Country Business Analysis I

Country Business Analysis I

Ariana Afghan Airlines was established on January 27, 1955. During the 1970s, Ariana was considered a top notch airline company by many travel experts. The airliner at that time had such equipment as Douglas DC-10s flying for them. Times looked bright for the airline company.

After the defeat of the Soviet Union in 1989 and former Najibulla's communist regime, the Taliban took over Kabul in 1996. Afghanistan faced substantial economic sanctions from the international sector during the Taliban. That, combined with the fact that the Taliban government took over the company and stopped all international flights, affected the airline's economic status through most of the 1990s, a period where their fleet was reduced to only a handful of Russian built An-26s, Yakovlev Yak-40s and three Boeing 727s, which were used on the longest domestic routes.

In October 1996, Pakistan provided a temporary maintenance and operational base at Karachi. During this time, the airliner's president was Hafez Younis. In 1999 Ariana flew only to Dubai and Saudi Arabia; also, limited cargo flights continued into China's western provinces. However, the UN sanctions forced the airline company to suspend overseas operations. In November 2001, the company was grounded completely.

After the removal of the Taliban government in 2001, following the September 11, 2001 Terrorist Attack, and subsequent U.S. invasion of Afghanistan, Ariana began to rebuild its operations by December 2001. About a month later, the UN sanctions were finally lifted so the airlines can fly again. As a gesture of good-will and step towards creating foreign relations with Afghanistan, the government of India gave the state carrier three Airbus A300s which had been in service with Air India.

By the other hand, the poor state of the Afghan transportation and communication networks has constrained the Afghan economy. In the absence of a railway system and functioning river ports, Afghanistan depend solely on road and air transport for the movement of passengers and goods. Domestic civil aviation serves an administrative and social function by providing access to areas with poor or non-existent road connections. Because of Afghanistan's remoteness, aviation is the most practical means for international travel. Afghanistan’s airspace, due to its strategic geographical location, offers one of the shortest routes between Asia and Europe. Keeping the Afghanistan’s airspace open to international over-flights broadly benefits the international community as well as the country itself.

From an operational perspective, the deterioration in aviation infrastructure has led to an inadequate capability of the air traffic services. In addition, the airline hasn't been devoid of tragedies. Since 1964 to 2000, Ariana Airlines had been surrounded in incidents and fatal accidents. Those issues put the airline in a big bad image throughout the world and have demonstrated a lack of ability to address the safety deficiencies. Considering those deficiencies, the immediate objective must be focused in analyzing the safety issues, their security, and then identifying ways of improvements for their image.

Once Ariana accomplish their security and image, the next objective is to reconstruct its infrastructure. With US help, the airline could joint with other international airline to maximize their functionality and efficiency. It could sign a money agreement (loan) to the construction or repair of air traffic control, electrical or communications equipment, and renovate the terminal buildings.

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