Members of an investigation committee and other officials at the wreck of an Azerbaijan Airlines' Embraer 190 near the airport of Aktau, Kazakhstan, on Thursday. AP
Members of an investigation committee and other officials at the wreck of an Azerbaijan Airlines' Embraer 190 near the airport of Aktau, Kazakhstan, on Thursday. AP
Members of an investigation committee and other officials at the wreck of an Azerbaijan Airlines' Embraer 190 near the airport of Aktau, Kazakhstan, on Thursday. AP
Members of an investigation committee and other officials at the wreck of an Azerbaijan Airlines' Embraer 190 near the airport of Aktau, Kazakhstan, on Thursday. AP

Azerbaijan Airlines crash: Flight was likely hit by Russian air defence, sources say


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The Azerbaijan Airlines flight that crashed in Kazakhstan on Wednesday had been hit earlier by Russian air defences, according to Azerbaijani media and analysts.

The Embraer SA 190 crashed near the city of Aktau while attempting an emergency landing, killing 38 of the 65 passengers and crew on board. It had flown hundreds of kilometres off its scheduled route from Azerbaijan's capital Baku to Grozny, in Russia's southern Chechnya region.

The plane was struck while approaching Grozny, Azerbaijan's government-backed Caliber news website reported, quoting unidentified government officials.

There was no official comment from the Azerbaijan's government.

Sources familiar with the Azerbaijani investigation into the crash told Reuters that preliminary results showed the plane was struck by a Russian Pantsir-S air defence system, and its communications were paralysed by electronic warfare systems on the approach into Grozny.

“No one claims that it was done on purpose. However, taking into account the established facts, Baku expects the Russian side to confess to the shooting down of the Azerbaijani aircraft,” one of the sources was quoted as saying.

Aviation security firm Osprey Flight Solutions said in an alert to airlines on Wednesday that video of the wreckage and the circumstances around the air space in south-west Russia indicated the possibility that the airliner was hit by anti-aircraft fire.

Russia's Dagestan and Chechnya regions have been targeted by Ukrainian military drones this month, with Russian air defences activated in response, Osprey said.

Earlier on Wednesday, the Russian Defence Ministry reported that 59 Ukrainian drones were brought down over several regions, it said.

Azerbaijan President Ilham Aliyev told a media briefing on Wednesday that it was too soon to speculate on the reasons behind the crash, but said that the weather had forced the plane to deviate from its course.

“The information provided to me is that the plane changed its course between Baku and Grozny due to worsening weather and headed to Aktau airport, where it crashed upon landing,” he said.

Russian rescuers carry a passenger wounded in the Azerbaijan Airlines plane crash from medical evacuation plane at Zhukovsky airport, outside Moscow, on Thursday. EPA
Russian rescuers carry a passenger wounded in the Azerbaijan Airlines plane crash from medical evacuation plane at Zhukovsky airport, outside Moscow, on Thursday. EPA

Rosaviatsia, Russia’s civil aviation authority, said that preliminary information indicated that the pilots diverted to Aktau after a bird strike led to an emergency on board. Asked about the claims that the plane had been fired upon by Russian air defences, Kremlin spokesman Dmitry Peskov told reporters that “It would be wrong to make hypotheses before investigators make their verdict.”

National flags were lowered across Azerbaijan, traffic across the country stopped at noon, and horns sounded from ships and trains as the country observed a moment of silence.

According to Kazakh officials, those aboard the plane included 42 Azerbaijani citizens, 16 Russians, six Kazakhs and three Kyrgyzstan nationals. Russia's Emergencies Ministry on Thursday flew nine Russian survivors to Moscow for medical treatment.

Nato called for a full investigation into the cause of the crash.

“Our thoughts and prayers are with the families and victims of Azerbaijan Airlines flight J28243,” Nato representative Farah Dakhlallah said on X.

“We wish those injured in the crash a speedy recovery and call for a full investigation.”

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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A widely accepted definition was made by the All Party Parliamentary Group on British Muslims in 2019: “Islamophobia is rooted in racism and is a type of racism that targets expressions of Muslimness or perceived Muslimness.” It further defines it as “inciting hatred or violence against Muslims”.

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Updated: December 27, 2024, 6:56 AM