Air Astana’s president and CEO, Peter Foster, reveals the secrets of his airline’s success and reflects on 10 years in the hot seat.
What is the secret formula behind Air Astana’s profitability?
We concentrate on three areas. The first is cost control, based on high fleet utilisation and low fixed cost, including some flexible labour contracts and long-term outsource contracts for heavy maintenance and aircraft spares, IT services and ticket distribution. Our operating cost is 6.2 US cents per available seat kilometre, one of the world’s lowest for a full service carrier. Furthermore, it has been on a constant downward trend since 2009.
The second area of focus is investment in operational reliability and our ground and onboard product. We have been on the IATA Operational Safety Audit register since 2007. And we have held an EASA 145 licence since 2003.
And third, we concentrate on location. We are the only airline operating extensively within, to and from the Central Asian and Caucasus region to offer this level of reliability and service standards. It has made us the region’s clear first choice carrier. We can leverage this into profitable yields even when core markets soften, as they are doing at present.
How will you develop your network and what destinations are you eager to serve?
We recently launched flights to Paris, which increases our European network to five cities – London, Frankfurt, Amsterdam, Istanbul and now Paris. We will shortly to start flying between Astana and Seoul in a codeshare with Asiana. We already operate with them from Almaty.
We hope to start Tokyo in 2016, Singapore in 2018 and New York in 2019 – once we have delivery of the Boeing 787s on order.
The priority is to build up frequencies to daily on all of the long-haul routes and continue to thicken the domestic and regional network, to create a true hub at Astana International Airport.
Will the B787 make a big difference to your operations?
On existing routes we expect to see operational savings of around 15% compared with the B767. But the cabins
will be similar to those of the B767, which were new last year and have been extremely well received. Most importantly though, it will allow us to develop our long-haul network.
Can Kazakhstan’s infrastructure cope with your ambitious plans?
There is no scope to develop the terminal at Almaty Airport so future plans centre on Astana. The airport will double in size in the run up to Expo 2017 and the new Airport Management Group is doing a good job of providing clear strategic focus.
Conditions are challenging at some of the domestic airports, particularly the smaller ones. There needs to be a clear understanding that some of these are socially necessary and must be maintained to correct standards and supported with public money. Airlines cannot be expected to subsidise them through artificially high user charges as inevitably airlines will simply stop flying to them.
What has been your biggest achievement in your 10 yearS at Air Astana and what would you like to see the airline achieve in the future?
We have a very stable and strong management team and I am very proud of having brought them together, from Kazakhstan and all parts of the world, including those I inherited. I think that their integrity and ability and extreme attention to detail transmits itself right through the airline and the result is a corporate culture of achievement and confidence.
The key will be to guard against arrogance and complacency, but I think we face enough challenges for that not to happen. If we can maintain the momentum and energy of the first 13 years for the next 12, it will have been a pretty good quarter of a century’s work.
Is technology the only solution to improving the passenger experience?
Technology plays a big part in service delivery, whether via remote booking and boarding services or through wider choices of entertainment and connectivity, more comfortable seats and so.
But anyone with money can buy hardware. The real differentiator as ever will be the efficiency and hospitality of the people at the airports, on the phones and in the cabin. Staff have to want to do this, you can’t force people to be warm and friendly. Training and development has to be geared towards creating the right internal environment for that.
Foster was awarded an OBE in the Queen’s New Year’s Honours list for his contribution to British Aviation in Kazakhstan.