Air Astana To Launch Kazakh LCC

 - November 6, 2018, 10:31 AM

Kazakhstan’s Air Astana plans to begin operating its own low-cost airline named FlyArystan in mid-2019 with four of its Airbus A320s in an all-economy, 180-seat configuration. Speaking with AIN before a public announcement, Air Astana CEO Peter Foster said the fleet will grow to at least 15 airplanes by 2022. Plans call for FlyArystan’s network to consist of new and present routes now flown by Air Astana, which has contracted with S7 Technics in Moscow to perform aircraft reconfiguration and painting.

"Initially [FlyArystan] was conceived as a defensive strategy in response to local airlines, as well as Air Arabia, Wizz Air, and Russia's Pobeda, all of whom are increasingly aggressive in this market,” Foster told AIN. “We intend to enter the market aggressively and grow new markets.”

He added that a study revealed a low incidence of air travel per capita of 0.22 trips per year in Kazakhstan. “For a country of our size and income level [that] presents a huge opportunity to grow total market, if we execute correctly,” said Foster. 

On the origin of the name, Foster explained that Arystan translates into Lion in the Kazakh language. “We wanted a forceful and decisive brand and one that we can take abroad as we expand into the rest of the region,” he said. “We believe that the branding is exportable."

Foster credits the founder of Indian low-fare carrier IndiGo, Rahul Bhatia, for planting the seeds for the concept over dinner in Delhi last October. “We look at India and see a highly successful airline, IndiGo, and expect to follow its example,” he said.

Challenges include undeveloped infrastructure, as Kazakhstan’s airports still haven’t fully equipped themselves with buses or ramps to allow caterers to service an aircraft when it arrives at a stand, for example. “The principal challenge will be airports’ infrastructure and the ability to turn around the aircraft in thirty to forty minutes,” explained Foster.

Ancillaries will prove crucial to the business plan of FlyArystan, 20 percent of whose revenues would come from seat selection, in-flight food, and baggage charges, said Foster.

Plans call for FlyArystan to operate from multiple aircraft bases in Kazakhstan, the identity of which Air Astana expects to reveal in the coming months. Astana International Airport, the carrier’s secondary hub that hosts Air Astana’s Aviation Technical Center, ranks as a strong contender. However, FlyArystan cannot make Astana its hub for flights to Russia once it starts to fly internationally unless Air Astana drops its Russian routes. While Kazakhstan and Russia have agreed to allow 14 flights per week and add one more carrier each, the pact does not allow the additional airlines to maintain an affiliation with the respective countries’ national carriers, explained Yolanta Strikitsa of London-based Strikitsa Consulting.

She added that while an LCC model could work on routes such as Karaganda-St Petersburg or Atyrau-Yekaterinburg, more attractive LCC routes will present themselves in neighboring Central Asian capitals and cities, China, and the Middle East.

Kazakhstan’s Samruk-Kazyna Fund owns a controlling stake in both Air Astana and Almaty-based LCC Qazaq Air, prompting Strikitsa to raise concern about the competitive implications. “The Kazakh market is not large enough for both new LCCs, especially since they belong to the same owner,” said Strikitsa. On whether the move to launch a new LCC could augur consolidation, Foster explained: “It’s not an aim but may be a consequence.”

Tim Jordan, a British-Australian national with over 15 years’ of senior LCC management experience at Cebu Pacific and Virgin Blue, will lead FlyArystan’s executive team.