Foreign airlines leave Kazakhstan's market due to rising prices

Business Materials 18 January 2018 14:59 (UTC +04:00)
The development of the route network from Astana is facing the risk of stopping and foreign airlines may reduce flights
Foreign airlines leave Kazakhstan's market due to rising prices

Baku, Azerbaijan, Jan. 18

By Nigar Guliyeva – Trend:

The development of the route network from Astana is facing the risk of losing foreign airlines which may reduce flights to Kazakhstan, Ibrahim Canliel , Chief Financial Officer at Air Astana said at a press conference on Jan.18.

"Over the past years, many airlines like Austrian Airlines, Asiana, KLM canceled their flights to Astana, further LOT airlines recently reduced the number of flights as well. Finnair, which launched flights to Astana last summer, suspended its flights in two months," he said.

According to Canliel, the reason for all this is the increase in prices. He further said that prices for aviation kerosene are rising. He said that The Energy Ministry of Kazakhstan assists in providing airlines with fuel, however, prices remain high.

"Prices have not declined, on the contrary, they are growing, oil is becoming more expensive: in particular, I can say that our prices did not fall in January, they increased. We will be only happy to see reduced fuel prices, but so far we do not see such a trend," Canliel said.

Airlines in Kazakhstan are concerned about the abolition of the regulation of tariffs for airport services, said IATA Regional Manager for Central Asia Jordan Karamalakov.

He reminded that in June 2017, the state abolished the regulation of prices for international flights that airports impose. This led to an uncontrolled increase in tariffs at Kazakhstan airports for international flights. Along with the high prices for aviation fuel, two foreign airlines canceled flights, several more reduce the frequency of flights.

In late 2017, aviation fuel prices for foreign carriers grew by 20 percent, due to which foreign airlines fail to plan their aviation activities properly.

In turn, SKAT commercial director Nikolai Buryakov noted that a dramatic increase in tariffs occurred in many Kazakh airports.

"For example, tariffs for the use of ground-based power sources at the Aktobe airport increased more than three-fold - from 9,000 to 29,000 tenge, the tariffs for heating the salons have also been increased, which is especially affected in the winter. In Atyrau, the prices for passenger services increased by 20 percent, land power sources by 50 percent, cleaning of the salon by 224 percent, "Buryakov said.

The official rate for Jan. 18 is 327.1 KZT / USD.