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Cablegate: Rrt Erbil: Rapid Growth in Kurdistan Region,S Air

VZCZCXYZ0001
RR RUEHWEB

DE RUEHGB #3158/01 3420955
ZNR UUUUU ZZH
R 080955Z DEC 09
FM AMEMBASSY BAGHDAD
TO IRAQ COLLECTIVE

UNCLAS SECTION 01 OF 03 BAGHDAD 003158

SIPDIS

E.O. 12958: N/A
TAGS: EAIR ECON IZ
SUBJECT: RRT ERBIL: RAPID GROWTH IN KURDISTAN REGION,S AIR
LINKS

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1. (U) This is an RRT Erbil cable.

2. (SBU) Summary: The growth of two international airports
in the Kurdistan Region (KR) -- Erbil International Airport
(EIA) and Sulaimaniyah International Airport (SIA) -- has
significantly increased air travel options for consumers and
paved the way for broader linkages in the region and beyond.
In contrast to Erbil and Sulaimaniyah, Dohuk Province has no
commercial airport; the one facility capable of being easily
developed for commercial use is occupied by the Turkish Army.
The new 16-gate terminal at EIA, which has an annual gate
capacity of approximately three million passengers but entry
and check-in capacity of only approximately one million
passengers, is tentatively scheduled to begin operation in
early March 2010. EIA's 80 weekly flights serve seven
western European cities and six major cities in the region.
SIA, with a smaller capacity, serves only three cities in
Europe and six regional cities with less frequency.
Currently three International Air Transport Association
(IATA) member airlines serve EIA, but only one serves SIA. A
USD50 commission per person per flight all non-Iraqi airlines
must pay to Iraqi Airlines has been an unwelcome tax to
consumers. End Summary.

Erbil and Its New Airport
-------------------------

3. (SBU) RRTOff met with KRG consultant Stafford Clarry (an
Amcit who is a long-time resident in the KR) October 15 to
tour Erbil's new state-of-the-art airport; Clarry provided a
progress update on December 1. The KRG has given Clarry a
mission to use the new Erbil airport as a major component of
a KR outreach marketing plan. He said the tentative plan is
for a March 3, 2010 opening; the KRG does not want to run
past Nowruz, the Kurdish New Year celebrations on March 21.
Clarry said that although increased economic activity in the
KR has created demand for moderately increasing air travel,
the larger vision for EIA is for Erbil to become a regional
hub, much like Singapore and Inchon are for southeast and
east Asia, respectively. For this reason the KRG called in a
Korean management consulting team from the company that
manages Inchon International Airport, signing a five-year
agreement approximately one year ago. There is currently a
team of 25 Koreans working at EIA in all areas of airport
operations and management, heavier on the technical side at
present but flexible enough to modify support as the new
terminal begins to service flights.

4. (SBU) Clarry said that the only remaining task on the
physical plant side was installation of the security cameras.
He said that the baggage screening equipment was recently
put in place, all construction was complete, and training for
personnel was ongoing. He said that the KRG is still in the
process of completing final international approval.
According to Clarry, thirty days after submission, likely in
early January, certification will become effective. He said
that at present there is no hurry to open the new airport as
there is not an imminent demand for larger aircraft or larger
volume than the existing terminal can handle. The KRG,s
initial target for the new airport was to be able to
accommodate 2.5 to four million passengers annually.
However, entry/check-in capacity for departing travelers is
only estimated at one million passengers annually, although
the rest of the terminal could accommodate three million.
Currently there are only two baggage claim carousels, but
should expansion become necessary in the future, there are
thoughts of constructing an entirely separate arrivals
building, enabling the departures area to expand. The
aerodrome, which features one of the longest runways in the
Qaerodrome, which features one of the longest runways in the
world at 4,800 meters, is estimated to be able to handle up
to ten million passengers annually.

5. (SBU) The new terminal features two VVIP lounges in a
separate building that have self-contained immigration
processing, ticketing, and security procedures. There is
also a separate entrance to the main terminal for
Commercially Important Persons (CIPs) that provides expedited
ticketing services and access directly to the business class
lounge for all first and business class ticket holders. The
terminal,s 16 gates are split into two wings by the central
departure atrium.

6. (SBU) From its opening on July 7, 2005, EIA has steadily
expanded it flight options for consumers. EIA currently
services approximately 80 passenger flights and dozens of
cargo flights per week. Some routes have arisen from the
Kurdish diaspora,s demand for travel between Kurdistan and
Europe, others due to the growth in trade between Kurdistan
and the region. To date the growth has been almost
exclusively westward toward Europe and the Mediterranean and
south to the Arabian Gulf. EIA boasts connections to seven
western European cities, including Dusseldorf, Gothenburg
(Sweden), London, Malmo (Sweden), Oslo, Stockholm, and

BAGHDAD 00003158 002.2 OF 003


Vienna, and six cities in the region, including Amman, Manama
(Bahrain), Beirut, Damascus, Dubai, and Istanbul. Flights to
two additional cities, Athens and Larnaca (Cyprus) have
tentative approval for charter flight service but have not
yet begun flying. A seventh city in the region, and the only
city to the east that is served by the airport, is Tehran,
connected by a single flight each week operated by Iraqi
Airways. According to Clarry and KRG Minister of Interior
Karim Sinjari, KRG and EIA authorities have held discussions
with Air France and Lufthansa and are hopeful that Erbil will
be connected to Paris and Frankfurt soon. An agreement with
these two airlines will boost the number of International Air
Transport Association (IATA) member airlines to five;
Austrian Airlines (OS), Gulf Air (GF) and Royal Jordanian
(RJ) are the other three. There are 13 flights each week to
Western Europe, including four each to Stockholm and Vienna,
and 24 flights each week in the region, including daily to
Amman, three to Manama, five to Beirut, and four to Istanbul.
The domestic flight map only features four Iraqi cities, one
of which is Sulaimaniyah. There is only a single flight each
week to each of the following Iraqi cities: Baghdad, Basra,
and Najaf. Clarry said that discussions are also in progress
with Emirates Airlines to increase service to Dubai. He
mentioned that if it should ever become necessary, the new
airport could accommodate the jumbo A380 aircraft.

Sulaimaniyah International Airport (SIA)
----------------------------------------

7. (SBU) On November 4, RRTOff met with SIA acting director
Abdul Khaliq Mohamed Abdul Raheem, to discuss growth in SIA's
air traffic. The airstrip was built in the 1970's as an air
base and used heavily by the Iraqi military in the 1980's
during the war with Iran. However, almost no fixed-wing
aircraft landed on the runway for nearly 14 years until
construction for a proper airport was begun in December 2003,
and the airport was opened for passenger air traffic in July
2005. SIA now supports nearly 60 passenger flights per week.
At present there is no separate air service for cargo
flights, but a Sharjah-based air cargo company is preparing
to start flights in 2010. Abdul Raheem said that the
long-term vision for SIA is to expand routes to the east (but
not to Iran), including China and other East Asian nations.
When asked about service to Iran, he said that there was
simply no demand for air service to Iranian cities. He said
that people traveling to Iran have more time than money and
would much rather pay USD30 to take the daily 12-hour bus
trip to Tehran than pay for a flight that would cost several
times that amount. Most business-related travel is to
Beirut, Dubai and Istanbul. Despite significant Iranian
exports to the KR and Iraq, there is surprisingly little
business air travel.

8. (SBU) Abdul Raheem described a de facto tax to travelers
in the Iraqi market: a USD50 per person, per flight
commission that all non-Iraqi airlines operating in Iraq must
pay to Iraqi Airlines as the national carrier. He said that
at the end of 2008, there were attempts to begin to address
this fee that is passed along to the traveler, but there has
not been significant movement on the issue. He expressed
hope that this system would be changed. SIA's flight
schedule is more domestically and regionally focused,
boasting only four flights to Europe weekly (two to
Stockholm, which continue on to London, and one each to
Munich and Dusseldorf). Regional international flights
include five to Amman weekly, three to Istanbul, two each to
Beirut and Dubai, and one each to Cairo and Damascus. Like
QBeirut and Dubai, and one each to Cairo and Damascus. Like
EIA there is only one flight weekly each to Basra and Najaf,
but SIA serves Baghdad daily. Finally, two flights each week
link EIA and SIA. Royal Jordanian is the only IATA airline
that serves SIA to date, although Abdul Raheem said that
discussions are progressing with Gulf Air to initiate service
to Bahrain sometime in 2010.

Dohuk Province
-----------------

9. (SBU) In sharp contrast to the other two provinces of the
KR, Dohuk has no operational commercial airport. Bamerni
airfield, to the northeast of Dohuk City near the Turkish
border, could potentially be developed into a commercial
facility, but is currently occupied by units of the Turkish
Army that are a legacy of earlier Turkish incursions against
the PKK. Dohuk Governor Tamar Ramadan has described plans to
build a completely new facility southeast of Dohuk near the
Mosul Dam. Governor Tamar believes an airport is a key
factor in developing tourism in the area. The province is
conducting a feasibility study for the proposed new airport.

Comment:
--------

10. (U) Although KRG visions may appear overly optimistic,

BAGHDAD 00003158 003.2 OF 003


the increase in the number of flights to and from the KR in
just over four years is striking. As members of the Kurdish
diaspora continue to travel back more frequently, as the
growing economy in the KR provides increasing opportunities
to people to enter the middle class, and as Erbil is
increasingly seen as a "safe option" within Iraq to host
national and international gatherings, further steady growth
seems likely. EIA will try to market itself as a
geographically central air hub for the region, but it faces
stiff competition.
HILL

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