at both dry and wet lease options
for aircraft. He prefers a dry lease with a lease-to-buy
option, but asserts that the Civil Aviation Directorate has
no objections to wet leases. Aroud told us that he is
intially planning to lease one turbo-prop cargo plane because
Syrian Air is not operating any, and is currently in
discussions with Iceland Air and Fokker on the lease options.
In the second stage of his project, he wants to operate
passenger routes to Sharjaa, Dubai, Turkey, Jordan, and Iraq.
Aroud mentioned the recent visit of the ICAO technical team,
as well as UNDP's and ICAO's willingness to negotiate
aircraft leases for Syrian Air (reftel). Aroud claims that
ICAO is prohibited from conducting similar negotiations for
potential operators (such as the emerging Syrian private
airlines) until they receive approval and certification from
the Syrian Civial Aviation Directorate.


6. (C) Comment: As reftel reported, SyrianAir faces serious
flight safety concerns that SARG oficials are anxious to
blame on U.S. sanctions. As these private airline
initiatives highlight, the SARG has options other than buying
new Boeing or Airbus planes for SyrianAir. But because the
establishment of private airlines in Syria poses a threat to
Syrian Air and its customer base, the necessary approval from
the Civil Aviation Directorate will likely not be
expeditiously granted. Nevertheless, it will be increasingly
incumbent on the SARG to choose between continuing to allow
its national carrier to fly unsafe aircraft or open up to
private investment.
SECHE