Cablegate: Open Skies On Gok Agenda for Air Services Negotiations

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P 301230Z OCT 07
FM AMEMBASSY NAIROBI
TO RUEHC/SECSTATE WASHDC PRIORITY 3176
INFO RUEHXR/RWANDA COLLECTIVE PRIORITY
RUEHGV/USMISSION GENEVA 4259
RUEHMT/AMCONSUL MONTREAL 0113
RUCPDOC/DEPT OF COMMERCE WASHDC
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RUEAYOK/FAA AERONAUTICAL CENTER OKLAHOMA CITY OK
RUEAHLC/HOMELAND SECURITY CENTER WASHDC

UNCLAS NAIROBI 004252

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SENSITIVE

DEPT FOR AF/E, AF/RSA, AF/EPS, EB/TPP/MTA, AND EB/TRA/AN
DEPT ALSO PASS TO DOT FOR CONNIE HUNTER AND KEITH GLATZ
DEPT ALSO PASS TO USTR FOR BILL JACKSON
TREASURY FOR VIRGINIA BRANDON
MONTREAL FOR USICAO
TSA FOR ROBERT MCLAUGHLIN

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E.O. 12958: N/A
TAGS: EAIR KTIA ECON KE
SUBJECT: Open Skies on GOK Agenda for Air Services Negotiations

REF: A)STATE 135337, B)NAIROBI 3667

1. (SBU) Summary: Ministry of Transport officials confirmed Kenya is
ready to negotiate an Open Skies Agreement with the U.S. and
requests confirmation of the proposed dates so it can complete its
internal consultations and provide proposals on the model Open Skies
text. Ikiara also suggested Nairobi could copy Dakar's passenger
handling procedures to obtain TSA approval and direct flights to the
U.S. for Kenya Airways pending achievement of Category One status.
This suggests Ministry concern that having only Delta fly the route
could generate political objections about lack of reciprocity in the
aviation relationship. See para 9 for action request. End
Summary.

Kenya Ready to Negotiate Open Skies Agreement
---------------------------------------------
2. (SBU) Econoff met with Ministry of Transport Permanent Secretary
Gerishon Ikiara to determine the Government of Kenya's (GOK) agenda
for its proposed November 26-28 bilateral air service negotiations
in Washington. Ikiara stated that he had met with all the
stakeholders, including Kenya Civil Aviation Authority (KCAA), Kenya
Airports Authority (KAA), the Attorney General, the Ministry of
Foreign Affairs, and Kenya Airways (KQ). He said Kenya is ready to
negotiate an Open Skies Agreement to replace the restrictive
informal agreement with the U.S. under which Pan Am had been
designated to fly the U.S.-Kenya route. He was not pleased that
Delta was already marketing its flight before applying to the
Ministry for designation and economic permission. However, the
Ministry is anxious to ensure Delta is designated and its proposed
direct flight via Dakar is approved to begin service in June 2008.

3. (SBU) Ikiara said the Yamoussoukro Declaration was a
complication, since Kenya did not want to appear to offer open skies
to the U.S. before it opened them to other African countries. The
U.S. restriction on foreign ownership of U.S. airlines and the EU's
use of an airline's principal base of business as the basis for
designation of the airline makes the African Union "nervous" about
Open Skies Agreements. He understood Tanzania and Ethiopia have
signed Open Skies Agreements, but maintain restrictions on
neighboring countries' airlines.

4. (SBU) Kenya also needs to do further analysis on the potential
impact of an agreement on Kenyan operators, especially Kenya Airways
(KQ). Ikiara expressed concern that U.S. airlines would benefit far
more than Kenya through Fifth Freedom rights to serve intermediate
and points beyond. Kenya will request transition periods for
unspecified provisions of the agreement.

December Elections Will Not Affect Negotiations
--------------------------------------------- ----
5. (SBU) Ikiara claimed the aviation services talks were at the
technical level, and would not be affected by the December 27
general election. Progress made or any agreement reached on a
technical framework would not be lost if a new government is
elected. He would like to initial an agreement and sign an MOU
within two months to bring it into operation until a Minister can
sign it. This would allow Delta and other airlines to begin service
via Dakar. If possible, the Ministry will send its proposal before
the talks in Washington. Ikiara and his staff would probably lead
the delegation to the November talks. KCAA Director General Chris
Kuto and KAA Managing Director George Muhoho would attend or send
their deputies. KQ will send a representative and perhaps a lawyer,
as would the Attorney General. PS Ikiara and KAA George Muhoho are
the only political appointees involved. Muhoho's term has two more
years to run, and the KCAA Board has not yet decided whether to
support an extension of the mandatory retirement age for Director
General Kuto.

Kenya Airways Interested in U.S. Service,
-----------------------------------------
6. (SBU) Ikiara stated that KQ wants to offer direct U.S. service as
part of the Sky Team, and that he hoped Northwest and perhaps Virgin
would also be interested in Kenya-U.S. flights, presumably via West
Africa.

But Kenya Needs to Achieve Category One
----------------------------------------
7. (SBU) Ikiara welcomed DOT's willingness to come to Kenya
December 5-7 to discuss Kenya's efforts towards Category One status,
noting that President Kibaki has expressed his interest. Ikiara
stated KCAA needs to improve its capacity to achieve Category 1
status. The low salaries make it difficult to recruit and retain
staff, so KCAA is seeking permission from the Public Services
Commission to offer higher salaries. KCAA is advertising the
positions to applicants, and may offer them contracts, if necessary,
to obtain more flexibility on compensation.

8. (SBU) Ikiara said that Jomo Kenyatta International Airport (JKIA)
was considering using the new apron parking for Delta's flights and
shuttle buses to move passengers between the aircraft and terminal.
He claimed that TSA had approved such a system in Dakar for direct
flights to the U.S., and asked if JKIA could use the same procedure
for KQ to meet the requirement to separate incoming and outgoing
passengers and enable direct flights. Econoff agreed to forward the
idea to the TSA representative at Post for review and forwarding to
TSA.

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Action Request
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9. (SBU) Action request: PS Ikiara asked the USG to confirm its
acceptance of the proposed negotiating dates ASAP. He also asked
the USG to provide definitions of the concepts of "operational
flexibility" and "change of gate," before the negotiations begin.
He would also appreciate any explanation of how intermodal
transportation could be practical in Kenya. Post would appreciate
TSA's reaction to Ikiara's suggestion that JKIA could qualify for

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TSA-approval for direct flights to the U.S. simply by separating

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incoming and outgoing passengers with shuttle buses. KQ may not
have the equipment and crew to service U.S. flights, but KQ is aware
it could wet lease a U.S. aircraft and crew.

Analysis and Comment
--------------------
10. (SBU) Delta's proposed flight has focused Kenyan attention on
the need for a bilateral air services agreement and to accelerate
progress towards Category 1 status. Ikiara's claim that an Open
Skies Agreement is too technical to become a political issue is too
optimistic. Any issue can and will be politicized, but he is
hedging his bets by seeking an initialed agreement and signed MOU in
less than two months. His question in para 8 about a means by which
KQ could fly directly to the U.S. before achieving Category One
suggests he anticipates objections about the apparent lack of
reciprocity in the aviation relationship. The political optic of
having only a U.S. carrier fly the route until Kenya achieves
Category One could make it difficult for the GOK to sign the
Agreement. The Ministry and the aviation sector are aware of the
differences between Category 1, TSA approval such as the one in
Dakar, and an Open Skies Agreement, but the public and politicians
would not be interested and could protest. This may be the basis
for any Kenyan requests for transition periods within the Agreement.
The economic benefits to Kenya of direct U.S.-Kenya flights are
generally understood by the GOK, exporters and the tourism industry.
If all aviation sector stakeholders agree they want an Open Skies
Agreement, it is likely to go forward under either Kibaki or
Odinga.

RANNEBERGER

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