Cablegate: United to Fly Direct From Washington to Moscow By

VZCZCXRO2683
RR RUEHLN RUEHPOD RUEHVK RUEHYG
DE RUEHMO #3573 3451128
ZNR UUUUU ZZH
R 101128Z DEC 08
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 1073
INFO RUEHXD/MOSCOW POLITICAL COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS MOSCOW 003573

SENSITIVE
SIPDIS

STATE FOR EUR/RUS AND EEB/TRA (JOHN BYERLY, MATT FINSTON)
COMMERCE FOR MAC (MATT EDWARDS, JAY THOMPSON, JACK BROUGHER)

E.O. 12958: N/A
TAGS: EAIR ETRD EINV ECON RS
SUBJECT: UNITED TO FLY DIRECT FROM WASHINGTON TO MOSCOW BY
END OF MARCH 2009

THIS CABLE IS SENSITIVE BUT UNCLASSIFIED. NOT FOR
DISTRIBUTION OUTSIDE USG CHANNELS OR FOR POSTING ON THE
INTERNET.

1. (SBU) On December 1, Oracio Marquez, United Airlines'
Manager for International Regulatory Affairs, confirmed to
Embassy Moscow's FAA Attache that United would start direct,
non-stop flights as of March 29, 2009 between Dulles
International Airport (IAD) and Moscow's Domodedovo
International Airport (DME). United had originally planned
to start flights in October 2008 but requested and received a
six-month extension from the U.S. Department of
Transportation. Marquez said United submitted the necessary
paperwork to Russia's transportation and aviation regulatory
authorities in November so that flights could begin in March.
He said United plans to fly the Boeing 767-300 aircraft on
the IAD-DME route. United's on-line booking system already
has the new flights listed (Flights 964 and 965) and shows
that seats are beginning to fill up for flights in April and
May 2009, with round trip economy-class tickets starting at
$918.

2. (SBU) United,s decision to start service at this time is
a bit of a surprise. Growth rates on international routes to
and from Russia have been declining in the second half of
2008. They are still predicted to grow by about 14-16
percent for 2008, according to Russian aviation experts, but
this is down from 21 percent in 2007 and is in spite of a
very strong performance in the first half of the year.
Russian experts expect growth rates to decline further in
2009, though still remain in positive territory. Currently,
Aeroflot provides the only direct flight between the two
cities, but does not fly daily. According to Marquez, the
limited competition, predicted continued growth in demand,
significant volume of government travelers between the two
capitals, and lower jet fuel prices made the direct DC-Moscow
flight attractive for United at this time.

3. (SBU) United still faces some challenges, however, as it
moves forward with starting operations. Marquez said United
currently has no employees on the ground in Moscow and will
only have two employees at Domodedovo airport even after
flights start. Most services will be provided by outside
contractors and service providers. The company is
negotiating with the East Line Group (an airline services
company and the manager of DME) to provide ground services,
but the companies have not yet finalized the contract terms.
RUBIN

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