“Governments and airlines just don’t mix,” says Peter Foster, president and chief executive officer of Air Astana, Kazakhstan’s national airline, that is working to widen its traveller base from India.
Air Astana started flying to India in 2004, and now operates 10 flights a week —seven between Almaty and Delhi, and three between Astana, the capital, and Delhi.
“Last year, 70,000 passengers flew between Kazakhstan and India, whereas this year 50,000 have travelled between the countries up to now,” Mr. Foster says.
The airline expects to launch a flight to Mumbai in 2019, and aims to fly from Delhi and Mumbai every day to Astana and Almaty, operating up to 21 flights a week.
It also carries business to Hyderabad and has a tie-up with Air India for transit/connect passengers.
Mr. Foster has been urging the Kazakh authorities for an easier visa regime for Indian passport holders.
“Business from India is carried to Ukraine, Georgia, Azerbaijan and Russia. Most of our passengers are Kazakh and Russian. But we want more Indians to fly to Kazakhstan. We are lobbying with the Kazakhstan government to relax visa norms,” he says.
Independent operation
As the national airline of the Republic of Kazakhstan, based in Almaty, Air Astana relies solely on its operational revenues.
“The government provides no funds, no subsidy, and all functions are based on profits,” Mr. Foster says. “The government takes no part in the management of the airline, which operates according to the best international standards. Samruk Kazyna, as the country’s sovereign wealth fund, is a 51% shareholder and exercises its shareholder rights in accordance with international practice of corporate governance standards.”
As a votary of privatisation, Mr. Foster believes that efficiency can be guaranteed only “when the government gets out”.
Otherwise, he says, “There is a massive drain of government funds.” Air Astana has won the Skytrax World Airline Awards for the Best Airline in Central Asia and India for the sixth time in a row.
At the CEO’s office, a model of a sleek Boeing Dreamliner and hot tea welcome the visitor.
Expansion plans
Mr. Foster, who took over as head of the airline in 2005, explains that the company plans to take delivery of three Dreamliners in the early part of the next decade. As a national entity, the airline plays a major role in the economy.
“Successful airlines promote growth across a range of industries,” Mr. Foster says, adding that the company employs 5,000 people and has never felt the need to make staff redundant.
Air Astana has paid over $300 million in taxes in 15 years which, he says, is “a measure of its successful operations.”
Can a private airline be called upon during times of emergency, for an evacuation, if the government has nothing to do with its operations? The chief of the airline from a former Soviet bloc country says: “There has been at least one requirement during a national emergency when we pitched in effectively. One does not have to be publicly evident to perform such moral obligations. In social media times, an airline that doesn’t [rise to the occasion during an emergency] invites commercial disaster.”
To attract passengers, a unique feature launched by Air Astana is the $1 offer — in the absence of immediate connecting flights from Astana and Almaty, transit passengers are given overnight accommodation at a four-star hotel for $1. If they choose to stay on, they pay the normal tariff.
The airline has faced challenging times.
When sanctions were imposed on Russia in 2014 for the invasion of Crimea, business suffered and revenue dropped 30%.
“But we remained profitable without making staff redundant because of our efficiency,” Mr. Foster says. The global recession of 2008-09 was another testing time, but there were “no layoffs”.
New growth horizons
Kazakhstan has seen nil economic growth in 2016-17 following a protracted slowdown in global oil prices, and wants to move away from oil, gas and minerals to sectors such as tourism and aviation.
The government has undertaken an aggressive expansion of roads, railways and airports.
With the East and the West well connected, Air Astana is looking at linking India with Central Asia, the Caucasus and Russia. “That is Air Astana’s Indian market,” asserts Mr. Foster.
(The writer was in Kazakhstan as part of an invited Indian media group)
