VZCZCXRO1687
RR RUEHMT
DE RUEHBU #0156/01 0441435
ZNR UUUUU ZZH
R 131435Z FEB 09
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 3036
RULSDMK/DEPT OF TRANSPORTATION WASHINGTON DC
RUCPDOC/USDOC WASHINGTON DC
RHMFIUU/HQ USSOUTHCOM MIAMI FL
RHMCSUU/FAA NATIONAL HQ WASHINGTON DC//AWH-10//
RHMCSUU/FAA MIAMI SO IFO23 MIAMI FL
RHMFIUU/FAA MIAMI ARTCC MIAMI FL
RUCNMER/MERCOSUR COLLECTIVE
RUEHMT/AMCONSUL MONTREAL 0070

UNCLAS SECTION 01 OF 02 BUENOS AIRES 000156 
 
SIPDIS 
SENSITIVE 
 
STATE EEB FOR DANIEL MOORE, MEGAN WALKLET-TIGHE, KRISTIN GUSTAVSON 
TRANSPORTATION FOR BRIAN HEDBERG 
FAA FOR BONNIE AHUMADA, KRISTA BERQUIST 
FAA MIAMI FOR JAY RODRIGUEZ 
BRASILIA FOR SHARON WALLOOPPILLAI 
MONTREAL PASS USMISSION TO ICAO 
 
E.O. 12958: N/A 
TAGS: EAIR ECON PREL AR
SUBJECT: Argentina: Airport Landing Fee Decrease and User Fee 
Increase Rolled Back 
 
Refs: (A) Buenos Aires 139 
 (B) Buenos Aires 123 
  (C) 08 Buenos Aires 1660 
       (D) 07 Buenos Aires 2390 
 
SUMMARY 
------- 
 
¶1. (SBU) After announcing cuts in aircraft landing fees and linked 
increases in airport passenger user fees in late February, the GoA 
has rescinded the move, reportedly at the behest of former President 
Nestor Kirchner.  International carriers had been promised the 
landing fee cuts in December 2007.  According to Ernesto Gutierrez, 
head of private airport concessionaire Aeropuertos Argentinas 2000, 
the boost in passenger fees would have provided additional revenues 
to fund airport security upgrades, a key concern of U.S. airlines 
which operate in Argentina.  END SUMMARY. 
 
----------------------------------------- 
The Official Word: Fees Up; No, Fees Down 
----------------------------------------- 
 
¶2. (SBU) GOA airport regulator ORSNA published February 4 a 
resolution that airport user fees (referred to in Argentina as the 
"airport tax," and currently collected by GOA tax agency AFIP) would 
increase beginning on March 1.  For international outbound 
travelers, the fee would increase 61% from USD 18 to USD 29, and the 
fee for domestic ticket holders would rise 140% from 6.05 pesos (USD 
1.73) to 14.5 pesos (USD 4.14).  Landing fees for commercial 
flights, which depend on the size of the plane, would increase 30% 
for companies that are behind in their airport fee payments. 
Companies that are up to date, which according to our civair 
contacts include all U.S. carriers, would instead receive a 30% 
discount from previous rates on landing fees. 
 
¶3. (SBU) Sergio Hurtado, American Airlines General Director in 
Argentina, told Econoff February 12 that all air carriers in 
Argentina had been aware of the new landing fees and international, 
but not domestic, passenger fees for the last few months.  The 
changes fulfilled conditions specified in the revised concession 
contract that the GoA signed with private airport concessionaire 
Aeropuertos Argentinas 2000 (AA2000) signed in December 2007, which 
stated that airline landing fees would be reduced at least 25%, but 
that increased passenger fees would ensure that AA2000's overall 
revenues would not be reduced (Ref D).  Rolf Meyer, United Airlines 
Country Manager in Argentina, told Econoff February 12 that a 
separate part of the resolution indicated that the old landing fee 
table would be eliminated, leaving open the possibility that the 30% 
landing fee discount would eventually be applied on a higher rate 
base. 
 
-------------- 
GoA Walks Back 
-------------- 
 
¶4. (U) On February 9, media reported that GOA Planning Minister 
Julio De Vido, while accompanying President Fernandez de Kirchner on 
her official visit to Spain, ordered that the fee increases not be 
implemented.  There was no official reason given for the change, nor 
was it clear whether the fees might eventually be reinstated.  The 
press quoted an anonymous Transportation Secretariat employee as 
saying that the suspension of the new fees was only temporary, given 
that the original resolution had not gone through proper channels. 
Both Hurtado and Meyer told Econoff that they have been told that 
former President and current First Husband Nestor Kirchner heard 
about the passenger user fee increases shortly after they were 
published in the press, and in the face of upcoming mid-term 
Congressional elections, called De Vido to tell him to roll them 
back.  Hurtado and Meyer also stated that they expected the domestic 
passenger fee to either be eliminated or reduced, but expressed 
optimism that the other fee changes - especially the landing fee 
reduction - would eventually be implemented.  Hurtado pointed out 
that $18 was one of the lowest international passenger airport user 
fees in South America, adding that $29 was close to average. 
 
------------------------------------------ 
 
BUENOS AIR 00000156  002 OF 002 
 
 
AA2000: Security Upgrades Tied to Fee Rise 
------------------------------------------ 
 
¶5. (SBU) In a conversation with the Ambassador on February 5, 
Ernesto Gutierrez, President of AA2000, stated that he had been 
expecting the fee increases.  He noted that, even with landing fees 
discounted by 30%, more timely payment by airlines and additional 
passenger user fee revenues would allow AA2000 to make much-needed 
security upgrades, particularly at Ezeiza International, Argentina's 
principal airport located just outside of Buenos Aires.  (NOTE: in a 
roundtable with a visiting eight-member CODEL on January 30, U.S. 
airline representatives called airport security issues a significant 
concern with respect to their operations in Argentina -- Ref B.  END 
NOTE.) 
 
¶6. (SBU) According to the ORSNA resolution, expanded airport user 
fees will permit AA2000 to improve its maintenance operations. 
Gutierrez added that this would be the first airport user fee 
increase in ten years, and commented that the planned security 
upgrades, which had been approved by the GOA Ministry of Justice's 
airport security police agency (PSA), were similar to upgrades that 
AA2000 had performed at an airport it operates in Morocco, and had 
been requested for another it operates in Montevideo, Uruguay.  PSA 
officials confirmed to Embassy TSA representative that they has been 
counting on revenue from the fee increases to fund security 
improvements. 
 
7 (SBU) Gutierrez also commented that ANAC (the National Civil 
Aviation Administration) still had no budget, and was operating with 
office space and computers on loan from AA2000.  He gave no 
indication that he was aware of the pending transfer of civil 
aviation control from the military to ANAC on April 1 (Ref A). 
 
------- 
COMMENT 
------- 
 
¶8. (SBU) U.S. carriers have expressed their disappointment that, 
over a year after a revised GoA concession agreement with AA2000 was 
signed, promised cuts in aircraft landing fees have yet to be 
implemented.  The reasons for the GoA delay in lowering landing fees 
and raising passenger fees remain unclear.  Beyond being unpopular 
with voters, perhaps the GoA is loath to increase passenger fees at 
a time when a rapidly slowing economy is cutting heavily into 
domestic and international tourism revenues.  In a similar vein, a 
new visa fee for citizens of countries who charge such fees for 
Argentines has also been postponed (Ref C). 
 
WAYNE