Iraq Gets a Lift From Airline Without Planes

The road from Baghdad to Saddam International Airport is deserted and looks unused. Certainly no airline passengers have traveled the route in years.

Still, inside the airport's main administration building are signs of life. In fact, Iraqi Airways (IA), one of Iraq's most successful companies before the 1991 Gulf War, could be leading the way in diversifying to survive under tough economic sanctions.

Few companies were hit as hard by the embargo as IA. Since 1990, when the United Nations sanctions were imposed on Iraq, no commercial flights have been permitted. Iraq deposited its fighter aircraft in Iran and parked all of its 15 Boeing commercial jets in neighboring friendly countries for safekeeping. Eight years later, that's where they remain.

But, as Ayad Hammam, director of IA's commercial activities explains, "flight operations was just a part of the company's work. We had 5,000 employees - not only pilots and engineers in flight operations, but also commercial, administration, legal, catering, and publicity staff and travel agents."

With sanctions, the Iraqi dinar lost its value and salaries became a pittance, especially in view of the soaring cost of living. As government employees, IA workers received monthly salaries, but that couldn't keep up with 6,000 percent inflation. Many left the company to scrounge a livelihood somewhere else. "Just half our staff is still with us," says Mr. Hammam. But IA retained many of its skilled staff.

"The company felt an obligation to its workers. After the war, we had to find new sources of revenue.... We wanted to make use of our employees," he says. "We had an international network.... We had highly trained mechanical engineers, and we were oriented to a competitive market."

IA found work in Malaysia for its pilots. And it made contracts with three other countries to employ teams of its engineers.

But the real success of the company lies at home. At the airport, the center of action is now the catering department. Its huge ovens and kitchens once prepared more than 6,000 meals daily for departing flights. When that market was wiped out, the kitchens were idle for a few years. Today they turn out a new line of foods for distribution to restaurants and shops in Baghdad.

IA's ovens and refrigerators can function today because IA put its engineers to work to repair worn machinery and convert cooling equipment into freezing units. This allowed the company to produce frozen packaged foods - chicken, falafel, hamburgers, and even ice cream.

"We compete with other food producers in the city. We also offer catering services for conferences at hotels and for family parties," says the department head, named Hiyam.

To help keep its employees, Iraqi Airways introduced a plan whereby employees share profits earned by these new endeavors. The head chef in the bakery section explains that his salary has tripled since the company began selling its breads and cakes on the open market and this plan was introduced.

The best example of IA's innovation is at the former central ticketing office in downtown Baghdad. That outlet has become the Iraqi Airways Businessman's Center. Operating around the clock, it provides the most efficient public phone and fax service in the country. A three-minute call to Cairo is 9,000 dinars ($6); a comparable call to Washington costs $8.

"We obtained a number of special phone lines from the government," says the manager, named Mohammed. "They are clear and fast, so we assure clients easy access to the rest of the world."

One client is from Turkey, now in Baghdad to line up contracts for his food company. Other businessmen - from Sudan, Romania, Korea, India, and Syria - stand nearby. Now that Iraq can sell oil for food and medicine, competition is strong here among those seeking contracts. It seems the Iraqi government has decided to support the entrepreneurship of its own people to move things along.