- The Washington Times - Friday, March 30, 2007

KABUL, Afghanistan — Afghanistan’s airline is struggling to stave off collapse caused by corruption, mismanagement and a crippling airplane lease that has submerged the national carrier in debt.

The government reportedly is scrambling to court investors to privatize up to 75 percent of state-owned Ariana Afghan Airlines, and is tallying its assets in case the company is liquidated.

The failure of the 52-year-old airline, which survived the Taliban regime despite international sanctions, would be a potent symbol of failure by the administration of President Hamid Karzai and would reinforce growing perceptions of corruption and incompetence.

“If Ariana collapses, it will be a very heavy blow for people’s trust in government,” said Ziauddin Zia, deputy commerce minister.

Ariana is blacklisted from flying to European Union countries because of safety concerns; it mostly flies to the United Arab Emirates, India, and Turkey. U.S. Embassy and United Nations employees are also banned from flying the airline because of safety concerns.

Ariana’s former maintenance director told the Associated Press that the airline’s safety department issues licenses and certifications to mechanics and pilots in exchange for $200 to $500 bribes.

Yousuf Sultani, who left his post in February and now lives in the United States, also said Ariana has 500 people on its maintenance department payroll but that only 30 work.

Afghanistan’s transportation minister, Niamatullah Ehsan Jawid, acknowledged the airline is beset by corruption that prevents it from turning a profit. Ariana employs about 1,800 people but operates only seven planes.

Among the estimated $14 million in immediate debts Ariana owes is a $1.9 million bill to Chicago-based Boeing Co. for two leased 757s, which must be paid by today. Ariana also owes about $7 million to its Afghan fuel supplier, which could turn off the pumps any day.

“If they are patient we can continue, if they are not we will have to stop [flying] tomorrow,” said Abdul Rahman Sultani, Ariana’s vice president of finance. “Either the Afghan government helps us or we stop our service.”

Ariana owes $41 million overall, Mr. Sultani said. It earned $3 million profit last year on an estimated $74 million in revenue. It lost $25 million the year before.

Ariana’s acting president — engineer Raz Mohammad Alami, named last week after Ariana lost its second president in six months — hopes the U.S. will intervene and ask Boeing for leniency, though Boeing has already pushed back the due dates on some of the debts.

“We have been very lenient, and we will continue to do everything we can to help Ariana, just like we do all our customers,” said Brian Walker, Boeing’s communications director for the Middle East and Africa. He did not elaborate.

It was the leased Boeing 757s — which Ariana was never able to use as it wanted — that could cause financial ruin.

The planes, contracted in 2005, couldn’t be delivered for more than a year because of leasing agreements and security requirements, said Abdul Ahad Mansoori, Ariana’s former president. As the planes sat idle in London and Paris last year, Ariana was accruing about $1.1 million in monthly debt for the lease, parking, maintenance and flight crews, said Mr. Sultani, Ariana’s vice president of finance.

“I worked with integrity and honesty,” former Ariana President Mohammad Nader Atash said of his tenure between May 2005 and fall of 2006.

Mr. Atash, a university professor and researcher with no experience in the airline industry before his appointment, reputed that a high-level government mafia wants Ariana to fail so officials can start — and profit from — their own airline. He declined to name the officials, saying to do so could put him in danger.

“They thought that if Ariana is not there, it’s open season for themselves,” Mr. Atash said by phone from his home in Virginia.

Mr. Jawid said he would let 75 percent of Ariana be privatized if an outside investor wanted to take over the company. He said he planned to meet with executives from Dubai-based Emirates Airline next week. Other investors are said to have expressed interest but no firm offers have been made.

Mr. Jawid is also contemplating another proposal. He plans to ask U.S. Ambassador Ronald Neumann next week if the U.S. could help with the Boeing contracts in exchange for the value of the planes bombed by the U.S. military during the invasion in 2001.

The U.S. Embassy said it wouldn’t comment until it saw the specifics of any such request.

At least Ariana’s Afghan-based fuel supplier, which is owed about $7 million, appears ready to grant the airline more leeway.

Abdul Ghafar Dawi of the supplier Dawi Group said he will continue to give Ariana the 60 to 80 tons of fuel it uses every day.

“Ariana is the dignity of Afghanistan,” Mr. Dawi said. “All my friends say it will collapse, but I love Ariana.”

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