There are plans to privatize two of the three airlines of Kazakhstan – Qazaq Air and Air Astana. According to Informburo of Kazakhstan, the government will shed its share in these airlines to promote competition in the civil aviation market.
The share of state participation in Air Astana and Fly Arystan is 76%, in Qazaq Air – 6%. Fly Arystan is a wholly owned subsidiary of Air Astana and is not a separate legal entity.
“Thus, this market belongs to a highly concentrated type with insufficiently developed competition. The presence of airlines with state participation leads to a decrease in competition between market participants, the disinterest of foreign air carriers and investors. These factors generally negatively affect competition,” said the Deputy Chairman of the Protection Agency and development of competition in the Republic of Kazakhstan Rustam Akhmetov at a press conference covered by the several media outlets including Informburo.
In the structure of the cost of air tickets, fuel costs account for the main share of expenses, he added. At the same time, there are several jet fuel suppliers only at the Astana airport. In other air harbors of the country, aviation fuel is sold exclusively by the airports themselves.
To develop competition in the civil aviation market, which will also help reduce the cost of air tickets, the agency, together with the Ministry of Industry and Infrastructure Development, decided to take the following measures:
- sell 100% shares of Qazaq Air and Air Astana;
- spin off Fly Arystan as a separate market entity until privatization;
- increase the duration of the “open skies” regime until 2028, as well as ensure the operation of this regime for all 13 international airports of Kazakhstan, providing all foreign airlines of the member states of the International Civil Aviation Organization with the rights to operate passenger flights to airports without frequency restrictions, taking into account technical capabilities of the airports;
- consolidate non-discriminatory access of jet fuel retailers to airport refueling complexes, as well as to work out the issues of building alternative refueling complexes at the country’s airports. /// nCa, 4 April 2023