SYRIAN CIVIL AVIATION AUTHORITIES DESPERATE

C O N F I D E N T I A L DAMASCUS 000660 SIPDIS DEPT FOR NEA/ELA, NEA/FOR, NEA/EX, EEB/ESC/TFS, L/EB; COMMERCE FOR BIS/SONDERMAN/CHRISTINO NSC FOR SHAPIRO/MCDERMOTT TREASURY FOR HIJJAR/CURTIN PARIS FOR NOBLES LONDON FOR LORD E.O. 12958: DECL: 09/08/2019 TAGS: EAIR ECON EINV ETTC PGOV PREL SY SUBJECT: SYRIAN CIVIL AVIATION AUTHORITIES DESPERATE REF: A. DAMASCUS 628 ¶B. DAMASCUS 188 Classified By: Charge d'Affaires Chuck Hunter for reasons 1.4(b,d) -------------- Summary -------------- ¶1. (C) Both Syrian Air and the SARG continue to take drastic steps to overcome the problems presented by a dwindling fleet of air worthy aircraft. In addition to their recently announced negotiations for the lease (with option to buy) of two TU 204 aircraft (ref A),Syrian Air has reportedly contracted to lease a Boeing 767 from Jordanian Aviation for two months to transport pilgrims from Syria to Saudi Arabia during the Hajj. Syrian Air is also searching for an air carrier to operate temporarily as a Damascus-based sub-contractor in order to maintain its current flight schedule. Separately, the SARG is proposing new legislation that would liberalize civil aviation in Syria via granting private carriers licenses to fly domestic Syrian routes. End summary. -------------- Syrian Air to Rent Boeing 767 for Hajj -------------- ¶2. (C) An Embassy source with close ties to Syrian Air senior management, Nazir Hussain (strictly protect),said Syrian Air contracted to lease a Boeing 767 for two months to transport pilgrims from Syria to Saudi Arabia during the Hajj season. The plane was reportedly leased from the same Jordanian company - Jordanian Aviation - that supplied Syrian Air with an Airbus A320 earlier this year (ref B). Hussain did not know the condition of the 767 or from where Jordanian Aviation had obtained the plane. ¶3. (C) Discussing the Airbus A320 aircraft previously leased from Jordanian Aviation, Hussain said he had heard from a Syrian Air official the plane was old (its airframe number is 29),and that it had sat idle in Greece for two years before being refurbished and leased to Syrian Air. Hussain also revealed that a Syrian Air pilot who regularly flew this particular aircraft had confessed that this Airbus A320 was dangerous to fly because the engines continually overheated on takeoff. The pilot also revealed the plane could not attain its rated maximum cruising altitude due to the poor performance of its engines. 
 -------------- Tupolev to Finance TU 204 Lease/Purchase -------------- ¶4. (C) Hussain confirmed the lease (with option to buy) of two TU 204 aircraft from Tupolev was going to be a trial run to assess if Syrian Air could function successfully in the future with a fleet consisting solely of Russian-made airplanes. He said it was his understanding the planes were to be financed by Tupolev. ¶5. (C) When asked about the training, logistics and maintenance issues arising from the addition of two Russian aircraft to a fleet of Airbus and Boeing, Hussain opined that Syrian Air management was not thinking in a long-term, total cost approach but instead was concentrating on short-term solutions to the immediate need for air worthy aircraft. He said maintaining airline routes represented a higher priority than minimizing cost. Hussain noted Syrian Air maintained a minimal flight schedule with a deteriorating fleet, but it remained profitable because of Syrian Air's monopoly on ground support services in all airports throughout the country. -------------- Syrian Air Looking to Sub-Contract Routes -------------- ¶6. (C) Econoff was recently contacted by a representative of WDL Aviation, Rolf Hartleb, to inquire about the current status of U.S. sanctions against Syria. WDL Aviation is a regional/charter airline headquartered at Cologne/Bonn airport in Germany. They operate a fleet of 5 four-engine, 100-seat British Aerospace BAe-146 regional jets as well as several smaller Lear jets and Fokker turboprops. WDL Aviation received an invitation from Syrian Air to operate temporarily as a Damascus-based sub-contractor to Syrian Air. Hartleb told Econoff WDL Aviation had been approached by Syrian Air about operating two BAe-146 jets out of Damascus. He said Syrian Air executives sought help in filling the void left by Syrian Pearl airlines. WDL Aviation's BAe-146 airplanes are the same type of plane that Syrian Pearl had attempted to lease. Hartleb said he would contact the Department of Commerce for further clarification on U.S. sanctions, but that WDL Aviation would probably walk away from the Syrian Air proposal. -------------- SARG Desires to Liberalize Civil Aviation -------------- ¶7. (SBU) In a related item, the SARG-owned daily Al-Baath reported on September 7 that SARG Minister of Transport Yacoub Suleiman Badr was to meet with Transport Ministry Directors and officials from Syrian Air and Syria's Civil Aviation Board to discuss the drafting of a bill that would liberalize civil aviation within Syria. According to the report, the bill would create an investment-friendly environment and allow private companies to obtain licenses to fly domestic Syrian routes. In an attempt to incentivize private carriers the Ministry is considering ten-year tax exemptions for investors who commence operations before 2010, as well as reducing fees for ground services provided by Syrian Air and reducing civil aviation fees paid to the SARG. ¶8. (SBU) Under this proposal, fares would be set by the companies rather than the Ministry in order to increase competition, but flight schedules for new airlines would be controlled by the SARG to avoid interference with Syrian Air,s flight schedule. Badr is expected to recommend the establishment of a task force composed of personnel from the Ministry of Transport, Syrian Air, the Civil Aviation Board and aviation safety officials to study these issues and draft legislation with an eye toward achieving a legislative decree prior to the end of 2009. -------------- Desperate Times Call for Desperate Measures -------------- ¶9. (C) Comment: Syrian Air and the SARG are looking for ways to maintain Syria's commercial air services in the face of current U.S. economic sanctions. They are discovering, however, that there are few viable alternatives. Purchasing the Russian TU 204 aircraft is a short-term fix, but may not be a long-term solution because, in the words of Aeroflot's Chief Executive Officer, Vitaly Savelyev, the Tupolevs "use so much fuel that they,re not economic (sic) to operate." The option of a sub-contracting arrangement similar to the one proposed to WDL Aviation could violate current U.S. sanctions. The SARG's efforts to find feasible alternatives highlight the extent of the crisis as the national carrier,s fleet of air worthy aircraft continues to deteriorate. HUNTER