07MOSCOW2462, RUSSIA BILATERAL CIVAIR NEGOTIATIONS: FRUITFUL

WikiLeaks Link

To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol).Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #07MOSCOW2462.
Reference ID Created Released Classification Origin
07MOSCOW2462 2007-05-25 13:14 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXYZ0000
OO RUEHWEB

DE RUEHMO #2462/01 1451314
ZNY CCCCC ZZH
O 251314Z MAY 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0614
RULSDMK/DEPT OF TRANSPORTATION WASHDC IMMEDIATE
INFO RUCPDOC/USDOC WASHDC PRIORITY

C O N F I D E N T I A L MOSCOW 002462 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EEB BYERLY AND COLEMAN 
EUR/RUS FOR WARLICK AND HOLMAN 
USDOT FOR STREET AND HATLEY 
USDOC FOR 4321/ITA/MAC/EUR/RISA BROUGHER AND BEADLE 
USDOC FOR 3004/CS/ADVOCACY/BLOOM 
 
E.O. 12958: DECL: 05/21/2017 
TAGS: EAIR ECON PREL RS
SUBJECT: RUSSIA BILATERAL CIVAIR NEGOTIATIONS: FRUITFUL 
TALKS BUT NO DEAL YET 
 
REF: MOSCOW 02189 
 
Classified By: Econ M/C Quanrud for reasons 1.4 B and D. 
 
1. (C) The U.S. and Russian civil aviation delegations had 
productive discussions May 16-17 on updates to the Annexes of 
our 1994 Bilateral Air Transport Agreement, but no deal was 
reached.  On overflights, the GOR continues to bar any use of 
the Trans-Siberian routes without a commercial agreement with 
Aeroflot but offered to increase crosspolar, Indian 
subcontinent, and Trans-East frequencies.  On codesharing, 
the GOR was not ready to allow third-country codesharing from 
Europe, particularly with German-owned carriers, but said it 
would study the issue.  On rights for Russian carriers, the 
GOR asked for limited Seventh Freedom cargo rights for routes 
between Asia, the United States, and points beyond.  The U.S. 
lead negotiator, Bureau of Economic, Energy, and Business 
Affairs Deputy Assistant Secretary John Byerly, and the 
Russian lead negotiator, Director General Gennady V. 
Loshchenov of the Ministry of Transport,s Department of 
State Policy in Civil Aviation, agreed to meet again 
September 4-6 in Washington. 
 
------------------------------- 
OVERFLIGHTS: NO TRANS-SIBERIAN, 
BUT INCREASES ON CROSS-POLAR, 
INDIAN, AND TRANS-EAST ROUTES 
------------------------------- 
 
2. (C) On Trans-Siberian routes, Byerly requested traffic and 
tech stops in Novosibirsk and Krasnoyarsk and also raised the 
issue of the Chinese requirement for planes using route 
"L888" to exit Chinese airspace at navigation point "Revki." 
Loshchenov was absolutely clear that he was not in a position 
to negotiate on any Trans-Siberian routes -- including use of 
the Revki crossing point -- without a corresponding 
commercial agreement between the airline concerned and 
Aeroflot for use of the route.  A final deal between the GOR 
and Europe to phase out the payments to Aeroflot required by 
such agreements had not been vetted through the Russian 
inter-agency process in time for the Russian-EU Summit in 
Samara May 17-18.  The deal, however, is expected to involve 
a phasing out of such payments for existing flights by 2014, 
coupled with an understanding that there would be no charges 
for new flights.  (Comment: Loshchenov clearly did not want 
to appear to be offering a free-ride to the Americans when 
the Europeans negotiated hard for a seven-year phase out.  He 
said, "I'd have every European carrier crying foul at my 
door."  End comment.) 
 
3. (C) The GOR would not allow any stop in Krasnoyarsk 
(principal hub of AirBridgeCargo, formerly Volga-Dnepr), but 
Loshchenov said it would consider a technical stop in 
Novosibirsk, provided the U.S. carrier entered into a 
commercial agreement with Aeroflot.  Likewise, all traffic 
including flight navigation point "Revki" and points farther 
north would require a commercial deal.  Loshchenov hinted 
that the amounts that U.S. carriers would be required to pay 
would be modest.  The U.S. delegation responded that 
mandatory commercial agreements were a "bad policy" that the 
United States and its carriers had consistently opposed.  To 
Loshchenov,s apparent surprise, the U.S. indicated its 
intention to drop the issue of Trans-Siberian routes, pending 
the outcome of the EU-Russia deal, rather than consider any 
form of pay-off to Aeroflot. 
 
4. (C) On other overflights, Loshchenov offered increases as 
part of an overall package with some room for bargaining. 
First, he offered 83 East-bound, 83 West-bound cross-polar 
frequencies; the USG requested 84-84 now, 119-119 in March 
2008, and 126-126 in Winter 2008.  Next, Loshchenov called 
service to India "sensitive" to Russian companies because of 
the connections they offer to India, through Moscow, for 
North American passengers and therefore offered 41-41; U.S. 
carriers are effectively using that now, and the U.S. side 
thus requested an increase to 52-52 in March 2008.  Finally, 
Loshchenov offered 300-500 for the Trans-East route as part 
of a larger package, which was acceptable to the USG. 
 
--------------------------------------------- 
RUSSIA NOT READY FOR THIRD-COUNTRY CODESHARES 
--------------------------------------------- 
 
5. (SBU) Though the GOR would like to see Aeroflot's 
applications for bilateral codesharing with Northwest, 
 
Continental, and Delta approved, it was still reluctant to 
offer third-country codesharing (even on a limited basis) to 
U.S. carriers wanting to serve Russia in cooperation with a 
European partner.  Loshchenov said that the whole Russian 
industry came to a consensus that third-country codesharing 
would eat too much into their European market share now. 
Loshchenov specifically said he was barred by bilateral 
protocol from allowing any third-country codesharing with a 
German-owned carrier.  (Comment:  This obviously includes 
United's bid to codeshare with Lufthansa but could als
o bar 
any cooperative marketing arrangements with Swiss Air, as it 
is now Lufthansa-owned.  End comment.)  Loshchenov did say, 
however, that he would study the protocol with Germany, 
consult with Russian industry, and consider, before the next 
round, the possibility of limited third-country codesharing 
(perhaps one flight to Moscow per day for each of the six 
principal U.S. carriers). 
 
--------------------------------------------- ---- 
SEVENTH FREEDOM CARGO RIGHTS FOR RUSSIAN CARRIERS 
--------------------------------------------- ---- 
 
6. (C) Besides approval of the Aeroflot codeshare 
applications, the GOR had only one major request.  It wanted 
limited Seventh Freedom cargo rights for routes between Asia 
and Alaska, continuing on to Chicago (and perhaps another 
point in the lower-48 states), and beyond, without servicing 
Russia.  Andrey Shumilin, the representative from 
AirBridgeCargo (formerly Volga-Dnepr), told us privately that 
his company is interested in carrying cargo between Asia and 
the United States.  With substantial loads, such flights 
would refuel in Krasnoyarsk.  He said, however, that 
AirBridgeCargo would like the option to forgo the stop in 
Krasnoyarsk during the low season (when it has very low 
payloads) because the extra landing fees in Krasnoyarsk would 
not make the trip profitable.  Shumilin stressed that this 
right would be for occasional use only, perhaps for 10 
percent of a total of no more than 300 flights per year 
(i.e., perhaps 30 flights would forgo the stop in Krasnoyarsk 
and operate on a Seventh Freedom basis).  Byerly replied to 
both Loshchenov and Shumilin that the U.S. has never granted 
Seventh Freedom all-cargo rights outside of an Open Skies 
agreement, but that the U.S. delegation would nevertheless 
study the matter before the September round. 
 
-------------------------------------- 
OTHER RUSSIAN PROPOSALS TO THE ANNEXES 
-------------------------------------- 
 
7. (SBU) During the opening session of the negotiations, the 
GOR proposed modifications to the Annexes, particularly Annex 
I, Section 6 and Annex II, Sections 1-3, tabling specific 
texts.  (Comment: Interestingly enough, the GOR never raised 
the drafts again in either the plenary sessions or the 
chairmen's meetings.  It is therefore not entirely clear how 
important these changes were to the Russian side.  End 
Comment.) 
 
8. (U) The proposed changes to Annex I, Section 6 address 
intermodal cargo and, according to Loshchenov, were requested 
by Russian Customs.  The changes to Annex II, Section 1 would 
remove the requirement that charter carriers be designated by 
diplomatic note.  In Section 2, Paragraph C, the Russians 
requested we strike the three listed reasons for a denial of 
an application: reciprocity, safety, and national security. 
Finally, the GOR proposed deleting Annex II, Section 3 
entirely, which would mean that humanitarian charters would 
count against the numerical limitation on charter flights. 
 
-------------------------- 
OTHER DOING BUSINESS ITEMS 
-------------------------- 
 
AIR NAVIGATION SERVICE FEES AND STATE FLIGHTS: 
 
9. (C) The Federal Air Navigation Service presented a chart 
to Byerly of all the U.S. carriers (and other entities) that 
allegedly owe money for air navigation services.  Natalia 
Kirillova explained that much of the money owed comes from a 
recent change of their operational dollar-ruble exchange 
rate.  Kirillova also stated that the U.S. Embassy owed for 
state flights to and over Russia but acknowledged that this 
topic would be discussed in Washington during upcoming state 
flights negotiations.  (Comment: Kirillova, her boss Mikhail 
Parnev, Alexander Zakharov from the Ministry of Foreign 
 
 
Affairs, and Elena Mikhayeva from the Ministry of Transport 
all raised the issue of state flights on the margins of the 
talks.  End comment.) 
 
FAA ISSUES: 
 
10. (SBU) The Federal Air Navigation Authority (FANA) also 
brought up concerns it had about air traffic control 
procedures on crosspolar routes and possible alternate 
landing destinations in the United States for Russian 
aircraft flying to Canada.  The U.S. Federal Aviation 
Administration (FAA) is aware of these issues and is working 
to get an answer for FANA. 
 
------- 
COMMENT 
------- 
 
11. (C) Perhaps Loshchenov said it best in his closing 
remarks, "There is no need to panic.  Even though we don't 
agree, we still have very good relations."  Though we didn't 
come to a solution this round, talks were open, honest, and 
friendly.  Both Byerly and Loshchenov acknowledged the need 
to consult in their capitals with the goal of finding a 
solution in the September talks. 
 
------------------------- 
LIST OF U.S. PARTICIPANTS 
------------------------- 
 
- John Byerly, Head of Delegation - Deputy Assistant 
Secretary for Transportation Affairs, Bureau of Economic, 
 
SIPDIS 
Energy, and Business Affairs, U.S. Department of State 
 
- Mary Street - Assistant Director for Negotiations, Office 
of International Affairs, U.S. Department of Transportation 
 
- Kathleen Milton - Attorney-Advisor, Office of the Legal 
Adviser for Economic and Business Affairs, U.S. Department of 
State 
 
- Steven Hatley - Senior Negotiator, Office of International 
Aviation, U.S. Department of Transportation 
 
- Laura Trejo - Senior Attorney, Office of International Law, 
U.S. Department of Transportation 
 
- Brian Staurseth - FAA Representative, U.S. Embassy Moscow 
 
- Kristen Grauer - Civil Aviation Officer, U.S. Embassy Moscow 
 
- Sametta Barnett, Director of Government Affairs, Delta 
Airlines 
 
- Cecilia Bethke - Managing Director of International 
Affairs, Air Transport Association 
 
- Kai Uwe Detering - Public Affairs Manager, United Parcel 
Service Germany 
 
- Oracio Marquez - Manager of Alliances, International, and 
Regulatory Affairs, United Airlines 
 
- Kevin Montgomery - Washington Representative of Polar Air 
Cargo 
 
- Jeffery Walker Morgan - Director of International and 
Regulatory Affairs, Northwest Airlines 
 
- Richard Page - SOAR International Ministries 
 
- David Short - Senior Counsel, Regulatory and Industry 
Affairs, FedEx Express 
 
- Daniel Weiss - Director, International Policy and 
Regulatory Affairs, Continental Airlines 
 
- Robert Wirick - Director, Regulatory Affairs, American 
Airlines 
 
---------------------------- 
LIST OF RUSSIAN PARTICIPANTS 
---------------------------- 
 
- Gennady V. Loshchenov, Head of Delegation - Director 
 
 
General, Department of State Policy in Civil Aviation, 
Ministry of Transport 
 
- Irina G. Fedechinka - Head of Air Services Division, 
Department of State Policy in Civil Aviation, Ministry of 
Transport 
 
- Elena A. Mikh
eeva - Deputy Head of Air Services Division, 
Department of State Policy in Civil Aviation, Ministry of 
Transport 
 
- Yulia V. Volodina - Senior Expert of the International 
Agreements Division Legal Department, Ministry of Transport 
 
- Yuri Romanenko - Civil Aviation Officer, Department of 
International Relations, Ministry of Transport 
 
- Alexander Delezha - Acting Director of the Air Transport 
Department, Russian Federal Air Transport Agency 
 
- Natalia Kirilova - Department of International Relations, 
Russian Federal Air Navigation Authority 
 
- Alexander Zakharov - Head of the Bilateral Relations, North 
America Desk, Ministry of Foreign Affairs 
 
- Igor Regush ) Aeroflot 
 
- Kamil Feizafmanov - Aeroflot Cargo 
 
- Martya Goryashko - Aeroflot Cargo 
 
- Andrey A. Shumilin - AirBridgeCargo 
 
- Yuri A. Malishev - AirBridgeCargo 
 
- Dennis Ilyin - AirBridgeCargo 
 
- Aleksei Leonov - AirBridgeCargo 
 
- Natalia V. Nazarova - AirBridge Cargo 
 
- Natalia Pechinkina - Transaero 
 
- Denis Savchenko - Transaero 
 
- Glenn Wicks - The Wicks Group 
 
- Katya Grimes - The Wicks Group 
 
- Sergey Teselkin - Polet 
 
- Denis Zuzanov - Polet 
 
- Yuri Lavrentiev - TESIS 
 
 
 
 
 
BURNS

Wikileaks

Advertisements
Post a comment or leave a trackback: Trackback URL.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: