CROSS-STRAIT WEEKEND AND CARGO CHARTER FLIGHTS -

C O N F I D E N T I A L TAIPEI 004173

SIPDIS

SIPDIS

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

E.O. 12958: DECL: 12/22/2016
TAGS: EAIR ECON PREL CH TW
SUBJECT: CROSS-STRAIT WEEKEND AND CARGO CHARTER FLIGHTS -
NOT BEFORE APRIL

REF: A. TAIPEI 3963


B. TAIPEI 4063

C. TAIPEI 4123

Classified By: AIT Economic Section Chief Daniel K. Moore, Reason 1.4 d


1. (C) Summary: On December 20, Taipei Airlines Association
(TAA) Chairman Tony C.C. Fan speculated that April 1, 2007,
was the earliest date possible for cross-Strait cargo and
weekend passenger charter flights. Fan's projection is
consistent with the most recent comments from the Mainland
Affairs Council (MAC) and industry contacts on timing for a
cross-Strait tourism agreement. Hence, no breakthrough on
these initiatives is likely until after the Lunar New Year
holiday in February. End summary.


2. (C) On December 20, 2006, TAA Chairman Tony C.C. Fan
told AIT/T that he believed the earliest date Taiwan and
the PRC could implement cross-Strait cargo and weekend
passenger charter flights would be April 1, 2007. As TAA
Chairman, Fan is one of the key participants in charter
flight discussions. He is also Chairman of TransAsia
Airways. Fan reported that he had traveled with William
Hsu, Secretary General of TAA, and Lin Chih-min, Director
of Ministry of Transportation and Communications'
Aviation Department, to the Mainland for a meeting with
Chinese counterparts on December 17.


3. (C) Fan said the two sides still differ on three
issues: the number of passenger flights, the number of
cargo flights, and whether to assign carriers to specific
routes. On passenger flights, Fan backtracked from
previous statement (ref A) that the two sides had already
agreed to 24 flights per week. In our more recent
discussion, he told us that the PRC is now pushing for 30
flights per week, while Taiwan wants to keep the number
limited to 24. On the other hand, Taiwan wants more
cargo flights than China -- 30 per month compared to 15.
Fan believes the most likely outcome is the lower number
proposed in each category -- 24 passenger flights per
week and 15 cargo flights per month.


4. (C) Fan said Beijing has proposed assigning carriers
to specific routes. He noted that carriers had not been
assigned for any previous charter flights. He fears that
if such assignments are made, the pro-independence Taiwan
Solidarity Union (TSU) will criticize the agreement for
establishing regular cross-Strait flights instead of
charters.


5. (C) Comment: Fan's April 1 projection is consistent
with what Mainland Affairs Council Economics Division
Director Fu Don-cheng and Taipei Association of Travel
Agents Chairman Yao Ta-kuang have speculated on timing
for an agreement on tourism (ref C). It appears that a
breakthrough on these initiatives is unlikely until after
the Lunar New Year holiday in February.
WANG