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Cablegate: Transborder Use of Very Light Jets

VZCZCXRO1770
RR RUEHGA RUEHHA RUEHQU RUEHVC
DE RUEHOT #2555/01 2372202
ZNR UUUUU ZZH
R 252202Z AUG 06
FM AMEMBASSY OTTAWA
TO RUEHC/SECSTATE WASHDC 3584
INFO RUCNCAN/ALL CANADIAN POSTS COLLECTIVE
RULSDMK/DEPT OF TRANSPORTATION WASHDC
RUEAHLC/DEPT OF HOMELAND SECURITY WASHDC
RUEANHA/FAA WASHDC

UNCLAS SECTION 01 OF 02 OTTAWA 002555

SIPDIS

SIPDIS

STATE FOR WHA/CAN AND EB/TRA
DOT FOR INTERNATIONAL AFFAIRS (CARAZZO)
FAA FOR INTERNATIONAL AFFAIRS (FRANCESCHI)
DHS/TSA FOR SUSAN WILLIAMS
DHS FOR CBP

E.O. 12958: N/A
TAGS: CA EAIR
SUBJECT: TRANSBORDER USE OF VERY LIGHT JETS


1. Summary: For frequent business travelers, Very Light
Jets (VLJs) offer important advantages, including less time
spent on the ground before flights, direct flights that avoid
multiple legs that often occur under the hub-and-spoke model,
and the ability to land on shorter runways than other jets
while flying faster than propeller planes of equal capacity.
These developments stand to have important consequences on
air travel, making aircraft available to a wider (but still
well-to-do) population, increasing the number of planes in
the air at any one time, and promoting the use of secondary
and small airports. The VLJs' impact on transborder travel
may be even more pronounced as inbound planes from Canada
could increase traffic to the international airports near the
border, thus putting additional strain on CBP personnel who
must travel to the smaller airports to conduct inspections.
End Summary.

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2. (U) On a recent tour of the Pratt and Whitney Canada
Headquarters with Montreal POL/ECON officer and Embassy
Ottawa ECON intern, the Vice President for Government
Affairs, Richard Bertrand, described the VLJ market as
"exploding". At the factory, the firm is devoting several of
its assembly groups to the construction of CPW 600 engines,
destined for new VLJs from Cessna (US), Eclipse (US), and
Embraer (Brazil). In the short term there appears to be a
large demand for VLJs. Reports in the industry journal
Aviation Week note that Eclipse alone has already received
more than 2400 orders for its VLJ, the Eclipse 500, and that
the FAA projects deliveries of 4950 VLJs of all types
between now and 2017. Some air taxi services are already
offering VLJ service, suggesting an industry move away from
slower propeller planes. The VLJs are expected to cost
significantly less than previous jets. For example, the
estimated cost of the Eclipse is $1.48 million, which is
cheaper than Light Jets, at a range of $3 million to $8
million, and other traditional business jets that can cost
tens of millions of dollars. The lower price has been an
incentive for air taxi services to start buying VLJs to
replace their older, slower propeller driven planes. For the
same reasons of lower cost and faster speed VLJs are also
attracting affluent private pilots.

3. (U) According to the Air Transport Association of Canada
(which represents scheduled carriers and sees the VLJ
phenomenon as an emerging form of competition), VLJs are
being marketed to elite business travelers, with the appeal
of shorter lines at check-in counters and security
checkpoints. Additionally, personal VLJs will provide direct
service to airports that may not have any direct scheduled
airline service or have limited flight availability. VLJ
travelers can avoid stops at legacy carrier hubs and instead
fly straight to their destinations at times convenient for
them. To the benefit of business travelers and current
propeller aircraft operators, the VLJs are being certified to
fly at 0.7 Mach, which is significantly faster than prop
planes. Finally, the VLJs open up many smaller airports
because the aircraft can safely and legally land on runways
as short as 3,000 feet, thus enabling pilots to operate from
much less crowded airports and/or at airports closer to
their travelers' destinations.

4. (U) The increased use of VLJs could cause additional
Q4. (U) The increased use of VLJs could cause additional
challenges for air traffic control, pilots, airport
management, and customs services. This new type of jet will
add more planes to the sky, making the sky over major
metropolitan areas even busier. Because these light aircraft
weigh less than 10,000 pounds, additional time will be needed
before final approach due to the potential of wake
turbulence. While VLJs are able to land at airports with
shorter runways, they can only enter the U.S. from other
countries legally at designated airports, possibly limiting
VLJ routes and markets from abroad.

5. (U) Additional VLJ traffic could also strain the current
system of customs and border protection along certain
transborder routes. In the case of travel between the U.S.
and Canada, this may lead to additional flights in and out of
the 39 American international airports near the border with
Canada. All of these airports carry the designation of
"International Airport", and as Embassy Ottawa CBP Attach
elaborated, whenever an aircraft arrives from abroad at a
designated International Airport, customs inspectors must be
available to process the passengers and inspect the aircraft.
For the larger airports, like O'Hare, the impact of these

OTTAWA 00002555 002 OF 002


new jets may be negligible. At smaller airports such as
Ogdensburg, NY, however, the impact on CBP personnel may be
more significant, particularly if the number of VLJs were to
rise suddenly, potentially displacing CBP personnel away from
their principal land crossing duty stations to the airports
for longer periods of time, to inspect the additional
aircraft and passengers.

6. (U) The Canadian Border Services Agency (CBSA) would face
similar understaffing, though perhaps to a lesser degree
overall. Canada has a limited number of airports with access
to customs known as Airports of Entry (AOEs). Similar to
some smaller American international airports, there are some
small AOEs where Canadian CBSA staff drive from other
facilities to conduct inspections. At these AOE locations,
CBSA would encounter similar personnel and time constraints,
as the U.S. CBP would have to confront. However, AOEs,
unlike American international airports, are not required to
be open to foreign traffic at all times. According to the
Canadian Airports Council, only 22 of the 118 AOEs are open
24/7. Thus, associated CBSA costs and overtime would likely
be more limited.

7. CBSA also has a program called CANPASS Private Aircraft,
which expedites the inspection process for pre-approved,
low-risk travelers. With this program, Canadian and American
citizens can undergo a security check and receive a five-year
CANPASS, which allows them to travel into Canada not only
through AOEs, but also at a number of other small airports
specifically designated by CBSA.

8. Comment: Aircraft manufacturers appear enthusiastic about
producing VLJs because of the apparent comparative
advantages over current commercial jet travel such as
additional airport and destination access, fewer costly
delays associated with overcrowded, hub-and-spoke large
airports, and the VLJ's cheaper production price tag. It is
too early to tell whether the industry's optimism and
consumer demand in VLJs will be sustained over the long term.
However, as the 2400 orders for the Eclipse 500, along with
hundreds of orders for other companies' VLJs, are assembled
and put into the air, their growing popularity is likely to
impact international airports along the U.S.-Canada border,
especially the CBP's ability to staff and conduct additional
inspections adequately at the airports while still
maintaining the same degree of CBP coverage and vigilance at
land and water border crossings. End comment.

9. Embassy Ottawa Economics section intern Andrew Levin
researched and drafted this message.

Visit Canada's Classified Web Site at
http://www.state.sgov.gov/p/wha/ottawa

DICKSON

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