Kazakhstan's aviation authorities negotiating with foreign investors on creation of new low-cost airline

ASTANA. Sept 28 (Interfax) - Kazakh authorities are discussing with foreign investors the possibility of creating a new low-cost air carrier, Talgat Lastayev, chairman of the civil aviation committee of the country's Ministry of Transport said.

"A new low-cost airline - we are open to it. We are currently negotiating with different companies, and there are no restrictions. According to my information, several investors are considering the possibility of creating both a passenger and cargo company," he said at a briefing on Thursday.

Negotiations are underway with investors from the Persian Gulf countries, China and Southeast Asia, Lastayev said.

There is currently one low-cost airline in Kazakhstan, FlyArystan, which is a division of the largest Kazakh air carrier Air Astana (a joint venture between the Samruk-Kazyna state fund and the British BAE Systems, who own 51% and 49%, respectively). It started operating in 2019.

Meanwhile, the low-cost airline did not live up to the hopes of Kazakhstanis for cheaper air tickets; the company's clients often complain about delays, rescheduling and cancellation of flights, as well as an opaque pricing policy.

The Civil Aviation Committee of the Ministry of Transport believes FlyArystan should be removed from the structure of Air Astana in order to increase competition in the market, and then put up for privatization.

"This is a hyper-concentrated market when one company [Air Astana] has a dominant position. Based on this, we, together with the agency [the Agency for the Protection and Development of Competition] introduced a proposal that FlyArystan should leave Air Astana by 2024," - Lastayev said earlier.