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