UPDATE ON TRANSPORTATION IN JORDAN: DELTA STARTS DIRECT

UNCLAS SECTION 01 OF 02 AMMAN 001717

SENSITIVE
SIPDIS

STATE FOR NEA/ELA AND EEB
ATHENS FOR FURLONG

E.O. 12958: N/A
TAGS: EAIR ELTN ECON JO
SUBJECT: UPDATE ON TRANSPORTATION IN JORDAN: DELTA STARTS DIRECT
FLIGHT FROM NY TO AMMAN; MINISTER HAS RAIL PLANS

REF: A. 07 Amman 4227

B. 07 Amman 4072

C. 07 Amman 3286


1. (SBU) SUMMARY: Delta Air Line's first flight from New York JFK to
Amman arrived June 6. The arrival of the first U.S. carrier in
Amman is one of many changes underway at Queen Alia International
Airport (QAIA) including the creation of a new government-owned
company which will own QAIA and will own and operate Jordan's other
airports. This new company will be launched by the Civil Aviation
Regulatory Commission (CARC) and will add to a complex system of
airport management and security oversight. The expected completion
date for construction of new terminals at QAIA has been extended to

2011. The Ministry of Transportation has also expressed a desire
for aid to support the construction of Jordanian rail service from
Syria to Saudi Arabia with a line to Iraq. End Summary.

Delta Flies to Amman as Part of Its Middle East Expansion
-------------- --------------


2. (SBU) Delta Air Lines began its first direct flight from New York
JFK to Amman on June 6 (ref B). Delta offers four flights per week
on a Boeing 767. CARC Chief Commissioner Suleiman Obeidat told
visiting U.S. Transportation Security Administrator Kip Hawley that
Delta's operations in Jordan are a "good sign" of the strong
U.S.-Jordan bilateral relationship and American investment in
Jordan. Tony Charaf, President of Delta Technical Operations,
explained that Delta was interested in Amman and the Middle East
because of the high growth rates for air travel. He told Econoff
that if the Amman-New York route is successful, Delta will consider
adding an Amman-Atlanta route which would have more connection
possibilities. He noted that the profitability of any route is a
function of the number of business travelers. Delta will compete
with Royal Jordanian which offers non-stop service from Amman to New
York, Chicago, Detroit, and Montreal.

Too Many Organizations at the Airport
--------------


3. (SBU) During meetings with Administrator Hawley, Delta Air Lines
officials discussed their operational and security plans and
managing Jordan's complicated airport bureaucracy. A large number
of organizations have management and security responsibilities at
QAIA airport including: Special Services Protection Unit (SSPU),the
airport management company Airport International Group (AIG),CARC,
military intelligence, General Intelligence Directorate, and the
national carrier Royal Jordanian. Several Jordanian contacts,
inside and outside the government, have mentioned the tensions and
turf battles caused by the complex system. In addition, Delta has
complained about the service it has received from RJ, which
currently holds a monopoly for several airport services, including
counter staff and baggage handling.


4. (SBU) Adding to the complex structure, Obeidat said that in June,
CARC will register and launch the government-owned Jordan Airport
Company (JAC). He explained that this step is a continuation of the
government's efforts to separate CARC's regulatory role from an
operational role (ref C). In addition to owning QAIA, JAC will own
and operate Marka (Amman's charter airport),the airport in Aqaba,
as well as any future airports (ref A). According to local press
reports, the government has allocated land in the Central Jordan
Valley for a new airport for the export of agricultural produce and
also has plans to convert a military airport in Mafraq to commercial
use.

Construction Delays at the QAIA Airport
--------------


5. (SBU) While JAC may own QAIA airport, the French company AIG will
continue to operate the airport under the 25-year concession awarded
to the company on a build-operate-transfer basis last year.
Francois Berisot, AIG's Chief Operations Officer, expressed
confusion to Econoff over the future role that JAC would play, given
AIG's role as airport management. He also admitted that completion
of AIG's project to renovate the existing two terminals at QAIA and

AMMAN 00001717 002 OF 002


construct two additional terminals may be delayed until 2011 (ref
C). Despite this delay, Berisot confirmed that significant
improvements in the existing terminals will be in place by summer
2009, the next high season. He said by October 2008, all baggage
screening will be moved behind the check-in counters for improved
security.

Minister of Transportation Talks Rail and Trucks
-------------- ---


6. (SBU) During a farewell meeting with Ambassador Hale on June 3,
Minister of Transportation Alaa Batayneh expressed a desire for USG
funding of future transportation projects. He described Jordan's
proposed rail strategy which would run from the border with Syria to
the border with Saudi Arabia and connect to Iraq. Batayneh
estimated the project would cost $3.8 billion for infrastructure and
an additional $2.5 billion for train engines and cars. Currently,
Jordan has only a narrow gauge railway from the historical Hijaz
Railway that was constructed to take passengers from Damascus to
Medina. The railway has deteriorated but sections are still
operational including from Amman to Damascus and from Jordan's
phosphate mines to Aqaba. Batayneh explained that the most
expensive stretch would be the tunneling required near Aqaba. He
elaborated that rail is an industry that requires government
subsidies and emphasized that if Jordan does not put in this
commercial rail line it would be by-passed by a route from Syria
through Iraq.


7. (SBU) Batayneh also noted the pressures on Jordan's
transportation sector, especially with rising fuel prices. He said
37% of fuel in Jordan is used for transportation. Batayneh also
explained Jordan's public transportation and trucking companies
systems must be 100% Jordanian by law. He noted that 88% of public
transportation in Jordan, such as buses and taxis, and 64% of
commercial trucks are owned by single-vehicle companies. He
rationalized the nationality requirement by explaining that if
trucking were opened up to foreign providers, it would be quickly
dominated by large Turkish trucking companies. He added this would
in turn devastate the thousands of families currently supported by
independent truckers.


8. (U) Batayneh proudly mentioned the signing of the $334 million
light rail project agreement with a Spanish-Kuwaiti consortium which
will connect Amman to Zarka, Jordan's third-largest city. Local
press has reported that the 16-mile track will use the current Hijaz
railway track and should reduce traffic congestion.


9. (U) TSA Administrator Hawley did not have an opportunity to
review this message before departing Jordan.

Visit Amman's Classified Website at
http://www.state.sgov.gov/p/nea/amman

HALE