Uzbekistan Airways eyes international IPO by year-end

Image: Uzbekistan Airways

Tashkent is preparing to list a 15% to 20% stake in national carrier Uzbekistan Airways on international markets before the end of the year. Backed by US-based asset management firm Franklin Templeton, a transformation blueprint aims to inject $120 million into the airline’s operating profit and propel its market capitalization to $2.3 billion.

The Government of Uzbekistan is accelerating its privatization drive, fast-tracking the capital market debuts of its premier state-owned assets. President Shavkat Mirziyoyev today convened a high-level working session to expedite operational restructuring and finalize IPO preparations for Uzbekistan Airways.

The airline’s overhaul is a cornerstone of a sweeping state initiative to list 13 enterprises of systemic importance, consolidated under the National Investment Fund of Uzbekistan (NIF). Managed by Franklin Templeton, the NIF successfully executed its debut international asset placement last month, raising $690 million. Global institutional demand oversubscribed the offering fourfold, peaking at $3 billion.

Following a deep operational audit of Uzbekistan Airways, Franklin Templeton formulated a transformation program spanning 115 targeted initiatives. Analysts project that the resulting synergies will boost annual operating profit by $120 million, driving the carrier’s valuation from $1.6 billion to $2.3 billion.

Key operational benchmarks include:

• Optimizing the route network and streamlining aircraft turnarounds;
• Minimizing delays and cancellations to boost on-time performance;
• Driving direct-to-consumer sales via proprietary digital channels;
• Enhancing profitability across catering and MRO (Maintenance, Repair, and Overhaul) subsidiaries;
• Deploying agile commercial tools to adapt swiftly to market volatility.

President Mirziyoyev emphasized that unlocking international capital markets hinges on elevating corporate governance, tightening financial discipline, accelerating full IFRS compliance, and securing an upgraded corporate credit rating.

The push for rapid modernization comes as Uzbekistan’s tourism sector experiences considerable growth. Inbound tourist arrivals have surged 27.5% year-to-date to 5.5 million, with the strongest demand originating from China, Malaysia, Japan, and the US.

However, officials noted that Uzbekistan Airways has struggled to keep pace with this surging demand, lagging behind its established fleet renewal and expansion schedules.

To eliminate these bottlenecks, the President ordered a complete overhaul of core business processes:

• Introducing an expedited, simplified procurement framework tailored to commercial aviation;
• Adopting global best practices to accelerate decision-making for aircraft leasing and deliveries;
• Divesting non-core assets and decommissioning legacy or specialized aircraft;
• Implementing a transparent framework for subsidizing public-service obligation (PSO) routes.

The broader strategic vision for the sector is to establish Tashkent as Central Asia’s premier transit hub. To achieve this, the government plans to dismantle operational silos between key industry players. Uzbekistan Airways, state airport operator Uzbekistan Airports, and the under-construction “New Tashkent” International Airport will be integrated into a unified, centrally coordinated ecosystem to seamlessly align infrastructure development, scheduling, and transit corridors.

A dedicated Project Office is being established to monitor the IPO timeline. To ensure institutional credibility, seasoned international and domestic executives with proven capital markets experience will be appointed to the boards of Uzbekistan Airways and the 12 other NIF-held state enterprises.

The final timeline for the roadshow and the subsequent 15–20% equity float is expected to be approved shortly.

CentralAsia+ Aero earlier reported: Uzbekistan Airways signs codeshare agreement with Etihad Airways.

CentralAsia+ Aero earlier reported: Uzbekistan to modernize another airport with foreign partner involvement.

CentralAsia+ Aero earlier reported: US investment bank to help Uzbekistan’s state airport operator tap capital markets.