Indian transit passengers are very crucial for Air Astana: Air Astana CEO

Kazakhstan's national airline Air Astana is planning an IPO

Kazakhstan’s national airline Air Astana is preparing for an IPO in FY19. Peter Foster, CEO, Air Astana, tells Arindam Majumder in an interview that the airline is counting on transit passengers from India to improve its business. Edited excerpts:
 
Air Astana is planning an IPO. What are the steps you are taking to increase its value proposition?
 
The intention is to do the IPO in 12 to 15 months. It will be a dual listing in Kazakhstan and London. Some of the promoters will hold onto their shares and new shares will be coming in. The existing shareholders' holding will go below the majority stake.

 

The main structural challenge that we face is that our country has 18 million people and Kazakhstan is a huge country. So the 18 million people are spread over a huge area not making it a very ideal market for domestic air transport. So it’s clear that we have to be present in big foreign markets which are within four hours distance of Kazakhstan. So, obviously India is a huge market.
 
What steps are you taking to tap into the Indian market?
 
We are promoting the two Kazakh cities of Almaty and Astana as stopover destinations through one-dollar stopover programme. The key is a more liberal visa regime. What we have demanded is allow free visa for Indian passengers for 72 hours. We have a lot of new hotels new coming up at Astana. The economy needs to diversify. So, the transit passengers will be crucial for us.

 
Dubai and Abu Dhabi are primarily the main hubs for Indian transit passengers. How does one compete against them?
 
We don’t want to compete against hubs like Dubai and Abu Dhabi but what we are proposing is new destinations like Moscow, St Petersberg, Ukraine, Georgia. These are the areas where we are very strong. We are not going to compete against Emirates in Dubai but if an Indian passenger is travelling to the regions I mentioned, our proposition would be that Air Astana is a much better idea than Middle East.
 
How has been the result of these?

 
The total number of passengers carried between Kazakhstan and India during 2017 reached 43,459 — an increase of 43 per cent compared with 2016. The number of transit passengers travelling from New Delhi via Almaty to other international destinations grew by 33 per cent year-over-year in 2016. These will never rival destinations like London and Paris but we need to grow them.
 
Do you plan to increase flights between Kazakhstan and India?
 
We have 10 flights a week to Delhi-three weekly flights from Astana and one daily from Almaty. We are considering Mumbai from 2019 but the problem with Mumbai is the lack of slots. But the Indian industry is fluid.

 
Which are the markets in this region other than India that you are looking at?
 
We sort of looked at Pakistan but decided that there is not much business there. We looked at Sri Lanka but again it’s primarily a tourist destinations. China is very important. We fly to far north-west of China. We have 21 weekly frequencies to China from Kazakhstan. In China we are looking at Chengdu.