US embassy cable - 04MADRID1833

UNCLAS MADRID 001833 
 
SIPDIS 
 
SENSITIVE 
 
EB/TRA/OTP FOR MEGAN WALKLET 
EB/TRA/AN FOR JOE YOUNG 
 
E.O. 12958: N/A 
TAGS: EAIR, SP, Trade Issues 
SUBJECT: SPAIN:  READOUT ON US-EU OPEN SKIES NEGOTIATIONS 
 
REF: A. STATE 91041 
 
     B. 03 MADRID 4336 
 
1.  SUMMARY:  We spoke May 18 with Deputy Director for Air 
Transportation Development Eugenia Llorens, who participated 
in the latest round of US-EU open skies negotiations, about 
matters contained in Reftel A and her views on the possible 
outcome of the negotiations and its implications for Spain. 
Llorens was uncertain whether this round of negotiations 
would be successful, but awaits information on an anticipated 
USG revised proposal.  She does not consider the US-Ireland 
negotiations to involve open skies issues, and therefore does 
not view them as a "green light" from Brussels to negotiate 
bilaterally.  She understands the importance to Spanish 
carriers of achieving an open skies agreement, but does not 
yet know whether the new Socialist government will be 
receptive to negotiating a bilateral agreement if an early 
harvest US-EU agreement cannot be reached by the June US-EU 
Summit.  She will soon brief the new Director General of 
Civil Aviation regarding these issues.  END SUMMARY. 
 
2.  We shared ref A talking points with Llorens who demurred 
until consulting with her new political leadership.  When 
asked for her views on the latest round of US-EU open skies 
negotiations, Llorens said that the "big uncertainty" is 
market access in the US.  Llorens seemed doubtful that the 
anticipated new US proposal will meet EU demands for greater 
access and be accepted by member states.  She also lamented 
the delays that would result in failure to achieve an early 
harvest as some of the negotiators will be changing in the 
fall. 
 
3.  Llorens does not yet know what stance the newly-elected 
Socialist GOS will take on bilateral negotiations should the 
goal of a US-EU early harvest fail, noting that Manuel 
Bautista Perez, the new Director General for Civil Aviation, 
just took office last week and has not yet been briefed on 
these matters.  She acknowledged that the GOS must clarify 
its position on this matter, mentioning that Spanish airlines 
are still exposed to potential antitrust action for lack of 
an open skies agreement. 
 
4.  Llorens acknowledged Ireland's current discussions with 
the US, but does not view the US-Ireland discussions to be 
true open skies bilateral negotiations.  She described the 
subject matter as a "very localistic issue" pertaining to the 
percentage of trans-Atlantic flights that must stop in 
Shannon rather than fly direct from the US to Dublin over the 
next few years.  She stated that the terms lack any antitrust 
component, implying that Ireland,s negotiations do not 
signal EC approval for new bilateral open skies negotiations 
between member states and the US, as we previously proposed 
to her (see Reftel B). 
 
5.  COMMENT:  Like the government it replaced, Spain's new 
government could continue wrestling with the 
mutually-exclusive desire to protect domestic commercial 
interests through a bilateral open skies agreement versus 
following the lead from Brussels and awaiting an eventual 
US-EU agreement.  The previous GOS generally did not oppose 
the instructions of Spanish EU Commissioner for Transport and 
Energy Loyola de Palacio regarding civil air matters.  This 
led to Spain's reluctance to pursue Iberia's desire for an 
agreement.  The new Socialist government may be more open 
than the last to move against de Palacio or her successor. 
Still, with its announced plans to be closer to Europe than 
the past administration, it remains to be seen under what 
conditions the new GOS would enter into bilateral open skies 
discussions with the US.  Llorens promised that the Embassy's 
request to meet with Director General Bautista will be 
granted prior to the June Transport Council meeting.  END 
COMMENT. 
ARGYROS