The problem of the aviation sector the monopoly of AZAL, - expert

Baku / 14.08.20 / Turan: As long as the airports and the national air carrier are in the hands of one company,  the  aviation sector of Azerbaijan will not improve, said the economic expert Emil Guliyev  in an interview with the Azerbaijani service of the Voice of America radio.

Recently, President Ilham Aliyev sharply criticized the activities of state-owned companies, including AZAL (Azerbaijan Airlines CJSC) for economic inefficiency.

“If AZAL accumulates huge tax debts, which are then canceled out due to the financial amnesty, then there is a systemic problem in the activities of this company, and its work is not properly set,” he said. 

Reforms in the company should begin with the separation of airports from the national air carrier. No matter how many AZAL representatives deny their monopoly, claiming equal conditions for all airlines, this is not the case.

“We do not know what conditions AZAL puts forward for airlines wishing to operate flights to Baku, but conclusions can be drawn based on the lack of results of negotiations. The story of the Romanian airline "Tarom", which wished to start direct flights from Georgia, Armenia, Azerbaijan and Ukraine to Romania, is indicative. 

A few months later, the company began direct flights from Tbilisi, Yerevan and Odessa to Bucharest. Only Baku was not on this list. One can only guess about the conditions put forward by AZAL, ”the expert said.

In his speech, Ilham Aliyev hinted at the possible privatization of some state-owned companies, and AZAL should be the first on this list, Guliyev said.

“To begin with, the air carrier should be separated from the airports, which should function as a separate commercial structure. After that, AZAL will have to survive in a competitive environment and build its work on the principles of a market economy,” Guliyev said.

He noted that the main discontent of passengers is the high cost of tickets for AZAL flights and the small number of low-budget companies (low-cost airlines) in the Azerbaijani market.

One of the possible options is the transfer of airports to the management of foreign companies, as in neighboring Georgia, where a Turkish company operates Tbilisi and Batumi airports.

“This practice has been successful, the number of airlines and the geography of flights have expanded. Even Azerbaijani citizens often use Georgian airports to fly abroad, ”Guliyev continued.

Another important point is the need to sign an aviation agreement between Azerbaijan and the EU.

“Appointing the new Foreign Minister Jeyhun Bayramov, the President of the country instructed him to complete negotiations on an agreement with the EU. The talk is about two agreements. The first is a new agreement with the EU and a second aviation agreement. Without this agreement, there will be no improvement in the aviation sector. EU representatives often repeat that Azerbaijan wants to become a transport hub, but without solving the problems with aviation, such a hub is impossible,” Guliyev summed up. –71D-