US embassy cable - 05VIENNA3292

UNCLAS SECTION 01 OF 02 VIENNA 003292 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR EB/TRA/AN AND EUR/AGS 
 
DOT FOR STEVEN HATLEY 
 
BRUSSELS FOR FAA/PABDULLAH 
 
FRANKFURT FOR TSA/ABROWN 
 
E.O. 12958: N/A 
 
TAGS: EAIR, AU 
SUBJECT: AUSTRIAN AIRLINES ON RUSSIA, IRAQ AND ITS BOEING 
 
FLEET 
 
REFS: A) STATE 153814; B) VIENNA 3019 
 
THIS MESSAGE IS SENSITIVE BUT UNCLASSIFIED - PLEASE 
 
PROTECT ACCORDINGLY.  NOT FOR INTERNET DISTRIBUTION. 
 
Summary 
 
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1.  (SBU) Walter Reimann, Austrian Airlines' (AUA) 
 
Director of International Relations and Governmnet 
 
Affairs, confirmed to post recently that AUA would focus 
 
on markets in China, India, and, especially, in Eastern 
 
Europe, where AUA has more destinations than any carrier. 
 
AUA would like to expand its service to Russia and 
 
eventually support Aeroflot participation in the Star 
 
Alliance.  However, Reimann opined that Russia would 
 
never agree to a traditional open skies agreement with 
 
the EU.  AUA understands the political reality underlying 
 
the European Commission's push for vertical mandates to 
 
negotiate open skies agreements with China, India, and 
 
Russia.  However, AUA is concerned the EC's approach 
 
could lead to blockages, similar to the current stalemate 
 
in U.S.-EC negotiations.  Riemann said AUA hoped its Star 
 
Alliance partner, United Airlines, would eventually fly a 
 
Chicago-Vienna route.  AUA hopes to secure rights to fly 
 
to Iraq in the near future.  AUA will continue to use its 
 
Airbus fleet for short- and medium-haul flights and its 
 
Boeing 777s for long-range flights, with plans to 
 
purchase an additional 777 in the near-term. 
 
Cooperation with Russia 
 
----------------------- 
 
2. (SBU)  In a recent meeting with post, Walter Reimann, 
 
Austrian Airlines' (AUA) Director of International 
 
Relations and Governmnet Affairs, confirmed that AUA's 
 
focus remained on markets in the Balkans, Russia, 
 
Urkaine, India, and China.  AUA currently serves four 
 
Russian destinations (Moscow, St. Petersburg, Rostow and 
 
Krasnodar), but has a code sharing agreement with 
 
Aeroflot only on two (Moscow and St. Petersburg).  AUA 
 
has repeatedly attempted to extend the codeshare to other 
 
Russian destinations pursuant to the bilateral air 
 
services agreement (ref B).  Reimann said AUA believes 
 
Aeroflot will eventually become a partner in the Star 
 
Alliance, but he admitted the Russian carrier was not yet 
 
ready to join.  During October bilateral talks with 
 
Russian officials, AUA hopes to receive permission to 
 
serve a fifth destination, Yekaterinburg, and to extend 
 
the codesharing agreement to all its Russian 
 
destinations. 
 
3.  (SBU) Echoing the views of the Austrian Civil 
 
Aviation Authority (ref B), Reimann noted that Russia was 
 
very reluctant to negotiate with EU member states, 
 
because of pending EU Commission initiatives on open 
 
skies agreements.  Reimann opined that Russia would not 
 
agree to a traditional open skies agreement, much less to 
 
the Commission's goal of an open aviation area. 
 
EU Mandate for Air Services Agreement 
 
------------------------------------- 
 
4.  (SBU) Riemann noted that there was pressure from the 
 
Commission to pursue vertical mandates on all open skies 
 
negotiations, thus preventing bilateral talks with 
 
important partners, such as China, Russia, and India. 
 
Riemann said AUA acknowledged the political reality that 
 
the EC would become more dominant vis--vis member states 
 
on open skies negotiations.  However, he warned that an 
 
ineffective vertical mandate could provoke a standstill, 
 
similar to the situation with U.S.-EC open skies talks. 
 
Riemann also expressed concern that smaller carriers 
 
would lose out to carriers from the larger member states 
 
in EC-led open skies talks with Russia, China, and India. 
 
AUA Service to the U.S. 
 
----------------------- 
 
5.  (SBU) AUA remains the only carrier offering non- 
 
stop service between Austria and the U.S. (daily 
 
flights from Vienna to Washington and New York). 
 
According to Reimann, AUA presently has no plans to 
 
fly to other U.S. destinations, but has encouraged its 
 
alliance partner United Airlines to service Vienna 
 
from Chicago.  Reimann pointed out that United lacked 
 
code sharing rights to fly to Russia and Ukraine via 
 
Germany.  Riemann noted that United flights to Russia 
 
via Vienna would be more attractive because AUA 
 
already possessed code-sharing agreements with Russia. 
 
Service to Iraq 
 
--------------- 
 
6.  (SBU) Reimann said AUA would like to obtain rights to 
 
fly to Iraq.  AUA plans to start discussions with the 
 
Iraqi Government in the near future.  Riemann cautioned 
 
that, ultimately, the security situation would determine 
 
whether or not AUA would fly to Iraq, especially to 
 
Baghdad.  However, Riemann stated that AUA was 
 
particularly interested in obtaining rights to fly to 
 
Arbil and Sulaymanyah in northern Iraq, where the 
 
security situation was more stable.  Riemann added that 
 
AUA would offer United code sharing possibilities in the 
 
event AUA begins flights to Iraq. 
 
Fleet Plans 
 
----------- 
 
7.  (SBU) AUA's fleet currently comprises 100 planes, 
 
including 28 Airbus and 18 Boeing jets.  Of the Boeing 
 
aircraft, three 777s and six 767s are for long-distance 
 
flights.  Reiman said that AUA plans to order a fourth 
 
777.  According to Reiman, AUA wants to utilize its 
 
Airbus aicraft for short- and medium-range routes, and 
 
its Boeing fleet for long-haul flights.  In Reiman's 
 
opinion, the A380 is "not the right plane for AUA's long- 
 
haul flights."  AUA would like to use the 777s on the 
 
North American routes in the summer, then redirect them 
 
for flights to India during the winter, thus optimizing 
 
cargo and passenger loads. 
 
VAN VOORST