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Viewing cable 08ASUNCION671, NEW AIR CARRIERS COMING TO PARAGUAY

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Reference ID Created Released Classification Origin
08ASUNCION671 2008-10-01 14:51 2011-06-03 00:00 CONFIDENTIAL Embassy Asuncion
Appears in these articles:
http://www.abc.com.py/nota/presidente-dudaba-de-inversores-de-fly
VZCZCXYZ0016
OO RUEHWEB

DE RUEHAC #0671 2751451
ZNY CCCCC ZZH
O 011451Z OCT 08
FM AMEMBASSY ASUNCION
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7283
INFO RUCNMER/MERCOSUR COLLECTIVE PRIORITY
RUEHPE/AMEMBASSY LIMA PRIORITY 0457
RUEHSN/AMEMBASSY SAN SALVADOR PRIORITY 0060
C O N F I D E N T I A L ASUNCION 000671 
 
SIPDIS 
 
WHA/BSC MDASCHBACH, PASS TO USTR KDUCKWORTH, PASS TO 
COMMERCE SCOOK 
 
E.O. 12958: DECL: 09/29/2027 
TAGS: EAIR ECON EINV ETRD PA
SUBJECT: NEW AIR CARRIERS COMING TO PARAGUAY 
 
Classified By: DCM Michael J. Fitzpatrick; reasons 1.4 (b) and (d). 
 
1. (U) The international carriers TACA and PLUNA will service 
Paraguay before the end of 2008.  The Uruguayan-owned carrier 
PLUNA (First Uruguayan Lines of Air Navigation) is expected 
to begin its service to Paraguay on October 29 with four 
weekly direct flights to Montevideo. PLUNA will also offer 
weekly flights from Ciudad del Este to Punta del Este, and 
will consider expanding its services with daily flights to 
Buenos Aires, Sao Paulo, and Santiago.  The Salvadorian-owned 
carrier TACA (Central American Air Transportation) will begin 
service November 15 with three weekly direct flights to Lima, 
which will be the first direct flights in over 20 years from 
Asuncion to Lima. TACA will also offer three weekly 
non-direct flights to Lima via Montevideo. TACA's South 
American hub is in Lima with connections to the U.S., 
Ecuador, Colombia, Central America, and the Caribbean. 
 
2. (C) A Paraguayan-owned local carrier, Aero Regional 
Paraguaya, is to offer direct flights to Brazil, Argentina 
and Uruguay in October 2008.  The carrier will fly only one 
plane, with limited services to the capitals of those 
countries. Local entrepreneurs announced in April that 
Colombian-owned subsidiary of Avianca, Ocean Air, will 
service Paraguay.  The carrier was registered but it still 
has no presence in the country, and there are no indications 
that it is actually planning to operate in Paraguay.  Another 
locally owned carrier, Fly Paraguay, recently registered but 
it is not ""officially"" operating.  (NOTE: Several private 
representatives have told Emboffs that Fly Paraguay is a 
Cuban-owned carrier.  The former head of Air Cubana is said 
to be the investor behind the carrier.  President Lugo told 
Ambassador September 19 that he was suspicious about the Fly 
Paraguay investors who approached him.  END NOTE.) 
 
3. (U) According to the latest figures from the National 
Civil Aeronautics Secretariat (DINAC), Paraguay's demand for 
international flights grew by 20 percent in 2007.  The 
Brazilian-owned carriers GOL and TAM, along with the 
Bolivian-owned Aerosur and the Argentine-owned Aerolineas 
Argentinas (both now operating irregularly), are the only 
international carriers with regular daily service to 
Paraguay.  Regular direct flights outside Sao Paulo, Buenos 
Aires, and Montevideo remain non-existent, and TAM cut one of 
its three Airbuses serving Paraguay August 1, further 
reducing flight frequency and routes, as well as laying off 
200 employees.  (NOTE: Flight availability was an issue 
before TAM's decision to downsize.  To secure a seat during 
peak-season, reservations and confirmations for outbound 
flights 3 months in advance are the norm. END NOTE.) 
 
4. (SBU) COMMENT: The arrival of TACA and PLUNA should 
increase Paraguay's connectivity but will not remedy its air 
traffic isolation. Paraguay remains the only country in 
MERCOSUR without direct international flights to the U.S. or 
Europe.  There is a growing demand for air travel, but the 
law that guarantees a 6 percent commission for travel agents 
and ongoing security and infrastructure issues at Asuncion's 
Silvio Pettirossi airport make direct flights to the U.S. or 
Europe difficult at this time.  President Lugo's new 
government has shown interest in modifying the travel agent 
commission law and improving conditions at Silvio Pettirossi, 
which would be the first steps to attract additional 
carriers. Until that happens, however, Paraguay remains--for 
all intents and purposes--hostage to TAM's near monopoly on 
daily air service. END COMMENT. 
 
Please visit us at     http://www.state.sgov.gov/p/wha/asuncion 
 
AYALDE