China's - Orient Aviation

EXECUTIVE INTERVIEWAir Astana blowing hotAstana, the capital of the CentralAsian nation of Kazakhstan, isone of the coldest capital citieson earth, with temperaturesplunging to - 40C. But the airlinethat bears its name, Air Astana,is running hot and plans steadyexpansion into Asia. TOMBALLANTYNE spoke to itspresident, Peter Foster, a formerexecutive with Cathay PacificAirways, Philippine Airlines andRoyal Brunei Airlines.Any airline that has more thandoubled its passenger andcargo revenue and its profits,in six months, must be doingsomething right. And pointedout Air Astana president, Peter Foster, ithad been achieved without any increase inairfares.Just five years old, Air Astana, 51%-owned by the Kazakhhstan governmentand 49% by Britain’s BAE SYSTEMS, isone of the industry’s quiet success stories.Launched in 2002 with three aircraft, it nowhas a fleet of 18 planes, operating a networkacross Central Asia and linking the regionwith Asia, Europe and the Middle East.“The airline became profitable in yeartwo. Its profitability has grown every yearsince,” Foster told Orient Aviation.After reporting income of US$32 millionon revenue of $375 million last year, Fosterexpects the carrier to increase its revenueto $589 million in 2007. The target is wellwithin reach.In the six months to June 30, passengerand cargo revenue rose 56% and 115%respectively. Profit increased 69%. Withavailable seat kilometres (ASKs) growing44% to 3.1 billion, passenger numbers couldrise close to 50% to more than two millionby the end of the year.“Our goal is to establish ourselves as theprincipal airline within our region. We seeCentral Asia and the CIS [Commonwealthof Independent States, the former Russianrepublics] as our home market,” said thechief executive.“We carry a lot of traffic between Asiaand Moscow and do a lot of business from‘Our goal is to establishourselves as the principleairline within our region’Peter FosterPresidentAir AstanaEurope to other parts of Central Asia. But weare not interested at this point in moving into,for example, the Bangkok-Europe market.“Our growth this year alone - 44% interms of capacity - is as much as any airlinecan sustain.”The airline has 13 inter nationaldestinations. Apart from Moscow, its busiestroute, it flies to Dubai, Delhi, Istanbul andAntalya in Turkey, and to Amsterdam,Frankfurt, Hanover, London and Milan.Asian destinations are Bangkok (once aweek), Seoul (twice weekly) and Beijing(six times a week).Air Astana’s fleet, which has an averageage of six years, consists of two B767-300s,four B757-200s, five A320-200s, one A321-100, one A321-200 and five Fokker 50s. Twomore A320s will arrive in March, an A319 inApril and a B757 in May.The plan is to increase the fleet to 34aircraft by 2014. Foster is expected toannounce an order for more new aircraftthis month. These are likely to be six moreA320s and three widebody jets, either A350sor B787s, with options on eight aircraft.Despite its success life has not been easyfor the airline. “The difficulty has beenestablishing a western airline on westernprinciples within a civil aviation systemset up on Soviet principles. That has beena challenge, but because we have high levelsupport, the adaptation has taken place,”said Foster.Domestically, Air Astana has littlecompetition. Internationally, it’s a differentgame. “To Seoul we compete with Asiana,to Germany it is Lufthansa, to Beijing itis China Southern Airlines, to MoscowTransaero and to Turkey it is TurkishAirlines,” said Foster.“On every one of our routes, with theexception of Germany, we are out-carryingthe competition and have the biggest shareof the market.”Load factors are climbing. At 68% in2006, they reached 76% in the first halfof 2007, climbing to 78% in July, thehighest ever recorded by the airline. Routeexpansion, particularly in Asia, is on theagenda. Services to Bangkok, Seoul andBeijing will become daily by 2009.Foster also has new destinations in mind.“We are looking at developing at least oneother point in Southeast Asia by 2008-09,”he said. It could be Kuala Lumpur, one reasonbeing Air Astana’s close ties with MalaysiaAirlines. Hong Kong is also a possibility.He would dearly love to add Japan to thelist, but faces the problem, as faced by allairlines, of slot availability.Foster readily admits that Kazakhstanisn’t the first place to trip off the tongue whenone thinks about tourist destinations. “It’smore a place for special interest travellers.But there is plenty of potential,” he said.Career trackBetween 1982 and 1999 PeterFoster worked in several managementpositions at Cathay Pacific in Asia,Australia and Europe. He left to headup the rehabilitation team at PhilippineAirlines. He was chief executive ofRoyal Brunei Airlines from 2002 to2005 when he joined Air Astana.38 ORIENT AVIATION NOVEMBER 2007