Cablegate: Will Aerocontinente Resume Flights?
This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS SECTION 01 OF 02 LIMA 002053
SIPDIS
SENSITIVE
DEPT FOR WHA/AND, EB/TRA/AN
FAA FOR MIAMI
E.O. 12958: N/A
TAGS: EAIR ECON ETRD EINV CASC PE
SUBJECT: WILL AEROCONTINENTE RESUME FLIGHTS?
REF: A) LIMA 1987 B) 04 LIMA 5082
1. (SBU) Summary. OFAC King Pin designate and owner of the
now defunct AeroContinente airlines, Fernando Zevallos,
recently announced plans to resume domestic service of his
airline. On May 1, AeroContinente announced job openings
for pilots who can fly F28s, B737s, and B727s - all planes
in the AeroContinente fleet. Roberto Rodriguez, acting
Director of the Directorate General of Civil Aviation
confirmed that if AeroContinente meets the DGAC's financial
and technical requirements, it will be granted permission to
fly. Rodriguez, however, noted that AeroContinente still
faces financial difficulties with its creditors and former
staff, and under the King Pin Act, is unable to purchase
parts from Boeing. Unless these problems were resolved 100
percent, Rodriguez vowed that AeroContinente will not fly.
End Summary.
Plans to Fly...
---------------
2. (U) Fernando Zevallos, former owner of
AeroContinente(before it was sold to staff in June and
renamed NuevoContinente), announced on May 1 that he is
exploring the possibility of restarting domestic
AeroContinente flights by the end of June. Taking advantage
of Lan Peru's current legal issues (ref A), Zevallos argues
that Peru's civil aviation sector is a disaster, with high
prices dictated by a foreign competitor (Lan Peru/Lan
Chile). (Note: According to the DGAC, the GOP plans on
initiating a civil case against Lan Peru over the video
scandal. End Note.) Promising to restore lower rates on
domestic flights, Zevallos claims there is no reason why
AeroContinente cannot resume flights in Peru. Zevallos
informed the local press that AeroContinente has met all of
MTC's requirements - the company has no legal problems, all
financial debts have been repaid, and all technical issues
resolved.
3. (U) Despite his posturing to the press, Zevallos failed
to indicate exactly how he planned to finance AeroContinente
operations. Under the King Pin Act, all of Zevallos' assets
in the United States were frozen. NuevoContinente (the new
name after AeroContinente was "sold"), in fact, was grounded
by the DGAC, not for safety and technical reasons, but
because it lacked the financial solvency to pay its fuel
bills and staff salaries(ref B).
4. (U) Zevallos claims that AeroContinente will use its six
functioning planes to service key domestic routes in Peru,
including Piura, Iquitos, Cusco, Tacna, and Juliaca. The
company issued an advertisement on May 1 calling for
experienced pilots of F28s, B727s, and B737s - all planes in
the former AeroContinente fleet. He also explained that
while AeroContinente was banned "for now" from flying to the
United States, there is no legal reason why AeroContinente
cannot fly to Europe and/or Asia.
But Will AeroContinente Take Off?
---------------------------------
5. (SBU) We met with Roberto Rodriguez, acting Director
General of the Directorate General of Civil Aviation (DGAC)
on May 3 to discuss Zevallos' plans to resume flights.
Rodriguez explained that he was unaware of Zevallos'
intentions until he saw the job advertisement in last
Sunday's paper. Rodriguez will meet with Zevallos on
Friday, May 6, to discuss AeroContinente's future.
6. (SBU) Rodriguez informed us that legally,
AeroContinente can fly in Peru. However, the company must
meet the DGAC's rigorous standards for recertification,
which includes an investigation into the company's finances,
as well as a full technical inspection. Rodriguez indicated
that when NuevoContinente was grounded in October, it only
had one operating plane, not six. He expects that the
company's planes will not pass the technical inspections,
given that Boeing is prohibited from selling spare parts to
AeroContinente/NuevoContinente under the King Pin Act.
Rodriguez did note that AeroContinente can purchase parts
for the F28.
7. (SBU) Rodriguez indicated, however, that if Zevallos
transferred ownership of the company to an independent
person or entity (including the GOP), AeroContinente would
then be able to purchase the necessary parts. The MTC and
DGAC would conduct a through investigation of the company,
which could take up to nine months. We noted that the
Department of Treasury would also conduct its own
investigation before allowing Boeing to sell parts to the
new company.
Comment
-------
8. (SBU) AeroContinente has a long way to go before the
DGAC will even consider granting it the proper flight
permits. It remains unclear whether Zevallos truly has
plans for AeroContinente or if he is trying to take
advantage of the current anti-Chile political climate.
Either way, the DGAC remains committed to promoting a safe
and secure civil aviation climate.
STRUBLE