Air Astana Part 2: Kazakhstan flag carrier to accelerate expansion, adopt single hub, pursue IPO

Kazakhstan's Air Astana is planning to accelerate expansion as part of a new 10-year business plan. The airline could potentially double in size over the next 10 years, driven by growth in transit traffic.

Under the new business plan Air Astana will likely focus on adding new destinations in China and South Asia while growing capacity to most of its existing destinations. A switch from a dual to single hub strategy will also help support an increase in transit traffic, which is expected to account for 30% of total traffic compared with approximately 10% currently.

Transit traffic will unlock a new growth phase for Air Astana, which has experienced a significant slowdown in growth over the last three years. However pursuing rapid expansion and more transit traffic can be risky, leading to more intense competition and requiring significant investment. An IPO, which is back in the pipeline after several years of delays, would help fund the expansion - assuming that investors are not scared away by the risk associated with competing against larger network airlines.