US embassy cable - 03AMMAN1251

UNCLAS SECTION 01 OF 02 AMMAN 001251 
 
SIPDIS 
 
SENSITIVE 
 
ROME FOR CASLO 
TREASURY FOR OASIA -- WON CHANG 
USDOC 4520/ITA/MAC/ONE/COBERG 
CINCCENT FOR POLAD 
 
E.O. 12958:  N/A 
TAGS: EAIR, EFIN, MOPS, JO 
SUBJECT: ROYAL JORDANIAN WAR CONTINGENCY PLAN 
 
SENSITIVE BUT UNCLASSIFIED. 
 
1.  (sbu)  Summary.  Royal Jordanian Airlines plans to 
shuttle passengers between Amman and a temporary 
operating hub in Athens in the event civil air traffic to 
Amman's Queen Alia airport is closed by a military 
conflict and/or lack of affordable insurance coverage. 
This scenario could have a major, potentially fatal, 
financial impact on the airline, which until recently had 
been fairly successful in putting its accounts back in 
order after excesses in the 1980s.  Post would appreciate 
guidance on the CEO's questions about if there are ways 
Fly America and participation in the U.S. Civil Reserve 
Air Fleet could be used to make up for some of the 
business the airline would lose in a war.  End Summary. 
 
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ATHENS-BASED TEMPORARY OPERATIONS 
--------------------------------- 
 
2.  (sbu)  Royal Jordanian (RJ) CEO Samer Majali and 
Civil Aviation Authority officials said RJ hopes to be 
able to continue normal operations for as long as 
possible in the lead-up to a possible military conflict. 
But the airline has drafted a contingency plan -- the 
outlines of which have been sketched in the local press 
-- that assumes that at some point it will become 
impossible to operate RJ's 15-plane fleet out of Amman 
because of military airspace restrictions or because 
insurers are no longer willing to cover the war risk. 
 
3.  (sbu)  RJ has agreed with Athens airport that if 
necessary, RJ's fleet and operations would be based in 
Athens.  Assuming that western Jordanian airspace remains 
open (as it was in 1991) RJ's two self-owned A320's (the 
remainder of the passenger fleet is leased) would be used 
to shuttle passengers from Amman to the new Athens hub. 
The airline and its owner, the government of Jordan, 
would assume the insurance risk if no or only limited 
affordable commercial cover is available.  Otherwise, 
flights would operate out of Athens as if from Amman, 
including the new non-stop service to New York.  Majali 
and CAA also believe that they have reached agreement 
with Israeli authorities that would permit continued RJ 
overflights of Israel, although the routing might be 
shifted further away from population centers. 
 
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POTENTIALLY DEVASTATING FINANCIAL IMPACT 
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4.  (sbu)  Majali said the financial impact on the 
airline of such a scenario would be devastating.  March 
and April reservations are already down over 40% from 
year ago levels.  The cost would be even higher if planes 
are caught on the ground in areas with closed airspace 
(such as Kuwait or Baghdad).  Majali was not optimistic 
about the airline's prospects after a conflict, expecting 
that European airlines would beat RJ to the punch in 
starting Baghdad service.  Thus, he expected that the 
airline -- which has recently been established as a 
supposedly self-sustaining company in hopes of 
privatization -- would likely have to call on significant 
government support in order to keep flying.  (Comment: 
RJ currently receives a low level of budget transfers 
from the GOJ, as well as subsidized jet fuel, and 
maintains a large debt to the refinery company.) 
 
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LOOKING FOR USG BUSINESS 
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5.  (sbu)  Majali noted the airline's experience in 
operating throughout the region, including to all of 
Iraq's major airports, and hoped that the U.S. government 
would find ways to take advantage of this as well as RJ's 
expected excess capacity during and after a conflict. 
For instance, he said he continued to work hard to find a 
U.S. codeshare partner that would allow RJ to carry USG 
passengers, and asked if the U.S. had any flexibility on 
Fly America provisions.  Also noting that the Civil 
Reserve Airline Fleet (CRAF) had recently been activated, 
he asked if there were ways to use RJ capacity for 
military purposes.  He said that he had been in touch 
with the UN about participating in possible relief 
operations. 
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COMMENT AND GUIDANCE REQUEST 
---------------------------- 
 
6.  (sbu)  We would appreciate Washington guidance on 
Majali's questions about Fly America and participating in 
CRAF support.  Although the airline's financial situation 
had been improving over the past year, a conflict would 
undoubtedly be a serious blow to its viability.  This 
would require the government to decide how much it wants 
to continue to pay to support its only national flag 
carrier, or shut it down. 
Gnehm