US embassy cable - 05TAIPEI4484

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 004484 
 
SIPDIS 
 
DEPT FOR EAP/TC 
DEPT PASS AIT/W 
 
E.O. 12958: DECL: 11/04/2015 
TAGS: EAIR, ECON, PREL, CH, TW 
SUBJECT: MAC GIVES POSITIVE INTERIM RESPONSE TO PRC CHARTER 
FLIGHT  LETTER 
 
REF: TAIPEI 4210 
 
Classified By: AIT Acting Director David J. Keegan, Reason 1.4 d 
 
1. (C) Summary: Pu Zhao-zhou, Director of the China Civil 
Aviation Administration's (CCAA) Taiwan, Hong Kong, and 
Macau Affairs Office, sent a letter to Tony C.C. Fan (Zhi- 
qiang), Chairman of the Taipei Airlines Association (TAA) 
proposing that if Taiwan and PRC cannot reach an agreement 
to proceed soon with formal discussions on cargo charters 
and weekend passenger charters, then they should begin 
separate discussions on passenger charter flights for the 
2006 Lunar New Year holiday.  The Mainland Affairs Council 
(MAC) issued a press statement November 4 indicating that 
the Taiwan government was considering the possibility of 
proceeding with Lunar New Year charter discussions 
separately.  MAC officials told AIT/T the statement was 
intended to be a positive interim response.  Comments by 
Minister of Transportation and Communications (MOTC) Lin 
Ling-san in the press and National Security Council (NSC) 
Senior Advisor Chen Chung-shin suggest that the Chen 
Administration may be willing to proceed with separate 
Lunar New Year charter discussions soon.  This would be a 
positive step and reinforce each side's commitment to 
progress on charter flights, but it would do little to 
resolve issues that still stand in the way of regular cargo 
and passenger charters.  End summary. 
 
2. (C) Taiwan's media widely reported November 4 that Pu 
Zhao-zhou, Director of the CCAA's Taiwan, Hong Kong, and 
Macau Affairs Office, sent a letter to Tony C.C. Fan (Zhi- 
qiang), Chairman of the TAA and TransAsia Airways, 
proposing that CCAA and TAA discuss Lunar New Year 
passenger charter flights for 2006, using the same model 
for discussion that was used January 15, 2005 in Macau to 
agree to the 2005 Lunar New Year charter flights.  TAA's 
Fan publicly confirmed that he received the letter and 
forwarded it to the MAC, but had no other comment for the 
press.  He told AIT/T that he received the letter by fax 
the morning of November 3.  He said the letter suggested 
separating Lunar New Year charters if the two sides were 
unable to reach agreement soon on formal discussions of cargo 
charters and weekend passenger charters together.  (Note: 
This year the Lunar New Year holiday falls on January 29, 
charter flights would need to begin up to two weeks in 
advance.  End note.)  Formal discussions are not likely to 
take place on any charter flights until the two sides have 
already informally agreed to all of the conditions for the 
flights.  The January 15, 2005, discussions for last year's 
Lunar New Year charter flights were concluded in less than 
two hours. 
 
3. (C) MAC issued a press release on November 4 with its 
initial reaction.  In the press release, MAC said that 
relevant government agencies were already examining the 
issue of whether Lunar New Year passenger charters should 
be discussed separately from cargo charters and the regular 
weekend passenger charters due to the shortage of time. 
MAC Senior Secretary Lee Li-jane indicated to AIT/T that 
the MAC press release although inconclusive should be seen 
as a positive interim reaction to what MAC views as 
expression of goodwill from the PRC.  However, she noted 
that to proceed with Lunar New Year passenger charter 
flights ahead of cargo flights would be a significant 
concession to the PRC, which has stronger interest in 
passenger charter flights, and Taiwan would have to 
consider its next step carefully.  (Note: The PRC has 
advocated moving immediately to regular weekend charters, 
while Taiwan has pushed for gradual implementation of 
passenger charters with Lunar New Year flights first, 
followed by other major holiday flights, and then weekend 
charters.  End note.) 
 
4. (C) According to media reports, Taiwan Minister of 
Transportation and Communications Lin Lin-san yesterday 
said that he expected formal discussions of Lunar New Year 
passenger charter flights to take place in November.  He 
speculated that travelers should be able to make 
reservations by early December.  National Security Council 
Senior Advisor Chen Chung-shin also told AIT/T that the 
Chen Administration might be willing to proceed with Lunar 
New Year passenger discussions ahead of discussion of cargo 
flights.  He commented that Taiwan's priority was to link 
cargo charter flights to weekend charter flights.  He also 
pointed out that Lunar New Year passenger charters would be 
relatively simple to implement based on the principles the 
two sides agreed to last year. 
 
5. (C) TAA's Fan told AIT/T that in his opinion from a 
technical perspective it would be best to begin formal 
discussions of Lunar New Year flights before the end of 
November.  He argued that after mid-December it would 
probably be too late.  This suggests that the Chen 
Administration still has the option of waiting until after 
the election to discuss Lunar New Year flights separately. 
Fan also explained that the only outstanding issues on 
Lunar New Year charters are whether Taiwan will open the 
flights to others besides Taiwan investors in the PRC and 
the possibility of adding additional destinations in the 
PRC.  (Note: Last year charter flights flew between 
Beijing, Shanghai and Guangzhou in the PRC and Taipei and 
Kaohsiung in Taiwan.  End note.) 
 
6. (C) Comment: Pu's letter suggests that the PRC believes 
that progress on a comprehensive agreement that would 
include cargo flights is unlikely before the December 3 
elections.  Now the Chen Administration must decide whether 
progress on any sort of charter flights might provide a 
political boost that would outweigh the possible perception 
the government had made a concession to the PRC on cargo 
charters.  At the same time, the administration must 
consider the possibility that delay until after the 
election will risk the feasibility of Lunar New Year 
charters entirely.  The comments by Lin and Chen suggest 
that there is the possibility that Taiwan will agree to 
move forward soon, possibly even before the election.  This 
would be a positive step and reinforce each side's 
commitment to progress on charter flights, but it would do 
little to resolve issues that still stand in the way of 
regular cargo and passenger charters.  End comment. 
Keegan