Air Astana's FlyArystan: Kazakhstan's new low cost option 


Air Astana's new unit FlyArystan will launch operations on 1-May-2019, giving leisure passengers and corporates the first low cost option in Kazakhstan’s growing domestic market. While FlyArystan is technically not an airline – because it will be using Air Astana’s operator’s certificate – the new budget brand could emerge as the first significant low cost competitor in Central Asia.

Air Astana, Kazakhstan’s largest airline, decided to establish a low cost brand in 2018. FlyArystan has been tasked with achieving 40% lower unit costs than its parent on the same routes, a goal driven mainly by the use of higher density aircraft.

Ancillary revenues are also a key component of the FlyArystan strategy, differentiating it from other domestic competitors. Kazakhstan recently implemented legislative changes enabling airlines to start charging passengers for baggage.


  • Air Astana’s new low cost unit FlyArystan is launching services on 1-May-2019.
  • FlyArystan will be the first low cost competitor in Kazakhstan’s domestic market.
  • FlyArystan’s inaugural six routes include three routes being transferred from Air Astana, two routes that both brands will operate, and one new route for the group.
  • FlyArystan should enable Air Astana to compete more effective in the domestic market against low fare (but not low cost) competitors.
  • FlyArystan should also enable Air Astana to regain domestic market share.

FlyArystan enables Air Astana to compete more effectively in domestic market 

FlyArystan’s standard fare only includes 5kg of hand baggage. Passengers with checked bags or larger hand bags need to pay additional fees or opt for a higher fare class. Seat assignments, food and drinks are also sold separately.

By unbundling and using high density aircraft FlyArystan should enable Air Astana to compete more effectively in Kazakhstan’s price sensitive domestic market. Although there are no low cost carriers in Kazakhstan, SCAT Airlines and Bek Air compete aggressively on price and are essentially low fare competitors.  

SCAT is the second largest airline in Kazakhstan, accounting for approximately 26% of current domestic seat capacity. Bek is the third largest competitor, with approximately a 13% share.

Kazakhstan domestic capacity share (% of seats) by airline: week commencing 22-Apr-2019

FlyArystan enables Air Astana to regain domestic market share 

Air Astana still has a leading 53% share of domestic seat capacity. However, in recent years the flag carrier has been focusing on expanding its international operation (including sixth freedom transit traffic), leading to domestic market share declines. 

Seven years ago, in Apr-2012, Air Astana accounted for an 85% share of domestic seat capacity (based on CAPA and OAG data). Air Astana’s annual domestic seat capacity has grown by only 10% in the past six years, whereas total domestic seat capacity in Kazakhstan has grown by approximately 70%.

SCAT’s domestic seat capacity has nearly tripled during this same six-year period. Bek Air has expanded rapidly since it launched in 2011.

Qazaq Air is also a new competitor, launching operations in 2015. Qazaq is fully government-owned whereas Air Astana is part government owned and part owned by BAE Systems. SCAT and Bek are privately owned. 

FlyArystan will initially only operate domestic services, enabling Air Astana to regain domestic market share. It also intends to compete in the regional international market at a later stage.

FlyArystan becomes only the fourth low cost competitor in the CIS 

Kazakhstan is currently served by five foreign LCCs: airBaltic, Air Arabia, flydubai, Pegasus and Wizz Air. As LCC competition in the international market intensifies Air Astana will look to use FlyArystan, following a dual brand strategy similar to the strategy it is now starting to pursue in the domestic market.

As CAPA highlighted in a Nov-2018 analysis report (after Air Astana first unveiled plans to launch a budget brand), the Aeroflot LCC subsidiary Pobeda is particularly a future threat. Pobeda is now the largest (and most successful) LCC in the CIS region.

FlyArystan becomes only the fourth low cost brand in the CIS after Pobeda, Air Manas and Buta Airways.

Air Manas is a small Kyrgyzstan-based joint venture LCC with Turkey-based Pegasus. Buta is the low cost brand of Azerbaijan Airlines, which has followed a similar strategy to Air Astana's by launching a low cost operation using its existing operator's certificate and aircraft already in the group's fleet.

See related report: Air Astana and Uzbekistan Airways add LCC brands

FlyArystan launches with two A320s and six routes 

FlyArystan is launching with two 180-seat single class A320s that have been reconfigured from Air Astana’s typical two class configuration. The fleet is slated to grow to four A320s by the end of 2019 and to 15 aircraft by 2023.

The new low cost operation will launch on 1-May-2019 and in the first week will operate flights from Kazakhstan’s largest city Almaty to Nur-Sultan (formerly known as Astana), Karaganda, Taraz and Uralsk. Almaty-Nur Sultan will be served with two daily flights and the other three routes with one daily flight each.

Daily flights from Almaty to Pavlodar and Shymkent are slated to start on 30-May-2019, giving FlyArystan six routes and seven daily flights at the end of its first month.

FlyArystan initial network

FlyArystan will initially serve five of Kazakhstan's 10 largest airports 

Almaty-Nur-Sultan is the largest of the routes being launched by FlyArystan in its first phase. Almaty and Nur-Sultan are the two largest cities in Kazakhstan and have the two largest airports.

Of the other five destinations from Almaty, Shymkent is the largest. Shymkent is the fifth largest airport in Kazakhstan based on current seat capacity. Karaganda is ninth largest, Uralsk’s Oral Ak Zhol Airport is eighth largest, Pavlodar is 11th largest and Taraz is 13th largest.

Kazakhstan currently has 18 airports with scheduled commercial services but only 10 have more than 5,000 weekly seats. Kazakhstan is a vast country and there is no high speed rail, making air travel the most attractive option for travelling between most cities.

Kazakhstan airports ranked by weekly seat capacity: week commencing 22-Apr-2019

Rank Airport IATA Seats Share of total seats
1 ALA 129,539 37.4%
2 TSE 105,331 30.4%
3 SCO 23,974 6.9%
4 GUW 20,652 6.0%
5 CIT 18,480 5.3%
6 AKX 10,334 3.0%
7 UKK 7,976 2.3%
8 URA 6,616 1.9%
9 KGF 5,430 1.6%
10 KZO 5,246 1.5%
11 PWQ 4,356 1.3%
12 KSN 3,782 1.1%
13 DMB 1,268 0.4%
14 PLX 1,112 0.3%
15 DZN 908 0.3%
16 TDK 700 0.2%
17 PPK 600 0.2%
18 KOV 400 0.1%

Kazakhstan’s airports handled 15 million passengers in 2018, according to Kazakhstan Civil Aviation Committee data. Traffic grew by 3% in 2018 and has increased by 60% since 2012, when Kazakhstan airports handled 9.4 million passengers. (Each domestic passenger is counted twice in this data.)

There are approximately five million annual domestic passengers in Kazakhstan. With low fare stimulation the market should continue to grow rapidly, given the size of the population (18 million) and Kazakhstan’s growing middle class population. 

Air Astana transfers two routes to FlyArystan

Air Astana is dropping services from Almaty to Karaganda, Pavlodar and Uralsk as FlyArystan launches these routes. Air Astana is not selling any FlyArystan flights on its website and is only offering one-stop connections in the Almaty-Karaganda, Almaty-Pavlodar and Almaty-Uralsk markets.

Although Air Astana will no longer serve the two routes, group capacity will nearly double. Air Astana uses E190 regional jets with 97 to 108 seats on these two routes, compared to the 180 seats on the FlyArystan A320s. The number of frequencies will be unchanged (seven per week) when FlyArystan takes over. 

Karaganda, Pavlodar, Uralsk are relatively small markets. Karaganda has three domestic routes and international services to Russia (Moscow and Novosibirsk).

Pavlodar has only two domestic routes and limited international services to Moscow. Uralsk has four domestic routes and limited international services to Frankfurt and Moscow. 

FlyArystan will compete against SCAT and the regional airline Qazaq Air on Almaty-Pavlodar. Bek is the only competitor on Almaty-Karaganda and Almaty-Uralsk. 

Taraz is a new market for the Air Astana Group 

Air Astana does not currently have any services at Taraz. The Almaty-Taraz route is not served by any airline at the moment, although it was previously served by SCAT and Qazaq. 

Taraz is currently only served from the capital Nur-Sultan (formerly known as Astana) by SCAT, and from Moscow by Russia’s S7 Airlines. Air Astana is banking that with low fares FlyArystan can stimulate demand and grow a market that is served mainly by surface transport.

Taraz is located approximately 500km from Almaty. It takes five to six hours to drive between the two cities. There is also a slow speed train that takes about nine hours. 

Taraz has a population of approximately 400,000. Pavlodar and (particularly) Uralsk are smaller cities located in more remote areas. Karaganda is slightly larger, with a population of approximately 500,000. 

Nur Sultan and Shymkent are large routes that Air Astana will continue to operate 

Shymkent is much larger and has a population of nearly 1 million, making it the third largest city in Kazakhstan (after Almaty and Nur-Sultan).

Based on current seat capacity, Almaty-Shymkent is the third largest domestic route in Kazakhstan. Almaty-Nur Sultan is the largest by a wider margin, with more than 30,000 weekly seats. Shymkent-Nur Sultan is second largest (with slightly over 6,000 weekly seats) and is currently slightly larger than Almaty-Shymkent

Kazakhstan top 10 domestic routes ranked by weekly seat capacity: week commencing 22-Apr-2019

Rank Origin Destination Weekly seats
1 Almaty International Airport Nur-Sultan Nazarbayev International Airport 31,878
2 Shymkent Airport Nur-Sultan Nazarbayev International Airport 6,412
3 Almaty International Airport Shymkent Airport 5,816
4 Almaty International Airport Atyrau Airport 5,566
5 Almaty International Airport Aktau Airport 5,354
6 Aktau Airport Atyrau Airport 4,564
7 Atyrau Airport Nur-Sultan Nazarbayev International Airport 4,436
8 Aktobe Airport Nur-Sultan Nazarbayev International Airport 4,176
9 Almaty International Airport Ust-Kamenogorsk Airport 3,580
10 Aktau Airport Nur-Sultan Nazarbayev International Airport 3,572

Air Astana has two daily flight on Almaty-Shymkent using a mix of E190s and A320s. SCAT and Qazaq also compete on the route and each offer one daily flight. Bek dropped Almaty-Shymkent in Sep-2018 but was a small player, with just three weekly flights.

Air Astana will continue to operate Almaty-Shymkent with two daily flights following FlyArystan’s launch. Therefore, in this case Air Astana is using FlyArystan to add capacity on a trunk route and give passengers the option of flying with its full service or budget brands.

Almaty-Shymkent one-way seat capacity by airline: Sep-2011 to Apr-2019

Air Astana's market share on Kazakhstan's largest route could reach 80% 

Air Astana is also giving passengers the options of a full service and low cost brand on the key Almaty-Nur Sultan route.

Air Astana will continue to operate up to 68 weekly flights (there are slight reductions during offpeak seasons) from Almaty to Nur Sultan after FlyArystan launches 14 weekly flights on Kazakhstan's busiest route. SCAT currently offers 21 weekly flights on Almaty-Nur Sultan, Bek has 19 frequencies, and Qazaq Air 14 frequencies.

Air Astana already has nearly a 70% share of seat capacity on the Almaty-Nur Sultan route. Its share of departures is slightly less than 60% as Air Astana generally uses larger aircraft (a mix of E190s, A320s, A321s, 757s and 767s) compared to SCAT (737s), Bek (Fokker 100s), and Qazaq (Dash 8s). 

With the launch of FlyArystan Air Astana's capacity share on Almaty-Nur Sultan could reach 80%. FlyArystan will initially generate 2,520 weekly one-way seats on the route, which will give it approximately a 13% share of total seat capacity. SCAT has a similar amount of capacity on Almaty-Nur Sultan, while Bek and Qazaq are smaller competitors.

Almaty-Nur Sultan one-way seat capacity by airline: Sep-2011 to Apr-2019

Air Astana takes sensible approach with initial FlyArystan network 

FlyArystan’s first routes indicate an experimental phase as Air Astana trials using its new low cost unit on a mix of new routes, route transfers and overlapping routes. 

How FlyArystan’s network strategy evolves as its fleet expands will likely hinge on the success of the various route types.

If FlyArystan can prove it can operate alongside Air Astana on Almaty-Nur Sultan and Almaty-Shymkent without impacting the parent, Air Astana will likely adopt a dual brand strategy for more domestic trunk routes. Of the initial six routes for FlyArystan, only Almaty-Nur Sultan and Almaty-Shymkent are among the top 10 domestic routes in Kazakhstan; the other eight routes in the top 10 could also be feasible for FlyArystan to operate alongside Air Astana.

If FlyArystan is successful in totally new markets for the group, such as Temez, Air Astana will also likely use the new brand to enter similar unserved routes. 

So far Air Astana has been upbeat, noting high uptake since FlyArystan began ticket sales at the end of March. 

Air Astana has also highlighted FlyArystan’s rapid launch with the first flight operating only six months after board approval. However, obviously such a quick launch would not have been achievable if Air Astana had created a subsidiary rather than unit or brand and applied for a new operator’s certificate. 

Want More Analysis Like This?

CAPA Membership provides access to all news and analysis on the site, along with access to many areas of our comprehensive databases and toolsets.
Find Out More