Air Astana plans more rapid regional growth as Kazakhstan emerges as world’s fastest growing market
Air Astana is planning to focus on further expansion of its short-haul international network in 2013 as it looks to leverage its position as the strongest carrier in the fast-growing Kazakhstan market and the Central Asia region. Air Astana plans to add capacity on several regional routes, most of which it has launched over the last two years as part of its extended home market strategy, while launching service to Kiev in the Ukraine and potentially Sochi or Ufa in Russia.
Air Astana will take a hiatus in growing its long-haul network after significant expansion over the last six months, including the launch of services to Hong Kong and Ho Chi Minh. The carrier, which enjoyed its 10th consecutive year of profitability in 2012 and ended the year with a respectable albeit reduced profit margin of about 6%, plans to resume long-haul expansion in 2014.
For now the opportunities regionally and domestically are too big to pass up. Kazakhstan is projected by IATA to be the world’s fastest growing passenger market over the next five years. Central Asia, a region bereft of IOSA-certified carriers, also has emerged as a major growth market that Air Astana is uniquely positioned to exploit.
IATA expects annual growth in Kazakhstan exceeding 20%
IATA in its 2012 to 2016 passenger traffic forecast that was released in Dec-2012, projects 20.3% annual growth for Kazakhstan’s international market and 22.5% growth for the country’s domestic market. This makes Kazakhstan the fastest growing market in the world, both in terms of domestic and international traffic, by a wide margin.
Another Central Asian country, Uzbekistan, was identified by IATA as the second fastest international market with projected annual growth of 11.1%. A third Central Asian country, Azerbaijan, also made IATA’s top 10 fastest growing international market list with projected annual growth of 8.9%. Two countries in the wider CIS region also made the list – Russia (with growth of 8.4%) and the Ukraine (with growth of 8.8%).
These figures hardly come as a surprise to Air Astana, which has been riding Kazakhstan’s rapid growth for several years. The flag carrier, which launched services in 2002, has seen its traffic more than double over the last six years from 1.5 million in 2006 to an estimated 3.3 million in 2012.
See related article: Kazakhstan’s Air Astana poised to complete several milestones in 2012 including IPO
Revenues have increased at a similar clip, more than tripling since 2005. Revenues grew about 12% in 2012 while passenger traffic grew about 9%, according to preliminary figures.
Air Astana annual passenger traffic 2002 to 2012*
Air Astana annual revenue 2002 to 2012*
According to IATA data, Kazakhstan’s market consisted of 4.9 million passengers in 2011, including 2.2 million domestic and 2.7 international passengers. Air Astana transported just over three million passengers in 2011, giving it about a 60% share of the world’s fastest growing market.
Air Astana currently accounts for about 64% of Kazakhstan’s domestic market, according to the carrier’s own figures. It currently accounts for 51% of seat capacity in Kazakhstan’s international market, according to Innovata data.
Kazakhstan international capacity share (% of seats) by carrier: 14-Jan-2013 to 20-Jan-2013
Air Astana targets extended home market
While Air Astana has benefitted significantly from Kazakhstan’s rapid growth, particularly domestically where it allocates about 55% of its seat capacity, the carrier has been working during the last two years on building its position to exploit the growth in all of Central Asia and parts of the CIS. Kazakhstan is well positioned geographically, located in the north end of Central Asia and just south of Russia. This puts its Almaty and Astana hubs in perfect position to connect Central Asia as well Russia.
As its main long-haul hub of Almaty is located in the far eastern corner of Kazakhstan, Air Astana is also well positioned to tap into the fast-growing market connecting the Far East, including neighbouring China, with Central Asia. Almaty also happens to be located almost exactly halfway between Europe and Far East but Air Astana has no intentions of entering the highly competitive Asia-Europe market as it is much more profitable offering short-haul to short-haul and long-haul to short-haul connections that exploit the carrier’s unmatched strength in its home region.
Air Astana has seen its transit business grow from virtually zero a few years ago to accounting for 20% of its passenger traffic in 2012. The carrier expects further rapid growth in transit traffic as it continues to build up its regional network from both of its hubs. Air Astana CEO Peter Foster told CAPA that the carrier aims to serve all its regional destinations daily from both Almaty and Astana within two years while also launching a few new regional destinations.
Currently all of Air Astana’s regional destinations are served less than daily, providing less than ideal connection options particularly for the carrier’s main client base – business passengers. Air Astana has so far gotten by without offering the most convenient schedules as it is the only decent option for many city pairs. But it recognises it will need to thicken out its schedule as more airlines expand across Central Asia and the CIS.
Air Astana plans 16% seat capacity growth for 2013 as five aircraft are added
Mr Foster said that most of the 16% capacity growth planned for 2013 will be allocated to the regional market. The focus will primarily be on expanding frequencies on existing routes but he said the carrier also plans to launch service by Jun-2013 to Kiev, which is a big white spot in its otherwise strong regional network across the CIS and Central Asia. Mr Foster said the carrier is also considering adding a new destination in Russia during 2013 with Sochi and Ufa currently being evaluated.
The regional expansion comes as Air Astana expands its narrowbody and regional jet fleet by five aircraft. Mr Foster said the carrier has agreed to lease two additional E190s for delivery in May-2013 and Nov-2013, which will give Air Astana a fleet of eight E190s by the end of 2013. He said the carrier has also committed to adding a ninth E190 in Feb-2014 and is now looking at possible further expansion of the E190 fleet in 2014.
Mr Foster said Air Astana also plans to take in 2013 the three A320s it has on outstanding order, with deliveries slated in May, July and September. This will give Air Astana a fleet of 12 A320 family aircraft by the end of 2013. It uses its A320 fleet on domestic trunk routes and on all flights to Moscow, St Petersburg, Delhi, Abu Dhabi, Istanbul and Urumqi in western China. (Some frequencies to St Petersburg and Tashkent are also currently operated with A320s.)
Air Astana will deploy the additional A320s primarily in the domestic market as the carrier has no plans to expand in India or China in 2013. The additional E190s will be mainly used to further grow the carrier’s regional international operation.
E190 becomes main tool in Air Astana’s extended home market strategy
Air Astana took its first three E190s, which the carrier operates in 98-seat two-class configuration, in 2011 and added three more in 2012. The E190 was selected in 2009 as it was seen as the ideal aircraft to build the carrier’s regional international network, supporting its new extended home market strategy.
The new E190 fleet has also have been used to take over the carrier’s Fokker 50s, which primarily operated domestically and were retired between Apr-2012 and Nov-2012. Air Astana had six Fokker 50s but only a portion of its new E190 fleet needs to be deployed domestically as the E190 has twice the capacity of the Fokker 50 and Air Astana had to drop on 01-Dec-2012 service to two domestic airports which can only accommodate turboprops. (Air Astana hopes at some point to resume service to Uralsk, an important market for the energy and mining industry in remote northwest Kazakhstan, but there has not yet been any movement on plans to upgrade the airport to accommodate jets.)
The regional international expansion began in 2011 with the first batch of E190s used on services from Almaty to Baku in Azerbaijan, Bishkek in Kyrgyzstan, Dushanbe in Tajikistan, Tashkent in Uzbekistan, Tbilisi in Georgia and Samara in Russia. Azerbaijan, Georgia, Kyrgyzstan, Tajikistan and Uzbekistan are all Central Asian countries.
Tashkent and Tbilisi were new markets opened with the E190s while Bishkek and Dushanbe had previously been served by Fokker 50s, which offered limited capacity and a less than ideal outdated all-economy product. Baku had been served with A320s and was transitioned to the smaller E190. Of Air Astana’s five Central Asian destinations, all are currently served with E190s with the exception of some frequencies to Tashkent.
As three additional E190s were added in 2012, routes were launched from Almaty to Kazan in Russia and from Astana to Omsk and Saint Petersburg in Russia, Tashkent and Tbilisi. All five of the new routes began with two to three weekly frequencies – which is Air Astana’s typical strategy for entering a new market.
Air Astana rapidly expands in southern Russia
Kazan and Omsk (and Samara the prior year) are all new destinations in southern or central Russia that were opened with E190s. Air Astana now has seven destinations in Russia – Kazan, Moscow, Novosibirsk, Omsk, Saint Petersburg, Samara and Yekaterinburg. Kazan, Novosibirsk, Omsk, Samara and Yekaterinburg are all considered regional destinations given their proximity to Kazakhstan. Novosibirsk and Yekaterinburg were originally served with Fokker 50s.
Kazan, Omsk, Samara and Yekaterinburg are now all served with three E190 weekly frequencies while Novosibirsk is served with four weekly E190 flights. Of these five destinations, Kazan and Samara is currently only served from Almaty while Novosibirsk, Omsk and Yekaterinburg are only served from Astana, which is located near the Russian border.
Moscow is Air Astana’s largest international destination with two daily flights from Almaty and one daily flight from Astana. St Petersburg in eastern Russia is served with three weekly A320 flights from Almaty and the two recently launched E190 flights from Astana. St Petersburg-Astana is the longest E190 route in the network at almost four hours.
Moscow and to a lesser extent St Petersburg is seen more as local point-to-point routes because, unlike the destinations in southern or central Russia, it has frequent non-stop links to most Central Asian destinations. Air Astana is the largest Central Asian carrier serving Novosibirsk and Samara and is the only Central Asian carrier serving Omsk, according to Innovata data.
Samara is served by two other Central Asian carriers, Tajik Air and Uzbekistan Airways, but Air Astana has more capacity in the market as the other carriers only serve Samara with one weekly flight. At Omsk, Air Astana is one of only four carriers operating international services along with Turkey’s Pegasus and Russia’s S7 and IrAero. There are only two routes from Omsk to Central Asia – Air Astana’s thrice weekly E190 service to Astana and one weekly Bombardier CRJ200 flight by IrAero to Baku.
Air Astana is not the largest Central Asian carrier in Kazan or Yekaterinburg but as it uses smaller aircraft is generally able to offer as many or almost as many frequencies as its competitors.
Air Astana intends to gradually build up over the next two years frequencies to daily in its four regional Russian markets as well as its five international destinations in other Central Asian countries. As is the case with its regional Russian routes, none of its Central Asian destinations are served daily yet – Tashkent has six weekly flights (four from Almaty and two from Astana); Baku has five weekly flights (three from Almaty and two from Astana); and Bishkek, Dushanbe and Tbilisi have four weekly flights each (Almaty only).
The carrier is also looking at adding the Russian markets of Sochi and Ufa. Neither currently has any non-stop service to Kazakhstan but both are already linked to a small group of other Central Asian destinations with low frequency service from Central Asian and Russian carriers.
Kiev completes regional network puzzle for Air Astana
Kiev represents a much bigger potential market and a huge hole in Air Astana’s current network. The Ukraine is the only country among the top 10 largest destinations from Kazakhstan not currently served by Air Astana. The carrier has been keen to add Kiev to its network for some time but has until now avoided the market because of over-capacity.
Until recently two Ukrainian carriers served Kazakhstan with Aerosvit serving five destinations and Ukraine International Airlines (UIA) also serving Almaty and Astana. While Ukraine-Kazakhstan is a big local market, particularly during the peak summer season, the up to 4,000 weekly one-way seats which were in the market during 2012 was not seen as sustainable. To fill its seats from Kazakhstan, Aerosvit and UIA frequently offered low fares to sixth freedom destinations in Europe served beyond Kiev.
Ukraine to Kazakhstan capacity by carrier (one-way seats per week): 19-Sep-2011 to 07-Jul-2013
The Jan-2013 exit from Kazakhstan of Ukrainian carrier Aerosvit, which is currently restructuring while in bankruptcy, has changed the dynamics of the market significantly, paving the way for Air Astana to finally enter Kiev. Aerosvit was the second largest foreign carrier after Transaero serving Kazakhstan, with up to 6,000 weekly round-trip seats depending on the season. UIA will take over some of this capacity but not all, leaving enough of a void for Air Astana.
See related article: Ukraine International to double international network as Aerosvit restructures
Aerosvit had approximately a 6% share of total international capacity in Kazakhstan and its exit should help European carriers in Kazakhstan as much as Air Astana. Lufthansa and Turkish, which are now the second and third largest foreign carriers in Kazakhstan based on seat capacity, should particularly benefit as Aerosvit’s low Kazakhstan-Europe fares are pulled from the market. (There is currently a freeze on any non-stop capacity being added to the Kazakhstan-Europe market as Air Astana is not able to expand to the EU until Kazakhstan gets off the blacklist while Kazakhstan is unwilling to let any European carrier add capacity until the blacklist issue is resolved.)
Mr Foster said Air Astana plans to start serving Kiev before Jun-2013, initially with three weekly flights from both Astana and Almaty. Capacity will likely be added over time in line with the strategy for thickening the schedule to all regional international destinations.
Air Astana focuses more on expanding its secondary hub at Astana
While most of the growth in Air Astana’s early years was funnelled to Almaty, where Air Astana is headquartered, over the last year several regional routes have been added at the capital Astana. The new focus on Astana comes partly in response to rising demand as Astana grows as a city but also partly because of necessity.
Several major businesses in recent years have moved their main offices to Astana, which has seen huge growth and some of the world’s most impressive construction projects since becoming Kazakhstan’s capital in 1997. This has led to steadily growing demand for international services from Astana, particularly from the corporate sector.
Almaty will remain the country’s largest city and financial centre but growth at the Almaty airport is challenging due to infrastructure limitations. Air Astana has been lobbying for several years for expansion of the airport, which only has four gates, but there has been no movement.
The current owners came close to selling the airport in 2012, which provided a ray of hope as the new owners were more likely to invest in expanding the facility. But the transaction wasn’t completed and Air Astana is now left again with the status quo, which means no space to expand during peak periods. Mr Foster said the current capacity is about 1,600 passengers per hour while during the morning peak typically over 2,000 passengers pass through in an hour.
Without being able to expand its existing banks at Almaty, Air Astana has started building up a bigger operation at Astana. The Astana airport is a much more modern facility, having opened in 2005, and has space to grow as well as handle an influx of transit passengers. The airport, which is government owned, is also moving forward with an expansion that will further boost capacity ahead of EXPO 2017, which Astana will host.
Air Astana top 10 hubs/bases/destinations by capacity (seats): 14-Jan-2013 to 20-Jan-2013
While Air Astana will continue to serve Almaty, it may be forced to direct all expansion to Astana and use Astana for all or virtually all transit traffic while limiting Almaty to only local traffic. This is not the preferred outcome as Air Astana sees rapid growth for both of its hubs. But at least the carrier has an alternative in Astana, which also provides a much better experience for the carrier’s transit passengers. “It’s great for Astana but poor for Almaty,” Mr Foster said, pointing to the economic impact on Almaty should Astana emerge as the carrier’s primary hub.
Astana has regional connections but no long-haul services to the Far East
Astana is already well positioned for regional routes given the several route launches over the last year connecting Astana with other Central Asian capitals and Russia. It also has one of the carrier’s three European routes which are spread out across the country with Frankfurt served from Astana, London from Almaty and Amsterdam from Atyrau in western Kazakhstan. But Astana is currently not well connected to Asia with the exception of China.
Air Astana route map from Astana
Air Astana route map from Almaty*
Air Astana significantly increased capacity to China last year as it launched two weekly flights from Astana to Beijing and upgraded Almaty-Urumqi service from three weekly flights to daily. The carrier also continues to operate three weekly Astana-Urumqi flights and five weekly Almaty-Beijing flights. Mr Foster says further China growth will not be considered until 2014 as the carrier first wants to let the capacity added in 2012 be absorbed.
The China-Kazakhstan bilateral was extended in 2012 to allow a third gateway in China for Kazakhstani carriers but Mr Foster said additional capacity is more likely to be added to Urumqi and Beijing before a new route to mainland China is considered. Air Astana would be interested in expanding in India, currently served from Almaty with five weekly flights to Delhi, but is constrained by bilateral restrictions.
Air Astana will also not look at growing in other East Asia markets until 2014 with the exception of adding capacity on the new Hong Kong route. Air Astana currently serves Bangkok, Hong Kong, Ho Chi Minh, Kuala Lumpur and Seoul – all only from Almaty. Hong Kong was launched in Aug-2012 with two weekly flights. Mr Foster expects a third frequency will be added by summer 2013 and potentially a fourth frequency by the end of 2013.
Air Astana increased its Bangkok service to daily as it launched two weekly flights to Ho Chi Minh on 04-Jan-2013. The new flight operates on an Almaty-Bangkok-Ho Chi Minh routing. Kuala Lumpur is served with three weekly flights and Seoul with two weekly flights.
Air Astana looks at Singapore and Tokyo for 2014
Air Astana now operates two leased older model 767s, which are to be replaced in 2013 as two new 767-300s are delivered. Air Astana originally ordered in 2012 four new 767-300ERs but recently cancelled one of the four orders after a Lufthansa Consulting study determined a three-aircraft fleet was sufficient for at least the time being.
But Mr Foster said the carrier will continue to review its long-haul fleet needs and could lease an additional “newer” 767. “I believe in the long-term we will have more than three 767s in the fleet,” he said.
The 767s will eventually be replaced by the three 787s on order, which are now slated for delivery from 2017.
See related article: Air Astana could kick start new spate of 767 orders
Air Astana also operates five 757s on long-haul routes to Asia and Europe. The carrier has extended the leases on these aircraft until the 2017 to 2019 time period. Mr Foster said the economy cabin on its 757s will be retrofitted in 2013 with new seats and seatback IFE. The business class cabins were already retrofitted in 2011.
Air Astana to evaluate A320neo and 737 MAX in 2013
While the 757s it the perfect aircraft for Air Astana’s network of several thin routes of about seven to eight hours (a by-product of its location roughly halfway between Asia and Europe) Mr Foster said the leases will not be extended again. He said the carrier plans to hold a competition in 2013 to evaluate the A320/A321neo and 737 MAX. The new generation narrowbody aircraft will replace its existing A320s as well as, it is hoped, its 757s.
Based on preliminary conversations with Airbus and Boeing, Air Astana believes the A321neo and 737-9 MAX may have sufficient range for most of its Asian and European routes without payload restrictions. If Air Astana is able to put A321neos or 787-9 MAXs on its 757s routes, the 787s could potentially be freed up to launch new longer-haul routes such as North America.
Another issue Air Astana may have to resolve is what it will do with its Asian flights should its primary hub shift to Astana. The more populated Almaty is a stronger market for its Asian flights as most traffic on these routes consists of holidaying Kazakhs.
Airport infrastructure challenge could derail growth
The situation at Almaty is worrisome as without a bigger airport the growth figures for the overall Kazakhstan market that are projected by IATA are not achievable. “When you look at the growth figures obviously this constraint is going to become actually critical,” Mr Foster said. He added that there will be a “massive constraint” on growth unless there is a “radical” change and the Almaty airport is expanded.
Mr Foster said the airport situation has started to become “a major national issue” as without expansion by 2017 Almaty is projected to lose USD1.4 billion per year in GDP contributions. But so far there has been no movement on the long overdue expansion of the outdated and badly congested airport. In addition to a lack of gates and aircraft parking spaces, the current airport’s departure and arrival halls are tiny. The airport also does not have a proper transit facility and has only a very small common use business class lounge.
IATA’s projections for the Kazakhstan market could prove to be overly rosy as Air Astana and foreign carriers face possible limitations on growth at the country’s largest international airport. Even with Air Astana’s recent international expansion at Astana, Almaty now accounts for 63% of the country’s total international seat capacity, according to Innovata data
Air Astana itself is relatively conservative and isn’t planning to grow nearly as rapidly as the IATA projections. Mr Foster said after 16% growth in 2013 the carrier’s business plan envisions annual growth of between 7% and 12% over the subsequent five years.
If the market does end up expanding as IATA projects despite the infrastructure limitations, Air Astana could see its market share slip significantly. IATA projects Kazakhstan’s market will reach 12.9 million passengers in 2016, including 6.8 international and 6.1 million domestic passengers.
But assuming growth of 16% in 2013 followed by 10% per annum in 2014 to 2016, Air Astana’s traffic will only grow to just over five million passengers in 2016, giving it only about 40% of the market compared to 60% currently. If IATA projections are accurate, Air Astana would need to carry nearly 8 million passengers in 2016 to maintain its 60% share of the market - a difference of more 50% compared to the carrier's current five-year business plan.
While Air Astana has a strong position in its home market, other local and foreign carriers are keen to expand rapidly and profit from the world’s fastest growing market. Kazakhstan’s second largest carrier, SCAT, has been growing faster than Air Astana, reporting 22% passenger growth in 2012 to 1.1 million passengers. SCAT, which operates a mixed fleet of western and Russian aircraft, reportedly carried 692,000 domestic and 404,000 international passengers in 2012.
Air Astana also competes in the domestic market against several small carriers but Air Astana is the only Kazakhstan carrier that is IOSA certified and not on the EU blacklist. Most of Kazakhstan’s other carriers also do not operate western aircraft. The market has seen several start-ups in recent years and could eventually attract a start-up following a more western model. Russia’s UTair recently said it was considering establishing a subsidiary in Kazakhstan.
IPO could lead to accelerated expansion for Air Astana
Air Astana could accelerate expansion, allowing it to maintain its current share of the fast-growing Kazakhstan market. An initial public offering (IPO) could help provide funds to support an accelerated expansion plan.
The Kazakhstan government, which owns the flag carrier in partnership with BAE Systems, was originally aiming to list Air Astana on the Kazakhstan Stock Exchange in 2012 with a future secondary listing potentially in Hong Kong or London. But the IPO has not yet proceeded as the carrier’s two shareholders have not yet met to discuss the IPO and agree on terms.
Mr Foster said Air Astana continues to support the idea of an IPO as he would like to see the carrier develop a stronger equity base and not have to rely as much on the debt markets. “We do need to this happen,” he said. “It’s a shame that it hasn’t happened [yet].”
Once the IPO process is started, which could happen in 2013, the airline should not have problems generating interest given its consistent profitability and domination of the world’s fastest growing market. Air Astana has not posted a loss since its launch year, 2002. Profits were down in 2012 for the second consecutive year, slipping about 15% from 2011 levels and about 32% from the peak in 2010, based on preliminary figures.
But Mr Foster points out that 2012 was a challenging year given the high fuel prices and the carrier did particularly well in the second half after as seeing an 80% drop in profits in the first half. Mr Foster said 2013 is hard to predict but carrier is “not too pessimistic” as economic conditions in Kazakhstan remain favourable.
Air Astana annual profits: 2002 to 2012*
Air Astana outlook remains bright despite prospect of intensifying competition
Air Astana has a bright outlook and will likely look at some point to accelerate expansion, particularly if there is a successful IPO. But the carrier is not overly concerned about its market share potentially slipping, or competition intensifying, as interest in Kazakhstan and Central Asia increases.
Air Astana is focused on the top end of the market and expects to see rapid expansion by other types of carriers, particularly domestically. Air Astana has already seen its domestic market share drop from nearly 80% a few years ago to 64%. Further drops are inevitable, particularly as the carrier no longer has turboprops, which are needed to access certain domestic airports.
In the international market it is also inevitable more foreign carriers will begin serving Kazakhstan and local carriers will look to take on Air Astana on more routes. Sharajah-based LCC Air Arabia has increased capacity by over 50% over the last year and is now the fourth largest carrier serving Kazakhstan after Transaero, Turkish and Lufthansa. China Southern is now the fifth largest foreign carrier and has expanded its Kazakhstan capacity by over 20% over the last year, according to Innovata and CAPA data.
Turkey’s Pegasus Airlines in 2012 became the second LCC to serve Kazakhstan. More LCCs as well as more full-service carriers will certainly be keen to enter the world’s fastest growing market.
Air Astana isn’t the largest airline in Central Asia but it has the strongest position
While it has by far the biggest international profile among Central Asian carriers, Air Astana is not currently the largest Central Asian international carrier. Uzbekistan Airways is slightly larger, currently offering about 44,000 weekly international seats compared to 42,000 for Air Astana.
In the Central Asia-Russia market, Air Astana is currently only the fourth largest carrier – behind Uzbekistan Airways and three Russian carriers: Ural Airlines, S7 and Transaero.
Air Astana is currently the largest carrier in the much smaller intra-Central Asia international market, which it has targeted over the last two years. Over the last year Air Astana has grown international seat capacity on international rotues within Central Asia by 32%, according to Innovata and CAPA data.
But the carrier still currently only has 3,500 weekly seats deployed on international routes within Central Asia, which makes Central Asia the second smallest of the seven regions Air Astana serves. Central Asia now accounts for only 8.3% of Air Astana's total international seat capacity, compared to 7.6% one year ago.
Air Astana international capacity (seats) by region: 14-Jan-2013 to 20-Jan-2013
Air Astana’s presence in the five Central Asian markets it serves is also limited despite its extended home market strategy. Air Astana currently has a 2% share of international capacity in Georgia, Kyrgyzstan and Uzbekistan and only a 1% share of international capacity in Azerbaijan and Tajikistan, according to Innovata data. (The Kazakhstan, Azerbaijan and Uzbekistan international markets are all approximately the same size while Tajikistan is slightly smaller and Georgia and Kyrgyzstan are much smaller).
But size does not always matter. Air Astana is focused on the top end of the market and becoming the “preferred carrier” in the region, particularly in the corporate sector. This initiative has largely succeeded as Air Astana stands out in the region because it is run to western standards. This in turn has helped the carrier forge several partnerships including with Etihad and Asiana. The carrier’s strong position in an increasingly important and fast-growing market will help attract more airline partners over the next few years, including potentially Cathay Pacific, and eventually a global alliance.
Air Astana may not grow quite as fast as the 20% plus clip projected for the Kazakhstan market, but the carrier will take more than its share of high yielding economy and premium passengers.