Cablegate: U.S.-Eu Open Skies, Boeing, and Cbp Pre-Clearance:

This record is a partial extract of the original cable. The full text of the original cable is not available.

C O N F I D E N T I A L SECTION 01 OF 02 DUBLIN 001488

SIPDIS

SIPDIS

USDOC FOR ITA/MAC/MCLAUGHLIN
USDOC FOR ADVOCACY CENTER/PNUGENT

E.O. 12958: DECL: 01/31/2015
TAGS: EAIR ETRD ECON EI
SUBJECT: U.S.-EU OPEN SKIES, BOEING, AND CBP PRE-CLEARANCE:
THE AMBASSADOR'S DECEMBER 6 DISCUSSION WITH TRANSPORT
MINISTER CULLEN

REF: STATE 219034

Classified By: Ambassador James C. Kenny; Reasons 1.4 (B) and (D).

1. (C) Summary: Discussion of the proposed U.S.-EU air
services agreement in the December 5 EU Transport Council
meeting was "extraordinarily positive," Transport Minister
Martin Cullen told the Ambassador in a December 6 meeting.
He expressed confidence that the U.S. Department of
Transportation's pending Final Order on control of U.S.
carriers would lead Member States to seal the agreement.
Noting the dynamic opportunities that the agreement would
bring to trans-Atlantic aviation, the Ambassador expressed
strong support for Boeing's bid to win Aer Lingus' recent
tender for long-haul aircraft. He highlighted the 787
Dreamliner's superior composite technology, fuel efficiency,
and cost savings, and he urged the carrier to avoid delays
with purchase orders and its overall privatization program.
Cullen emphasized that he had no authority over Aer Lingus'
procurement decisions, but acknowledged that the carrier
would focus on cost efficiencies in its decision. The
Ambassador also recommended cooperation to resolve mounting
problems with passenger delays and congestion in connection
with pre-clearance procedures performed by U.S. Customs and
Border Control at Dublin Airport. Cullen agreed and observed
that near-term airport expansion plans might offer a
solution. End summary.

An Upbeat EU Transport Council Meeting
--------------------------------------

2. (C) The December 5 EU Transport Council meeting, which
focused on the proposed U.S.-EU air services agreement (ref
A), was "extraordinarily positive," Irish Transport Minister
Martin Cullen told the Ambassador in a December 6 meeting.
Participating ministers, he noted, recognized that the
agreement posed significant benefits for both sides and was
superior to the deal put forward in 2004. Cullen said that
although he had actively lobbied for a U.S.-EU agreement in
previous Transport Council meetings, he had stood back on
December 5 in case it might be necessary to sway wavering
Member States at the end. He was surprised, however, to see
that "it was game, set, and match in the first five minutes."
In Irish bilaterals on the margins, the Germans had made
clear that they wanted a deal, whereas UK Transport Minister
Darling had, according to Cullen, displayed nervousness and a
glass-half-empty attitude. Cullen added nevertheless that if
the U.S. Department of Transportation could deliver its Final
Order on control of U.S. carriers, Member States would have
no difficulty approving the U.S.-EU agreement.

Boeing and Aer Lingus
---------------------

3. (C) The Ambassador expressed strong support for Boeing's
bid to win Aer Lingus' recent tender for 14 long-haul
aircraft, noting the dynamic opportunities that the U.S.-EU
agreement would bring to trans-Atlantic aviation. He cited
the Boeing 787 Dreamliner as the industry leader in avionics
technology, and he pointed out that EU suppliers for the 787
model included the UK, France, Germany, and Sweden. The
Ambassador also observed that the 787 was made from lighter,
composite materials that promised enormous cost savings
through fuel efficiency, an important consideration for Aer
Lingus, given the steep trajectories required for departure
from Dublin Airport. He observed that the 787 was so popular
that delivery dates for purchase orders from 25 other
carriers were already backed up till 2011. Aer Lingus, he
added, would thus lose out on any delays in its purchase
decisions, just as delays in the carrier's moves toward
privatization would hurt the value of its eventual placement
in financial markets.

4. (C) In response, Minster Cullen said that he was aware of
recent Boeing discussions with Aer Lingus, but he emphasized
that he had no authority over the carrier's procurement
decisions. He noted that Aer Lingus effectively had an
all-Airbus fleet, though it had flown an all-Boeing fleet in
previous decades. He added, however, that the "world was
about to change" with trans-Atlantic Open Skies and that
there "would be huge opportunities" with the planned
expansion of Aer Lingus service across the Atlantic and to
Africa, the Middle East, and East Asia. (In November, Aer
Lingus commenced new service to Dubai.) He anticipated that
Aer Lingus would seriously consider cost efficiencies in
purchasing the aircraft necessary for the pending ramp-up in
long-haul service. The Ambassador pointed out the 787 would
save Aer Lingus roughly USD eight million in fuel and USD 6
million in maintenance per plane over the near term. (In
addition to the 787 bid, a Boeing sales representative
informed Post on December 5 that John Sharman and Dermot
Mannion, Aer Lingus Chairman and CEO, respectively, had
expressed interest in acquiring two-four Boeing 777s in 2006
to meet its short-term needs.)

Resolving Pre-clearance Difficulties
------------------------------------

5. (C) The Ambassador highlighted Post's intention to work
with the Irish Department of Transport and the Dublin Airport
Authority (DAA) to resolve difficulties with immigration
pre-clearance procedures performed at Dublin Airport by U.S.
Customs and Border Control (CBP). He noted that the
insufficient capacity of airport facilities, coupled with CBP
staff limits, was causing significant delays in passenger
processing as well as overcrowding at airport gates. The
Ambassador added that the busier summer season, the September
Ryder Cup tournament (which could attract 50,000 tourists to
Ireland) and the beginning of U.S.-EU Open Skies next fall
would exacerbate these existing problems. Moreover,
Continental (whose Dublin-New York service is the carrier's
most profitable route worldwide) and Delta planned to add one
flight each in the summer season, which CBP had already said
would be impossible to pre-clear -- posing the competition
issues involved in pre-clearing some carriers, but not
others. As opposed to DAA proposals to split CBP staff
between two airport piers, the Ambassador recommended that
Ireland build a single facility that would advertise the
country's economic success and afford sufficient space for
full-service pre-inspection, inclusive of immigration,
customs, and agriculture checks. He also underscored that
Ireland was the only country in Europe to offer CBP
pre-clearance, an advantage that Ireland should seek to
exploit in its bid to compete with Heathrow as a European
gateway.

6. (C) Cullen acknowledged Ireland's aspiration to become a
European aviation hub, and he said that he was aware of CBP
difficulties at the airport. He cautioned, however, that
Ireland would need 10-20 years to build a new stand-alone
airport facility along the lines suggested by the Ambassador.
Dublin Airport, he explained, was now handling 17 million
passengers per year and would be able to accommodate up to 30
million with near-term plans to add a new pier. He invited
the Ambassador to meet with the DAA to review airport
expansion plans as part of an effort to resolve CBP
difficulties. (The Ambassador plans to tour CBP operations
at the airport before Christmas, prior to meeting with the
DAA.)

Comment: Cullen as a Conduit
----------------------------

7. (C) In a brief one-on-one pull-aside after the meeting,
Cullen expressed his willingness to brief the Ambassador on
ongoing discussions among EU Transport Ministers regarding
the U.S.-EU air services agreement. He indicated that he
greatly appreciated Secretary Mineta's willingness to phase
out (rather than immediately terminate) the Shannon Stop
requirement, and he reiterated his support for efforts to
seal the U.S.-EU deal.
KENNY

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