Interview of Kazakhstan Today with Air Astana President Peter Foster
text: "Kazakhstan Today"
In July, 2006, the Government of the Republic of Kazakhstan accepted the concept of development of civil aircraft which provides creation of new air routes, purchase of technical equipment, planes, creation of new regional airline to begin its work in 2007 - 2008. The president of Air Astana airline Peter Foster told about development of civil aircraft and prospects of development of the monopolist in Kazakh aviation market in the interview to Kazakhstan Today correspondent.
Kazakhstan Today: In 2006, the company Air Astana made an announcement to the effect that it would enter the London exchange. When does the company plan to make the IPO? Whose stock will be listed, the government of Kazakhstan or the company BAE Systems LTD?
Peter Foster: The question of Air Astana shares being publicly listed is in the plans of the company. The exact dimensions of the listing are not determined yet.
Kazakhstan Today: At the present time, how many planes has the company acquired through "wet" and operational leasing? What future plans will the company make concerning the signing of contract leases?
Peter Foster: At present there are 14 western type aircrafts in the air fleet of Air Astana, operated under contract lease: 3 Boeing 737-700/800, 4 Boeing 757-200, 5 Fokker-50, and 2 Airbus A-320. From the beginning of this year the air fleet of Air Astana has increased from 11 to 14 aircrafts. By the beginning of 2007 two more aircrafts will fill up the air fleet of the company, including a new A-320 airbus that was accepted by Air Astana on the 11th of July, 2006 and will be delivered to Kazakhstan by the beginning of August, 2006 after the completion of the modification works. The acceptance of this new airbus was conducted at the Airbus company's factory in Toulouse. Thus, the total number of aircrafts under operational leasing of Air Astana by the beginning of 2007 will be 16 units in accordance with the 10-year development strategy of the company till 2015. According to the plans of the company, by 2014 the air fleet will consist of 34 modern western-type aircrafts, including new wide-body long-houl aircrafts, which will be operated on some routes to European and Asian countries. Also, along with operational leasing, the company is planning to purchase aircrafts. The plans of Air Astana for the nearest future include placing orders for producing 6 modern jet aircrafts to the world leading manufacturers. The air company is operating under "wet" lease AN-24 aircrafts of Tulpar airline for partial covering of social flights, subsidized by the government in order to provide air communication between region centers and the capital, Astana. Also, in summer, Air Astana operates under "wet" lease TU-154 aircrafts of Sayakhat airline for providing additional charter flights from the regions of Kazakhstan to Germany. This is explained by the incapability of some domestic airports to receive western-type aircrafts.
Kazakhstan Today: Earlier the company intended to break its lease for the Fokker-50 airplane. Is that plan being kept? If so, when will Air Astana complete an operational lease?
Peter Foster: The operational lease contract for Fokker-50 aircrafts will expire next year. At present the possibility of its prolongation is being considered.
Kazakhstan Today: In the mass media, information continues about the breakage of Fokker-50s. What is the present technical condition of the Fokker-50?
Peter Foster: The technical condition of all aircrafts of the company, including Fokker-50 type planes fully complies with air worthiness regulations.
Kazakhstan Today: In 2006, the government of Kazakhstan announced the creation of a large regional airline in Kazakhstan. How does Air Astana intend to compete with the new airlines? Does Air Astana intend to continue to have flights in the regions of the Republic?
Peter Foster: Air Astana is positive towards a new stage of its development and the establishment of a new competitor in the market of domestic flights. The 10 year development strategy of the company, worked out in the end of 2005 has two main goals - the expansion of the air fleet and constant improvement of services provided to the passengers. For the time being there has been no corrections or changes of plans regarding flight geography, taking into account the establishment of a new airline.
Kazakhstan Today: Presently, what is the Kazakhstan component of the airline's staff? Could you mention the reasons why the key positions in Air Astana are occupied by foreign citizens?
Peter Foster: At the moment Air Astana has 1567 employees, 1542 of them are the citizens of the Republic of Kazakhstan, and 7 are foreigners. All our foreign managers are highly-qualified specialists in aviation with a rich experience of work in world leading airlines. The involvement of foreign managers is done with the purpose of providing higher efficiency of activities and standards of services, comparable with service-level of well-known international airlines.
Kazakhstan Today: Recently, delays on Air Astana flights become more frequent and it has been noted that there is an acute shortage of seats on board the airline. What is this associated with? How do you intend to solve this problem?
Peter Foster: Average on time performance indicator of the company since the beginning of 2006 makes up 81%, that conforms to world average on time performance indicators of regular flights and higher than such indicators of many world leading airlines.
Average load-factor of Air Astana flights in summer is 73%. As the demand for air traffic grows, Air Astana is increasing the frequency of regular flights taking into account limitations caused in Kazakhstan by incapability of some domestic airports to receive modern aircrafts, and for international flights - by slots given in foreign airports and in the framework of bilateral agreements between aviation authorities and appointed airlines of partner-countries.
In the first half of this year in order to meet the increasing demand Air Astana introduced additional frequencies and increased transportation volumes in the following directions. Besides, the realization of air fleet expansion plans of the company will meet an increasing demand of passengers in the future.
Kazakhstan Today: What plans does the airline have about entering new markets? Is Air Astana planning to fly to new destinations?
Peter Foster: Of course, Air Astana is planning to expand the range of its flights. From the beginning of 2006 the company has established two new routes - 1 domestic: Almaty - Karaganda - Almaty and 1 international: Atyrau - Istanbul - Atyrau. As for the nearest future plans, the company is going to open domestic flights from Atyrau to Uralsk and Aktobe, and also, in October - regular flights Almaty - Bangkok - Almaty. Now the possibility of opening other new international flights is being considered.
Kazakhstan Today: According to the information of experts, Air Astana airline systematically violates IATA rules concerning the establishment of tariffs. Among the violations are mentioned facts like the creation of a general agent in the Republic, the absence of its ticket sale offices, etc. Would you give your comments about this?
Peter Foster: Air Astana is acting in conformity with the legislation of the Republic of Kazakhstan and international aviation requirements, as a full member of IATA (International Air Transportation Association).
Kazakhstan Today: Earlier Air Astana announced that by 2015, it plans to increase its air fleet to 34 aircraft. What is the volume of finances that will be expended on this program? What type of aircraft will Air Astana purchase and from where?
Peter Foster: The expected amount of expenses on this program is confidential information that is not subject to broadcasting. The place of acquiring and the type of the aircrafts will depend on the offers by lease-granting companies in the market.
Kazakhstan Today: What are the economic indexes of the airline in the beginning of 2006?
Peter Foster: Operational and financial indexes of "Air Astana" from January till May of 2006 are: total duration of flights - 19 430,13 hours, number of passengers - 507 975 people, passengers turnover - 1 033 360 passenger/km, income - 15 791 341 000 tenge, expenses - 15 425 846 000 tenge, net profit - 365 495 000 tenge. This information is not audit-confirmed.
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