Identifier
Created
Classification
Origin
09DUSHANBE1112
2009-09-30 11:08:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Dushanbe
Cable title:
TAJIKISTAN - BOEING MAKES A DEAL WITH SOMON AIR
how-toVZCZCXRO7852 RR RUEHLN RUEHSK RUEHVK RUEHYG DE RUEHDBU #1112/01 2731108 ZNR UUUUU ZZH R 301108Z SEP 09 FM AMEMBASSY DUSHANBE TO RUEHC/SECSTATE WASHDC 0778 INFO RUCNCIS/CIS COLLECTIVE RUEHBUL/AMEMBASSY KABUL 0254 RUCPDOC/DEPT OF COMMERCE WASHINGTON DC RUEHDBU/AMEMBASSY DUSHANBE 1638
UNCLAS SECTION 01 OF 02 DUSHANBE 001112
SENSITIVE
SIPDIS
DEPARTMENT FOR SCA/CEN
E.O. 12958: N/A
TAGS: ECON ETRD PGOV EAIR TI
SUBJECT: TAJIKISTAN - BOEING MAKES A DEAL WITH SOMON AIR
REF: DUSHANBE 932
DUSHANBE 00001112 001.2 OF 002
UNCLAS SECTION 01 OF 02 DUSHANBE 001112
SENSITIVE
SIPDIS
DEPARTMENT FOR SCA/CEN
E.O. 12958: N/A
TAGS: ECON ETRD PGOV EAIR TI
SUBJECT: TAJIKISTAN - BOEING MAKES A DEAL WITH SOMON AIR
REF: DUSHANBE 932
DUSHANBE 00001112 001.2 OF 002
1. (SBU) Summary: Boeing has reached an agreement with Somon
Air (which is controlled by the President and his family),to
provide Somon Air up to six 737 aircraft by 2012. With the
aircraft, Boeing will provide a comprehensive package of
training for Somon pilots and maintenance staff and analytical
support to develop Somon's routes and company structure. Somon
says it will expand its routes considerably with these aircraft.
Somon Air seems to be in the process of replacing state-owned
Tajik Air, which would presumably go out of business when Somon
Air becomes large enough to take over its traffic. End Summary.
2. (SBU) Boeing Vice President for Middle East and Africa Marty
Bentrott called on Ambassador September 30, accompanied by
Jamshed Rahmonberdiev of Somon Capital, to discuss Boeing's new
relationship with Somon Air. Boeing will sell two 737s to
Somon, and will deliver them in two years. Somon will lease
two, and possibly up to four more 737s by 2012. Somon already
operates two 737-800s. Somon is entering into a comprehensive
relationship with Boeing, which will include training of
maintenance and flight crews, and assistance to develop routes
and marketing relationships.
AS ALWAYS IN TAJIKISTAN, BIG PLANS
3. (SBU) Rahmonberdiev, of Somon Capital, said Somon air would
expand its routes to Istanbul and Riga in the next month, later
start service to several cities in Russia, and is negotiating
with Chinese authorities to start service to Urumqi. They are
also considering flights to South Asia and Bangkok. Expanded
service within central Asia was less interesting to them,
because of low demand and Tajik Air's present regulatory
monopoly.
4. (SBU) Rahmonberdiev and Bentrott noted that the airplanes
bought directly from Boeing would be financed and would cost
less that the two 737s Somon bought last year from other owners.
Somon Capital paid cash for those two planes, did not do its
homework, and found itself with planes that needed expensive and
time consuming reconfigurations. They also lacked technical
support, forcing Somon to engage Turkish Air in an expensive
support contract.
5. (SBU) Bentrott said that a Boeing representative would likely
come to live in Dushanbe closer to the delivery date to ease
communications between Somon and Boeing. Next year Somon would
send about 60 pilots and technicians to Seattle for training on
the 737. In the near term, Somon Capital will visit Washington,
D.C. and Seattle in late October and will want to meet with
EximBank to discuss possible support from EximBank for this deal.
6. (SBU) No one from Somon Air itself came to the meeting.
Somon Air is owned by OrionBank, controlled by the President and
run by his brother-in-law. Somon Capital, half-owned by
OrionBank, is contracted to handle all financial dealing for new
aircraft for Somon Air, while the air company only operates the
aircraft. Rahmonberdiev, the CEO of Somon Capital, was
previously the embassy's commercial FSN and attended secondary
school in the United States under the FLEX program. Somon Air's
management comes with long experience at Tajik Air and is
reportedly unfamiliar with western business practices.
COMMENT: SLIGHTLY LESS STUPID, AS CORRUPT AS EVER
7. (SBU) Somon Air has been a comedy of errors, reflective of
political interference and the slavish need, which permeates
Tajik business and government, to instantly and unquestioningly
gratify every presidential whim. Last year Somon Air hastily
bought two aircraft, one new and the other barely used, to
satisfy a political priority to establish a private airline.
Thinking about aircraft internal configuration, engine software,
training, and maintenance all came later. Predictably the
DUSHANBE 00001112 002.2 OF 002
aircraft proved more expensive and difficult to operate than
foreseen. Somon had to turn to Turkish Air to fly and maintain
them. They seem now to be trying the old fashioned way, working
with Boeing to develop a plan and the planes and people to carry
out that plan. The scale of Somon's planned expansion indicates
that as in Kazakhstan, the new "private" airline will supplant
the existing state carrier, which will presumably then go
bankrupt. Even in these economically difficult times, finding
the money for all this seems not to be a problem. The President
and his close associates control Somon Air but, as Rahmonberdiev
has told us, the money to buy the airplanes comes from the
financially opaque and ostensibly state-owned Tajik Aluminum
Company. End Comment.
GROSS
SENSITIVE
SIPDIS
DEPARTMENT FOR SCA/CEN
E.O. 12958: N/A
TAGS: ECON ETRD PGOV EAIR TI
SUBJECT: TAJIKISTAN - BOEING MAKES A DEAL WITH SOMON AIR
REF: DUSHANBE 932
DUSHANBE 00001112 001.2 OF 002
1. (SBU) Summary: Boeing has reached an agreement with Somon
Air (which is controlled by the President and his family),to
provide Somon Air up to six 737 aircraft by 2012. With the
aircraft, Boeing will provide a comprehensive package of
training for Somon pilots and maintenance staff and analytical
support to develop Somon's routes and company structure. Somon
says it will expand its routes considerably with these aircraft.
Somon Air seems to be in the process of replacing state-owned
Tajik Air, which would presumably go out of business when Somon
Air becomes large enough to take over its traffic. End Summary.
2. (SBU) Boeing Vice President for Middle East and Africa Marty
Bentrott called on Ambassador September 30, accompanied by
Jamshed Rahmonberdiev of Somon Capital, to discuss Boeing's new
relationship with Somon Air. Boeing will sell two 737s to
Somon, and will deliver them in two years. Somon will lease
two, and possibly up to four more 737s by 2012. Somon already
operates two 737-800s. Somon is entering into a comprehensive
relationship with Boeing, which will include training of
maintenance and flight crews, and assistance to develop routes
and marketing relationships.
AS ALWAYS IN TAJIKISTAN, BIG PLANS
3. (SBU) Rahmonberdiev, of Somon Capital, said Somon air would
expand its routes to Istanbul and Riga in the next month, later
start service to several cities in Russia, and is negotiating
with Chinese authorities to start service to Urumqi. They are
also considering flights to South Asia and Bangkok. Expanded
service within central Asia was less interesting to them,
because of low demand and Tajik Air's present regulatory
monopoly.
4. (SBU) Rahmonberdiev and Bentrott noted that the airplanes
bought directly from Boeing would be financed and would cost
less that the two 737s Somon bought last year from other owners.
Somon Capital paid cash for those two planes, did not do its
homework, and found itself with planes that needed expensive and
time consuming reconfigurations. They also lacked technical
support, forcing Somon to engage Turkish Air in an expensive
support contract.
5. (SBU) Bentrott said that a Boeing representative would likely
come to live in Dushanbe closer to the delivery date to ease
communications between Somon and Boeing. Next year Somon would
send about 60 pilots and technicians to Seattle for training on
the 737. In the near term, Somon Capital will visit Washington,
D.C. and Seattle in late October and will want to meet with
EximBank to discuss possible support from EximBank for this deal.
6. (SBU) No one from Somon Air itself came to the meeting.
Somon Air is owned by OrionBank, controlled by the President and
run by his brother-in-law. Somon Capital, half-owned by
OrionBank, is contracted to handle all financial dealing for new
aircraft for Somon Air, while the air company only operates the
aircraft. Rahmonberdiev, the CEO of Somon Capital, was
previously the embassy's commercial FSN and attended secondary
school in the United States under the FLEX program. Somon Air's
management comes with long experience at Tajik Air and is
reportedly unfamiliar with western business practices.
COMMENT: SLIGHTLY LESS STUPID, AS CORRUPT AS EVER
7. (SBU) Somon Air has been a comedy of errors, reflective of
political interference and the slavish need, which permeates
Tajik business and government, to instantly and unquestioningly
gratify every presidential whim. Last year Somon Air hastily
bought two aircraft, one new and the other barely used, to
satisfy a political priority to establish a private airline.
Thinking about aircraft internal configuration, engine software,
training, and maintenance all came later. Predictably the
DUSHANBE 00001112 002.2 OF 002
aircraft proved more expensive and difficult to operate than
foreseen. Somon had to turn to Turkish Air to fly and maintain
them. They seem now to be trying the old fashioned way, working
with Boeing to develop a plan and the planes and people to carry
out that plan. The scale of Somon's planned expansion indicates
that as in Kazakhstan, the new "private" airline will supplant
the existing state carrier, which will presumably then go
bankrupt. Even in these economically difficult times, finding
the money for all this seems not to be a problem. The President
and his close associates control Somon Air but, as Rahmonberdiev
has told us, the money to buy the airplanes comes from the
financially opaque and ostensibly state-owned Tajik Aluminum
Company. End Comment.
GROSS