Air Astana, Kazakhstan’s national carrier, is crafting a wide-ranging business strategy bolstered by the arrival of six Airbus A320-family aircraft and two Embraer 190s and improved utilization of its widebody fleet.

“Planned new routes for the second half include Almaty to Hong Kong, Almaty to Ho Chi Minh City and Atyrau (an oil-rich city in western Kazakhstan) to Moscow. Flights from Astana to Beijing will be added to the existing Almaty-Beijing services,” the airline says of its expansion plan.

Air Astana says the twice-weekly Almaty-Hong Kong service will be launching Aug. 28 using Boeing 757-200s. It has yet to disclose the launch date for the Ho Chi Minh City service, but an Air Astana spokesman says it will be an extension of Air Astana’s Almaty-Bangkok service.

New Fleet Arrivals

The carrier operates 757s and Boeing 767s on its routes to East Asia and Europe. In January it took delivery of its fifth 757-200, an aircraft that is being leased. It also is scheduled to add two additional E-190s by January 2013 to replace the airline’s last three Fokker 50s.

Also from November to May the carrier says it expects to receive four A320s and two A321s.

Air Astana also says the four 767-300ERs it has on order will be delivered in 2013 and 2014, while three Boeing 787-8s on order will be delivered by the end of 2017, toward the early part of a two-year delivery schedule range discussed when the carrier first announced the 787 deal.

The airline’s ownership currently is split between Kazakhstan’s government and BAE Systems, which own 51% and 49%, respectively, but this should change in 2013 if a planned initial public offering (IPO) is successfully completed. Air Astana’s CEO, Peter Foster, late last year told Aviation Week that BAE plans to sell its stake to the Kazakhstan government prior to the IPO.

Air Astana is profitable, but a first half net income of $5 million compares poorly to the $37 million pre-tax profit posted in the first half of 2011 (Air Astana is not offering year-on-year comparisons for net income).

Cost Pressures

Revenue grew 13% to $394 million from $346 million, thanks to an 11% increase in available seat kilometers, but profits fell due to higher fuel prices, the airline says.

“The first half was challenging due to fuel price increases of more than 140% over the same period last year. The first quarter in particular was very tough.” says Foster.

“The second half, traditionally our strong period, is looking more promising as fuel prices have come off slightly and cost savings in other areas kick in. All markets with the exception of Europe continue to grow and we are confident of a 10th straight year of profitability.

“In particular our ‘extended home market strategy’ of developing routes to and from our near neighbors continues to gather pace. These markets are small but have terrific growth potential,” Foster adds.

Air Astana recently launched services from Kazakhstan’s capital Astana to Omsk in southeast Russia; Baku in Azerbaijan; Shymkent in southern Kazakhstan and Aktau in western Kazakhstan. It also launched a service from Kazakhstan’s commercial capital Almaty to Kazan in southern Russia.