Cablegate: Taiwan: Belated Progress On Cross-
This record is a partial extract of the original cable. The full text of the original cable is not available.
082257Z Aug 05
UNCLAS SECTION 01 OF 02 TAIPEI 003292
SIPDIS
STATE PASS TO AIT/W
STATE ALSO FOR EAP/RSP/TC
E.O. 12958: N/A
TAGS: EAIR TW
SUBJECT: TAIWAN: BELATED PROGRESS ON CROSS-
STRAIT DIRECT LINKS NEGOTIATIONS
1. Summary. In an August 3 press conference, Premier Frank
Hsieh announced that Taiwan authorities will grant approvals
to Taiwan carriers overflying China's airspace, and are
willing to negotiate with China on passenger/cargo direct
charter flights. Most political parties and companies are
happy both about this announcement, and about the initial
positive response from China. Mainland Affairs Council
(MAC), Ministry of Transportation and Communications (MOTC)
are working on the fleshing out relevant regulations while
the designated negotiator Taipei Airlines Association (TAA)
is awaiting further instructions. As People First Party
Vice Convener Sun Da-chien commented, although this good
news arrives very late, it is "Better late than never." End
summary.
Premier's Announcement
----------------------
2. In the Aug. 3 announcement, Hsieh explained that the
decision was made mainly to keep domestic air carriers
competitive by cutting down on flying time and fuel costs.
He added that he has instructed MAC and MOTC to make all
necessary arrangements. When asked whether Taiwan will open
its airspace to China's air carriers, the Executive Yuan
indicated that this issue would not be included in the
negotiation agenda. In conclusion, EY spokesman Cho Jung-
tai conveyed Taiwan's hope that this good-will gesture could
reopen the cross-strait dialogue mechanism.
China Gives Positive Response
-----------------------------
3. After Premier Hsieh made the announcement, China's Taiwan
Affairs office spokesman responded that China welcomes this
statement, and reiterated that they will try to make
progress on issues to expedite positive interactions and
maintain cross-Strait peace.
4. KMT whip Cho Bou-yuen said that the KMT welcomes this
announcement. PFP Vice Convener Sun Da-chien indicated that
in March 2005 he received information that domestic carriers
had already received China's approval to overfly China on
their Taiwan-EU routes. Sun thinks Premier's announcement
comes too late, but commented, "Better late than never."
TSU Secretary General Chen Chen-lung commented that from a
SIPDIS
cost-saving point of view, the TSU supports this initiative
on renewed cross-Strait negotiations as long as it is based
on equal sovereignty status. CIER President Chen Tien-jy
said he believed that this initiative would strengthen
Taiwan-EU economic ties. Taiwan Electrical and Electronic
Manufacturers' Association (TEEMA) Chairman Hsu Sheng-hsiung
suggested that Taiwan authorities follow the current New
Year charter flight negotiation model to conduct cross-
strait negotiations as soon as possible. Even if
passenger/cargo charter flights cannot be implemented in one
step, at least the cargo flights might get started. Hsu
added that Taiwan authorities should play a role as
consultant, not negotiator, "because only the carriers know
the important issues."
Implementation Agencies
------------------------
5. Mainland Affairs Council (MAC) explained that its reason
for approving overflying China and negotiating
passenger/cargo charter flights was to enhance Taiwan air
carriers' competitiveness. MAC said the next step depends
on China's response. Although it is acceptable for Taiwan
to negotiate both passenger and cargo charter flights at the
same time, Taiwan hopes to negotiate the cargo operation
first. According to MAC, it is very unlikely that China
will propose that their carriers overfly Taiwan's airspace.
MAC expects to follow the New Year charter flights as a
negotiation model. Premier Hsieh subsequently stated
publicly that Taiwan could not permit Chinese overflights
for reasons of national security.
6. According to Ministry of Transportation and
Communications (MOTC) Minister Lin Lin-san, carriers who
want to overfly China airspace only need to get approvals
from civil aviation authorities from both sides. MOTC will
coordinate with MAC to draft regulations for overflying
China within three days, with EY ratification expected
within five days. Once the EY approvals the regulations,
carriers may submit applications. On the passenger charter
flights, EY intends to focus on holidays first, in line with
China's earlier offer to allow such flights.
7. Civil Aeronautics Administration (CAA) Director General
Billy Chang said that once the overflight regulation is
approved by EY, CAA will complete carriers' applications
within one week. Taipei Airlines Association (TAA) Chairman
Fan Chih-chiang confirmed that he received MAC's oral
instructions on cross-strait negotiations on the evening of
August 3. He believes that although negotiation details are
much more complicated this time, there is a good chance for
success because authorities on both sides are willing. Fan
pointed out that Taiwan carriers are more interested in
cargo flights, while China has its eye on passenger flights.
According to Fan, Taiwan-based China Airlines suggested that
the first stage of direct cross-strait flights be cargo
flights between Taiwan and Shanghai, with Guangzhou and
Beijing added later. So far, except for MAC's oral notice,
Fan has not received any concrete instructions on
negotiations from the government. Therefore, TAA has not
taken any actions yet.
8. Taiwan carriers support passenger charter flight service
during holidays. Some carriers, including FAT and
TransAsia, are against two-day weekend charters, because on
most Fridays/Saturdays, there would be only Taiwan-bound
passengers, while on most Sundays/Mondays there would be
only China-bound passengers, making flights hard to operate
profitably.
Taiwan Major Carriers Movement
-------------------------------
9. CAL and EVA, the major beneficiaries, expect that
overflying China could save their EU/South Asia/Mid Asia-
bound flights lots of flight time, and could therefore save
an annual fuel cost of NTD 150 million each. CAL will
submit overflying-China applications to CAA on its Taipei-
Vienna, Taipei-Hanoi and Taipei-New Delhi routes. EVA AIR
will take the same action.
10. The airlines provided the following expected cost/time
saving from overflying China:
CAL Route Saving Time Saving Fuel
------ ----------- -------------- ---------------
Passenger Taipei-Frankfurt one hour USD 10,000-20,000
Taipei-Vienna one hour same
Taipei-New Delhi 30 min same
Taipei-Hanoi 30 min same
Cargo Nine EU-bound one hour/flight
routes
EVA Route Saving Time (one way)
------ ---------------- ------------------
Passenger Taipei-Paris one hour
Taipei-Vientiane 10-30 min
Taipei-Hanoi 10-30 min
Cargo Different destinations 10-30 min/flight
(overall fuel costs could reach NTD 0.2 billion a year)
PAAL