US embassy cable - 05DUBLIN1488

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