Afghan Airline on Brink of Collapse over Debts, Graft, Mismanagement

The government is scrambling to court investors to privatize up to 75 percent of 52-year-old, state-owned Ariana Afghan Airlines.

The planes, contracted in 2005, couldn't be delivered for over 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 Sultani, Ariana's vice president of finance.

Boeing would not allow the planes to be based in Afghanistan, so Ariana hired France-based Eagle Aviation to register and operate the planes out of Paris, said Mansoori. Eagle would not allow its flight crew to be based in Kabul, so they were instead based in Dubai, meaning Ariana was paying for expensive plane parking and hotels for the crew, he said. Eagle earlier this month stopped flying routes for Ariana, saying it hadn't been paid $3 million (€2.25 million) it was owed, Mansoori said.

Afghanistan's attorney general's office is investigating whether any Afghan officials improperly benefited from the contracts. Deputy Attorney General Mohammad Aloko said the office hadn't named any suspects, but Transportation Minister Jawid and other officials question whether former Ariana President Mohammad Nader Atash profited from the deal.

"I worked with integrity and honesty," Atash said of his tenure between May 2005 and fall of 2006.

Atash, a university professor and researcher and with no experience in the airline industry before his appointment, alleged 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," Atash said by phone from his home in Virginia.

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.

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 some $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," Dawi said. "All my friends say it will collapse, but I love Ariana."


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