Kazakhstan’s flagship airline Air Astana has plans to take full advantage of Moscow losing its status as a hub for flights between Europe and Asia. The carrier has also been buoyed by the post-pandemic reopening of China.
“Prior to the start of the war in Ukraine, a lot of traffic in general, going in the western direction, whether that was to Europe or to the US, was travelling from this region via the Russian Federation,” Air Astana chief executive Peter Foster was on March 29 quoted as saying by Reuters in an interview.
“Obviously,” he added, “that is no longer the case. And so what has happened is there has been a shift of gravity and we are extremely well placed to take advantage of that shift.”
Foster also discussed how Air Astana—51%-owned by Kazakhstan’s sovereign wealth fund and part-owned by BAE Systems—was looking at “very big opportunities in China, as China has opened again, following Covid”. He also noted that “India is doing well.., Pakistan is a growth market."
Air Astana has plans to in 2024 move ahead with its delayed initial public offering (IPO).
Many global airlines stopped flights to Russia following its invasion of Ukraine 13 months ago, wrecking Moscow’s air hub status at a stroke.
Air Astana—based at Almaty Airport outside Kazakhstan’s commercial capital Almaty rather than at the international airport in the political capital Astana—aims to increase its fleet to 50 aircraft by the end of this year, from its current 44 planes.
The company also plans to accelerate expansion plans for China, India and Pakistan in coming years with the ordering of additional Airbus 320 family aircraft and the obtaining of Boeing 787 Dreamliners, expected to become part of Air Astana’s own fleet in 2025. The airline currently leases Dreamliners.
Air Astana posted a record after-tax profit of $78.4m last year, up 115% y/y and achieved despite the airline ceasing its own flights to Russia. In 2022, Air Astana also generated $1.03bn in revenue and carried 7.35mn passengers.
Releasing the financials in late February, CEO Foster observed that FlyArystan, Air Astana’s low-cost carrier, had grown by 366% since its launch year of 2019. “It has a great future, as this region probably has the fastest growing low-cost air travel market in the world today,” said Foster.
In April 2021, Turkey’s TAV Airports, a member of Paris-based Groupe ADP, and Kazakhstan Infrastructure Fund (KIF) completed their buyout of Almaty Airport, with TAV taking a stake of 85% and KIF, managed by VPE Capital and backed by Kazyna Capital Management (KCM), receiving the remaining 15%. They set out plans to double the capacity of the airport with a $200mn investment.
The completion of the buyout was the first step in a $655mn infrastructure project to feature the construction of a new international terminal, the modernisation of the domestic terminal and the adoption of the International Air Transport Association’s (IATA's) Optimum Level of Service standards across the facility.