Air Astana was launched in 2002 as a new privately owned airline with two aircraft. In the meantime, the company has expanded to 57 jets, which are distributed as follows: 34 aircraft are operated under the Air Astana brand and 23 by the subsidiary Fly Arystan, which operates in the low-cost segment.
The latter company was initially just a sales brand, as all aircraft were operated by Air Astana. That changed this year, as Fly Arystan now has its own certificates, meaning that the former brand has become a fully-fledged airline.
Full-service carrier and low-cost airline in the group
According to Ibrahim Canliel, CFO of the Air Astana Group, there is a good reason for this, because in his opinion full-service carriers and low-cost airlines must be thought through and managed completely differently. The two airlines work closely together, but not everywhere. Air Astana is positioned as a classic network airline that aims to score points with its extensive service. Fly Arystan, on the other hand, is a point-to-point airline where the included services are reduced to the essentials and many services are subject to an additional charge. Overlaps and thus internal company competition are rare.
Air Astana is concentrating on the hubs in Almaty and Astana, which, according to Canliel, are roughly evenly positioned. The distribution of capacity would be roughly 50:50 percent, sometimes a little more or less here and there. Fly Arystan also has aircraft stationed at other Kazakh airports. Due to the size of the country, the low-cost brand is also trying to get involved in the domestic business. There are also some international point-to-point routes.
Ibrahim Canliel is happy that Air Astana has gotten rid of the Boeing 757s that it had been using for several years. During a media interview, he described this type of aircraft as "gas-hungry". The Airbus A321LR has been purchased as a replacement. Initially, it was said that only a few units would be given additional tanks to increase the range even further. In the meantime, the airline, whose headquarters are in Almaty, has decided to upgrade the entire fleet. However, the A321XLR has not yet been ordered. Canliel did not comment further on whether this model could be ordered at a later date.
Additional A320ceo models as a stopgap measure
This may also be because Air Astana has other concerns at the moment. The engine problems affecting carriers all over the world are causing additional costs for the Neo models. The company is counteracting this by keeping some A320ceo series units in service longer than planned. In addition, three units will be leased temporarily. The idea behind this is to keep flight operations stable in the coming year with the help of the A320ceo family aircraft. Although more brand-new Neos are gradually being delivered, some are also breaking down and have to wait for replacement engines. This problem affects pretty much all operators of the A320neo series with Pratt & Whitney engines.
There is another change in the fleet, as the very new Embraer E2 jets are being phased out. There are various reasons for this, but the main reason is that the aircraft manufactured in Brazil do not perform as well as Air Astana would like in the freezing Kazakh winter. When the respective leasing contracts expire, the regional jets will be returned to the lessors. The phase-out will begin shortly.
Air Astana was basically created on the drawing board and was rebuilt with Western help. At times, the British company BAE Systems played a major role. There is no continuity with another airline that used Soviet aircraft and went bankrupt. Today's aviation company essentially fulfils the role of a national carrier, but is not a state-owned company, but is privately owned. The majority is owned by intentional investors from Kazakhstan and Europe.
Simple entry requirements mean more passengers
Since the company was founded, Air Astana has grown strongly and quickly. The fact that the government has relaxed entry regulations for EU citizens has also played an important role. For about ten years now, time-consuming visa applications at embassies have no longer been necessary; instead, presenting a valid passport is sufficient for entry. According to Ibrahim Canliel, a similar effect has also been seen on routes to other countries, whose citizens the Kazakh government has made entry much easier. The reverse is of course also true when Kazakhs are allowed to enter without a visa if possible.
For a long time, Air Astana focused on international routes, apart from linking the Almaty and Astana hubs. This changed with the founding of Fly Arystan and especially with the advent of the corona pandemic. The group now holds a 60 percent market share on domestic routes. Kazakhstan is the ninth largest country in the world. Example: The flight time between Almaty and Astana - a "race track" on which several airlines compete - is around 1,5 hours. This is just one example. Traveling by land within Kazakhstan can be arduous. There are high-speed trains and good highways, but not everywhere. This means that the aircraft can shorten extremely time-consuming journeys by land. This is also accepted by the market, which, according to Ibrahim Canliel, can be seen on completely new Fly Arystan routes that were previously not served by anyone.
In the meantime, Air Astana has also set up its own training center for pilots and flight attendants, which is equipped with A320neo full-flight simulators, among other things. There is currently one "sim", but another is due to be added shortly. Maintenance for the Airbus A320neo series is carried out in-house in accordance with EASA specifications. Only the Embraer and Boeing jets are still maintained abroad or their staff complete training, for example at Lufthansa Flighttraining. Both the E2 series and the B767 are discontinued models at Air Astana, so it is entirely understandable that the company is no longer investing in its own technology. The future Dreamliners, on the other hand, are to be maintained in-house in the medium term. To this end, the infrastructure is being expanded significantly.
Voluntary renunciation of Russia
When asked about the customer groups and source markets, Canliel said that there are indeed differences between Astana and Almaty. The capital routes also benefit from the fact that Astana is the capital and conferences are held here or citizens and/or diplomats attend appointments. Almaty benefits from its geographical location and also has numerous customers who travel from the border regions of the surrounding countries. Both hubs have many transfer passengers from Georgia, China, Saudi Arabia, Turkey, Europe and many other regions. Russia also played an important role at one time, but the Air Astana Group voluntarily decided, without any instructions from the government, that after the Russian Federation army invaded Ukraine, it would no longer fly to Russia and would no longer use the airspace there. Canliel said that it could, but did not want to.
Air Astana also has to react to changing passenger travel trends. It has been recognised that passengers are increasingly preferring non-stop flights to connecting flights. This also contributed to the decision to use the Airbus A321LR model. Even taking the additional tanks into account, the airline plans to use these narrowbodies to serve routes such as London (Heathrow)-Almaty and Frankfurt-Almaty in the future, and refuelling stops would not be necessary.
According to the Air Astana CFO, kerosene would be purchased cheaply directly from the refineries, picked up and stored by the airline itself. "Eliminating" the middleman would reduce costs enormously. However, this only applies to the two Kazakhstani hubs, as abroad the airline is dependent on the local supply. Air Astana is not afraid of competition. The entry of low-cost airlines such as Fly Dubai or Wizz Air into the market would have resulted in more rather than fewer passengers, as every new provider would always attract attention to the topic of aviation.
cost structure cheaper than that of Turkish Airlines
According to Ibrahim Canliel, Air Astana's operating costs are around 30 percent lower than those of Turkish Airlines. However, the distribution between point-to-point and transfer flights is completely different. Currently, the Kazakh company only has around 16 percent transfer share. Before the pandemic, it would have been around 40 percent. The explanation for this: the route network is more point-to-point oriented and passengers would prefer nonstop and direct flights to transfer flights if they can avoid it. Another interesting thing about Air Astana is that the top management has been in office for a very long time compared to European airlines, with the exception of Ryanair. For example, Peter Foster has been at the helm of the Kazakh airline for 17 years. Part of the recipe for success has proven to be that there is strong continuity and at the same time considerable investment is made in the training of young managers.
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