MONGOLIA ADDS NEW AIR CORRIDORS, CASHES IN ON AMPLE

UNCLAS SECTION 01 OF 02 ULAANBAATAR 000264 SENSITIVE SIPDIS STATE FOR EAP/CM AND EB/TRAN/AN STATE PASS USTDA, EXIMBANK AND OPIC STATE PASS TO AID/ANE TOKYO, BEIJING AND SINGAPORE FOR FAA REP E.O. 12958: N/A TAGS: EAIR PGOV ECON AMGT MG SUBJECT: MONGOLIA ADDS NEW AIR CORRIDORS, CASHES IN ON AMPLE OVERFLIGHTS ¶1. (SBU) SUMMARY: Mongolia's Civil Aviation Authority (MCAA) has added three new air corridors and entry/exit points to accommodate 30% annual increases in air traffic and the expected 40% spike in flyovers during the Beijing Olympics. Approximately 200 flights pass over Mongolia each day (30 originating from North America),but only seven or so actually land here. The MCAA collects over US$50 million in flyover fees every year. On November 24, 2007, an Air France airbus nearly collided with a KLM aircraft, highlighting concerns about air traffic control training and equipment. A new Japanese-financed airport opening circa 2015 and recently purchased radar equipment will help, but MCAA is also focused on building ties with the FAA to open up training opportunities for flight controllers. In other news, the national carrier MIAT will soon withdraw completely from domestic service when its single Antonov aircraft is decommissioned next month. However, there are suggestions from competitors that MIAT may purchase two ATR aircraft as replacements and then, through heavy price subsidies, look to drive private competition from the skies. END SUMMARY. ¶2. (SBU) At a May 29 meeting with Econoff, attended by Econ Assistant and newly arrived Econ/Pol Intern Michael Evans (notetaker),MCAA's Deputy Director General A. Baldandorj elaborated on Mongolia's decision to open three additional air corridors through Mongolian airspace and to establish three new exit/entry points (two to China and one to Russia). Baldandorj said air traffic over Mongolia has in recent years been increasing by 30% annually, with the Beijing Olympics expected to produce a 40% up-tick this summer. Air corridor length within the country now totals 10,000 km, and authorities are planning to open another air corridor near Mongolia's eastern border with China. MCAA's Senior Air Traffic Control Expert J. Bayarsaikhan and ASM Specialist S. Buyandalai also attended the meeting. 15% OF AIR TRAFFIC ORIGINATES IN NORTH AMERICA -------------- -- ¶3. (U) Approximately 200 international flights per day pass through Mongolian airspace, and only a half dozen touch down at Ulaanbaatar's Chinggis Khan International Airport (mainly from Beijing, Berlin, Moscow, Tokyo and Seoul). 15% of international air traffic originates in North America, via the Polar 2 or 3 routes, most crossing over the country's eastern provinces of Dornod and Sukhbaatar on their way to China's major eastern cities. Europe - Beijing/Singapore routes represent the largest portion of Mongolia's' flyovers following the Asia 1 route that runs from NW Mongolia to the southern border near Morit. Last year, air carriers paid approximately US$50 million in flyover fees to MCAA, 60% of which was funneled direct