AZAL CONTRACTS FOR FOUR AIRBUS

Caspian Business News, 30 August 2004

By Gulnaz Guliyeva

BAKU, Azerbaijan - The state airline Azerbaijan Hava Yollari (Azal) has signed a contract with Airbus to buy three Airbus A319s and one Airbus Corporate Jetliner (ACJ). The Baku-based company becomes the first customer of Airbus in the South Caucasus.

The contract was signed in Berlin during the official visit of the Azeri President Ilham Aliyev. Aliyev and German Chancellor Gerhard Schroeder met for the signing ceremony.

"Azerbaijan's civil aviation has grown rapidly in recent years and our flag carrier has benefited from this growth through continuously increasing passenger numbers. Baku is becoming a leader in the transport field and a major air hub in the Caspian region," said Jahangir Askerov, general director of Azal, during the ceremony. "Our passengers already fly in modern and comfortable aircrafts, and we are pleased that our fleet will be joined by new Airbus aircraft, which help us to further consolidate our positions in the international market."

Airbus Chief Executive Noel Forgeard said that Azal's selection of the A320 family of aircraft marked a significant breakthrough in the Commonwealth of Independent States (CIS) market for Airbus. "We welcome Azal as the first Airbus customer in the Caucasus states, and we are confident that both airliner and corporate jet operations of Azal will contribute to more wealth."

Azal will receive its first A319 in mid-2005. All aircraft will be powered by CFM56-5 engines from CFM-International.

The A319 is a member of Airbus' best-selling single-aisle A320 family and features a spacious and comfortable cabin. Azal will configure the A319s with a flexible seat layout to host between 114 and 122 passengers in a two-class configuration. The airline will operate the A319s on its international network from Heydar Aliyev International Airport in Baku to European capitals and destinations in Asia and the Middle East.

The Airbus ACJ, with high quality and value for private transport, is based on the A319. The Airbus ACJ has twice the width of traditional business jets and three times the volume for about the same price as competing top-of-the-line aircraft. By the end of the year, more than 30 Airbus ACJ family aircraft will be in service worldwide.

The Azerbaijan ACJ can seat up to 55 passengers and will have a range of up to 9,000 kilometers, enough to fly non-stop from Baku to all European capitals and most major cities in Asia and Africa at a competitive operational cost. The ACJ is scheduled for delivery at the end of 2005.

Total cost of three Airbus A319s was 136.8 million euros ($168.3 million). Neither Azal nor Airbus announced cost of the ACJ.

Airbus is a global company with design and manufacturing facilities in France, Germany, the United Kingdom, and Spain, as well as subsidiaries in the United States, China, and Japan. Headquartered in Toulouse, France, Airbus is an EADS joint Company with BAE Systems.

Schroeder called on German investors to drop their reservations about the region around the oil-rich former Soviet republic, which borders Iran, Russia and Turkey.

Schroeder welcomed on Wednesday the reforms undertaken in Azerbaijan and hailed the economic growth that has begun in the country.

"The domestic reforms have led to surprising growth," said Schroeder, adding that efforts to improve the rule of law had brought "much success already."