US embassy cable - 02AMMAN7255

C O N F I D E N T I A L SECTION 01 OF 02 AMMAN 007255 
 
SIPDIS 
 
USDOC/4520/ITA/MAC/NOE/COBERG 
TREASURY FOR MILLS/PIPATANAGUL 
TDA FOR STEINGASS, SIGLER 
DEPT FOR PRM 
 
E.O. 12958: DECL: 12/15/2007 
TAGS: EAIR, PREL, ELTN, EWWT, PREF, BEXP, JO, IS 
SUBJECT: JORDAN: PEACE AIRPORT AND OTHER TRANSPORT ISSUES 
 
REF: AMMAN 5331 
 
Classified By: DCM Gregory L. Berry.  Reasons 1.5 (b) and (d) 
 
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SUMMARY 
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1.  (SBU)  According to Jordan's Transportation Minister, the 
Jordanian government remains ready to work with Israel on a 
plan to allow domestic flights bound for Eilat to land in 
Aqaba (REFTEL).  The Ministry has also prepared contingency 
plans for a possible conflict in Iraq.  Regarding Royal 
Jordanian Airlines (RJ), Dahabi, a former CEO of RJ, said the 
government had subsidized the airline over the past year, but 
hoped those costs would be one-off expenses.  END SUMMARY 
 
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ISRAELI FLIGHTS TO AQABA: WE ARE READY 
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2.  (SBU) In a December 11 meeting, Transportation Minister 
Nader Dahabi told the Charge that Jordan was ready to 
accommodate Israeli domestic flights at Aqaba airport 
following a decision by the Israeli government to discontinue 
such flights into Eilat airport for safety and environmental 
reasons (REFTEL).  He said that prior to the call for new 
Israeli elections in November, he had received a letter from 
then Israeli Transportation Minister Sneh requesting a 
meeting to discuss the idea, a revival, after a fashion, of 
the Peace Airport in Aqaba called for in the Israel-Jordan 
Peace Treaty.  Dahabi said that a meeting (reported in 
reftel) was held without Sneh's participation, but with both 
sides' Civil Aviation Authorities, the directors of the Eilat 
and Aqaba airports and Aqaba Chief Commissioner Aqel Biltaji 
attending. 
 
3.  (sbu)  As a result of the meeting, there appeared to be a 
broad consensus to move forward based on the Jordanian 
proposal described in reftel.  However, the call for early 
elections seems to have put off the Israeli side's ability to 
pursue discussions.  Dahabi added that the MOU from a 1998 
pilot project could act as the basis for any agreement, and 
reiterated the government's readiness to continue talks after 
the elections.  This tracks with recent conversations with 
CAA Director Hanna Najjar and Aqaba International Airport 
Director Omar al-Manha who have told us that they are ready 
to go once the Israelis are. 
 
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"DOING OUR HOMEWORK" RE: IRAQ 
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4.  (C) Regarding transportation contingency plans in 
response to possible military action in Iraq, Dahabi said 
that he, PM Abul Ragheb, and Minister of Planning Awadallah, 
"had done their homework" to see how such an action would 
affect Jordan's transport sector.  He said they were very 
realistic, sensing that at the beginning of a conflict, 
"things would be very hard, but would ease up".  Dahabi said 
that he has been direct with the industry about relying too 
much on Iraq, and has told private and public sector 
transportation interests that they have to look for other 
markets.  He said that he had worked with maritime, civil 
aviation, and public and private companies to find ways to 
deal with any inflow of refugees should hostilities drive 
them into Jordan.  He stressed the government was determined 
to not build refugee camps; rather, it would find ways to, 
for example, get third-country refugees back to their native 
countries.  Dahabi said the government was working with NGOs 
as well, and would be well prepared when the time comes. 
(Comment: Dahabi's comments reflect what we have heard from 
GOJ and UN contacts.  In addition, we have heard separately 
that IOM has contracted with Jordanian bus and shipping 
companies to transfer up to 100,000 TCN's from Iraq to 
Jordan.  End Comment.) 
 
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RJ: STILL SUBSIDIZED 
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5.  (SBU) Dahabi acknowledged that Royal Jordanian Airlines 
reported the first three quarters of 2002 were profitable, 
but he cautioned against reading too much into the figures. 
He said the auditor's figures, which will be released in 
April, will be more comprehensive, as they will include the 
"slow months" from October through December.  More important, 
he said the government has provided a number of subsidies to 
the airline to address the impact of the September 11 attacks 
on tourism and air travel.  He said the value of these 
amounted to $45 million.  For example, Dahabi said, the 
government was carrying third party insurance on RJ in the 
event a hijacked RJ plane was crashed into a building, a 
policy that makes the government liable for $1 billion, and 
would cost RJ $3 million per year.  He said the government 
urged RJ to layoff 500 employees, who would have to be 
compensated to the tune of $7 million, and the GOJ assumed 
those costs.  In addition to other miscellaneous costs, the 
Ministry of Finance has also, in the interests of cash flow, 
postponed collecting $14 million owed by RJ.  In any case, he 
said, these were one-off expenses, and expected that RJ would 
"be okay" in the end.  (Note: Dahabi also updated us on the 
status of the Boeing/Airbus offers, reported SEPTEL.  End 
note) 
 
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HELP FOR QIZS? 
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6.  (SBU) Regarding shipping challenges, Dahabi said he heard 
from various private sector representatives that they were 
"worried" about shipping delays through Israeli ports.  He 
said that he would like to talk to Israeli officials about 
how to ease QIZ exports through the port of Haifa.  He said 
that despite efforts to develop Aqaba as an option for QIZ 
exporters, Haifa clearly remained the favored port, 
particularly for exporters in Northern Jordan who ship to the 
Eastern U.S., as "you can always find a ship bound to the 
U.S. in Haifa; you can not always find one in Aqaba". 
 
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COMMENT 
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7.  (C)  We defer to Embassy Tel Aviv as to whether a new 
Israeli government might be interested in pursuing the option 
of using Aqaba airport.  The Israeli ambassador in Amman 
tells us that the political levels in the GOI have generally 
been supportive, but that the Israeli CAA has resisted the 
use of Aqaba for "special interest reasons."  Whatever the 
dynamics in the GOI may be, the Jordanians are ready to move 
(and perhaps, CAA Director Najjar hinted, accommodate some of 
those "special interests"), but firmly believe it is up to 
Israel to make the next move. 
 
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BIO 
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8.  (SBU)  Dahabi, who has been in the Abul Ragheb cabinet 
since 2001, was CEO of RJ for 7 years prior to his 
appointment to the government.  Before that he was an air 
force general.  He has a Masters in Engineering from 
Cranfield in the UK, and a Masters in Public Administration 
from Auburn. 
GNEHM