Identifier
Created
Classification
Origin
06TAIPEI3963
2006-11-27 06:28:00
CONFIDENTIAL
American Institute Taiwan, Taipei
Cable title:  

CROSS-STRAIT CHARTER FLIGHTS - PROGRESS POSSIBLE

Tags:  EAIR ECON PREL CH TW 
pdf how-to read a cable
VZCZCXRO8652
RR RUEHCN RUEHGH RUEHVC
DE RUEHIN #3963/01 3310628
ZNY CCCCC ZZH
R 270628Z NOV 06
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC 3186
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEKJCS/SECDEF WASHINGTON DC
RHHMUNA/USPACOM HONOLULU HI
RHEFDIA/DIA WASHINGTON DC
RUEAIIA/CIA WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 003963 

SIPDIS

SIPDIS

STATE PASS USTR
STATE FOR EAP/TC
COMMERCE FOR 3132/USFCS/OIO/EAP/WZARIT
TREASURY FOR OASIA/LMOGHTADER

E.O. 12958: DECL: 11/27/2016
TAGS: EAIR ECON PREL CH TW
SUBJECT: CROSS-STRAIT CHARTER FLIGHTS - PROGRESS POSSIBLE
IN DECEMBER

REF: A. TAIPEI 3581


B. TAIPEI 3439

C. TAIPEI 3210

D. TAIPEI 3147

E. TAIPEI 2991

F. TAIPEI 2376

Classified By: AIT ECONOMIC SECTION DEPUTY CHIEF TIMOTHY D. NEELY, REAS
ON 1.4 D

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 003963

SIPDIS

SIPDIS

STATE PASS USTR
STATE FOR EAP/TC
COMMERCE FOR 3132/USFCS/OIO/EAP/WZARIT
TREASURY FOR OASIA/LMOGHTADER

E.O. 12958: DECL: 11/27/2016
TAGS: EAIR ECON PREL CH TW
SUBJECT: CROSS-STRAIT CHARTER FLIGHTS - PROGRESS POSSIBLE
IN DECEMBER

REF: A. TAIPEI 3581


B. TAIPEI 3439

C. TAIPEI 3210

D. TAIPEI 3147

E. TAIPEI 2991

F. TAIPEI 2376

Classified By: AIT ECONOMIC SECTION DEPUTY CHIEF TIMOTHY D. NEELY, REAS
ON 1.4 D


1. (C) Summary: The airline executive who nominally leads
cross-Strait discussions on charter flights for Taiwan
believes the two sides should be able to resolve in
December all outstanding technical issues on cargo and
weekend passenger charter flights. However, he said an
announcement on charter flights would have to wait until
an agreement is reached on further opening Taiwan to PRC
tourists. In addition, losses for the ruling Democratic
Progressive Party (DPP) in the December 9 mayoral in
Taipei and Kaohsiung could further delay a deal on
charter flights. End summary.

Resolution of Technical Issues Possible in December
-------------- --------------


2. (C) Taipei Airlines Association (TAA) Chairman Tony
C.C. Fan told AIT on November 22 that Taiwan and the PRC
are close to resolving the outstanding technical issues
for cross-Strait cargo and weekend passenger charter
flights. As chairman of TAA, Fan nominally leads cross-
Strait discussions on charter flights and acts as a
primary channel of communication between the two sides.
Fan is also chairman of TransAsia Airways. According to
Fan, there will be no further progress on charter flight
discussions until after the December 9 mayoral and city
council elections in Taipei and Kaohsiung. However, Fan
expects that within days of the election, a meeting will
be held during which the two sides should be able to
quickly resolve all remaining issues. Fan said the
Taiwan authorities' attitude toward charter flights
seemed to have changed in recent weeks, becoming more
energized on the charter flight discussion process. MAC
officials, he said, had previously shown little interest
in his reports, but over the last few weeks they were

trying to reach him almost every day.


3. (C) According to Fan, the two sides have already
agreed on destinations for passenger and cargo flights.
They have decided that weekend passenger flights will
take place on Friday, Saturday and Sunday. Fan said each
side would fly 12 roundtrip passenger flights per week.
The two sides have decided that the flights will be open
to all PRC and Taiwan passport holders, but not to
foreigners.

Announcement Will Wait for Tourism Deal
--------------


4. (C) Despite encouraging progress on charter flights,
Fan predicted there would be no announcement until the
two sides have also reached an agreement on tourism. He
pointed out that the PRC had recently indicated that an
agreement on weekend passenger charters would be a
precondition to an agreement on tourism. Fan detailed
the history of various linkages drawn by both sides
between cargo charters, weekend passenger charters and a
tourism deal. With the PRC's latest move, Fan believes
that the two sides will have to announce agreements on
all three simultaneously.


5. (C) Fan professed he was not fully briefed on the
status of tourism discussions. He noted that the Chen
administration's appointment of a new Tourism Bureau
Director General at the Ministry of Transportation and
Communications had made the situation less clear. (Note:
The Tourism Bureau Director General also serves as the
chairman of the Taiwan Straits Tourism Association, which
has been authorized to represent Taiwan in cross-Strait
tourism negotiations. End note.) However, Fan said
there had been recent progress on some issues, including

TAIPEI 00003963 002 OF 002


procedures for issuing Taiwan travel documents in the PRC
and offices for PRC travel agencies in Taiwan.

Comment - Don't Buy Your Ticket Yet
--------------


6. (C) In his role as chairman of TAA, Fan is at the
center of cross-Strait charter flights discussions, and
previous information he has given AIT on the status of
technical discussions has proven accurate. However, as
chairman of a struggling domestic airline he has a strong
interest in the implementation of cross-Strait charters,
which may color his assessment of the likelihood that an
agreement is around the corner.


7. (C) In addition, the final decision on both sides will
be a political one. The outcome of the December 9
mayoral elections could substantially alter the political
calculus on both sides of the Strait. A major setback
for the ruling Democratic Progressive Party (DPP),
particularly the loss of both the Taipei and Kaohsiung
mayoral races, would embarrass the Chen administration
and could lead to high-level resignations. President
Chen Shui-bian might respond to a defeat by turning back
to his deep-Green pro-independence political base. The
resignation of the more pragmatic Premier Su Tseng-chang
could also be a blow to cross-Strait initiatives. Either
outcome could further delay, if not derail, an agreement
on charter flights, regardless of the status of technical
issues.
YOUNG