International expansion drives top-line growth, but elevated fuel costs and a strong tenge weigh on profitability for H1 2026.
ALMATY: Air Astana JSC, the leading airline group in Central Asia and the Caucasus, has released its financial results for the second quarter and six months ended 30 June 2026. While the Group reported robust revenue growth driven by a strategic pivot to international markets, profitability was squeezed by persistent inflationary cost pressures and ongoing costs related to the Pratt & Whitney engine issues.
Strong Revenue Performance Despite Capacity Constraints
The Group demonstrated strong commercial performance in the second quarter of 2026, despite capacity remaining broadly flat. Total revenue and other income surged by 18.3 percent year-on-year to 433 million US dollars in Q2, while for the first half of the year, revenue increased by 16.1 percent to 763.9 million US dollars. This top-line growth was achieved with capacity remaining essentially unchanged, reflecting a disciplined pricing strategy and Air Astana’s dynamic allocation of capacity towards higher-yielding international markets.
Unit revenue, measured as revenue per available seat kilometre or RASK, increased by 18.5 percent to 7.78 US cents in the second quarter, reinforcing the unit revenue recovery seen over the prior two quarters. This increase was primarily driven by the planned reallocation of capacity, supported by growth in international traffic across both the Air Astana and FlyArystan brands. FlyArystan notably contributed to the international growth with 21.4 percent standalone RASK growth.
However, the increase in unit revenue was insufficient to offset faster growth in unit costs. Cost per available seat kilometre, or CASK, increased by 24.3 percent to 7.29 US cents in Q2, resulting in CASK growth exceeding RASK growth by 5.8 percentage points. This narrowed the RASK-CASK spread to just 0.49 US cents in the quarter.
Profitability Impacted by Cost Headwinds
The combination of rising costs and stable capacity weighed heavily on the Group’s bottom line. Profit after tax fell to a loss of 0.1 million US dollars in the second quarter, compared to a profit of 18 million US dollars in the same period last year, bringing the first-half loss to 21.2 million US dollars. Earnings before interest, tax, depreciation, amortisation and rental costs, or EBITDAR, decreased by 3.7 percent to 93.6 million US dollars in Q2, with the EBITDAR margin declining by 4.9 percentage points to 21.6 percent.
Cost growth reflected continued pressure from fuel, including a 98 percent year-on-year increase in the average fuel price at international stations in the second quarter. The impact was compounded by the 7 percent strengthening of the Kazakh tenge against the US dollar and higher employee, aircraft ownership and engineering and maintenance costs, including labour costs associated with the Pratt & Whitney engine issue.
Despite these challenges, the Group maintained a strong liquidity position as at 30 June 2026, with cash and cash equivalents of 481.5 million US dollars. The leverage ratio stood at 2.1 times Group net debt to EBITDAR, up from 1.3 times in Q2 2025, driven by lower operating cash generation and continued investment in fleet. Both metrics remain comfortably within the Group’s medium-term guidance.
CEO Commentary on Navigating the ‘New Normal’
Ibrahim Canliel, Chief Executive Officer of Air Astana, commented on the results, highlighting the strategic shift in network allocation. He noted that the Group delivered strong top line growth in the second quarter of 2026, with revenue and other income accelerating by 18.3 percent, achieved with broadly unchanged capacity through disciplined pricing and dynamic allocation of capacity towards international markets.
However, Mr Canliel acknowledged the headwinds facing the Group, pointing out that unit cost growth continued to exceed unit revenue growth in Q2 as higher fuel prices at international stations persisted while the tenge remained strong. He expressed optimism regarding the Pratt & Whitney engine issues, noting that visibility has improved significantly with around 60 percent fewer groundings than the equivalent period last year and anticipation of zero groundings in summer 2027.
He also noted the volatility in the Gulf region throughout the second quarter, stating that the flexibility of the network enabled the Group to redeploy aircraft to satisfy strong customer demand in alternative markets, highlighting the countercyclical nature of their operations within what he termed the ‘New Normal’.
China Leads Aggressive International Expansion
A significant driver of the Group’s revenue growth was its aggressive expansion into international markets, particularly China. Following the launch of Shanghai services in the first quarter, the Group added services to Guangzhou, Urumqi and Xi’an, almost doubling summer capacity to China year-on-year to up to 51 weekly flights which will serve nine destinations by the end of the year.
Beyond China, the Group expanded connectivity to India, Europe, South East Asia, and Central Asia and the Caucasus. Air Astana increased Almaty-Delhi services to twice daily and maintained three weekly services to Mumbai, driving a 91 percent increase in available seat kilometres to India in the second quarter. Across Europe and Turkey, the airline increased Almaty-London to four weekly services and operated 11 weekly flights to Frankfurt from Almaty, Astana and Uralsk. Services to Istanbul increased to 25 per week from Almaty, Astana and Atyrau, including twice-daily flights from Almaty.
The summer programme also included new services to Larnaca and Dalaman and the resumption of seasonal routes to Podgorica, Batumi, Bodrum, Da Nang and Nha Trang. FlyArystan further expanded its international network with new services from Almaty and Astana to Gazipaşa-Alanya and from Astana and Aktau to Batumi. Air Astana’s regional connectivity was also strengthened through increased frequencies in Central Asia and the Caucasus, including three daily Almaty-Tashkent services and twice-daily Almaty-Tbilisi services.
These developments broaden point-to-point travel options while supporting transit connectivity through the Group’s Almaty and Astana hubs. The Group saw an 82 percent increase in international connecting traffic in the second quarter, demonstrating the countercyclical nature of the airline in the current operating environment.
Traffic Trends and Operational Performance
The traffic trend seen in the first quarter of 2026 continued into the second, with international capacity measured by revenue passenger kilometres rising 5.5 percent while domestic decreased by 7.2 percent. This trend aligns with the Group’s planned shift to higher margin international routes and supports its growth aspirations.
Group passengers carried fell by 1.7 percent to 2.45 million in Q2, while the average load factor remained stable at 81.6 percent. For the first half of the year, passengers carried remained broadly stable at 4.4 million while the average load factor improved to 82.4 percent.
Operational performance also saw improvement, with on-time performance for the quarter increasing by 5.9 percentage points to 87.6 percent. This trend has been maintained in July with a monthly on-time performance of 85.5 percent, up 9.2 percentage points. Likewise, the Net Promoter Score in June was up by 3 points to 53 and is trending higher in July.
Pratt & Whitney Engine Issues Reach Inflection Point
The majority of Air Astana’s fleet comprises Airbus A320 family aircraft powered by Pratt & Whitney PW1100G engines, which remain affected by contaminated powdered metal and durability issues announced in July 2023. This issue continues to require affected engines to be removed for accelerated inspections and shop visits, leading to increased aircraft groundings across the industry.
In the first half of 2026, the Group secured 11 additional engines to support fleet availability and mitigate the operational impact. More importantly, the Group reported significant improvements in inductions, faster turnaround times and enhanced lifetime of new high-pressure turbine blades. Following 11 inductions for fiscal year 2025, the Group anticipates over three times that number in 2026 and has additional commitments for 2027 as well as requests for more.
With this improvement, the number of groundings is around 60 percent lower than in the equivalent period last year, and the Group expects to have zero aircraft on ground during the 2027 summer peak. Management describes the second quarter as not only a step-change in visibility on this protracted issue but an inflection point in the impact it has on capacity, expressing confidence that the unit cost impact will improve in the near term.
Costs associated with Pratt & Whitney engine issues have been the fundamental drag on profitability, but discussions with the manufacturer to improve both production and costs have been productive, with significant near-term improvements expected in both areas.
Fleet Growth and Future Plans
The Group’s fleet is expected to grow to 86 aircraft by 2030, comprising 54 Air Astana brand aircraft and 32 FlyArystan brand aircraft. The fleet will include 83 Airbus A320 family aircraft and three Boeing 787-9 Dreamliners. The first Boeing 787-9 is expected to be delivered later in 2026 and will ultimately replace the existing Boeing 767 fleet.
Beyond 2030, the Group holds a flexible orderbook comprising up to 50 additional Airbus A320 family aircraft and up to 15 additional Boeing 787-9 aircraft scheduled for delivery between 2031 and 2035. This fleet plan is designed to support the Group’s long-term growth strategy and provide the best possible flight experience for its discerning customer base.
In the second quarter, the Group also successfully concluded negotiations with both Almaty and Astana airports, providing greater visibility around traffic-related costs at its hubs in the medium term.
Excellence and Customer Experience
Air Astana continues to invest in its inflight product and customer experience, supporting its premium positioning and long-term growth strategy. The company completed a Critical Design Review with satellite connectivity provider SES, advancing the planned installation of Wi-Fi hardware across its A321LR fleet to enhance passengers’ business and leisure inflight experience.
Following its introduction for the Nauryz celebration, Air Astana extended its collaboration with Sandyq beyond the seasonal period, reinforcing the airline’s role as a global ambassador for Kazakhstan by promoting national identity and cultural heritage through onboard catering and cabin experience.
In recognition of the focus on customer experience, Air Astana was awarded APEX Five-Star Major Airline status for the sixth consecutive year and was also named Best Overall Airline in Central and Southern Asia by APEX in 2025. The Group’s continued focus on service excellence was recognised at the Skytrax World Airline Awards 2025, where Air Astana was named Best Airline in Central Asia and CIS for the fourteenth consecutive year and received the Best Staff Service in Central Asia and CIS award for the ninth time. FlyArystan was also recognised as Best Low-Cost Airline in Central Asia and CIS for the third consecutive year.
Digital Transformation
During the first half of the year, Air Astana continued to accelerate its digital transformation agenda with a strong focus on customer experience, operational excellence and technology modernisation. A key milestone was the successful launch of the AI-powered customer communication platform, with ongoing investments to further enhance its capabilities. The company also delivered new digital solutions across airport operations and employee services, while continuing to expand its adoption of cloud technologies to improve agility, collaboration and scalability.
Air Astana continued to develop its direct digital channels in the second quarter, adding new functionality across its website and mobile app to improve personalisation and booking convenience. The airline launched MyTrips, providing Nomad Club members with a single view of upcoming travel by automatically saving direct bookings and allowing other itineraries to be added manually. The company also sent its first campaign powered by the new Customer Database Platform, a foundational step toward more advanced personalisation of customer communications and the digital experience going forward. These enhancements supported continued growth in the direct digital channel, with mobile app monthly active users reaching a record 149,000 in June, up 18 percent year-on-year.
ESG and Sustainability Commitment
At Air Astana, the importance of driving sustainability rather than reacting to its challenges is well understood. The Group continues to promote regional market developments in Sustainable Aviation Fuel and evaluate both potential supply opportunities and strategic partnerships as the domestic SAF market evolves.
In lieu of that, the Group has recently signed a SAF Memorandum of Understanding with an international fuel supplier in order to secure a stable, long-term supply of sustainable fuel and support its environmental aspirations. The SAF uplift is due to commence in Europe and expand to cover additional Air Astana routes in Asia in due course.
The modern fleet and anticipated aircraft deliveries ensure that the Group continues to fly the most efficient engines. Combined with AI-driven analytics to precisely optimise fuel consumption, the company seeks to minimise the environmental impact of travel for passengers. Air Astana has become one of the first companies in Kazakhstan to receive the DHL GoGreen Plus Certificate, recognising its support for reducing Scope 3 emissions.
Fuel Management
Air Astana uplifted close to 80 percent of its fuel in Kazakhstan, where it sources primarily from refineries directly and manages all logistics including transportation. Both pricing and supply through this channel have been very stable despite the conflict in the Gulf. International uplift, accounting for approximately 20 percent, was 25 percent hedged in the second quarter. The Group has not experienced any supply issues locally or internationally during the quarter.
Outlook: Medium-Term Confidence Amidst Near-Term Headwinds
The Group’s growth environment remains strong, and actions to adjust the network in light of ongoing conflicts continue to deliver attractive growth dynamics which are expected to support the structural tailwinds in the region. However, in the near-term, inflationary cost pressures are expected to persist, offsetting some of the revenue growth momentum.
The medium-term strategy, anchored on international expansion, continues apace and supports confidence in the Group’s medium-term guidance. This includes realigning capacity to protect margins and mitigate inflationary cost pressures while retaining a load factor in the mid-to-low 80s, expanding the total fleet to 86 aircraft by the end of 2030, and increasing EBITDAR margin to the mid-to-high 20s over the medium term with liquidity ratio above 25 percent and leverage below 3.0 times net debt to EBITDAR.
The Group’s in-house maintenance, repair and overhaul and training capabilities continue to support operational efficiency by providing greater control over maintenance and training activities and flexibility in responding to technical and operational requirements. Planning for additional hangar facilities is progressing as the Group continues to develop its heavy maintenance capabilities, and at the Group’s Flight Training Centre in Astana, the second European Union Aviation Safety Agency-certified A320 Full-Flight Simulator is now fully operational.
