US embassy cable - 05DUSHANBE1786

C O N F I D E N T I A L  DUSHANBE 001786 
 
SIPDIS 
 
 
E.O. 12958: DECL:  11/8/2015 
TAGS: PGOV, PREL, EAIR, ECON, TI, TU, RS 
SUBJECT: TAJIK AIR MONOPOLY HARMS TAJIKISTAN'S ECONOMIC PROSPECTS 
 
 
CLASSIFIED BY: Richard Hoagland, Ambassador, US Embassy 
Dushanbe, State. 
REASON: 1.4 (b), (d) 
 
1.  (SBU)  SUMMARY: Despite 30% annual growth, Tajikistan State 
Airlines (TSA) presents 
a mismanaged, bloated organization unable and unwilling to 
reform itself or 
respond to market forces.  Turkish Air is still negotiating to 
fly between 
Istanbul and Dushanbe, but threatens the very lucrative 
international 
travel that subsidizes TSA's domestic routes.  Despite limited 
attempts to 
modernize-including the promise of online ticketing in early 
2006-the 
leadership of Tajikistan Airlines shows little inclination to 
turn the 
company around and Tajikistan Airlines will likely remain an 
ineffective 
remnant of the Soviet days.  END SUMMARY 
 
2.  (C)  Anyone who has ever flown Tajik Air marvels at three 
things: the shabby 
interiors reminiscent of 1975, the haphazard way in which 
passengers elbow 
each other for seats and the box lunch with unidentifiable 
fluorescent green 
beverage, two boiled eggs and three candy bars.  During a 
November 2 lunch 
with Poloff, Firdavs Mukhtarov, Head of TSA's Marketing 
Division, painted a dismal 
picture of a company with $90 million annual turnover, but no 
business plan. 
TSA remains mired in the Soviet way of doing business.  Many of 
 
SIPDIS 
the fees for 
landing, taxiing and ground services are made in cash, remaining 
non-transparent and vulnerable to pilfering.  In 2001, TSA 
employed 125 
security workers at Dushanbe Airport; today almost 300 draw 
salaries of 
$50-65 a month.  (NOTE:  This wage is decent by local standards, 
where 
teachers and doctors officially earn $15-20 per month.  END 
NOTE.) 
Mukhtarov noted most new hires come to work, drink tea all day 
and leave. 
 
3.  (C)  TSA's international flights drive the company's 30% 
growth rate and 
subsidize domestic routes.  In addition to the two daily flights 
to Moscow 
and three weekly flights to Almaty, TSA operates weekly flights 
to Munich 
and Istanbul.  Around 15 Russian airlines fly between Tajikistan 
and Russia, 
meeting the growing demand for transport for at least half a 
million Tajiks 
working in Russia by flying into Tajikistan's smaller, regional 
airports 
like Khojand and Kilo. 
 
4.  (C)  Tajikistan Airline's General Director Mizro Anvarov is 
not receptive to any 
initiatives to make the company market-oriented, according to 
Mukhtarov. 
Anvarov took eight months to decide yes or no on a lucrative 
proposal to 
lease unused TSA helicopters to private ventures.  Mukhtarov 
observed that 
Anvarov places personal interests above corporate.  Anvarov's 
 
son represents 
one of the Russian airlines flying to Dushanbe and so the 
General Director has little incentive to expand TSA flights at 
the expense of his son's business. 
 
5.  (C)  Meanwhile, the work culture at Tajikistan Airlines 
mirrors the paralysis 
that seizes other parts of the Tajik government.  "If you don't 
do anything, 
you can't make a mistake," explained Mukhtarov.  "It is 
impossible to 
introduce any initiatives."  Despite this, he reported that TSA 
would 
implement an electronic reservation and ticketing system by 
January 2006. 
He dismissed the idea of refurbishing TSA's interiors to make 
them more 
attractive, observing they would be trashed in six months.  "Our 
planes are 
not old compared to Western fleets, but our customers do not 
understand 
commercial standards." 
 
6.  (C)  Despite more than two years of negotiations, Mukhtarov 
said Turkish Airlines 
was close to entering Tajikistan's market with regular 
Dushanbe-Istanbul 
flights, but TSA offered only one, between Ankara and Khojand 
only. 
Mukhtarov acknowledged many passengers would prefer to fly 
Turkish Air and 
three flights would make Istanbul a hub for Tajikistan-bound 
travelers, thus 
cutting into TSA's profitable international market.  Mukhtarov 
also 
indicated Turkish Air had originally offered Tajikistan Airlines 
a 
Munich-Istanbul route to help TSA passengers make more 
connections, but then 
rescinded the offer.  "Why would we give them something they 
took away from 
us?"  He asked. 
 
7.  (C)  COMMENT:  Mukhtarov has worked for Tajikistan Airlines 
for more than twenty 
years.  Like a minority of talented Tajiks, he carries the air 
of someone 
frustrated by ineptitude, but powerless to change anything.  We 
share his 
pessimism that any true reform can turn around Tajikistan Air. 
Only outside 
competition will change the airline industry in Tajikistan and 
make 
Tajikistan a destination that Western businessmen and tourists 
take 
seriously. 
 
8.  (C)  COMMENT CONTINUED:  We continue to see press reports 
that TSA is about to 
lease two "Boeing Airbuses."  According to our commercial 
section, this is 
nothing but sycophantic eyewash to please President Rahmonov, 
because he has 
said he wants to add Western aircraft to the TSA fleet.  END 
COMMENT. 
 
 
HOAGLAND 
 
 
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