An attempt by the government of Kazakhstan to stave off an exodus of foreign investors this past February not only saw the abrupt devaluation of the country’s currency, it meant that national carrier Air Astana would have to curtail its ambitious growth plans. “The devaluation forced us to slam on the brakes on new aircraft orders,” said company president Peter Foster during a recent press conference in London. “But our lean structure and lower overheads meant that we could sustain ourselves.”
For Foster it was a moment of déjà vu. “The last time we caught our collective breath was in 2009, yet we managed to get through it all to have a great year in 2010, with operating revenues up 14 percent.” Hoping that history repeats itself, Foster predicts a reversal of fortune by next year, in spite of the unfolding crisis in Ukraine and the resulting slump in air traffic in and out of the country.
Air Astana has, in effect, leveraged itself by surviving as the only viable carrier in the region. Without even a sniff of any rival encroaching on its market share, Air Astana has been able to establish routes covering the Russian Federation, CIS states and Central Asia. “We have the competitive advantage given our location in the region, mitigating the effects of the devaluation,” Foster remarked.
Furthermore, Kazakhstan borders China, facilitating access to lucrative emerging markets. The airline recently managed to expand its fleet with the addition of a third factory-fresh Boeing 767-300ER, augmenting a 31-strong fleet of Boeing 757-200s, Airbus A320-series jets and Embraer E190s.
The carrier’s removal from the European Union’s “blacklist” in April signaled a reprieve for the Kazakh aviation authorities and a golden opportunity for Foster. “This serves as a final validation of our safety standards, allowing us to fly into London Heathrow three times a week and to mark a shift to Astana for our growing European routes hub,” he concluded.