BRAZIL CIVAIR: POSSIBLE INCREASED FREQUENCIES, ROUTES FOR

UNCLAS SECTION 01 OF 02 BRASILIA 002309

SIPDIS

SENSITIVE
SIPDIS

STATE FOR WHA/EPSC AND EEB/TRA
STATE PASS USTR FOR KATE DUCKWORTH
FAA FOR CCAPESTANY, GBURDICK, KBERQUIST
DEPT OF TRANSPORTATION FOR BHEDBERG, MSTREET
BUENOS AIRES FOR TSA ATTACHE
MEXICO CITY FOR TSA ATTACHE MGALVAN
USDOC FOR 4332/ITA/MAC/WH/OLAC
USDOC ALSO FOR 3134/USFCS/OIO
NSC FOR TOMASULO
TREASURY FOR JHOEK
SOUTHCOM FOR POLAD
NTSB FOR RMACINTOSH, BENGLISH
STATE FOR USAID FOR LAC/AA

E.O. 12958: N/A
TAGS: EAIR ECON EIND PGOV PREL EINV BEXP BR
SUBJECT: BRAZIL CIVAIR: POSSIBLE INCREASED FREQUENCIES, ROUTES FOR
U.S. CARRIERS AND FUTURE DISCUSSION TOPICS

REF: BRASILIA 2124

SENSITIVE BUT UNCLASSIFIED--PLEASE PROTECT ACCORDINGLY


1. (SBU) Ambassador Sobel spoke again on December 19 with recently
confirmed new National Civil Aviation Agency (ANAC)
Director-President Solange Vieira, who will now be responsible for
air services negotiations with the United States. The Ambassador
also met separately on the same day with Minister of Defense Nelson
Jobim to discuss possible new frequencies and routes to several
cities, as well as other aviation issues. Brazil and U.S.
negotiators signed a Memorandum of Consultations at the conclusion
of December 5-6 civil aviation talks in Rio that expressed intent to
meet again before the end of 2008 (septel). The Rio session, the
first in more than 10 years, was an important first step in
establishing negotiations with Brazil on civil aviation issues. The
Ambassador's discussions were intended to maintain that momentum
toward achieving the ability to implement new routes as soon as
possible as well as other important US objectives in the
negotiations.


2. (SBU) Following are the talking points that the Ambassador left
behind as a nonpaper:

[Begin Text.]

Continued Bilateral Aviation Discussion with Brazil

We are pleased to hear the Brazilians are interested in continuing
our conversations.

Our carriers would like maximum flexibility to institute service to
and from areas in Brazil where demand appears likely to indicate
profitability, and therefore, there is no guarantee that the
availability of additional frequencies would translate into direct
flights.

Additionally, operating constraints, high fuel costs and other
factors can prevent carriers from implementing plans for new
service.

With different levels of specificity and limited commitment to
implement services, U.S. carriers have expressed interest in
additional frequencies and designations that would allow for new
services to cities such as Belem, Belo Horizonte, Brasilia,
Fortaleza, Manaus, Porto Alegre, Recife, Rio de Janeiro, and
Salvador before 2010.

On the road to broader liberalization, we are interested in
concluding a commercially significant interim agreement that would
include certain core elements:

In the short term, we are prepared to focus on a set number of
additional frequencies to be used to Brazilian cities, without an
increase in rights to operate to Sao Paulo.


BRASILIA 00002309 002 OF 002


While completely open routing is not offered except in the context
of Open Skies, we will consider a reasonable liberalization of
routing of benefit to Brazilian carriers.

We would like an agreement to liberalize the all-cargo relationship,
which supports our growing bilateral trade relationship.

Finally, we must have some commercially useable third country code
share rights; we are willing to talk about phase-in and limitations.


[End Text.]


3. (SBU) The reactions of Vieira and Jobim were positive to the
idea of increased frequencies and routes. Next steps will be to
engage bilaterally on the other topics listed.

SOBEL