NICARAGUAN CIVIL AVIATION BILL IN 'HOLDING PATTERN'

UNCLAS MANAGUA 001344 SIPDIS SENSITIVE SIPDIS FOR WHA/CEN AND EB/TRA STATE PASS TO DEPT OF TRANSPORTATION FOR FAA OFFICE OF INTERNATIONAL PROGRAM AND POLICY - MEL CINTRON E.O. 12958: N/A TAGS: EAIR ECON NU SUBJECT: NICARAGUAN CIVIL AVIATION BILL IN 'HOLDING PATTERN' REF: MANAGUA 0937 ¶1. (U) Summary: In this election year, a proposed civil aviation bill is stuck in a holding pattern in the Nicaraguan General Assembly. The bill, which was approved in general in 2004 but is still awaiting a second vote on individual articles, would bring Nicaragua into compliance with International Civil Aviation Organization standards and facilitate an upgrade of Nicaraguan Civil Aviation to Category I. Election year politics and the lack of a coordinated lobbying effort by industry have stymied chances of quick passage. End Summary ¶2. (U) ECONOFF met with three contacts in the industry and government regarding civil aviation legislation to gather opinions on the bill's prospects for passage before the November 2006 presidential election. While the bill has been placed on the legislative agenda for this session, it has not been assigned a date for discussion. ¶3. (U) Dr. Edwin Illescas, Legislative Counsel for the Assembly Commission on Communications, Transport, Energy and Construction, did not express optimism for the bill's chances of a final vote this legislative session. He indicated on June 14 that a group of bills pending a second vote require a political decision for passage, and that such a decision is unlikely given that election year politics have diverted the Assembly's attention. He explained that while the office of the Director General of Civil Aviation (DGAC) in the Ministry of Transportation and Infrastructure (MTI) has made clear its desire to see the bill move, other interested parties, including airlines and travel agents, have not been active advocates for the bill. According to Dr. Illescas, President Bolanos has not made the bill a top priority. On the other hand, Captain Orrin Watson, DGAC, was optimistic on June 9 that the bill will pass within the next month. ¶4. (SBU) Rosa Chavez, General Manager for American Airlines in Nicaragua expressed concern on June 7 about certain articles of the proposed legislation, including a proposed 6 percent commission to be paid to local travel agents and a requirement that all fares be submitted for approval to the GON. These are issues that the Embassy has often raised with the Assembly over the course of the last two years. Dr. Illescas confirmed later that the 6 percent travel agent commission article had been removed from the bill. However, Dr. Illescas put forth his view that the airlines do not want to be regulated and that their resistance to the GON approval of fares represented a manifestation of that mind-set. He explained that the current version of the article on fares allows GON to approve or reject airfares. ¶5. (SBU) Comment: Given the lack of a lobbying effort from U.S. and other carriers on the bill, ECONOFF will arrange a meeting with heads of U.S. airlines operating in Nicaragua with the Ambassador to discuss the potential for a coordinated effort. TRIVELLI