Will AZAL change with the departure of Jahangir Askerov?

Baku/04.09.23/ - In a notable development, Jahangir Asgarov, who had been at the helm of Azerbaijan Airlines CJSC (AZAL) since 1996, has been removed from his position as President by an order signed by President Ilham Aliyev on September 1. This shift in leadership has raised questions about potential shifts in the quality and pricing of services offered by AZAL. The responsibilities of the erstwhile head of AZAL have been entrusted to Samir Musa oglu Rzayev, the First Vice President of CJSC, on a temporary basis.

Anticipating the repercussions of this leadership change, economist Natig Jafarli delved into the matter during a segment of the program "Difficult Question." Jafarli underscored that the merger of AZAL and its low-cost subsidiary, Buta Airways, under a unified brand in October 2023 was an early indicator of forthcoming structural and managerial alterations within AZAL.

Jafarli noted that the removal of Jahangir Asgarov was not entirely unforeseen, given that the company had faced significant media scrutiny and even garnered attention from the country's president himself. Speculation had also arisen regarding Asgarov's absence from work and his purported reduced involvement in the company's operations.

Yet, Jafarli cautioned against overly optimistic expectations that the departure of Asgarov would instantaneously rectify the perceived shortcomings of AZAL. He emphasized that a comprehensive evaluation of the company's condition was challenging due to limited transparency around subsidies and asset calculations.

The expert raised pertinent queries about recent agreements made by AZAL, such as the $2.6 billion deals with Airbus and Boeing for aircraft supply in the current year. He pondered whether the burden of repayment would fall upon AZAL or be drawn from the state budget. The intricacies surrounding these agreements and their implications for AZAL's financial health remained enigmatic, casting a shadow over the company's fiscal landscape.

Jafarli acknowledged the modern fleet, airport infrastructure, and accumulated funds within AZAL's coffers. However, he underscored the imperative to differentiate between assets earned through the company's operations and those sourced from subsidies. The economist also highlighted the ambiguity surrounding AZAL's tax contributions and called for a comprehensive understanding of the company's financial position.