Full article in JPG format: page 38/39 & page 40
The decision by Kazakhstan’s government to free float its currency in August 2015 had an immediate impact on Air Astana, driving up costs and dampening demand as the oil-producing nation adjusted to a new era of low commodity prices and high inflation.
Peter Foster, the flag-carrier’s president and chief executive, admits that the rapid devaluation of the Tenge was a “massive negative” for the 15-year-old company, which is jointly owned by sovereign wealth fund Samruk-Kazyna and BAE Systems. The airline’s revenues fell 20% over the course of 2016, with foreign investors thinking twice about the country and Kazakhs tightening their belts in response.
“Free float ought to have been called freefall, because the currency really went into meltdown this time last year,” he tells Asian Aviation.
“But thank goodness it did happen, because it would have been completely impossible to sustain the Tenge at the level that it was. And at least in terms of local salaries and local expenditure, that now is reflective of genuine economic conditions...