VZCZCXRO5918
RR RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHHI #0814/01 1960345
ZNR UUUUU ZZH
R 140345Z JUL 08
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC 8132
INFO RUEHHM/AMCONSUL HO CHI MINH 4917
RULSDMK/DEPT OF TRANSPORTATION WASHINGTON DC
RUEHZS/ASEAN COLLECTIVE
RUEHFR/AMEMBASSY PARIS 0516
RUEHBS/USEU BRUSSELS

UNCLAS SECTION 01 OF 02 HANOI 000814 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR EEB/TRA/AN AND EAP/MLS 
SINGAPORE FOR FAA MARY WALSH 
MANILA FOR TSA SCOTTIE R. LAIRD 
 
E.O. 12958: N/A 
TAGS: EAIR ETRD ECON BEXP KTIA VM
SUBJECT: CIVAIR: SAFETY ISSUES COULD RESULT IN EUROPEAN BLACKLIST OF 
VIETNAM AIRLINES 
 
HANOI 00000814  001.2 OF 002 
 
 
(U)  This cable is sensitive but unclassified and not for internet 
distribution. 
 
¶1. (SBU) Summary: U.S. aviation experts from the FAA, Boeing, and 
Robinson Aviation met with officials of the Civil Aviation 
Administration of Vietnam (CAAV) and Vietnam Airlines.  The team 
discussed the results of a December 2007 civil aviation safety audit 
conducted in Vietnam by the International Civil Aviation 
Organization (ICAO), and the resumption of a technical assistance 
project to help Vietnam upgrade its civil aviation safety posture. 
The ICAO audit finds serious shortcomings in Vietnam's civil 
aviation safety oversight system.  The FAA cited safety checks in 
Paris on Vietnam Airlines' Boeing 777s and rumors that the EU may 
blacklist Vietnam's air carriers.  A European ban could damage 
Vietnam Airlines' business plan, including purchases of Boeing 
aircraft, and Vietnam's tourism and investment climate.  A CAAV 
official recommended high-level intervention by the Embassy with the 
Minister of Transport to underscore the seriousness of Vietnam's 
civil aviation regulatory issues and to urge an increase in funding 
and staffing for the CAAV.  End summary. 
 
¶2. (SBU) From July 8-11, 2008 a team of aviation experts from the 
FAA, Boeing, and Robinson Aviation, a technical contractor for the 
U.S. Trade and Development Agency (TDA), traveled to Vietnam to meet 
with officials of the Civil Aviation Administration of Vietnam 
(CAAV) and Vietnam Airlines.  The team discussed the results of a 
December 2007 Universal Safety Oversight Audit (USOAP) conducted in 
Vietnam by the International Civil Aviation Organization (ICAO), and 
the resumption of a technical assistance project to help Vietnam 
upgrade its civil aviation safety posture.  According to a report of 
the ICAO audit, which is not yet publicly available but which ICAO 
will make public in September, Vietnam has serious problems with its 
civil aviation safety oversight system. 
 
SOURCES SAY EUROPE MAY BLACKLIST VIETNAM AIRLINES 
------------------------------------------- ----- 
 
¶3. (SBU) According to the ICAO report, which the CAAV provided to 
the Embassy, the CAAV has insufficient resources to hire and retain 
qualified inspectors and experienced aviation safety technical 
staff.  The report says that Vietnam's national civil aviation law 
does not empower the CAAV to regulate and oversee aviation safety, 
including inspections of aircraft and aviation facilities.  (Note: 
Boeing and RVA sources told Econoff that the GVN has imposed a 
170-employee limit on the CAAV.  The CAAV also has no fulltime 
inspectors.  By comparison, Miami International Airport has 400 FAA 
inspectors.  End note).  The ICAO report cites other shortcomings, 
including weak oversight over airport safety operations, unclear 
lines of responsibility, poor record keeping, a failure to conduct 
medical assessments on pilots, improper handling of hazardous goods, 
unlicensed personnel, the absence of a safety management system or 
accident prevention program, and other issues.  The ICAO USOAP audit 
examines sixteen annexes and CAAV had issues in every annex. 
 
¶4. (SBU) Although ICAO has no enforcement powers per se, the audit 
is significant because aviation regulators around the world rely on 
ICAO reports in their own evaluations of whether states are carrying 
out their aviation safety obligations.  According to the FAA, 
airport authorities in Paris, presumably tipped off by USOAP 
inspectors, have recently been conducting ramp safety checks on 
Vietnam Airlines' Boeing 777s and have confirmed a number of 
violations contained in the ICAO report.  The FAA cited rumors that 
Vietnam Airlines could be the next carrier to join a growing list of 
airlines banned from European airspace.  In 2007, after ICAO 
conducted an equally poor audit in Angola, the EU blacklisted 
Angola's national flag-carrier, TAGG, shortly after Paris airport 
authorities began conducting similar ramp checks.  In 2007, the EU 
also banned all 51 Indonesian carriers, including state-run Garuda, 
from flying to Europe.  We also understand from an FAA source that 
on July 14, 2008, the European Union will announce whether it will 
blacklist all airlines in Cambodia and the Philippines. 
 
TDA SAFETY PROJECT WILL NOT REMEDY SAFETY SYSTEM 
--------------------------------------------- --- 
 
¶5. (SBU) The CAAV and technical contractor Robinson Aviation are 
about to resume work on a long-delayed $1.4 million technical 
assistance project funded principally by the TDA to help Vietnam 
upgrade its civil aviation safety posture.  Although the project 
will help improve Vietnam's civil aviation regulation, the FAA, 
Boeing and Robinson Aviation all emphasized that the CAAV's chronic 
lack of resources and staffing would preclude Vietnam from 
implementing much of the project's work, including the necessary 
 
HANOI 00000814  002.2 OF 002 
 
 
information technology systems.  They also said the CAAV would be 
unlikely to pass an FAA International Aviation Safety Assessment 
(IASA) and secure a Category I safety rating, allowing Vietnam 
Airlines to open service to the United States, even after CAAV 
completes the project.  A Boeing source, who previously conducted 
IASA audits for the FAA, opined the FAA would never grant a Category 
I safety rating to Vietnam if the EU were to blacklist Vietnam's air 
carriers first.  The sources all stressed that an EU ban would doom 
Vietnam Airlines' business plan, including its purchase of Boeing 
Aircraft, and damage Vietnam's investment and tourism climate. 
 
GVN LEADERSHIP UNAWARE OF THE PROBLEM 
------------------------------------- 
 
¶6. (SBU) In a June 10, 2008 meeting, CAAV Deputy Director General 
Lai Xuan Thanh acknowledged to the FAA's Mary Walsh and Econoff the 
depth of Vietnam's civil aviation safety woes.  He intimated that 
the GVN's leadership, including Minister of Transport Ho Nghia Dung, 
was unaware of the disastrous results of the ICAO audit, its 
implications for Vietnam Airlines' business plan, and the serious 
impact that a European flight ban could inflict on Vietnam's 
economy.  Thanh proposed a meeting between either the Ambassador or 
DCM and the Minister of Transport to impress upon the Minister the 
gravity of the situation and implore the GVN to pour more resources 
into the under-funded and understaffed CAAV. 
 
¶7. (SBU) Comment: The airline sector has dramatically outpaced the 
growth of the regulator in Vietnam.  Vietnam Airlines, which plans 
to equitize in 2009, flies international routes aboard ten modern 
Boeing 777 airplanes, has 21 Boeing 787 Dreamliners on order (with 
plans to order at least eight more in 2008), and has ambitions to 
become one of the preeminent air carriers in Southeast Asia.  In 
addition, two new privately owned startups, VietJet Air and Air 
Speed Up, recently signed agreements to procure Boeing 737 jets. 
Sources from the FAA, Boeing, and Robinson Aviation all emphasized 
that if the GVN does not increase funding to the CAAV in the short 
term, either by increasing direct government support or diverting 
revenue from well-funded Vietnam Airlines, that Vietnam's air 
carriers could find themselves with fleets of modern jets but no 
routes to fly. 
 
¶8. (SBU) The FAA's Mary Walsh cleared this cable. 
 
MICHALAK