Will Tajik Air be declared bankrupt?

The state air carrier Tajik Air has actually suspended its main activity: the airline does not operate its flights to all destinations. Experts expect the air company to be declared bankrupt with its subsequent transfer to private hands.

Tajik Air has been facing problems of a different kind for a long time, however, they began to appear more vividly before the New Year holidays, when the airline began to carry flights for several days. Tajik Air said that flights were temporarily suspended to some destinations, and the air company was forced to make changes to the flight schedule for January 2019 due to the unprofitability of certain flights.

Later, the airline stated that the private airline Somon Air would serve passengers until the end of the autumn-winter period, as regards its flights to Russia.

After that, Tajik Air sent its employees on unpaid leave, and suspended all flights.

“The decision to release the employees was made in order to optimize expenses in a difficult time for the company. On vacation sent flight attendants and pilots, and other departments who are temporarily out of work. The head office of the air company is operating normally,” Tajik Air informed Asia Plus.

It was noted that a special commission had been created under the leadership of Prime Minister Kohir Rasulzoda, designed to examine the situation, conduct an audit of the financial activities of the airline and decide on its future.

“We hope the situation will change soon for the better and we will again fly according to the current flight schedule,” Tajik Air added then.

The national airline has experienced great financial difficulties since the end of the 2000th. Specialists of the airline say that in such conditions the air carrier turned out to be due to high prices for jet fuel and the unstable economic situation. They believe that only state support can save the airline from imminent bankruptcy.

Last summer, the Government created the Supervisory Board, which headed Mr. Rasulzoda to improve the financial condition of the airline. The Council adopted a special program of state support for OAO Tajik Air for 2018-2023, which was approved by a government resolution at the end of September last year.

In particular, the program was aimed at “attracting foreign and domestic investment, strengthening public-private cooperation”.

One of the points of the plan of measures attached to the Program was the State Committee on Investments and State Property Management, the Civil Aviation Agency and the airline itself were instructed to submit proposals on attracting investments through the privatization of the Tajik Air stake.

This means that the government, which owns full shares of Tajik Air, is ready to transfer the airline into private hands.

The support program planned to sell more than two dozen Tajik Air aircraft. It was planned to write off the balance of the airline and sell the aircraft of 1969-1992 years of release.

According to the plan of measures for the implementation of this program, the equipment of the airline is planned to be sold in 2018 and 2019.

This decision-making policy is due to “the completion of operational life and storage (decommissioning, conservation), the unprofitability of their recovery, greater fuel consumption compared to foreign aircraft, as well as to ensure flight safety.”

The proceeds are planned to be spent on the financial rehabilitation of the state-owned air carrier.

At present, Tajik Air’s fleet consists mainly of Soviet-made aircraft, such as TU-154M, TU-134 A-3, AN-24 B, AN-26, AN-28, Yak-40, MI-8 MTB helicopters, and other planes, namely Boeing 767-322, Boeing 757-200, Boeing 737-300, Boeing 737-500 and China’s MA-60. The total number of the air company’s aircraft was 34, including 31 aircraft and three helicopters.

Of the total number of aircraft only four aircraft are in good condition. Six of them are faulty, and 21 are in storage. Of the three helicopters, only one is operational.

Sources close to the airline say that the airline will be declared bankrupt in the near future, after which its shares may be in private hands.

“We have been systematically approaching this in recent years. The company was kept on a weak oxygen feed, mastering its resources in a roundabout way in its own interests. The bulk of the profits of Tajik Air were derived through aviation kerosene: a large amount of its revenue was spent on the purchase of fuel from a fueling company, which monopolized the sector and sells fuel to airlines at inflated prices. Another part of the state air carrier’s profit remained with the Air Communications Agency, through which all air tickets in Tajikistan are sold. Not only does this agency have 12% of each ticket, it allows itself for months not to transfer airline deductions,” a source said.

According to this source, all this led to the fact that Tajik Air owed “a tidy sum” to the international airports in Dushanbe and Khujand, Refueling Center, Tajik Air Navigation, Tajik Catering Service (in-flight catering) and Amonat Bank.

The source said, “Most likely, they will write off Tajik Air’s debts to state-owned enterprises and structures, and will sell the airline cheaper. But for the debts to private refueling center and Tajik Catering Service, the new owner will have to pay, since no one will forgive them,” the source concluded.

An economist Rustam Azizov says that any self-respecting state, in order not to become dependent on foreign airlines, should have its own state-owned airline.

“Tajikistan seems to have it, but it does not develop at all or simply does not want to develop it. Tajik Air was taken away most of the market, profitable flight directions. Even the head of state does not fly on Tajik Air planes, preferring the private Somon Air,” he said.

The continued existence of the state air carrier under such conditions, according to the economist, does not make sense.

“Even if there is government funding, it will also evaporate as the financial resources of the air company. It is better to transfer the airline to influential people who can afford to modernize its technical fleet and improve its financial condition,” he explained.

The economist added that the appearance on the market of a worthy competitor in person of Somon Air can lead to an improvement in the quality of services and a decrease in their value.

Source – https://news.tj/

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