VZCZCXRO0266
RR RUEHLN RUEHVK RUEHYG
DE RUEHDBU #1136/01 2550536
ZNR UUUUU ZZH
R 110536Z SEP 08
FM AMEMBASSY DUSHANBE
TO RUEHC/SECSTATE WASHDC 0979
INFO RUCNCIS/CIS COLLECTIVE
RUEHIL/AMEMBASSY ISLAMABAD 0218
RUEHBUL/AMEMBASSY KABUL 0253
RUEHNE/AMEMBASSY NEW DELHI 0171
RUCPDOC/DEPARTMENT OF COMMERCE WASHINGTON DC 0042

UNCLAS SECTION 01 OF 02 DUSHANBE 001136 
 
SIPDIS 
SENSITIVE 
 
DEPARTMENT FOR SCA/CEN 
 
E.O. 12958: N/A 
TAGS: ECON ETRD PGOV EAIR TI
SUBJECT: TAJIKISTAN - BOEINGS ALL OVER, COMPLICATION SOARS 
 
¶1. (U) This message is sensitive but unclassified.  Please protect 
accordingly. 
 
¶2. (SBU) Summary: Boeing seems set to significantly expand its 
presence in Tajikistan over the next few months.  But we expect 
turbulence on the route to improved airline services here, as the 
two airlines in question face a lack of infrastructure to handle the 
new planes and financing problems.  Political interference is 
constant.  End Summary. 
 
ILFC COMES TO TOWN, FINDS TAJIK AIR AN ODD CUSTOMER 
 
¶3. (SBU) State-owned Tajik Air is hurrying to acquire more and 
larger Boeing aircraft.  Representatives of the International Lease 
Finance Corporation (ILFC) of Los Angeles arrived in Dushanbe on 
September 9 to discuss and possibly finalize an agreement with Tajik 
Air to lease-to-buy a used Boeing 757.  The ILFC representatives 
told emboff that their interactions with Tajik Air so far had led 
them to view Tajik Air as very inexperienced in dealing with leasing 
companies and the non-CIS aviation industry in general, and possibly 
unreliable.  They noted mirthfully that Tajik Air had tried to meet 
its obligation to deposit $1 million with ILFC for the 757 by using 
a letter of credit, and had complained that it did not know who ILFC 
was and that ILFC didn't use an official stamp on its documents. 
 
¶4. (SBU) ILFC had also heard that Tajik Air's relationship with VIM 
Avia of Russia, from which it was currently wet leasing two 757s, 
had soured over allegations of unpaid bills for training and 
services to VIM Avia [Note: There are also rumors that Tajik Air 
owes several million dollars to various parties for fuel].  ILFC 
representatives speculated that Tajik Air was in a hurry to conclude 
its deal with ILFC before Tajik Air is broken up and privatized in 
three separate companies - air transport, ground services, and 
navigation services, due to take effect January 1, 2009.  They 
expressed unease that Tajik Air officials believed the agreement to 
lease the 757 could be wrapped up during ILFC's two day visit to 
Dushanbe, especially considering that Tajik Air had not yet bothered 
to translate the associated 20-page contract into Russian or Tajik. 
Emboff noted that Tajik Air's breakup has been scheduled and 
rescheduled for several years, and is not sure to happen this time 
around.  Questions of which division of the company would assume 
which debts had so far blocked the breakup. 
 
¶5. (SBU) ILFC said their main concern was that Tajik Air might, due 
to its complicated financial situation and sense of invulnerability 
in Tajikistan's very weak rule-of-law environment, someday stop 
making payments to ILFC for the 757, at which point ILFC was unsure 
it would be able to repossess the aircraft.  They wanted to enlist 
the Embassy's support up front for what they expected to be a 
difficult relationship.  They could not say when the 757 might 
actually enter service in Tajik Air. 
 
MORE PRESIDENTIAL PRESTIGE SPENDING 
 
¶6. (SBU) ILFC representatives had heard from Boeing that Tajik Air 
was in discussions with Boeing about the purchase of a new Boeing 
Business Jet 737 to serve as an executive transport for President 
Rahmon. 
 
SOMON AIR PUSHED TOO FAST 
 
¶7. (SBU) Emboff also met recently with the Director General Rustam 
Khalikov of Somon Air, "Tajikistan's First Private Airline." 
Khalikov said Somon was moving forward with plans to buy two new 
737-800s, and to lease two more 737-800s.  The only problem was that 
Q737-800s, and to lease two more 737-800s.  The only problem was that 
Somon was moving too fast for his comfort, planning to acquire two 
of the airplanes before the end of 2008, and the other two in early 
¶2009.  He said that Somon's shareholders were forcing the rapid pace 
of acquisition for reasons not based on business needs, and that he 
lacked ground support, trained crews, and even ticketing 
arrangements for the new airplanes.  The new 737s also did not come 
with comprehensive maintenance training packages, a step taken to 
lower their price, which he thought was foolish and ultimately would 
be more expensive.  Because of this complex of problems, at the same 
time that new airplanes would arrive, he was being forced to go to 
Pegasus Airlines of Turkey to renew Somon's wet lease of a 737, at a 
price he considered extortionate.  He would not say who Somon Air's 
shareholders were. 
 
MINISTER OF TRANSPORT - STATE DIRECTED AIR ROUTES, PLEASE 
 
¶8. (SBU) In late August Emboffs met with Minister of Transport Ashur 
to discuss the prospects for improved regional aviation services. 
He stressed the importance of developing aviation links with 
Uzbekistan, cut off for several years from Tajikistan because of bad 
blood between the two countries' presidents.  He also complained 
 
DUSHANBE 00001136  002 OF 002 
 
 
about "imbalances" in airline service in the region, saying that 
airlines wrongly served only their own commercial interests, when 
they should be flying unprofitable routes too to provide air service 
to smaller communities.  He said that the important decisions in 
regional airline service were political in nature, and "we should 
not leave everything to the airlines to decide." 
 
¶9. (SBU) Comment: The acquisition of new Boeings is good news, but 
the ability of the airlines to operate them reliably is still in 
doubt.  The comments by the Minister of Transport are illustrative 
of the inclination of senior government officials to interfere in 
business decisions.  Somon Air's problems are likely also of 
official origin; the airline's unnamed shareholders probably include 
the President's family, and the high-level impulse to simply decree 
the existence of a private airline is resulting in new planes 
without trained crews or support infrastructure.  End Comment. 
 
QUAST