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Cablegate: Airline Business Steady in Nicaragua Despite Tense Relationship with Gon

VZCZCXYZ0004
OO RUEHWEB

DE RUEHMU #0069/01 0391729
ZNY CCCCC ZZH
O R 081729Z FEB 10
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0662
INFO WHA CENTRAL AMERICAN COLLECTIVE
RHEFHTA/TSA HQ WASHINGTON DC
RHMFISS/FAA MIAMI ARTCC MIAMI FL
RHMFISS/FAA NATIONAL HQ WASHINGTON DC

C O N F I D E N T I A L MANAGUA 000069

SENSITIVE
SIPDIS

E.O. 12958: DECL: 2020/02/08
TAGS: EAIR EINV ETRD PGOV NU
SUBJECT: AIRLINE BUSINESS STEADY IN NICARAGUA DESPITE TENSE RELATIONSHIP WITH GON

CLASSIFIED BY: Callahan, RobertJ, Ambassador; REASON: 1.4(B), (D)

SUMMARY

1. (C) Despite ongoing clashes with the GON's airport authority, commercial air carriers that serve U.S./Nicaragua routes reported steady sales and healthy load factors during the DCM's quarterly civil aviation roundtable on January 28. According to the airlines, long shifts worked by airport ramp and security personnel remain serious problems, while loyalty to the Sandinista National Liberation Front (FSLN) appears to be the primary factor in staffing the airport. All airlines reported strict compliance with TSA's enhanced security procedures as a result of the Christmas day incident on Northwest Airlines over Detroit. Luggage theft appears to be less of a problem than previously, but Continental reported new tactics on the part of thieves. TACA reported a recent incident involving an Iranian national who attempted to use forged documents to enter the United States from Managua. End Summary.

RELATIONS WITH AIRPORT AUTHORITY TENSE, BUT WORKABLE

2. (C) On January 28 local representatives from Continental, American, TACA and Spirit convened for the DCM's quarterly civil aviation roundtable. Overall, the airlines reported varied experiences interacting with the GON's aviation authority (the EAAI), which has now fully consolidated control over the administration of Sandino International Airport in Managua, ranging from ramp services to security. The ability of the airlines to conduct comprehensive audits of these EAAI services (which the airlines pay for) remains a primary concern. TACA's representative told the DCM that EAAI had recently denied the airline permission to conduct independent audits, but Sprit's representative said that a recent team of auditors from its Fort Lauderdale headquarters had not encountered any obstacles from EAAI. American's representative said that their auditors visit from Dallas-Fort Worth two times per year, and that they conduct in-house audits monthly. So far in 2010, American has not encountered problems with conducting its audits.

3. (C) TACA's representative said that ramp services at Sandino are spotty; sometimes services run without a hitch, but during peak hours, when lots of planes are on the ground, EAAI's services often fail to meet demand. American's representative offered similar comments, and added that American itself provides the training for EAAI personnel. The Spirit representative concurred with these comments, lamenting that poor service is to be expected "with a monopoly." In a now familiar refrain, the TACA representative stated that EAAI's ramp and security personnel continue to work extremely long hours, with almost no time off. He added that this only compounds poor service as a result of overworked, tired airport personnel.

4. (C) The Spirit representative said that the airport's General Manager, Orlando Castillo, reports directly to President Ortega instead of the Ministry of Transportation. He added that employment with EAAI is strictly reserved for FSLN loyalists, and that a strong patronage system exists. Continental's representative complained that under EAAI's watch, maintenance at Sandino Airport has slipped, with light bulbs not being replaced and facilities not being kept clean. Airline representatives stated that overall EAAI has boosted its roster of employees (all paid by the airlines), and that pro-FSLN posters are now a common sight at the airport.

Luggage Theft

5. (C) American and TACA told the DCM that the problem of luggage theft had decreased in recent months. The Continental representative, however, said there have been increased reports of luggage theft from outgoing baggage, which makes it more difficult to track these incidents. He said that theft remains a problem at Sandino Airport, and that it is well-coordinated. As an example, he said that EAAI personnel routinely use trucks and other vehicles to visually block the view from Continental's offices onto the tarmac as bags are being loaded and offloaded from aircraft. He told the DCM he has written numerous letters of protest to EAAI to no avail.

December 2009 TSA Visit and Enhanced Security

6. (C) Airline representatives told the DCM, not surprisingly,
that in December 2009 EAAI increased the number of its security
personnel at Sandino Airport from 80 to approximately 160 in order
to impress a visiting inspection team from the Transportation
Security Agency (TSA). After conducting a comprehensive
examination of the airport, TSA concluded that the airport meets
acceptable ICAO standards. On a related note, all of the
representatives told the DCM that both the airlines and the airport
are strictly adhering to TSA's latest guidance following the
Detroit incident on Christmas day, and that airport security
personnel are conducting 100% pat downs of all passengers. The
TACA representative said that EAAI had hired additional security
personnel to accommodate the new TSA guidelines.

Passenger Numbers Stable

7. (C) On the business side, airline representatives told the DCM
that load factors remain high, despite the global economic crisis
and the deteriorating political situation in Nicaragua. Passenger
numbers remain solid on both incoming and outgoing flights. Most
participants in the roundtable predicted that 2010 will resemble
2009 in terms of number of seats sold, with perhaps modest growth.
To maintain load factors, however, airlines are under pressure to
keep prices down, and profit margins are thin.

Iranian Attempts to Board Flight Using Forged Documents

8. (C) TACA's representative reported a recent incident in which
an Iranian national attempted to board one of its flights in
Managua using a photo-subbed French passport. Apparently the
traveler first attempted to fly from Costa Rica to Canada, but was
denied boarding and instead flew to Caracas. From Caracas, the
individual flew to Managua, where he attempted to board a TACA
flight to Los Angeles.

Comment

9. (C) Given Nicaragua's visa-free regime with Iran, we expect an
increase in Iranians exploiting this arrangement to attempt to
illegally reach the United States and Canada via Managua. On the
whole, airline participants in the roundtable seemed resigned to
the fact that EAAI's poor service, and its arbitrary, politicized
nature, will continue into the foreseeable future. As long as load
factors remain high on lucrative routes between Managua and the
United States, it is likely that that these carriers will continue
to plug away.
CALLAHAN

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