Kazakhstan’s Air Astana could kick start new spate of B767 orders

Air Astana's long-haul fleet currently consists of four leased B757-200s and two leased B767-300ERs with a fifth B757-200 slated to enter service next month. In 2007 Air Astana signed a letter of intent (LOI) to acquire three B787s plus three options with deliveries intended for 2014 and 2015. Air Astana CEO Peter Foster says the LOI "is still intact" and the carrier plans to soon discuss with Boeing converting the deal to a firm order. But he said Air Astana's B787s delivery slots have been pushed back to 2019 due to the numerous delays in the B787 programme.

Mr Foster says the B787s are now envisioned as growth aircraft for the end of this decade and could potentially be used to launch flights to the US. B767s and particularly B757s remain the ideal aircraft for the carrier's current long-haul network, which includes thin routes to Asia and Europe which are primarily six to eight hours in duration. But Mr Foster says Air Astana's five B757s will need replacing in the 2015 to 2016 timeframe while the carrier is looking to phase out its two B767s in 2014.

Air Astana has been evaluating potential replacements for both types with the B767-300ER and A330-200 under evaluation. Mr Foster expects the carrier will make a selection and place an order by the end of this year for six firm aircraft plus four options. Deliveries would begin in late 2013 and initially replace the two existing B767-300ERs before replacing the five B757s.

The B767-300ER is considered the heavy favourite as the A330-200 is considered too big for almost all of Air Astana's long-haul routes. Air Astana has several long and thin routes, most of which are served less than daily. Opting for B767-300ERs will also ensure commonality during the three-year transition period. As a result, ordering new B767-300ERs is considered the heavy favorite.

Mr Foster says the A321neo is not an option for replacing Air Astana's B757s as the neo will not have the range to take over most of its B757 routes. Airbus and some leasing companies have been touting the A321neo as a potential B757 replacement and being able to operate nearly all B757 missions. But Mr Foster doesn't see that, explaining the A321neo will only be able to fly at the very most 6.5 hours. This would preclude the A321neo from operating from Almaty to London, Bangkok, Kuala Lumpur, Hong Kong and Seoul. It also would mean the A321neo could not replace the B757 on most transatlantic routes.

Air Astana is unique in that its Almaty hub is roughly equal distance between Europe and East Asia. It is also unique in that it has an international network which consists of an unusual high concentration of long and thin routes. As a result, Air Astana is a niche carrier that relies heavily on the B757, which it also uses on some domestic flights, without a totally suitable replacement.

Speaking in Almaty this week at a small media briefing that was attended by CAPA sister publication Airline Leader, Mr Foster explained that the B757 offers "tremendous economics for an airline of our type with these long thin routes located pretty much equidistant between, Europe, Southeast Asia and Northeast Asia." He added that "the 757 is a damn good aircraft. It has great legs."

Air Astana earlier this year retrofitted its four B757s, which are equipped with winglets, and is happy to continue operating the aircraft for the short to medium term. But Mr Foster believes there will be a need to replace the fleet by the end of the 2016.

The retrofit included the installation of semi-life flat business class seats and reduced the total seat count from 170 to 166. The additional fifth B757 will also be retrofitted with semi lie-flat business class seats prior to entering service next month. The additional long-haul aircraft will allow Air Astana to launch service to Hong Kong as well as increase capacity to Bangkok to five weekly flights and to Kuala Lumpur to three weekly flights. Air Astana also currently uses its B757s and B767s to serve Beijing, Seoul, Amsterdam, Frankfurt and London as well as on some domestic routes. All of its long-haul destinations are only served from Almaty except Amsterdam, which is served from Atyrau, and Frankfurt which is served from Astana.

Mr Foster now expects the Almaty-Hong Kong service will begin in February with two weekly flights which will quickly increase to three per week. Mr Foster says Air Astana is also planning to operate a once weekly charter flight during the upcoming winter season to Ho Chi Minh City, which, if successful, could later become a new scheduled destination.

Air Astana's two B767s will be retrofitted next month with semi lie-flat seats similar to the seats already installed on the B757s. The retrofit will reduce the total seat count on Air Astana's B767-300ERs from 223 seats to 220 seats. The B757/B767 retrofit programme at Air Astana does not include a new in-flight entertainment system (IFE) as the carrier continues to use handheld IFE devices in business class.

Very few carriers in Europe or Asia have niche thin long-haul operations like Air Astana. However, several US carriers similarly rely on B757s for long and thin transatlantic routes. These carriers have the same dilemma in that they don't have any perfect options for replacing B757s. With the A321neo lacking the range for most transatlantic routes, US carriers could potentially follow Air Astana in ordering new B767s to replace B757s.

Boeing expects there could be spate of new B767 orders as carriers deal with B787 delays and ponder alternatives for replacing B757s. Already All Nippon Airways and LAN have ordered more B767s to address capacity shortfalls caused by B787 delivery delays. With Boeing keen to secure more B767 orders to bridge the gap before the B767 tanker reaches full production, clearly new B767-300ERs will be attractively priced. As Mr Foster explained, "the B767 has had a new lease of life because of the tanker programme for the US Air Force". Air Astana could be one of several existing B757/B767 operators that place orders for B767s in the near term.