Uzbekistan Airways SWOT: opportunities and challenges after reforms

Uzbekistan has emerged as an aviation market with huge potential, since president Shavkat Mirziyoyev took over two years ago following the death of the long-standing Soviet style dictator Islam Karimov. Uzbekistan has since embarked on a major reform path which has opened up tourism and is leading to a major restructuring of the air transport sector.

Uzbekistan is now focusing heavily on tourism, which has already experienced a more than doubling of visitor numbers over the past two years, and the country has put in place a new much less restrictive visa policy that should help drive further rapid growth. New policies aimed at encouraging growth in aviation have also been introduced, ushering in a new more liberal operating environment that should attract more foreign airlines and privately owned start-ups.

For the government-owned flag carrier, Uzbekistan Airways, the reforms create a more challenging environment of intense competition and an end to protectionism.

The airline is being separated from airports and other areas as Uzbekistan finally abandons the Soviet-style vertical structure in which the airline company controls virtually every facet of air transport, which has enabled cross-subsidisation with profits from monopolies in the airport and airspace sectors covering losses at the airline. The upside for Uzbekistan Airlines is that after a restructuring it should emerge as a leaner, more efficient airline with a strong position in a fast growing market on the cusp of a tourism boom.