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Cablegate: Morocco-Eu Open Sky Agreement Feeds Tourism Boom

VZCZCXRO6791
RR RUEHBC RUEHDE RUEHKUK RUEHROV
DE RUEHRB #2351/01 3631712
ZNR UUUUU ZZH
R 291712Z DEC 06
FM AMEMBASSY RABAT
TO RUEHC/SECSTATE WASHDC 5484
INFO RUEHEE/ARAB LEAGUE COLLECTIVE
RUEHLO/AMEMBASSY LONDON 3189
RUEHFR/AMEMBASSY PARIS 4494
RUEHCL/AMCONSUL CASABLANCA 2510
RUCPDOC/DEPT OF COMMERCE WASHDC
RHMCSUU/FAA NATIONAL HQ WASHINGTON DC

UNCLAS SECTION 01 OF 02 RABAT 002351

SIPDIS

SENSITIVE
SIPDIS

DEPT FOR NEA/MAG AND EB/TRA
USDOC FOR ITA/MAC/ANESA

E.O. 12958: N/A
TAGS: EAIR ECON MO
SUBJECT: MOROCCO-EU OPEN SKY AGREEMENT FEEDS TOURISM BOOM


1. (U) Summary: Morocco's booming tourist industry received a
boost on December 12 with the signing of a new EU-Morocco
open sky agreement. The agreement replaces all existing
Moroccan bilateral aviation agreements with European Union
(EU) member states and supports the GOM's goal of doubling
the number of tourists that visit Morocco each year to 10
million by 2010. In principle, the agreement provides
reciprocal, unlimited access between European and Moroccan
destinations, but complete ratification among EU members
along with Moroccan compliance with regulatory aspects of the
agreement may take up to 18 months. End Summary.

-------------------------
More Than Just Open Skies
-------------------------

2. (U) The primary objective of the EU-Morocco open sky
agreement is to provide reciprocal, unlimited access between
Moroccan and European destinations. The first phase, which
went into effect with the agreement's signing on December 12,
permits direct country-to-country flights, known as third and
fourth freedom rights. Fifth freedom rights, which enable
airlines to carry passengers to a reciprocal country, and
then on to an additional country (rather than back to their
own), will commence in the second phase of the agreement,
following EU member ratification and Moroccan implementation
of relevant EU aviation laws. Abdelouahab Yaalaoui, Director
of Civil Aviation and lead Moroccan negotiator for the
agreement's regulatory aspects, was non-specific when asked
about Morocco's implementation requirements, telling econoff
they were operational in nature.

3. (SBU) While the new agreement is intended primarily to
expand access to the Moroccan tourism sector, it also
includes key annexes on safety, air-traffic control,
regulatory management, and passenger security. According to
Yaalaoui, the agreement requires Morocco to achieve EU safety
and regulatory standards that are above and beyond those
required by the International Civil Aviation Organization
(ICAO). As a result, Yaalaoui said his office was expanding
in order to comply with the regulatory requirements of the
agreement and to manage the upgrade of Morocco's aviation
infrastructure. He said the intent was for civil air traffic
to experience a seamless transition in and out of Moroccan
airspace, just as if they were transiting between France and
Germany. He added that Morocco would expand its air-traffic
control capabilities, improve aviation safety, and strengthen
passenger screening. He also acknowledged that Morocco
cannot afford to compromise air-traffic safety as it strives
to expand tourism.

4. (U) Morocco's support for the open sky agreement sprang
from its desire to increase tourism. According to the
Minister of Transport, Karim Ghellab, tourists comprise
two-third's of Morocco's air passengers, which will require
Morocco to raise air passenger capacity to approximately 15
million per year if it is to meet its goal of attracting 10
million tourists by 2010. Ghellab explained that without the
new agreement, Morocco would have to invest more than USD 3.3
billion to expand Royal Air Maroc's fleet by 60 new planes in
the next five years in order to meet the 15 million target.

5. (SBU) In the short-term, low-cost carriers may have
difficulty expanding their service. In June 2006, EasyJet
and Ryanair initiated service to Morocco under previous
bi-lateral agreements. Expecting the new EU-Morocco open sky
agreement to go into effect at signing, Ryanair
(headquartered in Ireland) planned to expand service from
Germany and France by taking advantage of the agreements
fifth freedom rights. In November, however, Ryanair
announced that it was forced to postpone these plans
indefinitely due to a ratification issue within the EU.
While in principle, the EU-Morocco open sky agreement went
into effect at signing, several EU members have voiced the
need for national (internal) ratification, a process that
could take up to 18 months. Reportedly, French transport
officials oppose expanded fifth freedom rights under the new
accord until internal EU ratification is complete. Comment:
Morocco was the largest French passenger growth market in
2006, up more than 26 percent from 2005. Many observers
interpret France's tough stance as an attempt to protect Air
France's dominant position in the market. Until the
ratification issue is resolved, phase two of the agreement

RABAT 00002351 002 OF 002


and its fifth freedom rights appear on hold. End Comment.

--------------------------------------------- -
The Agreement Will Support, Not Create Tourism
--------------------------------------------- -

6. (U) While the agreement is intended to expand air service,
increase competition, and lower consumer costs, the African
Airlines Association (AAA) notes that open sky agreements in
themselves are not major tourism development drivers. For
example, Tanzania, Mali, Cape Verde, and Ghana have all
signed open sky agreements with the U.S. without any positive
impact on their tourism industry. Instead, the AAA and
UNESCO believe markets must develop consumer demand through
product packages.

7. (SBU) According to Philippe Queau, Mahgreb Regional
Representative for UNESCO, Morocco will need to continue
development of its unique historical niche to sustain growth.
While Morocco's beach resorts must compete with other
popular European destinations, Queau believes that Morocco's
future tourism potential lies in the development of its
cultural, historical, and architectural features. In a
December 21 conversation with econoff, Queau remarked that
Morocco's Casbahs, Riyads, and ancient heritage offer
Europeans a unique experience. As part of UNESCO's cultural
pillar, Queau said his office was actively engaged in
restoring historical buildings in Meknes and Fes in order to
make the area more attractive for tourists, thus creating the
demand for expanded traffic.

8. (SBU) Comment: The EU-Morocco open sky agreement serves
notice of Morocco's intent to become a leader in modern air
commerce and represents a significant milestone in its goal
of doubling the number of tourists that visit each year.
Nonetheless, Morocco faces a formidable task ahead in order
to achieve European air-traffic control and regulatory
standards. The majority of Moroccan airspace remains
uncontrolled, with full radar service limited to just a few
terminal areas. Furthermore, the office of the Director for
Civil Aviation faces a daunting task as it reinvents itself
to become the Moroccan version of the FAA. While full
implementation of the agreement's fifth freedom rights is
still months, if not years, away, all indicators point to a
continued boom for the Moroccan tourism industry. In the
meantime, Morocco must continue to seek a balance between
developing a tourism industry that attracts increased numbers
of European vacationers and preserving the ancient cultural
heritage that makes it unique. End Comment.
******************************************
Visit Embassy Rabat's Classified Website;
http://www.state.sgov.gov/p/nea/rabat
******************************************

Riley

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