Kazakhstan Adopts Open Skies Policy To Diversify Domestic Airline Industry

Beibut Atamkulov, Kazakhstan’s minister of industry and infrastructure development, announced Monday that the government has agreed to pilot an “open skies” aviation policy, which will promote the ease of access to and rules for national airports for foreign airlines.

“Over three years, Kazakhstani and foreign air carriers have launched 19 new connections, including to Tokyo, Warsaw, Budapest, Helsinki and other cities,” Atamkulov said while addressing a governmental meeting on October 7, according to Kazinform.

Kazakhstani airports served 14 million passengers last year, but it did not record growth in traffic. The new policy, which will be piloted at airports in nine cities, is expected to boost passenger traffic to the Caspian country. Nur-Sultan, Almaty, Shymkent, Ust-Kamenogorsk, Pavlodar, Kokshetau, Taraz, Petropavlovsk and Semey have been selected. Open skies is not new to Nur-Sultan – the country’s capital and formerly known as Astana – which adopted the policy in 2017.

At the same time, open skies is expected to make Kazakhstan’s domestic aviation market competitive and see a drop in ticket prices. Local airlines are hoping to launch direct connections to Singapore and Shanghai by 2020, and to New York City by 2021.

The ministry’s recent statement comes after President Kassym-Jomart Tokayev blamed local air carriers for “unreasonably high ticket prices.” As a result, the country’s economy ministry launched an investigation into Air Astana and SCAT – both domestic airlines – over an “abuse of a dominant or monopoly position regarding the establishment of monopolistically high prices for airline tickets.”

The ongoing investigation was opened based on a complaint by the Kazakhstan Civil Aviation Committee.

There are more than 20 national airlines operating in Kazakhstan, with only four – Air Astana, SCAT, Bek Air and Qazaq Air – really competing in the domestic market of commercial aviation.

According to the ministry of industry and infrastructure development, the main reasons for high ticket prices are the lack of aircraft available and the high cost of fuel. Despite sitting atop some of the world’s largest oil reserves, Kazakhstan continues to purchase up to 70 percent of aviation fuel, mostly from neighboring Russia.

Meanwhile, the government is planning to introduce what are called “fifth freedom” flights, meaning an airline is allowed to carry revenue traffic between foreign countries as a part of services connecting the airline's own country.

These routes, also called add-on or tag flights, permit an airline to sell tickets on standalone city-to-city routes in countries in which they otherwise would not be able to operate. For example, if Qatar Airways operates a flight connecting Doha, Nur-Sultan and Tokyo, passengers do not need to buy a ticket for the entire route and can just buy a ticket for the Nur-Sultan-Tokyo flight.

“A few years ago, three foreign companies, Austrian Airlines, Czech Airlines, and KLM, suspended flights to our country for commercial reasons,” Atamkulov said Monday.

“The ministry is now working to increase the attractiveness of flights to our country and a number of foreign air carriers are planning to come to the Kazakhstani market,” he said, mentioning Qatar Airways, Emirates, China Eastern and Pobeda, among others.

Currently, Kazakhstan has established air communication with 26 countries on 99 different international routes. These encompass 430 flights per week, operated by 26 foreign and three Kazakhstani airlines.