Privatization of an airline company in Kazakhstan: attraction of an investor to meet the growing demand for air travel in Central Asia

According to IATA, demand for air travel in the Asian Pacific region is booming (+63% 2023 vs 2022), while capacity is falling behind (+48% 2023 vs 2022).

Kazakhstan’s aviation market has achieved another record year in terms of PAX (11m in 2022 and 9,4m in 2021 or +17%). The main growth factors include a robust domestic market due to large distances between the major cities of the country (9th largest country in the world by territory), active development of international market resulting from liberalization of international policies and relations, the promotion of Astana as the financial center of Central Asia, and the advancement of tourism.

QAZAQ AIR was founded in 2015 as a new airline by the government of Kazakhstan. The airline reached positive operating income in 2022 and is slated for privatization by the end of this year, according to the plans of the Kazakhstani Government.

The primary aim of attracting a private investor is to foster the development and creation of new opportunities in the country’s aviation market, which includes expanding QAZAQ AIR’s route map and fleet size, as well as integrating innovations. Privatization is being executed by the sole owner of the company, Sovereign Wealth Fund Samruk-Kazyna JSC.

QAZAQ AIR is one of the three main airlines in the country holding the Aircraft Operator Certificate and provides regular domestic and international flights. The airline is a member of IATA and certified by the IOSA safety standards. It has a certified line maintenance base and operates an aviation training center. Following a hub and spoke model, the airline’s main hub is located in Astana. In 2021-2022, the airline was ranked as the 3rd best airline in Central Asia and CIS, according to Skytrax.

Its hub – Nursultan Nazarbayev International Airport – is rated as the best regional airport in Central Asia and CIS in 2021-2022.

The privatization is being conducted through an open two-stage tender process in accordance with the privatization rules of Samruk-Kazyna. The applications will close on 28 September 2023

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Company data

FleetDe Havilland Canada Dash 8 Q400 NG – 5 units, all of which are owned
Load factor in 202282%
Route map22 destinations (16 domestic, 6 international)
PAX in 2022561 000 passengers
Revenue in 202220,4 bln. KZT
Revenue CAGR, 2018-202238%
EBITDA in 20223,9 bln. KZT (EBITDA margin 19%)
Market share in Kazakhstan7%