Tuesday, December 5, 2017

Air Astana Sees Rebound Tied to Kazakhstan’s Recovery

Dec 4, 2017

As Kazakhstan’s economy starts to bounce back after two years of currency devaluation, GDP declines and suppressed oil prices, Almaty-based Air Astana has resumed expanding its scope of operations in Russia, the Central Asian countries, South Asia and China. Located at the crossroads of Asia and Europe, Kazakhstan stands geographically well positioned to attract transit traffic, which accounts for a growing proportion of Air Astana’s revenues.  
Air Astana flies to 46 international and 20 domestic destinations. “We are conscious the domestic market is very limited…That is why we are here [in India],” Air Astana CEO Peter Foster told AIN during a recent interview in Delhi. “Because of our geographical location, we can fly from nowhere to anywhere.”
Seventeen Airbus A320neos, five Embraer E190s and three Boeing 787s have fueled Air Astana’s fleet expansion. It expects to take delivery of another two A320neos by the end of the year, and plans call for the fleet to more than double in size, to 64 aircraft, by 2025.
Having completed 13 years of service in India, Air Astana plans to increase its three-times-weekly service between Astana and Delhi to a daily flight, followed by service to Mumbai in 2019. However, securing slots at the two capacity constrained airports presents a major challenge, said Foster.
“In Delhi, we can get the slots, not the best timings,” Foster told AIN. Of course, airport overcrowding isn’t specific to India: the airline had planned to add two more frequencies to Beijing this year but had to withdraw because of a paucity of slots.
“This debate is all about slots as Air India has air traffic rights on prime international routes,” said Foster in reference to the possible privatization of Air India. “Slots have started to feature on several airlines' balance sheets as assets. While they are not a tradeable commodity, they are becoming so.”
Plans for expansion to Asia Pacific include more flights to Bangkok, Seoul, Chengdu, and Xian by 2020 and to Hong Kong next year in codeshare with Cathay Pacific Foster expects to sign soon. At this point New York remains only a possibility. “If we decide to, it will be using the 787,” he said.
Foster confirmed the airline—49 percent owned by BAE Systems and 51 percent by Kazakh sovereign wealth fund Samruk-Kazyna—would release its planned initial public offering with the stock exchanges of Astana and London in October 2018. Its cost per available seat kilometer (ASK) remains below five cents, making it one of the world’s lowest cost full-service airlines.

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