VZCZCXRO4216
RR RUEHAG RUEHDF RUEHIK RUEHLZ
DE RUEHDL #0493/01 1241516
ZNR UUUUU ZZH
R 041516Z MAY 06
FM AMEMBASSY DUBLIN
TO RUEHC/SECSTATE WASHDC 6872
INFO RUCNMEM/EU MEMBER STATES
RUEHBL/AMCONSUL BELFAST 0373
RUCPDOC/USDOC WASHDC
RHEFHLC/DEPT OF HOMELAND SECURITY WASHINGTON DC
RUEHBS/USEU BRUSSELS

UNCLAS SECTION 01 OF 02 DUBLIN 000493 
 
SIPDIS 
 
SIPDIS 
 
COMMERCE FOR ITA/MAC/ROBERT MCLAUGHLIN 
COMMERCE FOR ITA/MAC/ADVOCACY CENTER OR PAT NUGENT 
DHS FOR CBP/JENNIFER SAVA 
 
E.O. 12958: N/A 
TAGS: EAIR ECON ETRD EI
SUBJECT: AMBASSADOR ADVOCATES FOR BOEING AND CBP WITH AER 
LINGUS CEO 
 
REF: DUBLIN 361 AND PREVIOUS 
 
DUBLIN 00000493  001.2 OF 002 
 
 
¶1.  Summary: In a May 2 meeting with Aer Lingus CEO Dermot 
Mannion, the Ambassador advocated Boeing aircraft for the 
carrier's long-haul needs and sought Mannion's help in 
pushing the Dublin Airport Authority (DAA) to upgrade U.S. 
Customs and Border Protection (CBP) operations in Ireland. 
Mannion said that the Boeing offer was attractive, and he 
noted that Aer Lingus would decide between Boeing and Airbus 
at roughly the same time as the carrier's likely stock 
flotation in September.  He also observed that Aer Lingus 
could enjoy the full benefits of trans-Atlantic Open Skies 
only if Dublin's new terminal were sized to accommodate 
rising passenger volume and to enable CBP to conduct full 
pre-clearance (adding agricultural and customs checks to 
passport screening.)  Mannion added that Aer Lingus needed 
clarity on the prospects for the U.S.-EU aviation agreement, 
including the phase-out of the Shannon Stop requirement, in 
order to start planning for the 2007-2008 winter travel 
season.  Post will continue efforts to press the case for 
both Boeing and CBP in our regular discussions with industry, 
the Irish parliament, and the GOI.  End summary. 
 
Advocacy for Boeing 
------------------- 
 
¶2.  In a May 2 meeting with Aer Lingus CEO Dermot Mannion, 
the Ambassador strongly advocated Boeing's 787 Dreamliner for 
the carrier's long-haul needs.  Mannion replied that Aer 
Lingus would probably decide between Boeing and Airbus at 
roughly the same time as the carrier's stock flotation, 
expected in September.  He added, however, that aircraft 
orders might also have to await the Dublin Airport 
Authority's decision on the size of Dublin's planned second 
terminal, which would determine the number of gates available 
to Aer Lingus planes (see para 4).  He noted that "the door 
remains very open to Boeing," and he observed that Aer Lingus 
would take advantage of Ex-Im Bank financing options if 
Boeing were to win the aircraft bid.  Mannion also recounted 
his efforts to quash press reports that Airbus had secured 
Aer Lingus' long-haul aircraft orders, following on the 
carrier's deal to acquire four Airbus A-330s in 2006-2007 for 
intra-European service.  Noting recent reports on the Airbus 
A-350's design flaws, the Ambassador stressed Post's 
intention to continue advocacy for Boeing.  Mannion 
recommended that emboffs speak with members of the airline's 
newly formed aircraft purchases evaluation team. 
 
Needed Clarity on U.S.-EU Open Skies 
------------------------------------ 
 
¶3.  Aer Lingus needs clarity on prospects for the U.S.-EU 
aviation agreement, including the U.S.-Ireland annex, to plan 
future trans-Atlantic service, said Mannion.  He explained 
that Aer Lingus sold seats 300 days in advance and was 
already preparing its tentative schedule for the 2007 summer 
season.  A delay until October 2006 in the signing of the 
U.S.-EU agreement would only give Aer Lingus enough time to 
plan for the 2007-2008 winter season.  Mannion expected, 
however, that Aer Lingus would launch service to San 
Francisco in 2007 as the first of the three additional U.S. 
points that Aer Lingus would be permitted to serve under the 
U.S.-Ireland annex to the U.S.-EU agreement.  He also 
remarked that, due to the uncertain timing of the U.S.-EU 
agreement, the Irish Department of Transport intended to 
re-engage with USG negotiators on the U.S.-Ireland annex 
during U.S.-EU aviation discussions the week of May 8. 
(Under the annex, October 29, 2006, is the start date for the 
phase-out of the current "Shannon Stop" requirement, by which 
U.S. and Irish carriers may operate one non-stop flight 
to/from Dublin for each non-stop flight to/from Shannon.) 
 
Right-sizing Dublin Airport for Aer Lingus and CBP 
--------------------------------------------- ----- 
 
¶4.  With the April 5 Irish Cabinet decision to privatize Aer 
Lingus through a stock flotation, the carrier's next goal was 
to ensure that Dublin Airport's planned second terminal would 
meet the carrier's needs, observed Mannion.  He noted that 
the Dublin Airport Authority (DAA) had aimed to submit the 
planning application for the new terminal this month, a 
target that now would not be met.  Mannion cautioned that 
further delay with the planning application would seriously 
jeopardize the terminal's scheduled opening in 2009.  On the 
 
DUBLIN 00000493  002.2 OF 002 
 
 
upside, the delay had allowed Aer Lingus more time to consult 
with the DAA on the terminal size required to accommodate the 
carrier's rising passenger volume projections.  The 
Ambassador cited an April 28 Irish Times report that Aer 
Lingus and Ryanair had convinced the DAA on the need to 
expand the planned terminal, at a possible extra cost of euro 
100 million.  Mannion responded that whereas Aer Lingus had 
had regular contact with working-level DAA officials on the 
terminal, the DAA Board of Directors had refused to consider 
expansion until this past week. 
 
¶5.  Aer Lingus could enjoy the full benefits of 
trans-Atlantic Open Skies only if the new terminal were also 
configured to enable U.S. Customs and Border Protection (CBP) 
to conduct full pre-clearance, adding agricultural and 
customs checks to passport screening, remarked Mannion.  The 
Ambassador said that he was focused not only on the DAA's 
plans to accommodate CBP in the new terminal, but also on 
dealing with mounting passenger congestion in CBP's current 
facilities over the next two summers, especially with the 
likely onset of bilateral Open Skies.  Mannion pointed out 
that a delay in the terminal's opening till 2010 would 
exacerbate pressures on CBP staff.  He added that CBP would 
be key to Aer Lingus' plans to link its new Dublin-Dubai 
service with established Dublin-U.S. flights in 2007, since 
Middle Eastern passengers would prefer to be pre-cleared 
outside the United States.  Mannion and the Ambassador agreed 
to continue coordinated approaches to the DAA on CBP's needs, 
with emboffs noting the possibility of moving sooner to full 
pre-clearance in the more spacious Shannon Airport. 
 
Comment: Pressing the cases for Boeing and CBP 
--------------------------------------------- - 
 
¶6.  This was the Ambassador's third meeting with Mannion 
since he assumed his Aer Lingus post last summer, and in each 
discussion the Ambassador has urged Aer Lingus to choose 
Boeing and to choose quickly, with orders for the 787 
Dreamliner now backed up to roughly 2011.  In previous 
discussions, Mannion noted difficulties in placing orders 
during ongoing negotiations with labor about the stock 
flotation, lest he create doubts about his commitment to 
reduce the carrier's reported euro 340 million pension 
deficit with the flotation proceeds.  The Irish Cabinet's 
April 5 decision to proceed with the stock flotation has lent 
certainty to Aer Lingus' ability to raise equity for the 
aircraft orders.  We are concerned, however, that the Dublin 
Airport sizing issue might become another reason for delay in 
Aer Lingus' aircraft purchase decisions. 
 
¶7.  Post will continue to press the case for upgrading CBP 
operations at Dublin and Shannon Airports.  In a recent 
dinner with Irish Parliament's Foreign Affairs Committee, the 
Ambassador described the potential advantages of full 
pre-clearance for Dublin as a trans-Atlantic hub, leading one 
committee member to raise the issue in Parliament the next 
day.  Shannon Airport has also hired a U.S. consultant to do 
a feasibility study on Shannon's ability to move to full 
pre-clearance.  We look forward to receiving from CBP 
headquarters an updated standards document that outlines for 
airports the logistical requirements for CBP to provide full 
pre-clearance. 
BENTON