Tajik Commercial Air Service Modernization - Baby Steps

UNCLAS SECTION 01 OF 02 DUSHANBE 000210 SIPDIS SIPDIS SENSITIVE DEPT FOR SCA/CEN COMMERCE FOR ITA E.O. 12958: N/A TAGS: ECON ETRD EAIR TI SUBJECT: Tajik Commercial Air Service Modernization - Baby Steps Mixed News from Tajik Air -------------- ¶1. (SBU) In the past six months Tajik Air, the state-owned national carrier, has acquired four Boeing aircraft, all on wet-lease. It's not quite the improvement that it seems. The first two aircraft acquired were 25-year old Boeing 737s. They are not allowed to land in Russia or the European Union due to inconsistencies in their maintenance records, but are flying between Dushanbe and Khujand and Almaty. When they showed up here, media carried some commentary about their ineligibility to fly even to Russia, and the dubious financial planning involved in their acquisition (they might fly at a loss). With these shortcomings, they might still represent a step up from Tajik Air's fleet of decrepit Tupolev 154s. The Tajik Air Tupolev fleet has dwindled over the years as airplanes became too old to use, and the Dushanbe airfield is littered with these abandoned aircraft. Only four Tu-154s actually fly, and these are reportedly within two years of the end of their service lives. (When their service will actually end is another matter.) ¶2. (U) On a better note, in January 2008 Tajik Air leased a Boeing 757 from Russia's VIM-AVIA, and is flying it to Russian destinations and Sharjah. Tajik Air reports it has agreed to lease a second 757, and will soon begin to use both airplanes with Tajik pilots and cabin crew. They plan to have the crews trained in the United States by Boeing subsidiary Alteon Corporation. The government also continues to express interest in acquiring a new 737 to serve as a presidential aircraft and to fly commercial service for Tajik Air when not serving the president. Newly promoted Deputy Prime Minister Alimardon insists the president would need a brand new aircraft - price tag $40-50 million. Somon Air -- a Better Bet? -------------- ¶3. (SBU) Meanwhile Somon Air, Tajikistan's "first private airline," seems about to fly (after years of talk). Somon Air is owned by Presidential brother-in-law Hassan Asadullozoda (formerly Saddulloev) and managed by former General Director of Tajik Air Mr. Mirzo Mastangulov. Like most other people of influence in Dushanbe, Mastangulov is from the President's home district of Kulyob. Insiders at the new airline's parent company, Somon Capital, report that he is not an effective manager, and that they are seeking expatriate managers. ¶4. (SBU) Somon recently acquired its first aircraft, a Boeing 737-800 wet-leased from a Turkish company. Somon says it will acquire more planes this coming summer, but will begin with this one plane flying to Moscow, Almaty, Urumqi, Dubai, and Istanbul on a weekly schedule. This is largely a virtual airline, with maintenance carried out in Istanbul, few staff, and ticket sales being handled by Tajik Air. This relationship has already proven to be a problem, as finding the tickets is difficult, and Tajik Air has prevented the Moscow service from beginning by holding up delivery to Russian civil aviation authorities of a code-share agreement between it and Somon Air. ¶5. (SBU) Tajik Air probably also had a hand in a recent total disruption of air service with Russia. On February 2 Russian authorities suspended all Tajik Air flights into Russia because Tajik civil aviation authorities tried to impose a fee of $15 on every passenger arriving in Tajikistan on a Russian carrier. By Qevery passenger arriving in Tajikistan on a Russian carrier. By late Saturday night the suspension had been temporarily cancelled, and the two sides have agreed to talk this out over the next few weeks. ¶6. (SBU) Comment - Not a Free Market Revolution: Somon Air's strategy may be to eventually replace a dying Tajik Air with its own presidentially-connected monopoly, but Tajik Air's effort to modernize suggest the state airline isn't going under without a fight. And as long as Tajik Air exists, it will try to hinder the development of independent air services. An example of this is Turkish Air, which has tried for years to get a third weekly flight from Istanbul without success, despite (or because of) the overwhelming demand for its existing two weekly flights. Relations with Uzbekistan represent another political distortion in the local airline market; air service to any point in Uzbekistan is non-existent, due to enmity between the two countries. This is despite the fact that many Tajiks have family and business connections in Uzbekistan, and vice-versa. Things are changing slowly here, and Tajikistan is still hard to access, expensive to get to, and generally off the map. End Comment. DUSHANBE 00000210 002 OF 002 JACOBSON