Identifier
Created
Classification
Origin
08QUITO452
2008-05-22 21:10:00
CONFIDENTIAL
Embassy Quito
Cable title:
CARRIERS STILL FIGHTING QUITO AIRPORT FEES
how-toVZCZCXYZ0011 PP RUEHWEB DE RUEHQT #0452 1432110 ZNY CCCCC ZZH P 222110Z MAY 08 FM AMEMBASSY QUITO TO RUEHC/SECSTATE WASHDC PRIORITY 8859 INFO RUEHBO/AMEMBASSY BOGOTA PRIORITY 7563 RUEHBR/AMEMBASSY BRASILIA PRIORITY 3913 RUEHCV/AMEMBASSY CARACAS PRIORITY 3032 RUEHLP/AMEMBASSY LA PAZ MAY 1059 RUEHPE/AMEMBASSY LIMA PRIORITY 2611 RUEHGL/AMCONSUL GUAYAQUIL PRIORITY 3560
C O N F I D E N T I A L QUITO 000452
SIPDIS
FOR DEPT OF TRANSPORTATION: ATTN BRIAN HEDBERG
FOR OPIC AND EXIM
E.O. 12958: DECL: 05/23/2018
TAGS: EAIR EINV EFIN EC
SUBJECT: CARRIERS STILL FIGHTING QUITO AIRPORT FEES
REF: QUITO 2168
Classified By: ADCM Nan Fife, Reason: 1.4 b and d.
C O N F I D E N T I A L QUITO 000452
SIPDIS
FOR DEPT OF TRANSPORTATION: ATTN BRIAN HEDBERG
FOR OPIC AND EXIM
E.O. 12958: DECL: 05/23/2018
TAGS: EAIR EINV EFIN EC
SUBJECT: CARRIERS STILL FIGHTING QUITO AIRPORT FEES
REF: QUITO 2168
Classified By: ADCM Nan Fife, Reason: 1.4 b and d.
1. (SBU) Summary: Resolution remains elusive in the
drawn-out debate over charges paid by international air
carriers to the Quito airport concession operator Quiport.
Quiport offered to defer all airport fee increases until the
new airport opens in 2010, but the airlines disagree with a
contract provision that restrains the airlines from taking
legal action against Quiport for the duration of its
concession, or 35 years. The head of the local airline
association visited OPIC and ExIm bank on May 9 to express
disagreement with planned fee increases. End summary.
2. (SBU) The most recent round of talks between Quiport and
ARLAE, the Ecuadorian airline association that includes U.S.
and other international air carriers, began in February, when
a local court ruled that American Airlines must stop paying
its landing and other airport fees "by consignment" to the
court, rather than directly to Quiport (reftel). Under
Secretary for Aviation Captain Guillermo Bernal was called in
to mediate the talks, and the airlines agreed to pay directly
to Quiport until a negotiated solution could be found (note:
some international carriers, such as LAN, had already been
paying Quiport directly, but "under protest").
3. (SBU) The airlines have claimed over the last two years
that Quiport's fee increases have caused them to "pay for
services not yet received." This is because a portion of the
fees charged at the present airport are used to fund
construction of the new Quito airport (Quiport holds the
concessions for both airports). As such, Quiport says it
developed a proposal that would freeze increases at their
present rate (adjusted for inflation) until the opening of
the new airport in 2010 * at which time the airlines would
be charged a 26% increase. This, Quiport said, would cost
the company $4 million, but the airlines had reportedly
agreed to it during the course of their most recent talks.
4. (SBU) In early May, when the proposed agreement was drawn
up into a "Principle of Cooperation" document, the airlines
refused to sign, saying that Quiport had added a stipulation
requiring the airlines to waive all judicial proceedings
against the company for the duration of its concession, or 35
years. The head of ARLAE, Antonio Salvador, visited OPIC and
ExIm Bank on May 9 (introducing himself as a representative
of TACA Airlines, and regional representative of IATA),to
say that the proposal was "immoral." American Airlines and
Continental both told post that they will not sign a document
that prohibits legal action for this length of time.
5. (C) When asked what they will do now, American and
Continental both conceded that they would continue to pay
their fees directly to Quiport, though under protest, since
it appears that their legal options have diminished (AA says
it will continue to seek legal recourse, however). Quiport
says that without a Principles of Cooperation document, they
will continue to implement regularly-scheduled fee increases
as per their concession contract. They have, however, again
appealed to Under Secretary Bernal for intervention, should
they again experience payment problems.
Jewell
SIPDIS
FOR DEPT OF TRANSPORTATION: ATTN BRIAN HEDBERG
FOR OPIC AND EXIM
E.O. 12958: DECL: 05/23/2018
TAGS: EAIR EINV EFIN EC
SUBJECT: CARRIERS STILL FIGHTING QUITO AIRPORT FEES
REF: QUITO 2168
Classified By: ADCM Nan Fife, Reason: 1.4 b and d.
1. (SBU) Summary: Resolution remains elusive in the
drawn-out debate over charges paid by international air
carriers to the Quito airport concession operator Quiport.
Quiport offered to defer all airport fee increases until the
new airport opens in 2010, but the airlines disagree with a
contract provision that restrains the airlines from taking
legal action against Quiport for the duration of its
concession, or 35 years. The head of the local airline
association visited OPIC and ExIm bank on May 9 to express
disagreement with planned fee increases. End summary.
2. (SBU) The most recent round of talks between Quiport and
ARLAE, the Ecuadorian airline association that includes U.S.
and other international air carriers, began in February, when
a local court ruled that American Airlines must stop paying
its landing and other airport fees "by consignment" to the
court, rather than directly to Quiport (reftel). Under
Secretary for Aviation Captain Guillermo Bernal was called in
to mediate the talks, and the airlines agreed to pay directly
to Quiport until a negotiated solution could be found (note:
some international carriers, such as LAN, had already been
paying Quiport directly, but "under protest").
3. (SBU) The airlines have claimed over the last two years
that Quiport's fee increases have caused them to "pay for
services not yet received." This is because a portion of the
fees charged at the present airport are used to fund
construction of the new Quito airport (Quiport holds the
concessions for both airports). As such, Quiport says it
developed a proposal that would freeze increases at their
present rate (adjusted for inflation) until the opening of
the new airport in 2010 * at which time the airlines would
be charged a 26% increase. This, Quiport said, would cost
the company $4 million, but the airlines had reportedly
agreed to it during the course of their most recent talks.
4. (SBU) In early May, when the proposed agreement was drawn
up into a "Principle of Cooperation" document, the airlines
refused to sign, saying that Quiport had added a stipulation
requiring the airlines to waive all judicial proceedings
against the company for the duration of its concession, or 35
years. The head of ARLAE, Antonio Salvador, visited OPIC and
ExIm Bank on May 9 (introducing himself as a representative
of TACA Airlines, and regional representative of IATA),to
say that the proposal was "immoral." American Airlines and
Continental both told post that they will not sign a document
that prohibits legal action for this length of time.
5. (C) When asked what they will do now, American and
Continental both conceded that they would continue to pay
their fees directly to Quiport, though under protest, since
it appears that their legal options have diminished (AA says
it will continue to seek legal recourse, however). Quiport
says that without a Principles of Cooperation document, they
will continue to implement regularly-scheduled fee increases
as per their concession contract. They have, however, again
appealed to Under Secretary Bernal for intervention, should
they again experience payment problems.
Jewell