Boeing confirmed (08-Feb-2012) Air Astana signed a contract to purchase four 767-300ER and three 787-8 aircraft, valued at USD1.3 billion at current list prices. The order will be the country's largest single order for commercial aircraft. [more - original PR]
Boeing confirms Air Astana contract
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Air Astana Part 1: Kazakhstan flag carrier increases focus on transit traffic as profits drop
Kazakhstan’s Air Astana is increasing its focus on sixth freedom transit traffic as part of a new strategy aimed at capitalising on its low cost structure and geographic position at the crossroads of Asia and Europe. More transit traffic is necessary to unlock a new phase of growth and reduce its reliance on its home market.
Air Astana has nearly doubled its transit traffic over the past year in response to challenging market conditions in Kazakhstan. The Kazakhstan economy has weakened significantly as oil prices have collapsed, leading to rapid currency devaluation that has impacted Air Astana’s top line. The airline’s revenues have fallen 25% since 2013 while passenger traffic has been relatively flat.
Increased sixth freedom traffic, slower expansion and reduced costs have enabled the airline to maintain profitability. A further and bigger transit traffic push is risky but should drive improved scale, a resumption of growth, and a stronger long-term position – which in turn will make Air Astana more attractive as it revisits long-delayed IPO plans.
Hawaiian Airlines: cost creep casts a slight shadow over a favourable PRASM performance
Hawaiian Airlines’ geography has been a boon for the airline throughout 2016 as the company’s unit revenue performance has outpaced that of its peers. Hawaiian has benefitted from immunity to the lack of pricing traction in many domestic markets on the US mainland, and rational capacity deployment on is largest North American routes.
The company expects to continue posting a unit revenue outperformance for the remainder of 2016, driven by still favourable capacity trends in its markets. Hawaiian’s own capacity growth is expected to fall between 3% and 4% for 2016, and remain in the low- to mid- single-digit range for the foreseeable future.
Although Hawaiian continues to outperform the industry in unit revenue, the company is facing inflated unit costs in 2016 driven by several factors, including increased compensation and technology investments. The airline is also in the middle of pilot negotiations, and has acknowledged additional cost headwinds once a new collective bargaining agreement is reached.