CIVAIR: NO SOUTH AFRICA INTEREST IN OPEN SKIES

UNCLAS PRETORIA 000399

SIPDIS

SENSITIVE BUT UNCLASSIFIED
SIPDIS

E.O. 12958: N/A
TAGS: EAIR SF
SUBJECT: CIVAIR: NO SOUTH AFRICA INTEREST IN OPEN SKIES
NEGOTIATIONS



1. (SBU) Summary. South Africa's Acting Chief Director for
Aviation and Bilateral Affairs reiterated that South Africa
preferred incremental liberalization to an open skies
agreement with the United States. South Africa's current
strategy was to improve access for its carriers to African
markets by pursuing the pan-African Yamoussoukro Agreement.
He said that South Africa was warning African countries that
if U.S. or EU carriers started linking their 5th freedom
rights in Africa, it would lead to greatly discounted prices
on legs where the passenger loads were low, thus hurting
African carriers. He argued that these countries should
rather open their markets to South Africa. Bierman said that
the Department of Transport (DOT) gave up on trying to learn
more about the needs of South Africa's growing air cargo
market. Its only concern was whether there seemed to be
sufficient capacity. End Summary.


2. (SBU) South Africa's Acting Chief for Bilateral
Negotiations, Johann Bierman, reiterated that South Africa
was not interested in pursuing an open skies agreement with
the United States, but remained interested in discussing
incremental improvements to the existing bilateral agreement.
Bierman explained that South Africa's current strategy was
to improve access for its carriers to African markets by
pursuing the pan-African Yamoussoukro Agreement. The
Yamoussoukro Agreement calls for the liberalization of
intra-Africa air transport.


3. (SBU) Bierman commented that allowing U.S. or European
carriers to operate freely in Africa would come at a cost to
the development of African aviation. He said that South
Africa objected to other African countries, such as Namibia,
Ghana, and Nigeria, negotiating bilateral agreements with the
United States and others. He argued that these countries
should rather open their markets to South Africa, they
resisted doing so because they knew that South Africa would
actually enter and dominate their markets. He said that
South Africa was warning African countries that if U.S. or EU
carriers started linking their 5th freedom rights, it would
lead to greatly discounted prices on legs where passenger
loads were low, thus hurting African carriers. He further
noted that if South Africa signed an open skies agreement
with the United States, then South Africa would not have much
to stand on when it came to keeping African countries united
in the pursuit of Yamoussoukro. He added that an open skies
agreement with the United States would also weaken South
Africa's position vis--vis the United Kingdom, which was
pushing hard for greater access to the South African market.


4. (SBU) Econoffs highlighted the benefits of open skies for
Bierman. During the August 2005 bilateral negotiations in
Washington, Bierman's predecessor, Godfrey Selepe, identified
three objections to the U.S. open skies proposal: no
cabotage, limitations from the Fly America Act, and
limitations on the foreign ownership of airlines. Bierman
acknowledged these objections, but did not elaborate. He
said that Minister Radebe had agreed in principle to moving
toward open skies over time, but not necessarily under the
U.S. model. Bierman said that while South Africa would
request a significant number of supplemental flights in 2010
when it hosted the World Cup Soccer event, it saw no reason
to speed liberalization simply to serve this one event. He
also explained that the DOT gave up on trying to learn more
about the needs of South Africa's growing air cargo market
because airlines provided a myriad of volume discounts and
rebates to their customers, making understanding the industry
rather difficult. DOT's only concern was whether there
seemed to be sufficient capacity.


5. (SBU) Bierman is normally the Department of Transport's
Manager for Infrastructure and Multinationals, where he
focuses on the development of aviation policy. He is
currently also serving as Acting Chief Director for Aviation,
Bilateral Affairs. Former Chief Director Godfrey Selepe now
works for South African Airways as head of Aeropolitcal
Affairs and Alliances.
TEITELBAUM