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