On 20 October 1910, a plane flew over Baku for the first time. Childishly clumsy and unstable, French biplane Farman III piloted by Sergey Utochkin made a few circles above awestruck lookers-on and, acclaimed by a thunder of applause, landed.
After this introduction of Azerbaijan to aviation, it took only 13 years for the new type of air transport to acquire an official status in the region: the Caucasus Joint Stock Company of Civil Aviation - ZAKAVIA - was established in 1923. It was founded by the Mughan Melioration Construction, the Caspian Shipping Company and AzNeft (Azerbaijan Oil Company). ZAKAVIA planes were intended to conduct aerial surveys, deliver emergency goods and carry mail.
ZAKAVIA proved to be a good manager. As early as in April 1923, a Junkers airplane performed a return flight from Baku to Tbilisi, while two years later an airfield was built in Kishly and an airport terminal opened.
In 1926, regular flights began on the Mineralnye Vody–Grozny–Makhachkala–Baku–Yevlakh–Tbilisi route. Airports started operating in Baku, Yevlakh and Shaki where Dornier Komet III and Dornier Merkur planes were based. Their crew consisted of two people. The successful completion of a flight largely depended on the skill of the pilots because the aircraft had no navigation equipment at the time. Pilots were guided by roads, railway lines, local terrain and other features known only to themselves. Despite the imperfections, the international air-route Kharkiv-Baku-Bandar-e Pahlavi was opened in 1929, while in 1933 a first flight to Moscow over the Caucasus ridge was carried out, shortening the distance of the route by 1100 km. A regular air-route Baku-Moscow was opened in 1937. It was operated by local aircraft Kharkov KhAI-1 and Putilov Stal-3 which carried 15 passengers a day. It was quite an impressive figure at the time.
The Baku-Kharkiv, Baku-Grozny, Baku-Rostov-on-Don, Baku-Astrakhan, Baku-Tbilisi flights were introduced the following year, while the Baku airport received the status of a separate economic unit by a resolution of the Council of People's Commissars. On 2 June 1938, the first aviation group was established in Azerbaijan. In 2006, by the decree of Ilham Aliyev, the President of the Republic of Azerbaijan, this date was declared the Day of Civil Aviation of Azerbaijan.
A decade earlier, another landmark event took place, justifying the hopes of enthusiasts that aviation would be used in many spheres of human activity. During one of the flights over the Caspian Sea pilot Teymur Mustafayev spotted an oil slick on the surface of the water. On returning to the airfield, he communicated the coordinates of the place to geologists who subsequently discovered a major hydrocarbon deposit there. Thus, aviation contributed to the establishment of a new industrial sector – offshore oil production.
Economic development in Azerbaijan, the key oil industry center of the Soviet Union, was very rapid at the time, enabling Azerbaijani aviation great confidence in the sky. It was playing an important role in the national economy, but following the outbreak of World War II it was largely reoriented to military ends. From 1941 to 1945, Azerbaijani aviation operated under the motto “All For the Front, All For the Victory”. The labor and military feats of Azerbaijani pilots will never be forgotten. Neither will those who have sacrificed their lives on the altar of victory in the war.
After the World War II Azerbaijani pilots resumed carrying passengers and cargo. New aircraft emerged on air-routes originating from Baku, such as Li-2, Il-14, Il-18, An-24, special purpose planes An-2, helicopters Mi-1 and Mi-4.
A qualitatively new stage in the history of Azerbaijan’s civil aviation fleet occurred in the 1970-80s. This was a time when airports fitted with soft-surface runways were built in Ganja, Yevlakh, Naftalan, Nakhchivan, Zaqatala, Lankaran, Agdam, Agstafa and Shaki. They could accommodate Yakovlev Yak-40 jets. A total of 11 districts of the republic were linked to Baku by air-routes.
Azerbaijan’s aviation fleet was among the first to receive Tupolev Tu-134 and Tu-154 jet planes and Mi-2 and Mi-8 helicopters. In those years planes were becoming the most popular means of transport – fast, comfortable and affordable for everyone.
In 1990, Azerbaijan announced that it was setting up its own airline independent of Aeroflot, the behemoth that had previously handled air services for the Soviet republics. Azerbaijan Airlines (AZAL) was officially established on August 17, 1992. Its first president was Vagif Sadykhly.
Formed from the regional branch of Aeroflot, Azerbaijan Airlines, also known as Azerbaijan Hava Yollari, soon spread its wings into the world outside the Soviet Union that had been Aeroflot's exclusive domain. A scheduled Baku-Istanbul route was launched in January 1991 in partnership with the Turkish Airlines, and the cargo enterprise Aviasharg was created with the United Arab Emirates.
AZAL inherited a huge fleet from Aeroflot, including more than 20 Soviet-made Tupolev airliners, some regional airliners and freighters, 90 light aircraft, and 50 helicopters. It was quick to lease a pair of Boeing 727s, however, that once belonged to PanAm (and were built in 1968). AZAL had an extensive involvement with Aviation Leasing Group (ALG), the U.S.-based lessor of these Boeing 727s. It had a transatlantic charter cargo joint venture with ALG's Buffalo Airways, which was also training AZAL aircrews to Western standards in Dallas, Texas.
Azerbaijan worked out a deal to acquire Boeing airliners (of the 737, 757, 767, and 777 models) in the mid-1990s in exchange for the amount of fuel the more efficient planes were expected to save compared with the old Tupolevs, reported the Interfax news agency. AZAL also was operating ten smaller Yakovlev Yak-40 tri-jets, a massive Ilyushin Il-76 freighter, and several Antonov turboprops.
In November 1994 AZAL began a route to Dubai, which, along with Istanbul, was a key source of Western goods. It was soon also flying to Tehran, Tel Aviv, Moscow, Saint Petersburg, London, and China. Service to several regional destinations was suspended in mid-1998 due to low margins and the need to repair three Yak-40 aircraft.
With the exception of a few major cities, service to neighboring CIS countries was suspended as well in January 1999. These routes were generally unprofitable as well and were facing new competition from trains. The main reason for the suspension was that it owed money to its neighbors. According to the Trend News Agency, domestic flights accounted for only about 16 percent of AZAL's traffic in 1998.
According to Flight International, the airline's fortunes took a leap forward in May 1996 when Jahangir Askerov became AZAL's director-general. A pilot himself, Askerov reorganized AZAL into five units: the airline, airports, air traffic control, in-flight catering, and cargo.
The country invested in a new air traffic infrastructure, including a new airport terminal and new air traffic control facilities (air traffic control had to deal not only with arrivals and departures, but with more than 1,600 overflights a month, noted Flight International.) The national airline was running out of aircraft, however, due to a lack of spare parts, an official told AssA-Irada news agency. In 1999, AZAL was down to seven Tupolevs and two Boeing 727s.
In spite of the new infrastructure, leading foreign airlines (British Airways, Lufthansa, KLM) were shutting down their operations in the country due to high fees, poor service, and the widespread practice of bribery, reported Russia's ITAR-TASS News Agency. Azerbaijan President Heydar Aliyev promised a crackdown on corruption.
Azerbaijan's border dispute with Armenia over Nagorno-Karabakh had delayed financing for two new Boeing 757s from the U.S. Ex-Im Bank. The $66 million loan guarantee was the Ex-Im Bank's first transaction for Azerbaijan, according to Air Transport Intelligence. The financing also was guaranteed by the Azerbaijan government and the International Bank of Azerbaijan. The United Kingdom's Export Credits Guarantee Department guaranteed financing for the aircrafts' Rolls-Royce engines.
The first of these Boeing 757s was delivered in the fall of 2000. The planes offered the carrier unprecedented range, comfort, and efficiency on long-haul international routes. They also helped project a modern image to the world. Interestingly, the second Boeing 757 to be delivered arrived in December laden with medical supplies due to a recent earthquake in Azerbaijan. In January 2001, AZAL used one of the planes to begin operating a Paris-Baku route in collaboration with Air France.
Azerbaijan, a predominantly Muslim country, experienced a reduction in air traffic following the 9/11 terrorist attacks on the United States. AZAL was able to remain profitable through 2001, however, and even make progress toward paying off its debt. The airline was soon shopping for more new aircraft as it retired its aging Soviet models. AZAL ordered its first Western-made helicopters in October 2002, purchasing six for EUR 52 million from Eurocopter. AZAL used helicopters to ferry personnel and equipment oil rigs in the Caspian Sea.
In July 2004, two of AZAL's airliners were impounded by Turkey over a 12-year-old debt owed by Azerbaijan's Agriculture Ministry to a Turkish company. In the same month, AZAL ordered new Ukrainian-made, 52-passenger An-140 turboprops to replenish its regional fleet, paying about $36 million for four planes.
The company also was ordering four aircraft from Airbus, three Airbus A319 mid-size airliners and one Airbus Corporate Jetliner, for use as an official state aircraft. These were all powered by CFM International engines. AZAL had a large number of aircraft types for such a small company, from manufacturers in Russia, Ukraine, Europe, and the United States.
The construction of the Baku Cargo Terminal (BCT), completed in March 2005, has made Baku one of the major transfer points for cargo proceeding from the west eastwards and from the north southwards. The same year, the BCT became a member of the IATA Ground Handling Council and a participant in the World Business Partners Program of the Airports Council International.
Commissioned shortly afterwards were the Nakhchivan International Airport, a new terminal in the Zabrat airport and the Ganja International Airport. A five-star hotel was built at the Heydar Aliyev International Airport of Baku. International airports of Lankaran and Zaqatala were opened in 2008.
The civil aviation fleet welcomed such aircraft as Airbus A319 and Airbus A320, ATR 72-500 and ATR 42-500.
On 22 July 2010 Boeing and Azerbaijan Airlines have signed an agreement to substitute two Next-Generation 737 airplanes for one 767-300ER (extended range) and two 767 Freighters. The substitution has been updated on Boeing's Orders and Deliveries website. Including this announcement, Azerbaijan Airlines had a total of eight Boeing airplanes on order: two 767-300ERs, two 767 Freighters, two Next-Generation 737s and two 787-8s.
On September 2010 AZAL cancelled an order for the remaining two Next-Generation 737s.
On 24 December 2010 AZAL stopped using the Russian-made Tupolev planes. So far, Tupolev 134 and Tupolev 154 planes have carried out flights from the capital Baku to the Nakhchivan Autonomous Republic. Nowadays AZAL operates A319, A320 and Boeing 757 on these routes.
In January 2011, Azerbaijan Airlines have got European service standard from the European Economic Chamber of Trade, Commerce and Industry (EEIG) by unanimous decision.
On June 2, 2011, Azerbaijan Airlines has taken delivery of the first of two Boeing 767-300ERs which is expected to serve the South-East Asia routes. The remaining one B763 and two Boeing 767-300Fs to be delievered in 2012.
Azerbaijan Airlines hopes to launch its first flights to the United States in 2014 when it takes delivery of the two Boeing 787 Dreamliners that it has on order.