UKRAINE: GOU TELLS IATA ALL ISSUES RESOLVED: IATA

UNCLAS KYIV 002542 SIPDIS SENSITIVE SIPDIS STATE FOR EUR/RUS PATTERSON, EEB BYERLY AND COLEMAN USDOC FOR 4231/ITA/MAC/EUR/RISA BROUGHER AND BEADLE USDOC FOR 3004/CS/ADVOCACY/BLOOM USICAO MONTREAL FOR LAURA FAUX-GABLE NSC FOR WARLICK AND MCKIBBEN E.O. 12958: N/A TAGS: EAIR ETRD KTIA PREL UP SUBJECT: UKRAINE: GOU TELLS IATA ALL ISSUES RESOLVED: IATA AWAITING OFFICIAL CONFIRMATION REF: A. KYIV 2383 ¶B. KYIV 1974 ¶C. KYIV 2788 ¶D. STATE 10632 Treat as Sensitive but Unclassified. Not for Internet. ¶1. (SBU) On September 20, the GOU told the International Air Transport Association (IATA) that all issues regarding IATA's Billing and Settlement Program (BSP),including its ticket stock, had been officially resolved and IATA was no longer in danger of being shut down (ref C). The Ministry of Finance confirmed the GOU's stance on October 2, when it finally approved IATA's request to register its ticket stock, noting that MinFin had received the necessary approval from the Ukrainian State Aviation Administration (SAA). ¶2. (SBU) The breakthrough came when IATA CEO Giovanni Bisignani met September 20 with Ukrainian Deputy Minister of Transportation and Communications and Head of the Ukrainian SAA, Anatoliy Kolisnyk, on the margins of the International Civil Aviation Organization General Assembly in Montreal. Bisignani asked Kolisnyk for written confirmation that Ukraine no longer had any issues with IATA. To date, however, that written assurance has not been forthcoming, and SAA officials have told us that they have no intention of giving IATA such a letter. They cite the approval of IATA's ticket stock by the MOF as sufficient evidence of Kolisnyk's commitment to the IATA. IATA has also not yet received formal confirmation from the Ministry of Economy that it will rescind its order suspending all IATA's cross border transactions. IATA says the Ministry of Economy is still waiting for confirmation from the Procurator General that the original basis of the GOU's complaint against IATA (the use of unregistered ticket stock) has been resolved. (Note: Ambassador plans to raise IATA's status with Minister of Economy Kinakh during a scheduled meeting later this week.) ¶3. (SBU) In a September 28 discussion with EconOff, Deputy Director of the SAA Dmytro Babeichuk blamed IATA's Country Director Sergey Martinyuk for the breakdown in relations between IATA and the GOU that ultimately led to the treat to shut down IATA. Babeichuk argued relations between the SAA and IATA would have been much better if IATA had registered its ticket stock in 2005 instead of pursuing the issue as a matter of principle in Ukrainian courts, a process that lasted two years. Babeichuk said the SAA was unable to work with Martinyuk, a Ukrainian citizen. Several airlines and embassies share the view that Martinyuk is part of the problem. They say his confrontational style and stubborn refusal to register IATA's tickets until after the GOU threatened to shut down IATA exacerbated the situation. The SAA has invited mid-level IATA reps to Kyiv in mid-October to discuss its relationship with IATA, its problems with Martinyuk and whether IATA's electronic tickets (the recent dispute only concerned IATA's paper tickets) conform to Ukrainian law. Comment -------------- ¶4. (SBU) The SAA's continued interest in the trade organization's electronic tickets may be a signal that IATA's problems with the GOU are not over. In any case, industry reps in Kyiv have told us that they suspect the ticket issue to be a front for the SAA's desire to capture the large cash flows generated by IATA's BSP cleaning system. The SAA's stance on IATA's electronic tickets, which we expect to surface during the upcoming meetings with IATA, should shed more light on the GOU's true intentions. End comment. Taylor