Air Astana’s CEO Peter Foster says there are many destinations the Kazakh carrier may never fly to again due to the impact of the Covid-19 crisis, such as certain cities in Russia, Southeast Asia, and Europe as the airline looks to adapt to the new market environment.
“At least half a dozen places we flew to before the pandemic, we may never fly there ever again,” said Foster in an interview with Business Traveller Asia-Pacific.
“But on the opposite side, there are some places we may fly to that we’ve never flown to in the past,” he added.
The airline is currently considering new destinations that will appeal to leisure travellers seeking transit-free, point-to-point travel which Foster says has become more popular amid the coronavirus pandemic.
“What seems to be becoming very apparent is that people, particularly those travelling on holiday for leisure reasons, do not want to go through hub airports anymore. They don’t want to hang out in large airports or large cities with their families. They want to go to point A to point B, and point B being their final destination,” said Foster.
Some of the destinations the airline is considering adding to its network in the near-future include the Maldives, points in Sri Lanka, Da Nang and Nha Trang in Vietnam, and possibly even Phuket when travel restrictions ease, noted Foster.
Air Astana, which operated a network of 60 international and domestic routes from hubs in Almaty and Nur-Sultan before the coronavirus crisis, suspended most of its flights in March following lockdowns in Kazakhstan. According to the carrier, its capacity between January and September 2020 was 48 per cent lower in comparison to the same period last year.
The airline also brought forward the retirement of eight aircraft, including four B757s and four Embraer 190s as part of its restructuring to adapt to the Covid-19 crisis. The B757s have been replaced with Airbus A321LRs.
In June, the carrier began resuming its international services as travel restrictions began to ease, and now flies to several countries on a limited schedule including Kyrgyzstan, Uzbekistan, South Korea, Germany, Russia and leisure destinations such as Turkey and Dubai.
Foster says while the airline is experiencing low load factors on its five-times weekly Frankfurt route due to restrictions on travel into the European Union, its Turkey and Dubai routes have been relatively popular, particularly among tourists, with load factors averaging around 75 per cent.
“There is a lot of pent up demand for leisure travel. Tourism, particularly to Antalya in Turkey is very popular. Same applies to Dubai, another popular leisure travel destination,” said Foster.
Two of Air Astana’s largest markets are Russia and China. The airline recently resumed services between Nur-Sultan and Moscow with a flight once a week. Prior to the pandemic, Air Astana operated 54 frequencies a week to various Russian destinations, noted Foster.
“There is enormous demand and links between Kazakhstan and Russia, whether it’s business links, student links, family links, tourism links. The single biggest traffic movement on an international route from Kazakhstan is to and from Russia,” said Foster.
Foster said the airline is also looking into re-starting its routes to China.
“We’ve had some good discussions with the Chinese authorities about a return to China in a restrictive form. Our primary objective there would be Beijing,” said Foster.
Air Astana’s 2021 outlook
Foster says the national airline currently has no plans to seek a government bailout to help it ride out the crisis.
“We went into the crisis in good financial shape. 2019 was a very good year. I think because we have a track record of being a good airline and also a good business, we were able to obtain credit lines from commercial banks and lending institutions without having to go to our government. We haven’t gone to our government and have no intention of doing so,” said Foster.
Foster said the airline could return to profitability in early 2021 depending on the trajectory of the pandemic.
“There was a very sharp spike in cases at the end of June and much of July in Kazakhstan, but since that time it has come down and the number of cases is much lower. People are going about their daily life with some restrictions, but not too many,” said Foster.
“If we’re able to maintain this level of the pandemic we can look towards profitability early in 2021 and probably quite healthy profitability given the restructuring that we have done during the course of the last seven months. We’ve returned a lot of old aircraft, the B757s are gone, the Embraer 190s are gone. A lot of old aircraft have been replaced by more efficient aircraft such as the A321LR.
“Barring a major second wave, we think by the end of the the first quarter of 2021 the airline should be returning to much more stable footing, but that does not take into account what might happen with the pandemic. We’re seeing cases starting to spike again in other parts of the world,” said Foster.
When asked what Air Astana will look like after the pandemic, Foster said the carrier will be a “much easier, less complex business to manage.”
“It will have a much more flexible approach to international markets. A lot more charters, a lot more leisure destinations. The low-cost airline is developing very fast and we hope for that to continue. The aircraft we will be operating will be much younger, and therefore much more efficient,” said Foster.
“We see Air Astana in a year’s time in a much healthier position that it was in prior to the pandemic, of course subject to how this develops.”