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Viewing cable 07LAPAZ1569, NEW AIRLINE FINANCED BY VENEZUELA -- OLD AIRLINE

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Reference ID Created Released Classification Origin
07LAPAZ1569 2007-06-06 19:03 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy La Paz
VZCZCXYZ0008
PP RUEHWEB

DE RUEHLP #1569 1571903
ZNR UUUUU ZZH
P 061903Z JUN 07
FM AMEMBASSY LA PAZ
TO RUEHC/SECSTATE WASHDC PRIORITY 3844
INFO RUEHAC/AMEMBASSY ASUNCION 6824
RUEHBO/AMEMBASSY BOGOTA 4167
RUEHBR/AMEMBASSY BRASILIA 8052
RUEHBU/AMEMBASSY BUENOS AIRES 5301
RUEHCV/AMEMBASSY CARACAS 2535
RUEHPE/AMEMBASSY LIMA 2680
RUEHMD/AMEMBASSY MADRID 3497
RUEHMN/AMEMBASSY MONTEVIDEO 4651
RUEHQT/AMEMBASSY QUITO 5164
RUEHSG/AMEMBASSY SANTIAGO 9765
RHMFIUU/HQ USSOUTHCOM MIAMI FL
RUMIAAA/USCINCSO MIAMI FL
RUEHUB/USINT HAVANA 0348
RHEHNSC/NSC WASHINGTON DC
RHEBAAA/DEPT OF ENERGY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
UNCLAS LA PAZ 001569 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR WHA/AND 
TREASURY FOR SGOOCH 
 
E.O. 12958: N/A 
TAGS: EAIR ECON EAID BL
SUBJECT: NEW AIRLINE FINANCED BY VENEZUELA -- OLD AIRLINE 
FINANCED BY US FIRM? 
 
 
1. (SBU) The Bolivian press announced on June 6 that, 
according to sources from the GOB, a new national airline 
"Aerolineas Bolivianas" will soon be launched with USD 30 
million of financing provided by Venezuela under the auspices 
of the People's Trade Agreement and the Bolivarian 
Alternative for the Americas.  The GOB sources indicated that 
an Executive Unit would be formed this year to undertake 
marketing studies, elaborate regulations, and complete 
necessary procedures to launch the new airline, which would 
function "autonomously" using a competitive business model to 
offer Bolivians cheaper fares.  Aerosur (the main Bolivian 
airline following the collapse of the formerly state-owned 
LLoyd Aero Boliviano) La Paz Manager Gerad Lopez told Emboff 
that Aerosur is concerned about unfair competition in the 
private sector from the GOB and Venezuelan financing of a 
state airline.  Aerosur has also received information that 
Venezuela has offered to provide discount jet fuel to 
Aerolineas Bolivianas. 
 
2. (U) Meanwhile, the press reported on June 3 that the 
bankrupt, partially-privatized LLoyd Aero Boliviano (LAB) had 
reached agreement with a U.S. firm, Swiss TransAtlantic 
Corp., in which the U.S. company would invest USD 80 million 
to purchase 50.3 percent of LAB's shares, enabling the failed 
company to relaunch domestic and international flights. 
(Note: LAB is currently 50.3 percent owned by workers and 
48.6 percent held in trust to pay Bolivian pensions.  End 
note.)  LAB workers lacked knowledge of the deal and demanded 
transparent negotiations.  LAB's general manager said on June 
5 that the meeting scheduled for that day with the U.S. firm 
had been postponed, but predicted that domestic flights, 
which were suspended last March, would be relaunched between 
June 11 and 18. 
 
3. (SBU) Comment:  On several occasions, Post has heard talk 
of setting up a state-owned "Bolivarian" airline linking 
Bolivia, Venezuela, and Cuba.  The effective collapse of LAB 
has left a void in the aviation market that the GOB is 
apparently interested in filling.  We suspect that the USD 80 
million investment supposedly agreed upon with LAB will not 
come to pass.  In September 2006, a UK Virgin Islands Firm, 
Trans-Atlantic Aviation, Ltd., expressed interest in 
investing in LAB, but was unable to prove its legitimacy and 
repeatedly delayed the presentation of registration 
documents.  As we have been unable to find any information 
about Swiss TransAtlantic Corp. on-line, it seems that this 
new interest in LAB may be more smoke and mirrors.  End 
comment. 
URS