flying high
aiming higher
I N T E G R A T E D R E P O R T 2 0 2 3
airastana.com
Air Astana Integrated Report 2023
aiming higher
I N T E G R A T E D R E P O R T 2 0 2 3
airastana.com
Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Reporting scope and boundaries
The scope of this Annual Report encompasses Air Astana Group’s operations for the period from 1 January to 31 December 2023.
Our reporting boundaries primarily focus on activities directly managed and controlled by Air Astana Group. While we strive for
transparency and accuracy in reporting, it’s important to note that certain data may be subject to limitations, such as availability,
reliability, and comparability. We have made reasonable efforts to address these constraints and provide meaningful insights.
Reporting standards and external assurance
In preparing this Annual Report, we have adhered to internationally recognised frameworks and standards to ensure the quality and
consistency of our disclosures.
Our disclosures align with the Global Reporting Initiative (GRI 2021) Standards, the Task Force on Climate-related Financial Disclosures
(TCFD) recommendations, and the International Financial Reporting Standards (IFRS).
To provide assurance on the accuracy and reliability of our sustainability-related information, we have engaged Ernst & Young Advisory
LLP to conduct limited assurance. The financial statements included in this report have been audited by KPMG Audit LLC in accordance
with International Standards on Auditing (ISAs).
We are committed to upholding the highest standards of reporting excellence and will continue to engage with independent assurance
providers to strengthen the trust and confidence of our stakeholders in our disclosures.
Note:
Throughout this Integrated Report, the terms ‘Company’, ‘Air Astana’, ‘We’ refer to Air Astana JSC while ‘Group’ encompasses both
Air Astana JSC and FlyArystan JSC. Air Astana JSC is a sole shareholder of FlyArystan JSC.
About this report
01 Air Astana Integrated Report 2023
The scope of this Annual Report encompasses Air Astana Group’s operations for the period from 1 January to 31 December 2023.
Our reporting boundaries primarily focus on activities directly managed and controlled by Air Astana Group. While we strive for
transparency and accuracy in reporting, it’s important to note that certain data may be subject to limitations, such as availability,
reliability, and comparability. We have made reasonable efforts to address these constraints and provide meaningful insights.
Reporting standards and external assurance
In preparing this Annual Report, we have adhered to internationally recognised frameworks and standards to ensure the quality and
consistency of our disclosures.
Our disclosures align with the Global Reporting Initiative (GRI 2021) Standards, the Task Force on Climate-related Financial Disclosures
(TCFD) recommendations, and the International Financial Reporting Standards (IFRS).
To provide assurance on the accuracy and reliability of our sustainability-related information, we have engaged Ernst & Young Advisory
LLP to conduct limited assurance. The financial statements included in this report have been audited by KPMG Audit LLC in accordance
with International Standards on Auditing (ISAs).
We are committed to upholding the highest standards of reporting excellence and will continue to engage with independent assurance
providers to strengthen the trust and confidence of our stakeholders in our disclosures.
Note:
Throughout this Integrated Report, the terms ‘Company’, ‘Air Astana’, ‘We’ refer to Air Astana JSC while ‘Group’ encompasses both
Air Astana JSC and FlyArystan JSC. Air Astana JSC is a sole shareholder of FlyArystan JSC.
About this report
01 Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
STR ATEGIC REPORT
About this report 01
Investment case 03
About us 04
At a glance 06
Our growth story 08
Chairman’s statement 10
CEO’s statement 12
Business model 14
Stakeholder engagement
and priorities 16
Market review 21
Strategy 26
Key performance indicators 30
Operating review 32
Sustainability 42
Financial review 67
Risk management 70
CORPOR ATE
GOVERNANCE
Introduction to Corporate
Governance 80
Board of Directors 82
Senior Management team 86
Board leadership and
Company purpose 90
Division of responsibilities 94
Composition, succession
and evaluation 96
Strategic Planning Committee 97
ESG Committee 98
Treasury Committee 99
Audit Committee 100
Nomination and
Remuneration Committee 102
FINANCIAL
STATEMENTS
Statement of management’s
responsibilities 104
Independent Auditors’ Report 105
Consolidated statement
of profit or loss 109
Consolidated statement of other
comprehensive income 110
Consolidated statement
of financial position 111
Consolidated statement
of changes in equity 112
Consolidated statement
of cash flows 113
Notes to the consolidated
financial statements 115
ADDITIONAL
INFORM ATION
Major transactions 167
Economic performance 167
GRI content index 168
Independent practitioner’s
assurance report 171
Glossary 173
GROUP FIN A NCIA L HIGHLIGHTS
GROUP NON-FIN A NCIA L HIGHLIGHTS
TOTAL REVENUE (USD)
1,175m 2022 Adjusted 1 : 1,016m
2022: 1,032m
NUMBER OF PASSENGERS
8.1m 2022: 7.4m
ADJUSTED EBITDAR (USD)
301m 2022 Adjusted 1 : 260m
2022: 288m
NET DEBT EBITDAR
1.5x 2022 Adjusted 1 : 1.9x
2022: 1.7x
1 Excluding extraordinary market event (EME) and gain from fuel hedging (FH).
NUMBER OF AIRCRAFT
49 2022: 43
OPERATING PROFIT (USD)
136.0m 2022 Adjusted 1 : 120.4m
2022: 148.7m
NUMBER OF FLIGHTS
55,068 2022: 51,819
ADJUSTED EBITDAR MARGIN
25.6% 2022 Adjusted 1 : 25.6%
2022: 27.9%
CO 2 EMISSIONS (TONNE/‘000 RPK)
0.076 2022: 0.077
Flying high to deliver a
long-term record of success
FULL-SERVICE AND LOW-COST
CARRIERS
A single Group operating full-service
and low-cost carriers: two airlines with
differentiated strategies. This brand model
allows both to make the most of untapped
growth opportunities: targeting different
markets and geographies and catering for
a range of varying customer needs and
travel purposes.
Air Astana: Full-service offering focused
primarily on business and, increasingly,
‘lifestyle’ travel.
FlyArystan: Independently-managed and
highly scalable low-cost carrier bolstering the
propensity to fly.
OPERATIONAL EFFICIENCY
OPTIMISED BY A YOUNG AND
MODERN FLEET
We operate a modern, fuel-efficient fleet
of 49, comprised of 41 Airbus, 5 Embraer
and 3 Boeing aircraft with an average age
of 5.3 years.
Planned expansion of the fleet allied with
advanced technical and training facilities will
greatly aid our operational efficiency and
support our growth trajectory.
STRONG GOVERNANCE
AND AGILE MANAGEMENT
Air Astana Group is pledged to uphold the
highest corporate governance standards as
befits an organisation of its standing with
leadership and oversight provided by its
experienced Board of Directors.
Its experienced and dynamic
management team have repeatedly
proven their agility while maintaining
financial and growth objectives.
MARKET
OPPORTUNITY
The Group already commands a strong
position in the home market and Central
Asia and Caucasus region with easy access
to neighbouring mega markets for
international travel.
With their complementary offerings,
Air Astana and FlyArystan are set to take
advantage of untapped possibilities for
expansion within these markets.
FINANCIAL
RESILIENCE
The combination of proactive route
planning, cost leadership and operational
agility have proved a successful formula
for promoting financial resilience
throughout the cycle.
With efficient cost structures in place,
both Air Astana and FlyArystan
outperform most of their peers in
profitability metrics.
ENVIRONMENTAL, SOCIAL,
GOVERNANCE (ESG)
COMMITMENT DRIVING
SUSTAINABLE GROWTH
The Group’s ESG Strategy together with its
Low-Carbon Development Programme for
2023–2032 is typified by its commitment to
becoming the most sustainable airline in
the CIS and Central Asia, initiatives that
prioritise the safety, health and well-being
of its employees and funding projects that
support the community.
INVE STMENT C A SE 02 03 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
About this report 01
Investment case 03
About us 04
At a glance 06
Our growth story 08
Chairman’s statement 10
CEO’s statement 12
Business model 14
Stakeholder engagement
and priorities 16
Market review 21
Strategy 26
Key performance indicators 30
Operating review 32
Sustainability 42
Financial review 67
Risk management 70
CORPOR ATE
GOVERNANCE
Introduction to Corporate
Governance 80
Board of Directors 82
Senior Management team 86
Board leadership and
Company purpose 90
Division of responsibilities 94
Composition, succession
and evaluation 96
Strategic Planning Committee 97
ESG Committee 98
Treasury Committee 99
Audit Committee 100
Nomination and
Remuneration Committee 102
FINANCIAL
STATEMENTS
Statement of management’s
responsibilities 104
Independent Auditors’ Report 105
Consolidated statement
of profit or loss 109
Consolidated statement of other
comprehensive income 110
Consolidated statement
of financial position 111
Consolidated statement
of changes in equity 112
Consolidated statement
of cash flows 113
Notes to the consolidated
financial statements 115
ADDITIONAL
INFORM ATION
Major transactions 167
Economic performance 167
GRI content index 168
Independent practitioner’s
assurance report 171
Glossary 173
GROUP FIN A NCIA L HIGHLIGHTS
GROUP NON-FIN A NCIA L HIGHLIGHTS
TOTAL REVENUE (USD)
1,175m 2022 Adjusted 1 : 1,016m
2022: 1,032m
NUMBER OF PASSENGERS
8.1m 2022: 7.4m
ADJUSTED EBITDAR (USD)
301m 2022 Adjusted 1 : 260m
2022: 288m
NET DEBT EBITDAR
1.5x 2022 Adjusted 1 : 1.9x
2022: 1.7x
1 Excluding extraordinary market event (EME) and gain from fuel hedging (FH).
NUMBER OF AIRCRAFT
49 2022: 43
OPERATING PROFIT (USD)
136.0m 2022 Adjusted 1 : 120.4m
2022: 148.7m
NUMBER OF FLIGHTS
55,068 2022: 51,819
ADJUSTED EBITDAR MARGIN
25.6% 2022 Adjusted 1 : 25.6%
2022: 27.9%
CO 2 EMISSIONS (TONNE/‘000 RPK)
0.076 2022: 0.077
Flying high to deliver a
long-term record of success
FULL-SERVICE AND LOW-COST
CARRIERS
A single Group operating full-service
and low-cost carriers: two airlines with
differentiated strategies. This brand model
allows both to make the most of untapped
growth opportunities: targeting different
markets and geographies and catering for
a range of varying customer needs and
travel purposes.
Air Astana: Full-service offering focused
primarily on business and, increasingly,
‘lifestyle’ travel.
FlyArystan: Independently-managed and
highly scalable low-cost carrier bolstering the
propensity to fly.
OPERATIONAL EFFICIENCY
OPTIMISED BY A YOUNG AND
MODERN FLEET
We operate a modern, fuel-efficient fleet
of 49, comprised of 41 Airbus, 5 Embraer
and 3 Boeing aircraft with an average age
of 5.3 years.
Planned expansion of the fleet allied with
advanced technical and training facilities will
greatly aid our operational efficiency and
support our growth trajectory.
STRONG GOVERNANCE
AND AGILE MANAGEMENT
Air Astana Group is pledged to uphold the
highest corporate governance standards as
befits an organisation of its standing with
leadership and oversight provided by its
experienced Board of Directors.
Its experienced and dynamic
management team have repeatedly
proven their agility while maintaining
financial and growth objectives.
MARKET
OPPORTUNITY
The Group already commands a strong
position in the home market and Central
Asia and Caucasus region with easy access
to neighbouring mega markets for
international travel.
With their complementary offerings,
Air Astana and FlyArystan are set to take
advantage of untapped possibilities for
expansion within these markets.
FINANCIAL
RESILIENCE
The combination of proactive route
planning, cost leadership and operational
agility have proved a successful formula
for promoting financial resilience
throughout the cycle.
With efficient cost structures in place,
both Air Astana and FlyArystan
outperform most of their peers in
profitability metrics.
ENVIRONMENTAL, SOCIAL,
GOVERNANCE (ESG)
COMMITMENT DRIVING
SUSTAINABLE GROWTH
The Group’s ESG Strategy together with its
Low-Carbon Development Programme for
2023–2032 is typified by its commitment to
becoming the most sustainable airline in
the CIS and Central Asia, initiatives that
prioritise the safety, health and well-being
of its employees and funding projects that
support the community.
INVE STMENT C A SE 02 03 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Aiming higher to create one
of the finest airlines in the world
Building on its successful track record,
Air Astana Group, the flagship carrier
of Kazakhstan and one of the largest
airlines in Central Asia and Caucasus,
is well positioned for substantial
growth opportunities in the
region and beyond.
% % MARKET SHARE OF KAZAKHSTAN’S
DOMESTIC MARKET FOR THE GROUP
Aiming higher
Our future plans to develop our domestic market share
will focus on increasing our network density within
Kazakhstan and our planned fleet expansion will provide
us with greater capacity to achieve this. At the same time,
we will both capitalise on the rise in business travel and
continued growth of FlyArystan in the burgeoning
domestic market.
CUSTOMER SATISFACTION RATING (CSAT)
FOR AIR ASTANA BRAND
(INDUSTRY AVERAGE 82)
Aiming higher
Retaining customer satisfaction is core to our quality service
offering. Our dedicated Customer Experience Team has
developed an integrated programme for improving the
customer experience across the organisation. This includes
quantitative and qualitative metrics to measure customer
satisfaction including industry-adopted indicators such as
Net Promoter Score and Customer Satisfaction Rating.
ON-TIME PERFORMANCE
FOR THE AIR ASTANA GROUP
Aiming higher
On-time performance (OTP) is a key criterion in passenger
choice. The Group is committed to improving its OTP and has
introduced a number of measures, including restricting personal
leave and training for operational crew to low-demand periods
and improving communication with domestic airports to identify
planned construction work that could potentially disrupt
flight schedules.
TOTAL FLEET ACROSS
THE AIR ASTANA GROUP
Aiming higher
We believe that a larger fleet at the disposal of both airline
brands will provide each with the increased flexibility to add
capacity on new routes; of particular importance in a dynamic
region where new opportunities can quickly develop. We plan to
expand our current fleet from 49 to 80 by the end of 2028 and,
while doing so, will phase out our use of Embraers and focus on
increasing our commitment to the Airbus family.
Air Astana received prestigious awards for
‘Best Cabin Service’ and ‘Best Entertainment’
within the Central/Southern Asia group
from the Airline Passenger Experience
Association (APEX).
In September 2023, Air Astana commissioned
its new Flight Training Centre – the first facility
in Central Asia certified by the European
Aviation Safety Agency (EASA). The new
training centre is equipped with the very latest
generation flight simulators and fire facilities
that meet international standards.
In February 2024, the Air Astana Group
successfully completed its IPO and, with this,
achieved a number of firsts in Kazakhstan:
the first domestic and international business
to achieve simultaneous listing on three
stock exchanges; the first IPO with take up
from both international and local institutions,
and retail investors; the first public
privatisation with the State share dropping
below 50%. Following the IPO 42% of the
Company’s shares were in public free float.
ABOUT US 04 05 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
of the finest airlines in the world
Building on its successful track record,
Air Astana Group, the flagship carrier
of Kazakhstan and one of the largest
airlines in Central Asia and Caucasus,
is well positioned for substantial
growth opportunities in the
region and beyond.
% % MARKET SHARE OF KAZAKHSTAN’S
DOMESTIC MARKET FOR THE GROUP
Aiming higher
Our future plans to develop our domestic market share
will focus on increasing our network density within
Kazakhstan and our planned fleet expansion will provide
us with greater capacity to achieve this. At the same time,
we will both capitalise on the rise in business travel and
continued growth of FlyArystan in the burgeoning
domestic market.
CUSTOMER SATISFACTION RATING (CSAT)
FOR AIR ASTANA BRAND
(INDUSTRY AVERAGE 82)
Aiming higher
Retaining customer satisfaction is core to our quality service
offering. Our dedicated Customer Experience Team has
developed an integrated programme for improving the
customer experience across the organisation. This includes
quantitative and qualitative metrics to measure customer
satisfaction including industry-adopted indicators such as
Net Promoter Score and Customer Satisfaction Rating.
ON-TIME PERFORMANCE
FOR THE AIR ASTANA GROUP
Aiming higher
On-time performance (OTP) is a key criterion in passenger
choice. The Group is committed to improving its OTP and has
introduced a number of measures, including restricting personal
leave and training for operational crew to low-demand periods
and improving communication with domestic airports to identify
planned construction work that could potentially disrupt
flight schedules.
TOTAL FLEET ACROSS
THE AIR ASTANA GROUP
Aiming higher
We believe that a larger fleet at the disposal of both airline
brands will provide each with the increased flexibility to add
capacity on new routes; of particular importance in a dynamic
region where new opportunities can quickly develop. We plan to
expand our current fleet from 49 to 80 by the end of 2028 and,
while doing so, will phase out our use of Embraers and focus on
increasing our commitment to the Airbus family.
Air Astana received prestigious awards for
‘Best Cabin Service’ and ‘Best Entertainment’
within the Central/Southern Asia group
from the Airline Passenger Experience
Association (APEX).
In September 2023, Air Astana commissioned
its new Flight Training Centre – the first facility
in Central Asia certified by the European
Aviation Safety Agency (EASA). The new
training centre is equipped with the very latest
generation flight simulators and fire facilities
that meet international standards.
In February 2024, the Air Astana Group
successfully completed its IPO and, with this,
achieved a number of firsts in Kazakhstan:
the first domestic and international business
to achieve simultaneous listing on three
stock exchanges; the first IPO with take up
from both international and local institutions,
and retail investors; the first public
privatisation with the State share dropping
below 50%. Following the IPO 42% of the
Company’s shares were in public free float.
ABOUT US 04 05 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
Uralsk
Atyrau
Aktau
Aktau
Aktobe
Aktobe
Kyzylorda
Turkistan
Shymkent
Shymkent
Almaty
Kostanay
Astana
Almaty
Samarkand
Turkistan
Astana
Semey
Karaganda
Ust-Kamenogorsk
Pavlodar
Amsterdam
Frankfurt
Sharm-El-Sheikh
Istanbul Ankara
Podgorica
Antalya
Heraklion
Bodrum
Doha
Male
Mumbai
London
Delhi
Ürümqi
Phuket
Tbilisi Batumi
Kutaisi
Baku
Dushanbe
Uralsk
Atyrau
Tashkent
Bishkek Seoul
Colombo
Jeddah
Dubai
Bangkok
Beijing Uralsk
Atyrau
Aktau
Aktobe
Kyzylorda
Turkistan
Shymkent
Almaty
Kostanay
Astana
Semey
Karaganda
Ust-Kamenogorsk
Pavlodar
Amsterdam
Frankfurt
Shar
Ista
Podgorica
Herak
Bod
London STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION AT A GL A NCE
Connecting
the world
The Air Astana Group continued to
expand its network and, at the end
of 2023, Air Astana operated on 50
routes and FlyArystan on 57, a total
of 91 routes for the Group.
This covers five geographical areas, increasing our share of both the
domestic market and in the Central Asian and Caucasus region as
well as on international routes to multiple locations across Europe
(such as London, Amsterdam and Frankfurt), Saudi Arabia (such as
Jeddah) and Asia (such as Beijing and Bangkok). We are building our
presence in the flourishing ‘lifestyles’ market and now fly to popular
tourist destinations in the Maldives, Thailand, Montenegro, Greece,
Georgia, Turkey, Egypt and the UAE. In line with this broader
geographic spread and increased flight availability, we also
experienced strong passenger growth, carrying over 8.1 million
passengers – 10% above that of 2022.
‘Lifestyle’ continues to take off
Our commitment to the development of
our offering to popular lifestyle destinations was
reflected by an increase in both the destinations
served and the frequency of flights. Our busy
summer schedule in 2023 included regular flights
to Greece (Heraklion on the island of Crete),
Turkey (Bodrum, Antalya), Montenegro (Podgorica),
Georgia (Kutaisi, Batumi), UAE (Dubai) and Thailand
(Bangkok, Phuket).
DOMESTIC AND INTERNATIONAL
ROUTES IN 2023
DESTINATIONS IN 2023 1
LEADING BRANDS
Full-service airline
ROUTES
50 Primary focus on
business and point-to-
point 'lifestyle' travel
Expanding network
to regional and
international destinations
Modern fuel-efficient aircraft
Two-class product
High aircraft utilisation
vs peers
DESTINATIONS
36
PASSENGERS
4.4m
Independently managed
LCC business
ROUTES
57 Low-cost market disruptor
Rapid network expansion
in the domestic and near
home markets
Focus on international
destinations that are within
4–5 hours
Diversified base strategy
(5 bases)
High-density single-class
seating
Uniform A320 family aircraft
High aircraft utilisation
vs peers
DESTINATIONS
27
PASSENGERS
3.7m Charter flights 1 Where Air Astana and FlyArystan fly to the same destination, this has been counted as one.
07 Air Astana Integrated Report 2023 06 Air Astana Integrated Report 2023
Atyrau
Aktau
Aktau
Aktobe
Aktobe
Kyzylorda
Turkistan
Shymkent
Shymkent
Almaty
Kostanay
Astana
Almaty
Samarkand
Turkistan
Astana
Semey
Karaganda
Ust-Kamenogorsk
Pavlodar
Amsterdam
Frankfurt
Sharm-El-Sheikh
Istanbul Ankara
Podgorica
Antalya
Heraklion
Bodrum
Doha
Male
Mumbai
London
Delhi
Ürümqi
Phuket
Tbilisi Batumi
Kutaisi
Baku
Dushanbe
Uralsk
Atyrau
Tashkent
Bishkek Seoul
Colombo
Jeddah
Dubai
Bangkok
Beijing Uralsk
Atyrau
Aktau
Aktobe
Kyzylorda
Turkistan
Shymkent
Almaty
Kostanay
Astana
Semey
Karaganda
Ust-Kamenogorsk
Pavlodar
Amsterdam
Frankfurt
Shar
Ista
Podgorica
Herak
Bod
London STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION AT A GL A NCE
Connecting
the world
The Air Astana Group continued to
expand its network and, at the end
of 2023, Air Astana operated on 50
routes and FlyArystan on 57, a total
of 91 routes for the Group.
This covers five geographical areas, increasing our share of both the
domestic market and in the Central Asian and Caucasus region as
well as on international routes to multiple locations across Europe
(such as London, Amsterdam and Frankfurt), Saudi Arabia (such as
Jeddah) and Asia (such as Beijing and Bangkok). We are building our
presence in the flourishing ‘lifestyles’ market and now fly to popular
tourist destinations in the Maldives, Thailand, Montenegro, Greece,
Georgia, Turkey, Egypt and the UAE. In line with this broader
geographic spread and increased flight availability, we also
experienced strong passenger growth, carrying over 8.1 million
passengers – 10% above that of 2022.
‘Lifestyle’ continues to take off
Our commitment to the development of
our offering to popular lifestyle destinations was
reflected by an increase in both the destinations
served and the frequency of flights. Our busy
summer schedule in 2023 included regular flights
to Greece (Heraklion on the island of Crete),
Turkey (Bodrum, Antalya), Montenegro (Podgorica),
Georgia (Kutaisi, Batumi), UAE (Dubai) and Thailand
(Bangkok, Phuket).
DOMESTIC AND INTERNATIONAL
ROUTES IN 2023
DESTINATIONS IN 2023 1
LEADING BRANDS
Full-service airline
ROUTES
50 Primary focus on
business and point-to-
point 'lifestyle' travel
Expanding network
to regional and
international destinations
Modern fuel-efficient aircraft
Two-class product
High aircraft utilisation
vs peers
DESTINATIONS
36
PASSENGERS
4.4m
Independently managed
LCC business
ROUTES
57 Low-cost market disruptor
Rapid network expansion
in the domestic and near
home markets
Focus on international
destinations that are within
4–5 hours
Diversified base strategy
(5 bases)
High-density single-class
seating
Uniform A320 family aircraft
High aircraft utilisation
vs peers
DESTINATIONS
27
PASSENGERS
3.7m Charter flights 1 Where Air Astana and FlyArystan fly to the same destination, this has been counted as one.
07 Air Astana Integrated Report 2023 06 Air Astana Integrated Report 2023
45%
Air Astana
market share
67%
combined
market share STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
A history of growth
…a future of opportunity
Now in our third decade of providing our loyal customers with the very
highest levels of safety, service and efficiency, we look back with pride
on the achievements that we have made over the years.
2001
September
Creation of Air Astana as a
JV between the Republic of
Kazakhstan and BAE Systems
3
Boeing 737
in fleet
2.3m
passengers
in 2008
2001 2024F 2028F 2002 2003 … 2007 … 2008 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2025F 2022 2026F 2023 2027F
2002
May
First flight Almaty
to Astana
September
First International flight
Almaty to Dubai
2007
December
Launch of frequent
flyer programme
Nomad Club
2008
December
Launch of pilot
training programme
Officially registered
by IATA as an IOSA-
compliant carrier
2003
August
EASA JAR 145
certification received
for Engineering and
Maintenance
2012
May
First in CIS four-star
SKYTRAX rating
October
First own
aircraft
delivery
2013
June
SKYTRAX Best airline
in Central Asia and
India and best
airline service
2014
June
Association of Asia
Pacific Airlines
included Air Astana
as a full member
2016
November
Delivery of first
A320neo aircraft
We maximise growth by:
Offering easy access to ‘lifestyle’
destinations
Supporting international visa-free
programmes
Expanding and optimising our fleet
to support growth trajectory
2018
May
Commissioning
of the aviation
technical centre
in Astana
2017
December
Delivery of first
A321 neo aircraft
2019
May
Launch of FlyArystan,
the low-cost carrier
in Central Asia
2021
March
FlyArystan launched
first international
route Turkistan to
Istanbul
2024
February
Air Astana Group
successfully completes
its IPO having raised
USD 120 million for
further growth.
2022
April
Air Astana launched
direct flights to Greece
October
Delivery of first new
Airbus aircraft to
FlyArystan
2023
April
FlyArystan awarded
four-star LCC
September
Inauguration of
full-flight simulator
FlyArystan 37%
Air Astana 30%
8.1m
total passengers
in 2023
80
Group fleet
by 2028F
46
Air Astana
fleet by 2028F
34
FlyArystan
fleet by 2028F
31
Air Astana
fleet in 2023
18
FlyArystan
fleet in 2023
OUR GROW TH STORY
Untapped potential for air travel in Kazakhstan
There are substantial opportunities for growth within this highly
underserved market with a low propensity to fly.
Opportunity in Central Asia and Caucasus region
Air Astana Group can help improve air travel connectivity in
the significantly underserved market of the Central Asia and
Caucasus region.
POPULATION OF
KAZAKHSTAN 1
20.0m
POPULATION OF CENTRAL
ASIA & CAUCASUS 1
95m
AIR TRAVEL PENETRATION:
2023
0.6 2
WEEKLY FREQUENCIES:
AIR ASTANA
48
PASSENGERS:
INDIA
164m
CHINA
325m
WESTERN EUROPE
857m
MID-TERM POTENTIAL
1.2 3
FLYARYSTAN
26
Significant opportunities through
international expansion
Kazakhstan is strategically located with easy access to two of the
largest aviation markets in the world, India and China, and close
proximity to the Middle East and Europe.
1 As of 1 January 2024, www.stat.gov.kz data
2 Company’s full year results presentation.
3 Potential growth of comparable countries in the mid term
Source: Company information, World Bank, IATA as of 2022.
09 Air Astana Integrated Report 2023 08 Air Astana Integrated Report 2023
Air Astana
market share
67%
combined
market share STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
A history of growth
…a future of opportunity
Now in our third decade of providing our loyal customers with the very
highest levels of safety, service and efficiency, we look back with pride
on the achievements that we have made over the years.
2001
September
Creation of Air Astana as a
JV between the Republic of
Kazakhstan and BAE Systems
3
Boeing 737
in fleet
2.3m
passengers
in 2008
2001 2024F 2028F 2002 2003 … 2007 … 2008 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2025F 2022 2026F 2023 2027F
2002
May
First flight Almaty
to Astana
September
First International flight
Almaty to Dubai
2007
December
Launch of frequent
flyer programme
Nomad Club
2008
December
Launch of pilot
training programme
Officially registered
by IATA as an IOSA-
compliant carrier
2003
August
EASA JAR 145
certification received
for Engineering and
Maintenance
2012
May
First in CIS four-star
SKYTRAX rating
October
First own
aircraft
delivery
2013
June
SKYTRAX Best airline
in Central Asia and
India and best
airline service
2014
June
Association of Asia
Pacific Airlines
included Air Astana
as a full member
2016
November
Delivery of first
A320neo aircraft
We maximise growth by:
Offering easy access to ‘lifestyle’
destinations
Supporting international visa-free
programmes
Expanding and optimising our fleet
to support growth trajectory
2018
May
Commissioning
of the aviation
technical centre
in Astana
2017
December
Delivery of first
A321 neo aircraft
2019
May
Launch of FlyArystan,
the low-cost carrier
in Central Asia
2021
March
FlyArystan launched
first international
route Turkistan to
Istanbul
2024
February
Air Astana Group
successfully completes
its IPO having raised
USD 120 million for
further growth.
2022
April
Air Astana launched
direct flights to Greece
October
Delivery of first new
Airbus aircraft to
FlyArystan
2023
April
FlyArystan awarded
four-star LCC
September
Inauguration of
full-flight simulator
FlyArystan 37%
Air Astana 30%
8.1m
total passengers
in 2023
80
Group fleet
by 2028F
46
Air Astana
fleet by 2028F
34
FlyArystan
fleet by 2028F
31
Air Astana
fleet in 2023
18
FlyArystan
fleet in 2023
OUR GROW TH STORY
Untapped potential for air travel in Kazakhstan
There are substantial opportunities for growth within this highly
underserved market with a low propensity to fly.
Opportunity in Central Asia and Caucasus region
Air Astana Group can help improve air travel connectivity in
the significantly underserved market of the Central Asia and
Caucasus region.
POPULATION OF
KAZAKHSTAN 1
20.0m
POPULATION OF CENTRAL
ASIA & CAUCASUS 1
95m
AIR TRAVEL PENETRATION:
2023
0.6 2
WEEKLY FREQUENCIES:
AIR ASTANA
48
PASSENGERS:
INDIA
164m
CHINA
325m
WESTERN EUROPE
857m
MID-TERM POTENTIAL
1.2 3
FLYARYSTAN
26
Significant opportunities through
international expansion
Kazakhstan is strategically located with easy access to two of the
largest aviation markets in the world, India and China, and close
proximity to the Middle East and Europe.
1 As of 1 January 2024, www.stat.gov.kz data
2 Company’s full year results presentation.
3 Potential growth of comparable countries in the mid term
Source: Company information, World Bank, IATA as of 2022.
09 Air Astana Integrated Report 2023 08 Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
CH A IR M A N ’S STATEMENT
Successful momentum
continues
I am pleased to join the Air Astana Group as the Chairman of the
Air Astana JSC Board as the Group enters the next exciting phase
in its development.
Nurlan Zhakupov
Chairman of the Board of Directors
Since I joined the Board in December 2023,
I have been extremely impressed not
only by the professionalism of the senior
management team and employees but
also their passion towards the business.
This is a wonderful reflection of the ethos
of the Group’s corporate culture that actively
encourages and celebrates the skills and
dedication of its people.
Before I reflect on the achievements of
2023, it would be remiss not to report on
the outstanding success of the Group’s IPO
in the 1st quarter of 2024. Air Astana JSC
has become the first company – both
domestically and internationally – to
achieve a simultaneous listing on three
stock exchanges: the Kazakhstan Stock
Exchange, Astana International Exchange
and London Stock Exchange. I look forward
to working closely with the management
team, building on the positive momentum
of the IPO, to accelerate the development
and growth of the Group’s infrastructure.
Delivering continued growth
The senior management team has used
its substantial experience and operational
skills to successfully navigate various market
challenges over recent years. 2023 was also
not without its challenges: the ongoing
Russia-Ukraine war and more recent conflict
in the Middle East imposing airspace closures
and rerouting as well as pushing up oil prices.
While the COVID-19 pandemic is thankfully
behind us, the majority of businesses globally
are still recovering from its impact. The ability
of Air Astana and FlyArystan to adapt to the
situation – together increasing their share of
the domestic market when borders were
closed and shifting their horizons to new
lifestyle destinations, intra-regional flights
and mega markets as the world re-opened –
enabled a strong recovery in 2022.
This trajectory continued into 2023, when
the Group carried over 8 million passengers
on around 55 thousand flights on 91 routes
across 43 destinations. I am pleased to
report that this delivered strong annual
returns with total revenue and other
income for the Group up 13.8% to USD 1,174.5
million (2022: USD 1.032.3 million) and by
USD 158.3 million or 15.6% excluding
extraordinary market event in 2022
(partial mobilisation in Russia).
Investing in our fleet, people
and training
Yet, the financial performance only tells part
of the story as we lay the foundations for
future growth. By simplifying and expanding
the fleet with fuel-efficient and eco-friendly
aircraft, the Group has increased capacity,
improved passenger comfort and reduced
our environmental impact. During the year,
we increased the fleet to 49 (30 operated by
Air Astana and 19 by FlyArystan) with plans
to grow the fleet to 80 by the end of 2028. To
meet the demand for qualified pilots, we also
initiated our ab-initio scheme nearly 8 years
ago to train pilot from scratch and have had
270 graduates with 65 already reaching
captain status.
Alongside this focus on growth, we increased
efficiency through investment in engineering
and maintenance, pilot training, ground
handling and catering, and spare engines.
Specifically in 2023, we opened a Flight
Training Centre certified by the European
Aviation Safety Agency and purchased
a L3Harris full flight simulator for pilot
training and simulators for emergency cabin
evacuation and fire training for flight crew.
Taken together, our operational excellence
continues to earn us high levels of customer
loyalty. We have garnered both external
recognition and awards from international
associations and passenger forums for both
our airlines. Amongst these, both airlines
received accolades in the Skytrax World
Airline Awards: Air Astana was recognised as
the ‘Best Airline in Central Asia and CIS’ for
the eleventh time; FlyArystan was recognised
as the ‘Best Low-Cost Carrier in Central Asia
and CIS’ for the first time.
Motivational corporate culture
As the largest employer in Kazakhstan,
employing over 6,000 people, we take our
responsibilities very seriously. The expertise
and skills of our employees are invaluable
assets for the business and we honour
this by providing a nurturing, inclusive
and friendly workplace environment.
Our corporate HEART values (Hospitable,
Efficient, Active, Reliable, Trustworthy)
underpin our ethos of recognition,
professional development and, above all,
equality of opportunity. In return, we are
rewarded by a workforce that is truly
engaged and motivated to achieving
goals together.
Strength in governance
The Air Astana Group has always
had a strong commitment to corporate
governance and this will continue during
my tenure as Chairman of the Board. We
are very fortunate to be working with a
highly experienced senior management
team, who have already proved their ability
to maintain financial and growth objectives
under the most trying of circumstances,
enabling both Air Astana and FlyArystan
to outperform most of their peers.
Commitment to ESG
The aviation industry as a whole is committed
to minimising its environmental impacts.
The Group’s ESG Strategy, together with its
Low-Carbon Development Programme for
2023–2032, takes this further in its pledge to
becoming one of the most sustainable arlines
in the CIS and Central Asia. The ESG Strategy
also focuses on initiatives that prioritise
the safety, health and well-being of its
employees and funding projects that
support the wider community.
We are constantly exploring alternative
energy sources and implementing fuel-
efficient flight plans to minimise our
environmental impact and ensure a
sustainable future for the business. As part
of this, we are proud to be participating in
a ground-breaking research programme in
collaboration with business partners and
regulatory authorities, which is looking at
the potential of producing and consuming
using sustainable aviation fuel (SAF) in
Kazakhstan.
Looking ahead to 2024
We enter 2024 confident of delivering
further growth and extending our market
leadership position. This is underpinned
by the Group’s operational expansion
plans and robust demand for air travel
across domestic, intra-regional and
international routes.
The new international terminal will be
opening at Almaty airport during the year,
increasing the total capacity to 14 million
passengers per annum. This will not only
improve the quality of the airport’s services
but also enable more routes to be launched.
The Group will be taking advantage of this
by opening its own Business Class lounge
at the airport and adding frequencies to
existing destinations and in next few years,
we expect to introduce new routes to East
Asia, Gulf, Indian subcontinent and Europe.
This will also be supported by the launch
of a new, more user-friendly website for
our customers to ensure we are always
delivering the best possible service.
I am proud to be Chairman of Air Astana JSC
Board of Directors and look forward to
working with my colleagues across the
business to continue our success.
PERFOR M A NCE
A ND RE SILIENCE
We have once again
successfully navigated
various market challenges.
This is reflected in the
15.6% increase in total
revenue and other income
at USD 1,174.5 million
(2022: USD 1,032.3 million)
excluding EME and FH.
CULTURE
Our employees are an
invaluable asset for the
business. We recognise this
by providing a nurturing,
inclusive and friendly
workplace environment
while investing in their
professional development
and equality of opportunity.
Our motivational corporate
culture, operational
excellence and efficiency
earn us high levels of
customer loyalty.
SUCCE SSION PL A NNING
Succession planning in the
Group is vital to ensuring
stability and business
continuity. This applies
both to developing and
maintaining the experience
and knowledge among
our employees but also
by introducing a formalised
Succession Planning Policy
for senior executives
and the Board.
10 11 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
Successful momentum
continues
I am pleased to join the Air Astana Group as the Chairman of the
Air Astana JSC Board as the Group enters the next exciting phase
in its development.
Nurlan Zhakupov
Chairman of the Board of Directors
Since I joined the Board in December 2023,
I have been extremely impressed not
only by the professionalism of the senior
management team and employees but
also their passion towards the business.
This is a wonderful reflection of the ethos
of the Group’s corporate culture that actively
encourages and celebrates the skills and
dedication of its people.
Before I reflect on the achievements of
2023, it would be remiss not to report on
the outstanding success of the Group’s IPO
in the 1st quarter of 2024. Air Astana JSC
has become the first company – both
domestically and internationally – to
achieve a simultaneous listing on three
stock exchanges: the Kazakhstan Stock
Exchange, Astana International Exchange
and London Stock Exchange. I look forward
to working closely with the management
team, building on the positive momentum
of the IPO, to accelerate the development
and growth of the Group’s infrastructure.
Delivering continued growth
The senior management team has used
its substantial experience and operational
skills to successfully navigate various market
challenges over recent years. 2023 was also
not without its challenges: the ongoing
Russia-Ukraine war and more recent conflict
in the Middle East imposing airspace closures
and rerouting as well as pushing up oil prices.
While the COVID-19 pandemic is thankfully
behind us, the majority of businesses globally
are still recovering from its impact. The ability
of Air Astana and FlyArystan to adapt to the
situation – together increasing their share of
the domestic market when borders were
closed and shifting their horizons to new
lifestyle destinations, intra-regional flights
and mega markets as the world re-opened –
enabled a strong recovery in 2022.
This trajectory continued into 2023, when
the Group carried over 8 million passengers
on around 55 thousand flights on 91 routes
across 43 destinations. I am pleased to
report that this delivered strong annual
returns with total revenue and other
income for the Group up 13.8% to USD 1,174.5
million (2022: USD 1.032.3 million) and by
USD 158.3 million or 15.6% excluding
extraordinary market event in 2022
(partial mobilisation in Russia).
Investing in our fleet, people
and training
Yet, the financial performance only tells part
of the story as we lay the foundations for
future growth. By simplifying and expanding
the fleet with fuel-efficient and eco-friendly
aircraft, the Group has increased capacity,
improved passenger comfort and reduced
our environmental impact. During the year,
we increased the fleet to 49 (30 operated by
Air Astana and 19 by FlyArystan) with plans
to grow the fleet to 80 by the end of 2028. To
meet the demand for qualified pilots, we also
initiated our ab-initio scheme nearly 8 years
ago to train pilot from scratch and have had
270 graduates with 65 already reaching
captain status.
Alongside this focus on growth, we increased
efficiency through investment in engineering
and maintenance, pilot training, ground
handling and catering, and spare engines.
Specifically in 2023, we opened a Flight
Training Centre certified by the European
Aviation Safety Agency and purchased
a L3Harris full flight simulator for pilot
training and simulators for emergency cabin
evacuation and fire training for flight crew.
Taken together, our operational excellence
continues to earn us high levels of customer
loyalty. We have garnered both external
recognition and awards from international
associations and passenger forums for both
our airlines. Amongst these, both airlines
received accolades in the Skytrax World
Airline Awards: Air Astana was recognised as
the ‘Best Airline in Central Asia and CIS’ for
the eleventh time; FlyArystan was recognised
as the ‘Best Low-Cost Carrier in Central Asia
and CIS’ for the first time.
Motivational corporate culture
As the largest employer in Kazakhstan,
employing over 6,000 people, we take our
responsibilities very seriously. The expertise
and skills of our employees are invaluable
assets for the business and we honour
this by providing a nurturing, inclusive
and friendly workplace environment.
Our corporate HEART values (Hospitable,
Efficient, Active, Reliable, Trustworthy)
underpin our ethos of recognition,
professional development and, above all,
equality of opportunity. In return, we are
rewarded by a workforce that is truly
engaged and motivated to achieving
goals together.
Strength in governance
The Air Astana Group has always
had a strong commitment to corporate
governance and this will continue during
my tenure as Chairman of the Board. We
are very fortunate to be working with a
highly experienced senior management
team, who have already proved their ability
to maintain financial and growth objectives
under the most trying of circumstances,
enabling both Air Astana and FlyArystan
to outperform most of their peers.
Commitment to ESG
The aviation industry as a whole is committed
to minimising its environmental impacts.
The Group’s ESG Strategy, together with its
Low-Carbon Development Programme for
2023–2032, takes this further in its pledge to
becoming one of the most sustainable arlines
in the CIS and Central Asia. The ESG Strategy
also focuses on initiatives that prioritise
the safety, health and well-being of its
employees and funding projects that
support the wider community.
We are constantly exploring alternative
energy sources and implementing fuel-
efficient flight plans to minimise our
environmental impact and ensure a
sustainable future for the business. As part
of this, we are proud to be participating in
a ground-breaking research programme in
collaboration with business partners and
regulatory authorities, which is looking at
the potential of producing and consuming
using sustainable aviation fuel (SAF) in
Kazakhstan.
Looking ahead to 2024
We enter 2024 confident of delivering
further growth and extending our market
leadership position. This is underpinned
by the Group’s operational expansion
plans and robust demand for air travel
across domestic, intra-regional and
international routes.
The new international terminal will be
opening at Almaty airport during the year,
increasing the total capacity to 14 million
passengers per annum. This will not only
improve the quality of the airport’s services
but also enable more routes to be launched.
The Group will be taking advantage of this
by opening its own Business Class lounge
at the airport and adding frequencies to
existing destinations and in next few years,
we expect to introduce new routes to East
Asia, Gulf, Indian subcontinent and Europe.
This will also be supported by the launch
of a new, more user-friendly website for
our customers to ensure we are always
delivering the best possible service.
I am proud to be Chairman of Air Astana JSC
Board of Directors and look forward to
working with my colleagues across the
business to continue our success.
PERFOR M A NCE
A ND RE SILIENCE
We have once again
successfully navigated
various market challenges.
This is reflected in the
15.6% increase in total
revenue and other income
at USD 1,174.5 million
(2022: USD 1,032.3 million)
excluding EME and FH.
CULTURE
Our employees are an
invaluable asset for the
business. We recognise this
by providing a nurturing,
inclusive and friendly
workplace environment
while investing in their
professional development
and equality of opportunity.
Our motivational corporate
culture, operational
excellence and efficiency
earn us high levels of
customer loyalty.
SUCCE SSION PL A NNING
Succession planning in the
Group is vital to ensuring
stability and business
continuity. This applies
both to developing and
maintaining the experience
and knowledge among
our employees but also
by introducing a formalised
Succession Planning Policy
for senior executives
and the Board.
10 11 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
CEO’S STATEMENT
Accelerating our
business forward
In 2023, the Air Astana Group carried 8.1 million passengers,
a growth of 10.1% YoY, generating USD 136 million operating profit
on total revenues of USD 1.2 billion, an increase of 12.9% and
15.6% respectively on an underlying basis 1
. Profit after tax was
USD 68.7 million, a growth of 21.5% excluding EME and FH.
Peter Foster
CEO
With the following wind of this strong
result, we completed an IPO in February 2024,
becoming the first company in Kazakhstan to
simultaneously list on three stock exchanges:
The Kazakhstan Stock Exchange (KASE),
Astana International Exchange (AIX) and
the London Stock Exchange (LSE).
The IPO attracted considerable demand from
both domestic and international investors.
It raised USD 356m of which USD 120m will
fund the development of mainly ground
operational infrastructure. Kazakhstan’s retail
investors were allocated 97.8% of their orders.
These, together with international institutions
and our founding shareholders Samruk-
Kazyna and BAE Systems PLC, both of
whom remain substantial shareholders,
represent a balanced register.
The successful IPO was a reflection of
continued commitment to the airline’s
high performance and sound corporate
governance, the twin pillars of our success
since the airline’s founding in 2002. I wish
to thank my colleagues for delivering a
consistent track record of growth and
profitability, which has enabled us to become
the largest airline group in Kazakhstan and
Central Asia and one of the fastest-growing
airline groups in the world.
In 2023, both Air Astana and FlyArystan
delivered profitable growth despite the twin
challenges of high inflation and continued
fall-out from the war in Ukraine. Flights
remain suspended to, from and over the
Russian Federation with spare capacity
redeployed to leisure and business routes.
We increased available seat kilometres (ASKs)
by 11% without any reduction in load factor as
demand remained strong across all markets.
The 6% increase in unit cost reflects pressure
across the sector including though not limited
to a 20% increase in fuel costs. However, the
underlying picture is stable, excluding the
one-off benefit in 2022 from fuel hedging
positions and an inflow of Russian citizens
to and through Kazakhstan following ‘partial’
mobilisation in the Russian Federation in late
September 2022. We continue to take a
conservative approach to capital expenditure
and variable cost addition in order to ensure
that our cost base remains among the lowest
in the sector.
Operationally, we have continued to develop
the Group’s fleet and expand the network.
Despite supply chain challenges, we added
six new A 320 family aircraft in 2023, ending
the year with a fleet of 49 aircraft (51 at the
time of writing). This will increase to 56 by
the end of 2024. We have expanded the
network to Jeddah and Doha, in addition to
FlyArystan's seasonal routes to Antalya and
Dubai. This was achieved whilst continuing to
reduce per passenger CO 2 emissions, a
consistent trend since 2015.
I am cautiously pleased to report that we
have to an extent been able to mitigate
the impact of the GTF engine recall by Pratt
& Whitney. This includes sourcing spare
PW1100 engines and managing the Airbus
NEO fleet to ensure that as many aircraft
as possible are available for peak periods.
We have recently concluded an agreement
for a compensation and support package
with Pratt & Whitney.
Whilst the problem is frustrating,
management priority remains as ever
the maintenance of operational safety.
In 2019 we became the first airline in
Kazakhstan to perform heavy maintenance
C-checks on our Airbus 320 family aircraft
in accordance with EASA standards. In
December, we completed the first six-year
C-check at our engineering and technical
centre in Astana. We successfully completed
the International Air Transport Association's
Operational Safety Audit (IOSA) for the
ninth time.
I have often referred in these letters to the
positive internal culture and organisational
behaviour which we have been able to
develop and which remains our essential
strength. One cannot overstate the
importance of this, whilst recognising that
culture is a fragile thing, more easily lost
than created. At all levels and throughout
all areas of activity, we continue to prioritise
training and development, the setting of
rigorous standards of professionalism and
ethics, and fairness as the guiding principle
of all aspects of staff management. In this
regard we are pleased to have recently
inaugurated a Flight Training Centre in
Astana, the first EASA-licensed facility
in Kazakhstan, equipped with a full-flight
simulator enabling us to bring recurrent flight
crew training onshore. We continue to be
recognised by the Talentist and Universum
as one of the best employers in Kazakhstan,
with an improved level of staff engagement
as measured in an independent survey
conducted by Gallup in December. It is not
by accident that the professionalism of the
team was once again recognised by Skytrax,
as Air Astana was awarded 'Best Airline in
Central Asia and CIS' for the eleventh
consecutive year, whilst FlyArystan was
awarded ‘Best Low Cost Carrier in Central
Asia and CIS’ for the first time.
Looking ahead to 2024, we expect to
deliver further growth across both brands,
underpinned by increased capacity and fleet
expansion. The launch of the new Almaty
International Terminal in mid-2024 is
expected to almost double capacity at our
main hub. While cost and inflation outlook
remains challenging, we retain one of the
lowest unit cost bases and highest operating
margins across the industry. More broadly,
our leading market position puts us in a
strong position to benefit from sustained
demand in the Group’s extended home
market and nearby mega markets, China
and India.
I would like to conclude by thanking all
my colleagues for their hard work and
commitment, and our customers for their
continued loyalty. As we embark on life as a
public company and the next stage of growth,
I would also like to thank my fellow members
of the Board of Directors and Samruk-Kazyna
and BAE Systems PLC for their continued
support, and to welcome our new
shareholders to the Group.
GROUP IPO
The Company was founded
with just USD 17 million
with no capital increase
during its 22 years in
business. Our increasing
success now calls for further
funding for future projects,
in particular infrastructure
development, and we
therefore took the decision
to go for a public offering
to help advance this. Our
position as the leading
airline in Central Asia
proved a huge attraction
for institutional and retail
investors alike and we
were particularly pleased
that the local community
in Kazakhstan piled in
to take 53% of the total
shares. Such was the level
of interest that the IPO was
oversubscribed multiple
times, despite upsizing the
offering to meet demand,
and reached USD 356
million. We have raised
USD 120 million for the
business and positioned to
finance our ambitious plans
for the ongoing success of
Air Astana and FlyArystan.
1 Adjusted EBITDAR for 2022 benefited from the impact of partial mobilization in Russia which caused an extraordinary market event (EME), inflow citizens from Russia to and through
Kazakhstan with impact of USD 16.2 million and a gain from fuel hedging (FH) amounting to USD 12.1 million.
12 13 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
Accelerating our
business forward
In 2023, the Air Astana Group carried 8.1 million passengers,
a growth of 10.1% YoY, generating USD 136 million operating profit
on total revenues of USD 1.2 billion, an increase of 12.9% and
15.6% respectively on an underlying basis 1
. Profit after tax was
USD 68.7 million, a growth of 21.5% excluding EME and FH.
Peter Foster
CEO
With the following wind of this strong
result, we completed an IPO in February 2024,
becoming the first company in Kazakhstan to
simultaneously list on three stock exchanges:
The Kazakhstan Stock Exchange (KASE),
Astana International Exchange (AIX) and
the London Stock Exchange (LSE).
The IPO attracted considerable demand from
both domestic and international investors.
It raised USD 356m of which USD 120m will
fund the development of mainly ground
operational infrastructure. Kazakhstan’s retail
investors were allocated 97.8% of their orders.
These, together with international institutions
and our founding shareholders Samruk-
Kazyna and BAE Systems PLC, both of
whom remain substantial shareholders,
represent a balanced register.
The successful IPO was a reflection of
continued commitment to the airline’s
high performance and sound corporate
governance, the twin pillars of our success
since the airline’s founding in 2002. I wish
to thank my colleagues for delivering a
consistent track record of growth and
profitability, which has enabled us to become
the largest airline group in Kazakhstan and
Central Asia and one of the fastest-growing
airline groups in the world.
In 2023, both Air Astana and FlyArystan
delivered profitable growth despite the twin
challenges of high inflation and continued
fall-out from the war in Ukraine. Flights
remain suspended to, from and over the
Russian Federation with spare capacity
redeployed to leisure and business routes.
We increased available seat kilometres (ASKs)
by 11% without any reduction in load factor as
demand remained strong across all markets.
The 6% increase in unit cost reflects pressure
across the sector including though not limited
to a 20% increase in fuel costs. However, the
underlying picture is stable, excluding the
one-off benefit in 2022 from fuel hedging
positions and an inflow of Russian citizens
to and through Kazakhstan following ‘partial’
mobilisation in the Russian Federation in late
September 2022. We continue to take a
conservative approach to capital expenditure
and variable cost addition in order to ensure
that our cost base remains among the lowest
in the sector.
Operationally, we have continued to develop
the Group’s fleet and expand the network.
Despite supply chain challenges, we added
six new A 320 family aircraft in 2023, ending
the year with a fleet of 49 aircraft (51 at the
time of writing). This will increase to 56 by
the end of 2024. We have expanded the
network to Jeddah and Doha, in addition to
FlyArystan's seasonal routes to Antalya and
Dubai. This was achieved whilst continuing to
reduce per passenger CO 2 emissions, a
consistent trend since 2015.
I am cautiously pleased to report that we
have to an extent been able to mitigate
the impact of the GTF engine recall by Pratt
& Whitney. This includes sourcing spare
PW1100 engines and managing the Airbus
NEO fleet to ensure that as many aircraft
as possible are available for peak periods.
We have recently concluded an agreement
for a compensation and support package
with Pratt & Whitney.
Whilst the problem is frustrating,
management priority remains as ever
the maintenance of operational safety.
In 2019 we became the first airline in
Kazakhstan to perform heavy maintenance
C-checks on our Airbus 320 family aircraft
in accordance with EASA standards. In
December, we completed the first six-year
C-check at our engineering and technical
centre in Astana. We successfully completed
the International Air Transport Association's
Operational Safety Audit (IOSA) for the
ninth time.
I have often referred in these letters to the
positive internal culture and organisational
behaviour which we have been able to
develop and which remains our essential
strength. One cannot overstate the
importance of this, whilst recognising that
culture is a fragile thing, more easily lost
than created. At all levels and throughout
all areas of activity, we continue to prioritise
training and development, the setting of
rigorous standards of professionalism and
ethics, and fairness as the guiding principle
of all aspects of staff management. In this
regard we are pleased to have recently
inaugurated a Flight Training Centre in
Astana, the first EASA-licensed facility
in Kazakhstan, equipped with a full-flight
simulator enabling us to bring recurrent flight
crew training onshore. We continue to be
recognised by the Talentist and Universum
as one of the best employers in Kazakhstan,
with an improved level of staff engagement
as measured in an independent survey
conducted by Gallup in December. It is not
by accident that the professionalism of the
team was once again recognised by Skytrax,
as Air Astana was awarded 'Best Airline in
Central Asia and CIS' for the eleventh
consecutive year, whilst FlyArystan was
awarded ‘Best Low Cost Carrier in Central
Asia and CIS’ for the first time.
Looking ahead to 2024, we expect to
deliver further growth across both brands,
underpinned by increased capacity and fleet
expansion. The launch of the new Almaty
International Terminal in mid-2024 is
expected to almost double capacity at our
main hub. While cost and inflation outlook
remains challenging, we retain one of the
lowest unit cost bases and highest operating
margins across the industry. More broadly,
our leading market position puts us in a
strong position to benefit from sustained
demand in the Group’s extended home
market and nearby mega markets, China
and India.
I would like to conclude by thanking all
my colleagues for their hard work and
commitment, and our customers for their
continued loyalty. As we embark on life as a
public company and the next stage of growth,
I would also like to thank my fellow members
of the Board of Directors and Samruk-Kazyna
and BAE Systems PLC for their continued
support, and to welcome our new
shareholders to the Group.
GROUP IPO
The Company was founded
with just USD 17 million
with no capital increase
during its 22 years in
business. Our increasing
success now calls for further
funding for future projects,
in particular infrastructure
development, and we
therefore took the decision
to go for a public offering
to help advance this. Our
position as the leading
airline in Central Asia
proved a huge attraction
for institutional and retail
investors alike and we
were particularly pleased
that the local community
in Kazakhstan piled in
to take 53% of the total
shares. Such was the level
of interest that the IPO was
oversubscribed multiple
times, despite upsizing the
offering to meet demand,
and reached USD 356
million. We have raised
USD 120 million for the
business and positioned to
finance our ambitious plans
for the ongoing success of
Air Astana and FlyArystan.
1 Adjusted EBITDAR for 2022 benefited from the impact of partial mobilization in Russia which caused an extraordinary market event (EME), inflow citizens from Russia to and through
Kazakhstan with impact of USD 16.2 million and a gain from fuel hedging (FH) amounting to USD 12.1 million.
12 13 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
BUSINE SS MODEL
A highly differentiated
business
RE SOURCE S A ND INPUTS
Brand and reputation
With over 20 years’ experience and major investment in both
its reputation and brand names, Air Astana and FlyArystan, the
Air Astana Group has established positive brand recognition.
This translates into significant commercial value and helps
foster good relationships with stakeholders.
Financial resources
The Air Astana Group has demonstrated operational and financial
resilience throughout the double crises – COVID and the Russian-
Ukrainian conflict. Through proactive management and financial
discipline, it has built an efficient cost structure that enables its
airlines to outperform most of their peers in profitability metrics.
People and culture
The Group’s focus on equal opportunities, training and development
opportunities helps it retain and attract new talent. Through its
corporate values and promotion of a culture of recognition, it has
created a positive work environment for its 6,499 employees.
Modern fleet
We are simplifying our fleet structure by focusing on Airbus
aircraft. Our fleet had average age of 5.3 years as of the end of
2023. The Group benefits from reduced maintenance costs and
better fuel consumption, which positions it competitively among
comparable international network and LCC carriers.
Service excellence
Air Astana has become a byword for outstanding excellence in
customer service among its peers. In 2023, for the eleventh time,
it was once again acknowledged as the ‘Best Airline in Central
Asia and CIS’ in the Skytrax World Airline Awards.
Partnerships
Our partnership strategy is to expand co-operation through
codeshare and interline arrangements in order to extend the reach
of our airlines and enrich our passenger offering through reciprocal
initiatives, such as loyalty programmes and benefits, and enhanced
airport maintenance services.
WH AT WE DO
The Air Astana Group is the largest airline group in Central Asia
and the Caucasus, providing scheduled, point-to-point and transit,
short-haul and long-haul air travel and cargo on domestic,
intra-regional and international routes across Central Asia, the
Caucasus, Europe (including Turkey), the Middle East and Asia
(including India and China). Targeting different geographies and
customer markets, its two differentiated but complementary
brands – Air Astana and FlyArystan – respectively command 30%
and 37% of market share on domestic and intra-regional routes
from Kazakhstan 1 .
HOW WE DO IT DELIVERING VA LUE FOR…
A strategy to achieve our vision
Our ambition for the future is to that the Air Astana Group
establishes its position as one of the finest airline groups in the
world. Our strategy to achieve this vision is built on three key
pillars: growth, operational efficiency and excellence.
Growth Efficiency Excellence
Read more about our Strategy on p. 26–29
…our shareholders
Our commitment to operational
excellence and strong fiscal
discipline enables us to achieve our
targets for growth and supports our
intention to pay dividends to our
shareholders.
DIVIDENDS PAID FOR 2022
USD 16.8m
…our passengers
Whether flying on our full-service
or low-cost carriers, we pride
ourselves on providing our
passengers with the award-
winning standards of hospitality,
comfort and safety for which we
are renowned.
AIR ASTANA’S CSAT RATING
79
FLYARYSTAN’S CSAT RATING
84
Maximising opportunity
Air travel between the 27 commercial airports in Kazakhstan
offers a compelling alternative to road and rail travel across
its vast land mass and will be a significant contributor to the
Group’s future growth. Outside our borders, we are already
tapping into the neighbouring Central Asia and Caucasus region
with its large populations and developing economies. While
further afield, we are now focused less price-sensitive, lifestyle
destinations, including the Maldives, Thailand, Montenegro,
Greece, Georgia, Turkey and the Red Sea.
…our people
Our employees are central to the
Group’s success and we reward
their loyalty and dedication by
offering competitive salary
packages and professional
development as well as providing
for their emotional well-being.
INVESTMENTS IN TRAINING
IN 2023
USD 6.7m
Strong financial discipline
Driven by operational efficiency and excellence, the backbone
of the Group remains its rigorous financial management, which
is key to maintaining one of the lowest unit cost performances
(measured by CASK) among both of its airlines’ international
competitors. Without this cost advantage, we would not be able
to compete effectively on air fares, stimulate market demand or
support market share and growth.
…our suppliers and partners
Mutual respect for our suppliers
and business partners is key to
developing positive, long-term
relationships with beneficial
outcomes for all parties.
PROCUREMENT FROM
LOCAL SUPPLIERS
31%
…Government, regulators
and local authorities
We create employment and
support the development of local,
social and economic infrastructures
in Kazakhstan, while ensuring that
we meet all relevant legislatory
and regulatory requirements.
TAXES PAID IN 2023
USD 104.1m
UNDERPINNED BY FAC TOR S
TH AT DE TER MINE OUR
LONG-TER M GROW TH Market trends and opportunities
Read more on p. 21–25
Stakeholders
Read more on p. 16–20
Sustainability
Read more on p. 42–66
Risk management
Read more on p. 70–79
Governance
Read more on p. 80–103
From the heart of
Eurasia, we are building
one of the finest airlines
in the world
R
e
g
i
o
n
a
l
r
o
u
t e s
D
o
m
e
s
t
i
c
r
o
u
t
e
s
C
h
a
r
t
e
r
L o w - c o s t
s
e
r v i c
e
s
C
a r
g o
I
n
t
e
r
n
a
t
i
o
n
a
l
l
o
n
g
-
h
a
u
l
r
o
u
t
e
s
1 Based on number of seats.
14 15 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
A highly differentiated
business
RE SOURCE S A ND INPUTS
Brand and reputation
With over 20 years’ experience and major investment in both
its reputation and brand names, Air Astana and FlyArystan, the
Air Astana Group has established positive brand recognition.
This translates into significant commercial value and helps
foster good relationships with stakeholders.
Financial resources
The Air Astana Group has demonstrated operational and financial
resilience throughout the double crises – COVID and the Russian-
Ukrainian conflict. Through proactive management and financial
discipline, it has built an efficient cost structure that enables its
airlines to outperform most of their peers in profitability metrics.
People and culture
The Group’s focus on equal opportunities, training and development
opportunities helps it retain and attract new talent. Through its
corporate values and promotion of a culture of recognition, it has
created a positive work environment for its 6,499 employees.
Modern fleet
We are simplifying our fleet structure by focusing on Airbus
aircraft. Our fleet had average age of 5.3 years as of the end of
2023. The Group benefits from reduced maintenance costs and
better fuel consumption, which positions it competitively among
comparable international network and LCC carriers.
Service excellence
Air Astana has become a byword for outstanding excellence in
customer service among its peers. In 2023, for the eleventh time,
it was once again acknowledged as the ‘Best Airline in Central
Asia and CIS’ in the Skytrax World Airline Awards.
Partnerships
Our partnership strategy is to expand co-operation through
codeshare and interline arrangements in order to extend the reach
of our airlines and enrich our passenger offering through reciprocal
initiatives, such as loyalty programmes and benefits, and enhanced
airport maintenance services.
WH AT WE DO
The Air Astana Group is the largest airline group in Central Asia
and the Caucasus, providing scheduled, point-to-point and transit,
short-haul and long-haul air travel and cargo on domestic,
intra-regional and international routes across Central Asia, the
Caucasus, Europe (including Turkey), the Middle East and Asia
(including India and China). Targeting different geographies and
customer markets, its two differentiated but complementary
brands – Air Astana and FlyArystan – respectively command 30%
and 37% of market share on domestic and intra-regional routes
from Kazakhstan 1 .
HOW WE DO IT DELIVERING VA LUE FOR…
A strategy to achieve our vision
Our ambition for the future is to that the Air Astana Group
establishes its position as one of the finest airline groups in the
world. Our strategy to achieve this vision is built on three key
pillars: growth, operational efficiency and excellence.
Growth Efficiency Excellence
Read more about our Strategy on p. 26–29
…our shareholders
Our commitment to operational
excellence and strong fiscal
discipline enables us to achieve our
targets for growth and supports our
intention to pay dividends to our
shareholders.
DIVIDENDS PAID FOR 2022
USD 16.8m
…our passengers
Whether flying on our full-service
or low-cost carriers, we pride
ourselves on providing our
passengers with the award-
winning standards of hospitality,
comfort and safety for which we
are renowned.
AIR ASTANA’S CSAT RATING
79
FLYARYSTAN’S CSAT RATING
84
Maximising opportunity
Air travel between the 27 commercial airports in Kazakhstan
offers a compelling alternative to road and rail travel across
its vast land mass and will be a significant contributor to the
Group’s future growth. Outside our borders, we are already
tapping into the neighbouring Central Asia and Caucasus region
with its large populations and developing economies. While
further afield, we are now focused less price-sensitive, lifestyle
destinations, including the Maldives, Thailand, Montenegro,
Greece, Georgia, Turkey and the Red Sea.
…our people
Our employees are central to the
Group’s success and we reward
their loyalty and dedication by
offering competitive salary
packages and professional
development as well as providing
for their emotional well-being.
INVESTMENTS IN TRAINING
IN 2023
USD 6.7m
Strong financial discipline
Driven by operational efficiency and excellence, the backbone
of the Group remains its rigorous financial management, which
is key to maintaining one of the lowest unit cost performances
(measured by CASK) among both of its airlines’ international
competitors. Without this cost advantage, we would not be able
to compete effectively on air fares, stimulate market demand or
support market share and growth.
…our suppliers and partners
Mutual respect for our suppliers
and business partners is key to
developing positive, long-term
relationships with beneficial
outcomes for all parties.
PROCUREMENT FROM
LOCAL SUPPLIERS
31%
…Government, regulators
and local authorities
We create employment and
support the development of local,
social and economic infrastructures
in Kazakhstan, while ensuring that
we meet all relevant legislatory
and regulatory requirements.
TAXES PAID IN 2023
USD 104.1m
UNDERPINNED BY FAC TOR S
TH AT DE TER MINE OUR
LONG-TER M GROW TH Market trends and opportunities
Read more on p. 21–25
Stakeholders
Read more on p. 16–20
Sustainability
Read more on p. 42–66
Risk management
Read more on p. 70–79
Governance
Read more on p. 80–103
From the heart of
Eurasia, we are building
one of the finest airlines
in the world
R
e
g
i
o
n
a
l
r
o
u
t e s
D
o
m
e
s
t
i
c
r
o
u
t
e
s
C
h
a
r
t
e
r
L o w - c o s t
s
e
r v i c
e
s
C
a r
g o
I
n
t
e
r
n
a
t
i
o
n
a
l
l
o
n
g
-
h
a
u
l
r
o
u
t
e
s
1 Based on number of seats.
14 15 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
STA K EHOLDER ENG AGEMENT A ND PRIORITIE S
Understanding what matters
to our stakeholders
Engaging with our stakeholders to grasp their needs and
expectations more fully – regardless of whether they are affected
by our operations or shape our long-term goals – is crucial for
maintaining our license to operate and for the ongoing prosperity
of our business. Through open and transparent communication
and interaction with all our stakeholders, we have established
robust and reliable relationships.
Link to strategy
Growth Efficiency Excellence
Overview
The expertise, skills and drive of our skilled workforce are
indispensable in shaping our success, both presently and in
future endeavors. Recognising their value, we are committed
to providing a secure and healthy work setting, alongside
competitive remuneration and equitable chances for
everyone. We support our employees’ career advancement
through comprehensive training and personalised growth
strategies. The cornerstone of our strategy towards employee
welfare is our steadfast adherence to strong business ethics
and corporate principles.
Material needs
Remuneration
Equal opportunities for all genders, different ages,
nationalities
Growth and personal development
Training and learning opportunities
Safe and healthy environment
Well-being and mental health
Business ethics
Corporate values
Link to strategy
Overview
Our relationship with our shareholders is both constructive
and enduring, bolstered by their backing for the sustained
and steady growth of our business, enhancing the Company’s
value with an eye towards environmental, social, and human
considerations. As a public listed company on three stock
exchanges, we are mindful of the need to follow all the
rules on disclosure and transparency, as well as ensuring
that every one of our shareholders has equal access to
Company information.
Material needs
Financial and sustainable performance and growth
Transparency
Corporate values and business ethics
ESG performance
Link to strategy
Overview
Our network encompasses a diverse range of suppliers
and business partners, from innovative start-ups and small
enterprises to extensive multinational corporations, all
essential in providing high-quality products and services
on time. Through a clear and efficient purchasing procedure,
coupled with mutually beneficial agreements, we have
fostered positive and enduring connections with our
suppliers and partners.
Material needs
Long-term positive relationships
Business ethics
Treatment of suppliers (timely payments)
Compliance with regulations
Procurement practices
Link to strategy
How we engaged in 2023
Code of Conduct (Code of Ethics)
Direct correspondence
Social media
How we engaged in 2023
Employee pulse surveys (to measure emotional concerns
and identify worries)
Regular (weekly/monthly) communication from the CEO
Employee Social Stability Index surveys, conducted by
the Centre for Social Co-operation and Communication,
which measure labour relations, well-being and
workplace satisfaction
Management conference with YouTube broadcast for
all employees
Departmental forums
Team building activities
4-month long challenge among employees targeting sport,
social responsibility and self-development
Face-to-face communication with management
HEART Employee Recognition Programme (HEART Awards)
Mobile application for sharing ideas and communicating
news and initiatives
Corporate magazine
Performance reviews
Whistleblowing line for reporting violations of legislation
and the Code of Conduct (fraud, corruption, discrimination,
unethical behaviour, etc.)
Feedback platform for mutual recognition among employees
Outcome of our engagement
In 2023 employee engagement has increased from 4.10
in 2022 to 4.13 out of 5 with a record high number of
respondents – 2,094.
The engagement ratio, which is the second most
important indicator, is the highest in history and is
6.8 engaged employees for each actively disengaged.
Confidence in leadership has also increased and now is in
the 59th percentile of Gallup’s database compared to 57th
in 2022.
How we engaged in 2023
Shareholders meeting(s)
Conferences
Reports and publications
Presentations to potential investors
Conference calls
Site visits
Direct communication
Outcome of our engagement
Following engagement with our shareholders, we were
able to secure their support for a range of strategic issues
related to the Company’s growth plans, financial and
sustainable performance.
Our numerous presentations to potential investors had a
positive impact on the successful outcome from our three
stock exchange listings.
There were 12 General Meetings of shareholders, which
among other matters addressed: approval of the annual
financial statements; dividend payment for 2022; approval
of the 5-year Business Plan and Annual Budget; election
of the members of the Board of Directors and Board
Committees for a new term; remuneration issues; fleet
renewal and expansion.
How we engaged in 2023 continued
Website
Whistleblowing line for reporting violations of legislation
and the Code of Conduct (fraud, corruption,
discrimination, unethical behaviour, etc.)
Visit to Maintenance, Repair, Overhaul (MRO) conferences
and industry exhibitions
Feedback surveys
Inviting core suppliers to Company events (e.g. new
aircraft presentations)
Outcome of our engagement
Agile supply chain processes allowed us to re-route major
supplies in order to stay compliant with the UK, EU and US
sanctions and make sure our operations were not
jeopardised.
In 2023, we carried out a number of supply chain
initiatives to reduce overheads as part of the Company’s
cost-cutting programme. We were able to decrease
significant overheads within the logistic process by
implementing new means of delivering routine shipments
and approaches to deliveries, economy of scale in
logistics, etc.
We receive up-to-date information and news within the
industry, which helps us to respond proactively. This is vital
given the current instability of our supply chains.
OUR PEOPLE
SH A REHOLDER S A ND POTENTIA L INVE STOR S
SUPPLIER S A ND BUSINE SS PA RTNER S
16 17 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
Understanding what matters
to our stakeholders
Engaging with our stakeholders to grasp their needs and
expectations more fully – regardless of whether they are affected
by our operations or shape our long-term goals – is crucial for
maintaining our license to operate and for the ongoing prosperity
of our business. Through open and transparent communication
and interaction with all our stakeholders, we have established
robust and reliable relationships.
Link to strategy
Growth Efficiency Excellence
Overview
The expertise, skills and drive of our skilled workforce are
indispensable in shaping our success, both presently and in
future endeavors. Recognising their value, we are committed
to providing a secure and healthy work setting, alongside
competitive remuneration and equitable chances for
everyone. We support our employees’ career advancement
through comprehensive training and personalised growth
strategies. The cornerstone of our strategy towards employee
welfare is our steadfast adherence to strong business ethics
and corporate principles.
Material needs
Remuneration
Equal opportunities for all genders, different ages,
nationalities
Growth and personal development
Training and learning opportunities
Safe and healthy environment
Well-being and mental health
Business ethics
Corporate values
Link to strategy
Overview
Our relationship with our shareholders is both constructive
and enduring, bolstered by their backing for the sustained
and steady growth of our business, enhancing the Company’s
value with an eye towards environmental, social, and human
considerations. As a public listed company on three stock
exchanges, we are mindful of the need to follow all the
rules on disclosure and transparency, as well as ensuring
that every one of our shareholders has equal access to
Company information.
Material needs
Financial and sustainable performance and growth
Transparency
Corporate values and business ethics
ESG performance
Link to strategy
Overview
Our network encompasses a diverse range of suppliers
and business partners, from innovative start-ups and small
enterprises to extensive multinational corporations, all
essential in providing high-quality products and services
on time. Through a clear and efficient purchasing procedure,
coupled with mutually beneficial agreements, we have
fostered positive and enduring connections with our
suppliers and partners.
Material needs
Long-term positive relationships
Business ethics
Treatment of suppliers (timely payments)
Compliance with regulations
Procurement practices
Link to strategy
How we engaged in 2023
Code of Conduct (Code of Ethics)
Direct correspondence
Social media
How we engaged in 2023
Employee pulse surveys (to measure emotional concerns
and identify worries)
Regular (weekly/monthly) communication from the CEO
Employee Social Stability Index surveys, conducted by
the Centre for Social Co-operation and Communication,
which measure labour relations, well-being and
workplace satisfaction
Management conference with YouTube broadcast for
all employees
Departmental forums
Team building activities
4-month long challenge among employees targeting sport,
social responsibility and self-development
Face-to-face communication with management
HEART Employee Recognition Programme (HEART Awards)
Mobile application for sharing ideas and communicating
news and initiatives
Corporate magazine
Performance reviews
Whistleblowing line for reporting violations of legislation
and the Code of Conduct (fraud, corruption, discrimination,
unethical behaviour, etc.)
Feedback platform for mutual recognition among employees
Outcome of our engagement
In 2023 employee engagement has increased from 4.10
in 2022 to 4.13 out of 5 with a record high number of
respondents – 2,094.
The engagement ratio, which is the second most
important indicator, is the highest in history and is
6.8 engaged employees for each actively disengaged.
Confidence in leadership has also increased and now is in
the 59th percentile of Gallup’s database compared to 57th
in 2022.
How we engaged in 2023
Shareholders meeting(s)
Conferences
Reports and publications
Presentations to potential investors
Conference calls
Site visits
Direct communication
Outcome of our engagement
Following engagement with our shareholders, we were
able to secure their support for a range of strategic issues
related to the Company’s growth plans, financial and
sustainable performance.
Our numerous presentations to potential investors had a
positive impact on the successful outcome from our three
stock exchange listings.
There were 12 General Meetings of shareholders, which
among other matters addressed: approval of the annual
financial statements; dividend payment for 2022; approval
of the 5-year Business Plan and Annual Budget; election
of the members of the Board of Directors and Board
Committees for a new term; remuneration issues; fleet
renewal and expansion.
How we engaged in 2023 continued
Website
Whistleblowing line for reporting violations of legislation
and the Code of Conduct (fraud, corruption,
discrimination, unethical behaviour, etc.)
Visit to Maintenance, Repair, Overhaul (MRO) conferences
and industry exhibitions
Feedback surveys
Inviting core suppliers to Company events (e.g. new
aircraft presentations)
Outcome of our engagement
Agile supply chain processes allowed us to re-route major
supplies in order to stay compliant with the UK, EU and US
sanctions and make sure our operations were not
jeopardised.
In 2023, we carried out a number of supply chain
initiatives to reduce overheads as part of the Company’s
cost-cutting programme. We were able to decrease
significant overheads within the logistic process by
implementing new means of delivering routine shipments
and approaches to deliveries, economy of scale in
logistics, etc.
We receive up-to-date information and news within the
industry, which helps us to respond proactively. This is vital
given the current instability of our supply chains.
OUR PEOPLE
SH A REHOLDER S A ND POTENTIA L INVE STOR S
SUPPLIER S A ND BUSINE SS PA RTNER S
16 17 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
STA K EHOLDER ENG AGEMENT A ND PRIORITIE S
CONTINUED
Link to strategy
Growth Efficiency Excellence
Overview
Our collaboration with government bodies, regulatory
agencies and local authorities is crucial for our operational
mandate. We contribute to both national and local tax
revenues and play a role in social and economic growth
by generating employment opportunities and aiding in the
development of infrastructure.
Material needs
Business ethics
Compliance with legislation and regulatory requirements
Compliance with the anti-corruption legislation of the
Republic of Kazakhstan
Safety during flights
Health and safety of employees
Sustainability
Link to strategy
How we engaged in 2023
Face-to-face communication
Working groups
Direct correspondence
Phone calls
Industry conferences and forums
Audits
Reports
Overview
The success of our business depends upon the customers
who choose to fly with us. Our customers are diverse and
drawn from a wide geographical range – local, regional and
international. With their safety and comfort of the highest
priority, our teams work hard to ensure that the customer
experience of travelling with us exceeds their expectations
and earns their loyalty. We engage with customers across
multiple touchpoints to listen and respond to their needs.
Material needs
Safety
Comfortable travel
High quality of services
Cost and affordability
Availability of ticketing offices at the airports and/or
in the city
Availability of call centre employees and other channels
for contacting the airline when problems arise
User-friendly app and website (ease of booking, making
changes, online check-in, etc.)
Ancillary services across the website, ticketing offices,
agencies and on check-in desks
On-time performance
Link to strategy
How we engaged in 2023
Various pre-flight communication channels in our Call Centre
and other contact centres (Live-web chat, an automated
WhatsApp chat-bot with live-consultant options)
Frontline teams interaction for providing high quality service
Customer Help Centre at help.airastana.com
Service Recovery Unit
Customer Experience & Service Training Unit
Online customer service evaluation survey onboard and
post-flight
Nomad Club Loyalty Programme
Codeshare and interline partnerships
Inflight safety instructions and videos
‘Tengri’ inflight magazine
Expanding operations within Kazakhstan and abroad
Website and mobile app
Social media
Whistleblowing line for reporting violations of legislation
and the Code of Conduct (fraud, corruption, discrimination,
unethical behaviour, etc.)
On-board standards coaches for qualitative feedback
Crew interaction and feedback to management in the form
of reports
Outcome of our engagement
Continuation of work with the Government, shareholders
and other national and international institutions to
represent and protect the interests of the Company.
Working on the implementation of the strategic concept
for the development of transport and logistics potential
of the Republic of Kazakhstan until 2030. In particular,
participation in the Working Group on the creation of
a Single Aviation Security Operator, which envisages
reforming the sphere of aviation security of the state.
Continuation of work on development and modification
of legislation and standards based on best international
practice.
Protecting the interests of the Company by holding a
number of meetings on issues concerning local airport
infrastructure aviation issues on the level of Country and
Eurasian Union.
Achieving successful results in negotiations with
Uzbekistan, the UK and Thailand and other countries,
which have allowed us to significantly expand our
international route network.
As a result of lengthy negotiations with the Ministry of
Health of the Republic of Kazakhstan in 2023, we achieved
a significant reduction in the time for checking and
obtaining Sanitation Engineering Systems (SES) certificates
for new aircraft from 18–20 days to 4–6 days.
Started work with the Ministry of Health of Kazakhstan
to simplify sanitary and quarantine control of transiting
aircraft within Customs Union territory, in order to
minimise delays in the departure of connecting and
other flights.
Outcome of our engagement
In developing our Customer Experience Strategy, we continue
following three key principles for our passengers:
Meaningful experience
Meaningful experience refers to the positive and significant
interactions and engagements that customers have with Air
Astana Group’s product, service, or brand in general. In the
context of our business and customer relations, creating a
meaningful customer experience strategy involves going
beyond basic transactions and aiming to establish emotional
connections and satisfaction. Key elements of a meaningful
customer experience for us include personalisation,
convenience, responsiveness, empathy and a focus on
meeting or exceeding customer expectations. Our main
objectives aim to build long-term relationships, customer
loyalty, and positive brand perceptions.
During 2023, examples of this included: Air Astana’s first Voice
of the Customer forum for Nomad Club frequent flyers, the
Summer `23 Taskforce volunteer project during the busy
holiday season and the introduction of the Zendesk Customer
Relationship Management (CRM) system and e-vouchers to
enhance premium services and disruption management.
Measurable experience
Measurable experience is one that helps us understand who
our current and future customers will be, what products they
need and how they perceive the Air Astana and FlyArystan
brands. Regular polls and surveys of service quality provide
invaluable feedback and enable us to take measures to
improve our service.
During recent years, the methods of collecting and analysing
data have evolved to give us a more comprehensive
understanding of the preferences and expectations of our
customers. But, more importantly, the knowledge gained
from our research is communicated across all departments
highlighting both positive results and improvements needed
in products and service delivery with the core objective of
aligning our offering to create consistent service excellence.
In 2023, we introduced an on-board survey, which is available in
in-flight entertainment system to every customer flying with us,
with automated data collection feeding results to a dynamic
dashboard. Alongside this we continued to survey passengers
after each flight by post-flight survey notifications, enabling
us to monitor the customer experience through daily ratings
and sentiments. Towards the end of the year, we launched a
Mystery Shopper project to help us measure whether we are
consistent in our product and services delivery against our
existing standards.
GOVERNMENT, REGUL ATOR S A ND LOC A L AUTHORITIE S
PA SSENGER S
18 19 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
Link to strategy
Growth Efficiency Excellence
Overview
Our collaboration with government bodies, regulatory
agencies and local authorities is crucial for our operational
mandate. We contribute to both national and local tax
revenues and play a role in social and economic growth
by generating employment opportunities and aiding in the
development of infrastructure.
Material needs
Business ethics
Compliance with legislation and regulatory requirements
Compliance with the anti-corruption legislation of the
Republic of Kazakhstan
Safety during flights
Health and safety of employees
Sustainability
Link to strategy
How we engaged in 2023
Face-to-face communication
Working groups
Direct correspondence
Phone calls
Industry conferences and forums
Audits
Reports
Overview
The success of our business depends upon the customers
who choose to fly with us. Our customers are diverse and
drawn from a wide geographical range – local, regional and
international. With their safety and comfort of the highest
priority, our teams work hard to ensure that the customer
experience of travelling with us exceeds their expectations
and earns their loyalty. We engage with customers across
multiple touchpoints to listen and respond to their needs.
Material needs
Safety
Comfortable travel
High quality of services
Cost and affordability
Availability of ticketing offices at the airports and/or
in the city
Availability of call centre employees and other channels
for contacting the airline when problems arise
User-friendly app and website (ease of booking, making
changes, online check-in, etc.)
Ancillary services across the website, ticketing offices,
agencies and on check-in desks
On-time performance
Link to strategy
How we engaged in 2023
Various pre-flight communication channels in our Call Centre
and other contact centres (Live-web chat, an automated
WhatsApp chat-bot with live-consultant options)
Frontline teams interaction for providing high quality service
Customer Help Centre at help.airastana.com
Service Recovery Unit
Customer Experience & Service Training Unit
Online customer service evaluation survey onboard and
post-flight
Nomad Club Loyalty Programme
Codeshare and interline partnerships
Inflight safety instructions and videos
‘Tengri’ inflight magazine
Expanding operations within Kazakhstan and abroad
Website and mobile app
Social media
Whistleblowing line for reporting violations of legislation
and the Code of Conduct (fraud, corruption, discrimination,
unethical behaviour, etc.)
On-board standards coaches for qualitative feedback
Crew interaction and feedback to management in the form
of reports
Outcome of our engagement
Continuation of work with the Government, shareholders
and other national and international institutions to
represent and protect the interests of the Company.
Working on the implementation of the strategic concept
for the development of transport and logistics potential
of the Republic of Kazakhstan until 2030. In particular,
participation in the Working Group on the creation of
a Single Aviation Security Operator, which envisages
reforming the sphere of aviation security of the state.
Continuation of work on development and modification
of legislation and standards based on best international
practice.
Protecting the interests of the Company by holding a
number of meetings on issues concerning local airport
infrastructure aviation issues on the level of Country and
Eurasian Union.
Achieving successful results in negotiations with
Uzbekistan, the UK and Thailand and other countries,
which have allowed us to significantly expand our
international route network.
As a result of lengthy negotiations with the Ministry of
Health of the Republic of Kazakhstan in 2023, we achieved
a significant reduction in the time for checking and
obtaining Sanitation Engineering Systems (SES) certificates
for new aircraft from 18–20 days to 4–6 days.
Started work with the Ministry of Health of Kazakhstan
to simplify sanitary and quarantine control of transiting
aircraft within Customs Union territory, in order to
minimise delays in the departure of connecting and
other flights.
Outcome of our engagement
In developing our Customer Experience Strategy, we continue
following three key principles for our passengers:
Meaningful experience
Meaningful experience refers to the positive and significant
interactions and engagements that customers have with Air
Astana Group’s product, service, or brand in general. In the
context of our business and customer relations, creating a
meaningful customer experience strategy involves going
beyond basic transactions and aiming to establish emotional
connections and satisfaction. Key elements of a meaningful
customer experience for us include personalisation,
convenience, responsiveness, empathy and a focus on
meeting or exceeding customer expectations. Our main
objectives aim to build long-term relationships, customer
loyalty, and positive brand perceptions.
During 2023, examples of this included: Air Astana’s first Voice
of the Customer forum for Nomad Club frequent flyers, the
Summer `23 Taskforce volunteer project during the busy
holiday season and the introduction of the Zendesk Customer
Relationship Management (CRM) system and e-vouchers to
enhance premium services and disruption management.
Measurable experience
Measurable experience is one that helps us understand who
our current and future customers will be, what products they
need and how they perceive the Air Astana and FlyArystan
brands. Regular polls and surveys of service quality provide
invaluable feedback and enable us to take measures to
improve our service.
During recent years, the methods of collecting and analysing
data have evolved to give us a more comprehensive
understanding of the preferences and expectations of our
customers. But, more importantly, the knowledge gained
from our research is communicated across all departments
highlighting both positive results and improvements needed
in products and service delivery with the core objective of
aligning our offering to create consistent service excellence.
In 2023, we introduced an on-board survey, which is available in
in-flight entertainment system to every customer flying with us,
with automated data collection feeding results to a dynamic
dashboard. Alongside this we continued to survey passengers
after each flight by post-flight survey notifications, enabling
us to monitor the customer experience through daily ratings
and sentiments. Towards the end of the year, we launched a
Mystery Shopper project to help us measure whether we are
consistent in our product and services delivery against our
existing standards.
GOVERNMENT, REGUL ATOR S A ND LOC A L AUTHORITIE S
PA SSENGER S
18 19 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
114.4%
3.9%
Air Astana RPK IATA RPK
6.3%
-11.4%
Air Astana RPK IATA RPK STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
STA K EHOLDER ENG AGEMENT A ND PRIORITIE S CONTINUED
Link to strategy
Growth Efficiency Excellence
Memorable experience
Memorable experiences are created by delivering enjoyable
moments and positive emotions that make for the best lasting
impressions. Through our emphasis on customer experience
and service excellence, we aim to win customer loyalty by
making their journey with us both easy and comfortable,
whether for business or leisure. We analyse our customer
experience metrics on a monthly basis and identify impacting
factors. During 2022, we had some dips in our ratings due to
the civil unrest early in the year in Kazakhstan and during the
summer months when, along with rest of the airline industry,
the surge in passenger travel after the pandemic overloaded
airport operations globally. In 2023, we managed this more
effectively and achieved even better results than we had
before the pandemic.
Attaining high customer satisfaction ratings is key to the
high standards that we have set ourselves with targets of: Net
Promoter Score (NPS) at 40 for Air Astana and 35 for FlyArystan;
Customer Satisfaction Ratings (CSAT) at 80 for both airlines.
In 2023, based on 22,800+ responses, Air Astana’s NPS was 46
and CSAT 79 and FlyArystan achieved a NPS of 37 and CSAT of
84 based on 35,800+ responses. Not only have we more than
achieved our targets for the year but in general the ratings for
our customer experience performance is higher than or close to
the industry benchmarks for global airlines of NPS at 22 and
CSAT of 82, placing us amongst the top airlines in the world for
customer satisfaction.
Once again, we gained international recognition for the
excellent quality of on-board service and offering. Air Astana
was rated a four-star airline by Skytrax and ranks among the
top 50 airlines in the world. In the Skytrax World Airline
Awards for 2023, Air Astana was named ‘Best Airline in
Central Asia and CIS’ for the 11th time and, for the second
time, recognised for ‘Best Service in Central Asia and CIS’.
FlyArystan was named the ‘Best Low-cost Airline in Central
Asia and CIS’. See the full list of awards on page 38.
Since 2022 a new CRM system has been introduced to
communicate with customers via Help Centre portal on help.
airastana.com. This year our teams constantly worked on
improvements:
First reply time in September 2023 has been reduced by
88% from 6 hours to 41 minutes from the previous year,
and ahead of the industry average by 25 hours.
Full Resolution Time has been reduced to 1 hour 12 minutes
in September 2023 compared to 10 hours 45 minutes a year
ago, while the industry average was 55 hours.
CSAT on Help Centre reached 90 in September 2023
which is 7% up on last year.
In March 2023 we opened our Regional Call Centre in
Pavlodar. As of today we have hired 19 ticketing agents
and two team leaders, very dedicated, bright young people,
supporting each other and ready to learn more. They have
already answered 13,054 calls by December 2023, which is
up 150% from what it was when they started in March, and
it already makes up over 25% of all calls we receive in our
call centres. Regional Call Centre in Pavlodar provides support
to our customers along with our main call centres located in
Almaty and Astana. Opening this Regional Call Centre was
aligned with Company’s ESG Strategy to provide equal
opportunities independent from age, gender, nationality
or place of residence.
PA SSENGER S CONTINUED
M A RK E T OVERVIE W
Air travel
demand is bouncing back
However, leisure travel is more closely
linked to seasonality and particularly
pronounced across Europe, which was
somewhat surprised by the sheer volume
of passengers clamouring to take to the air
in the summer of 2023. In 2019, they had
scheduled for a 50% increase in demand
during the holiday season; the increase to
65% in 2023 created delays and frustration
for passengers and employees alike.
The impact in North America, for example,
is not so extreme with vacations to warm
beach destinations on short flights taken
all year round.
But never look a gift horse in the mouth:
flexibility and adapting to this increased
seasonality has to be the solution.
Some airlines have already taken steps
by moving crew training sessions and only
allowing employees to take annual leave in
off-peak periods. Maintenance programmes
have been adjusted to take this into account.
Increased use of automated processes
such as self check-in help to ease the
pressure. At the other end of the spectrum,
identifying and operating more flights to
those countercyclical lifestyle destinations
offering winter sunshine as well as seeking
out commercial and international MICE
(meetings, incentives, conferences and
exhibitions) contracts can boost revenue
during periods of low demand.
Air transport for passengers
and goods is inextricably linked
to global economic development.
Connectivity between countries
and cities is a vital enabler
across all business and social
landscapes. COVID travel
restrictions dramatically
interrupted connectivity in 2020
with unique city pairs falling by
more than 28% and the closure
of almost 6,000 flight routes.
More recently, flight restrictions to and from
Russia have also had a negative impact, but
the opening up of the Chinese market is
already having a positive effect. The IATA
connectivity index measures scheduled
passenger capacity weighted against the
economic scale of destinations served.
In 2023, international connectivity had
recovered to 89.5% of pre-pandemic levels
and domestic connectivity to 97.5%, 12ppt
above 2022 1 . It is anticipated that this will
continue to improve in 2024.
What is also interesting to note is the
changing shape of passenger demand and
how this impacts airlines. COVID left the
airline industry with two distinct but very
different scenarios. For many, business travel
is now a thing of the past as Zoom and
Teams technology have negated the need
to leave their office (or even the comfort of
their home) to connect with colleagues on
the other side of the world. This created
a massive hole in airline revenue, which
looked like it could be filled by what has
been termed by some as ‘revenge travel’ –
the desire to venture to far flung corners and
exotic locations after months of lock down.
And, certainly, lifestyle destinations were
snapped up by passengers as a new era of
tourism took off.
The restoration of connectivity is powering the global economy
as people travel to do business, further their educations, take hard-
earned vacations and much more. But to maximise the benefits of
air travel in the post-pandemic world, governments need to take a
strategic approach. That means providing cost-efficient infrastructure
to meet demand, incentivising sustainable aviation fuel (SAF)
production to meet our net zero carbon emission goal by 2050
and adopting regulations that deliver a clear cost-benefit.
Willie Walsh
IATA Director General
Domestic RPK (2023 vs 2019) International RPK (2023 vs 2019)
20 21 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
3.9%
Air Astana RPK IATA RPK
6.3%
-11.4%
Air Astana RPK IATA RPK STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
STA K EHOLDER ENG AGEMENT A ND PRIORITIE S CONTINUED
Link to strategy
Growth Efficiency Excellence
Memorable experience
Memorable experiences are created by delivering enjoyable
moments and positive emotions that make for the best lasting
impressions. Through our emphasis on customer experience
and service excellence, we aim to win customer loyalty by
making their journey with us both easy and comfortable,
whether for business or leisure. We analyse our customer
experience metrics on a monthly basis and identify impacting
factors. During 2022, we had some dips in our ratings due to
the civil unrest early in the year in Kazakhstan and during the
summer months when, along with rest of the airline industry,
the surge in passenger travel after the pandemic overloaded
airport operations globally. In 2023, we managed this more
effectively and achieved even better results than we had
before the pandemic.
Attaining high customer satisfaction ratings is key to the
high standards that we have set ourselves with targets of: Net
Promoter Score (NPS) at 40 for Air Astana and 35 for FlyArystan;
Customer Satisfaction Ratings (CSAT) at 80 for both airlines.
In 2023, based on 22,800+ responses, Air Astana’s NPS was 46
and CSAT 79 and FlyArystan achieved a NPS of 37 and CSAT of
84 based on 35,800+ responses. Not only have we more than
achieved our targets for the year but in general the ratings for
our customer experience performance is higher than or close to
the industry benchmarks for global airlines of NPS at 22 and
CSAT of 82, placing us amongst the top airlines in the world for
customer satisfaction.
Once again, we gained international recognition for the
excellent quality of on-board service and offering. Air Astana
was rated a four-star airline by Skytrax and ranks among the
top 50 airlines in the world. In the Skytrax World Airline
Awards for 2023, Air Astana was named ‘Best Airline in
Central Asia and CIS’ for the 11th time and, for the second
time, recognised for ‘Best Service in Central Asia and CIS’.
FlyArystan was named the ‘Best Low-cost Airline in Central
Asia and CIS’. See the full list of awards on page 38.
Since 2022 a new CRM system has been introduced to
communicate with customers via Help Centre portal on help.
airastana.com. This year our teams constantly worked on
improvements:
First reply time in September 2023 has been reduced by
88% from 6 hours to 41 minutes from the previous year,
and ahead of the industry average by 25 hours.
Full Resolution Time has been reduced to 1 hour 12 minutes
in September 2023 compared to 10 hours 45 minutes a year
ago, while the industry average was 55 hours.
CSAT on Help Centre reached 90 in September 2023
which is 7% up on last year.
In March 2023 we opened our Regional Call Centre in
Pavlodar. As of today we have hired 19 ticketing agents
and two team leaders, very dedicated, bright young people,
supporting each other and ready to learn more. They have
already answered 13,054 calls by December 2023, which is
up 150% from what it was when they started in March, and
it already makes up over 25% of all calls we receive in our
call centres. Regional Call Centre in Pavlodar provides support
to our customers along with our main call centres located in
Almaty and Astana. Opening this Regional Call Centre was
aligned with Company’s ESG Strategy to provide equal
opportunities independent from age, gender, nationality
or place of residence.
PA SSENGER S CONTINUED
M A RK E T OVERVIE W
Air travel
demand is bouncing back
However, leisure travel is more closely
linked to seasonality and particularly
pronounced across Europe, which was
somewhat surprised by the sheer volume
of passengers clamouring to take to the air
in the summer of 2023. In 2019, they had
scheduled for a 50% increase in demand
during the holiday season; the increase to
65% in 2023 created delays and frustration
for passengers and employees alike.
The impact in North America, for example,
is not so extreme with vacations to warm
beach destinations on short flights taken
all year round.
But never look a gift horse in the mouth:
flexibility and adapting to this increased
seasonality has to be the solution.
Some airlines have already taken steps
by moving crew training sessions and only
allowing employees to take annual leave in
off-peak periods. Maintenance programmes
have been adjusted to take this into account.
Increased use of automated processes
such as self check-in help to ease the
pressure. At the other end of the spectrum,
identifying and operating more flights to
those countercyclical lifestyle destinations
offering winter sunshine as well as seeking
out commercial and international MICE
(meetings, incentives, conferences and
exhibitions) contracts can boost revenue
during periods of low demand.
Air transport for passengers
and goods is inextricably linked
to global economic development.
Connectivity between countries
and cities is a vital enabler
across all business and social
landscapes. COVID travel
restrictions dramatically
interrupted connectivity in 2020
with unique city pairs falling by
more than 28% and the closure
of almost 6,000 flight routes.
More recently, flight restrictions to and from
Russia have also had a negative impact, but
the opening up of the Chinese market is
already having a positive effect. The IATA
connectivity index measures scheduled
passenger capacity weighted against the
economic scale of destinations served.
In 2023, international connectivity had
recovered to 89.5% of pre-pandemic levels
and domestic connectivity to 97.5%, 12ppt
above 2022 1 . It is anticipated that this will
continue to improve in 2024.
What is also interesting to note is the
changing shape of passenger demand and
how this impacts airlines. COVID left the
airline industry with two distinct but very
different scenarios. For many, business travel
is now a thing of the past as Zoom and
Teams technology have negated the need
to leave their office (or even the comfort of
their home) to connect with colleagues on
the other side of the world. This created
a massive hole in airline revenue, which
looked like it could be filled by what has
been termed by some as ‘revenge travel’ –
the desire to venture to far flung corners and
exotic locations after months of lock down.
And, certainly, lifestyle destinations were
snapped up by passengers as a new era of
tourism took off.
The restoration of connectivity is powering the global economy
as people travel to do business, further their educations, take hard-
earned vacations and much more. But to maximise the benefits of
air travel in the post-pandemic world, governments need to take a
strategic approach. That means providing cost-efficient infrastructure
to meet demand, incentivising sustainable aviation fuel (SAF)
production to meet our net zero carbon emission goal by 2050
and adopting regulations that deliver a clear cost-benefit.
Willie Walsh
IATA Director General
Domestic RPK (2023 vs 2019) International RPK (2023 vs 2019)
20 21 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
Domestic
1
2
3
4
1. FlyArystan
2. Air Astana
3. SCAT
4. Qazaq Air
Source: CIRIUM SRS Industry Data.
37%
30%
29%
4%
International
1
3 4
5
2
7
6
1. Air Astana
2. SCAT
3. Aeroflot
4. Turkish Airlines
5. FlyArystan
6. flydubai
7. Others
Source: CIRIUM SRS Industry Data.
28%
15%
9%
7%
7%
5%
29% STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
M A RK E T OVERVIE W CONTINUED
With slower opening of some markets,
international passenger traffic did not
increase quite so dramatically as it did in
2022 (up 152.7%), when the vast majority
of COVID-related travel restrictions were
lifted. Nevertheless, international RPKs
continued to climb and were up 41.6%
year-on-year, achieving 88.6% of 2019
levels. There was also an upward trend in
ASKs with a 34.4% increase, 87.7% of 2019
levels, while PLF improved by 4.2ppt
coming in at 82.8% and achieving 99.2%
of its pre-pandemic results.
Domestic travel RPKs rose by 30.4%
during 2023, compared with 2022. Buoyancy
throughout the year in domestic traffic was
positively impacted by China – the largest
domestic market in the world – lifting COVID
restrictions in January. China’s domestic
traffic increased by 138.8% year-on-year and
is already 7.1% above 2019 levels. Most of
the monitored markets – with the exception
of Australia and Japan – actually passed the
pre-pandemic marker by halfway through
2023, with total domestic RPKs finishing the
year-end at 3.9% above 2019 levels.
Asia-Pacific
Benefiting from the opening up of the
Chinese market, Asia Pacific once again
returned the strongest year-over-year
rate among the regions. RPKs more than
doubled with a 126.1% rise in international
traffic during 2023, compared with 2022,
but this still remains 27.7% below pre-
pandemic levels; ASKs rose by 101.8% and
PLF to 9.0ppt at 83.1%. With the ramp-up of
airline operations and tourism returning, a
full recovery is expected during 2024.
However, a more granular analysis confirms
that recovery within the region has not been
uniform. Several countries within Central
Asia recorded stellar performances during
the first half of the year, with RPKs and ASKs
climbing above 2019 levels for the first time.
Tajikistan led the recovery and was in good
company with Kazakhstan, Kyrgyzstan and
Uzbekistan; these last two having also
improved their load factor compared with
2019. Only Turkmenistan has yet to recover
to pre-pandemic levels.
Longer term, Asia Pacific is the most
likely region to experience rapid growth in
passenger traffic. Between 2019 and 2040,
passenger numbers are forecast to increase
by 5.5% annually and reach a total of 4
billion, which would equate to more than
50% of global passenger demand. Visa-free
passage for Indian citizens wishing to travel
to Kazakhstan saw a substantial growth in
passenger numbers in 2023 compared with
2022. Between 2019 and 2040, travel from
India is forecast to rise 6% annually and
increase to half a billion in total.
Europe
International passenger traffic in Europe was
the slowest within the regions and its results
still down on 2019 levels. Year-on-year, RPKs
only increased by 22.0%, ASKs by 17.5% and
PLF rose by 3.1ppt to 83.8%. However, for the
first time since the start of the pandemic,
traffic in December was higher than in the
corresponding month in 2019.
Middle East
In the Middle East, international RPKs rose
by 33.3% traffic in 2023, compared with
2022. Capacity measured in ASKs increased
by 26.0% while PLF climbed 4.4ppt to 80.1%,
reaching 3.8ppt above 2019 levels.
Kazakh aviation market
Kazakhstan has 20 airports, 18 of which
are open to international commercial
flights. They are either Government-owned
or privately owned – except for Aktau
International Airport, which is owned
by a public-private partnership.
According to the Aviation Administration
of Kazakhstan (AAK), there are 920 aircraft
on the Kazakhstan civil aircraft register,
17% of which are airliners. The number of
commercial passengers using Kazakh airlines
has increased steadily from 7.3 million in
2019 to 9.5 million in 2021 and almost
11 million in 2022.
The number of Kazakh air operators
registered by AAK made up 53 in 2023.
Air Astana is one of seven airlines eligible
to fly to EU countries; the other operators
are Comlux, Prime Aviation, FlyJet.kz,
KazAirJet, Jupiter Jet and SCAT. Domestic
flights are carried out by six airlines –
Air Astana, FlyArystan, SCAT, Qazaq Air,
Southern Sky and Zhetysu.
Kazakhstan continued to develop its air
transportation capabilities in 2023. The Civil
Aviation Committee is reforming the civil
aviation industry, with the aim of adopting
a European Management model within 2–3
years. As part of this, the AAK is now
responsible for the industry’s control
and supervisory functions, improving
effectiveness and preventing corruption.
In 2022, Kazakhstan’s flight safety level
was raised from 73% to 84% in an audit
carried out by the International Civil
Aviation Organisation (ICAO). This is 15%
higher than the global average recorded
in 2021. The Civil Aviation Committee
co-operates closely with both the ICAO
and the European Aviation Safety Agency
(EASA), who recognised Kazakhstan’s
efforts to uphold and improve flight
safety. There are no restrictions imposed
on Kazakh airlines flying into European
destinations; flights are bound only by
existing intergovernmental agreements
on air traffic.
The ICAO has no plans to conduct another
safety audit of Kazakhstan in the foreseeable
future given that compliance with safety
standards is comparable to the average of
other member countries covered by the
European Aviation Safety Agency (EASA).
The Kazakhstan Government is committed
to introducing more international flights and
continues implementing its open skies
policy to attract new foreign air carriers.
Notably, this included flights to Doha
(Qatar), Ankara (Turkey), Medina (Saudi
Arabia), Baku (Azerbaijan) and Dushanbe
(Tajikistan) during the spring and summer.
Alongside this, there would also be an
increase in flights from: Astana, Almaty,
Aktau, Turkistan and Atyrau to Istanbul;
from Astana and Almaty to Antalya; from
Almaty to Baku, Tbilisi, Phuket and Male.
Kazakhstan plans to open flights to
Pakistan, introducing new routes from
Almaty to Karachi and Lahore, and to
increase the number of flights to India
on the Almaty-Delhi route, to China on
the Almaty-Chengdu route, to the UK on
the Almaty-London route, as well as from
Almaty to Bodrum, Batumi, Heraklion,
Podgorica and from Astana to Tbilisi and
Podgorica. Flights are also expected to
resume on the Astana-Bishkek, Aktau-
Yerevan, Almaty-Samarkand, and
Shymkent-Kutaisi routes.
Air Astana launched twice-weekly flights
to Tel Aviv in September 2023 but had to
terminate these a month later due to the
conflict in the region.
Domestic market
There can be no doubt that the launch
of FlyArystan had a staggering impact on
Kazakhstan’s domestic market – both before,
during and after the pandemic – and also
aided the rapid recovery of the overall air
transport market. Following the launch of
the airline in May 2019, domestic passenger
traffic was boosted in the second half of the
year, increasing by 9% to 8.6 million for the
full year (2018: 7.9 million). Today,
Kazakhstan has the fastest growing
domestic market in the world.
Global aviation markets
Air passenger traffic
2023, and particularly the last quarter,
delivered strong results for both international
and domestic passenger traffic across all
regions. Projections are that, by the end
of 2024, global air passenger numbers
will have fully recovered to 2019 levels.
This could perhaps be the last time when
there will be any need to refer back
to pre-pandemic levels to gauge how well
the industry is performing. The continuing
Russia-Ukraine and more recent Middle East
wars, compounded by the ensuing Red Sea
situation, are all factors that will still need to
be taken into consideration.
And, while the recovery in travel is good
news, Willy Walsh, Director General of Air
Industry Transport Association, is keen to
point out that, in order to maximise the
benefits of air travel in the post-pandemic
world, governments need to take a
strategic approach. Putting cost-efficient
infrastructures in place to meet demand,
incentivising the production of sustainable
aviation fuel (SAF) to meet the 2050 target
for net-zero carbon emissions and adopting
regulations that deliver clear cost-benefits
– these all have a part to play in helping
airlines increase the global prosperity and
well-being of people and businesses.
Global passenger markets
Overall airline traffic, measured in revenue
passenger kilometres (RPKs), increased
36.9% year-on-year in 2023, and delivered
total revenues of USD 896 billion. With a
particularly strong last quarter, full year
traffic was within touching distance of
2019 levels at 94.1%. This is a significant
improvement over 2022 when it stood
at 68.7%. Overall capacity measured in
available seat-kilometres (ASKs) also grew,
by 24.1% year-on-year and to 94.4% of
pre-pandemic levels. Still under the 2019
threshold, but only by 0.3 ppt, the global
passenger load factor (PLF) stood at 82.3%.
1 Source: IATA Global Outlook for Air Transport, December 2023.
Air Astana’s and FlyArystan’s market
share in Kazakhstan
22 23 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
1
2
3
4
1. FlyArystan
2. Air Astana
3. SCAT
4. Qazaq Air
Source: CIRIUM SRS Industry Data.
37%
30%
29%
4%
International
1
3 4
5
2
7
6
1. Air Astana
2. SCAT
3. Aeroflot
4. Turkish Airlines
5. FlyArystan
6. flydubai
7. Others
Source: CIRIUM SRS Industry Data.
28%
15%
9%
7%
7%
5%
29% STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
M A RK E T OVERVIE W CONTINUED
With slower opening of some markets,
international passenger traffic did not
increase quite so dramatically as it did in
2022 (up 152.7%), when the vast majority
of COVID-related travel restrictions were
lifted. Nevertheless, international RPKs
continued to climb and were up 41.6%
year-on-year, achieving 88.6% of 2019
levels. There was also an upward trend in
ASKs with a 34.4% increase, 87.7% of 2019
levels, while PLF improved by 4.2ppt
coming in at 82.8% and achieving 99.2%
of its pre-pandemic results.
Domestic travel RPKs rose by 30.4%
during 2023, compared with 2022. Buoyancy
throughout the year in domestic traffic was
positively impacted by China – the largest
domestic market in the world – lifting COVID
restrictions in January. China’s domestic
traffic increased by 138.8% year-on-year and
is already 7.1% above 2019 levels. Most of
the monitored markets – with the exception
of Australia and Japan – actually passed the
pre-pandemic marker by halfway through
2023, with total domestic RPKs finishing the
year-end at 3.9% above 2019 levels.
Asia-Pacific
Benefiting from the opening up of the
Chinese market, Asia Pacific once again
returned the strongest year-over-year
rate among the regions. RPKs more than
doubled with a 126.1% rise in international
traffic during 2023, compared with 2022,
but this still remains 27.7% below pre-
pandemic levels; ASKs rose by 101.8% and
PLF to 9.0ppt at 83.1%. With the ramp-up of
airline operations and tourism returning, a
full recovery is expected during 2024.
However, a more granular analysis confirms
that recovery within the region has not been
uniform. Several countries within Central
Asia recorded stellar performances during
the first half of the year, with RPKs and ASKs
climbing above 2019 levels for the first time.
Tajikistan led the recovery and was in good
company with Kazakhstan, Kyrgyzstan and
Uzbekistan; these last two having also
improved their load factor compared with
2019. Only Turkmenistan has yet to recover
to pre-pandemic levels.
Longer term, Asia Pacific is the most
likely region to experience rapid growth in
passenger traffic. Between 2019 and 2040,
passenger numbers are forecast to increase
by 5.5% annually and reach a total of 4
billion, which would equate to more than
50% of global passenger demand. Visa-free
passage for Indian citizens wishing to travel
to Kazakhstan saw a substantial growth in
passenger numbers in 2023 compared with
2022. Between 2019 and 2040, travel from
India is forecast to rise 6% annually and
increase to half a billion in total.
Europe
International passenger traffic in Europe was
the slowest within the regions and its results
still down on 2019 levels. Year-on-year, RPKs
only increased by 22.0%, ASKs by 17.5% and
PLF rose by 3.1ppt to 83.8%. However, for the
first time since the start of the pandemic,
traffic in December was higher than in the
corresponding month in 2019.
Middle East
In the Middle East, international RPKs rose
by 33.3% traffic in 2023, compared with
2022. Capacity measured in ASKs increased
by 26.0% while PLF climbed 4.4ppt to 80.1%,
reaching 3.8ppt above 2019 levels.
Kazakh aviation market
Kazakhstan has 20 airports, 18 of which
are open to international commercial
flights. They are either Government-owned
or privately owned – except for Aktau
International Airport, which is owned
by a public-private partnership.
According to the Aviation Administration
of Kazakhstan (AAK), there are 920 aircraft
on the Kazakhstan civil aircraft register,
17% of which are airliners. The number of
commercial passengers using Kazakh airlines
has increased steadily from 7.3 million in
2019 to 9.5 million in 2021 and almost
11 million in 2022.
The number of Kazakh air operators
registered by AAK made up 53 in 2023.
Air Astana is one of seven airlines eligible
to fly to EU countries; the other operators
are Comlux, Prime Aviation, FlyJet.kz,
KazAirJet, Jupiter Jet and SCAT. Domestic
flights are carried out by six airlines –
Air Astana, FlyArystan, SCAT, Qazaq Air,
Southern Sky and Zhetysu.
Kazakhstan continued to develop its air
transportation capabilities in 2023. The Civil
Aviation Committee is reforming the civil
aviation industry, with the aim of adopting
a European Management model within 2–3
years. As part of this, the AAK is now
responsible for the industry’s control
and supervisory functions, improving
effectiveness and preventing corruption.
In 2022, Kazakhstan’s flight safety level
was raised from 73% to 84% in an audit
carried out by the International Civil
Aviation Organisation (ICAO). This is 15%
higher than the global average recorded
in 2021. The Civil Aviation Committee
co-operates closely with both the ICAO
and the European Aviation Safety Agency
(EASA), who recognised Kazakhstan’s
efforts to uphold and improve flight
safety. There are no restrictions imposed
on Kazakh airlines flying into European
destinations; flights are bound only by
existing intergovernmental agreements
on air traffic.
The ICAO has no plans to conduct another
safety audit of Kazakhstan in the foreseeable
future given that compliance with safety
standards is comparable to the average of
other member countries covered by the
European Aviation Safety Agency (EASA).
The Kazakhstan Government is committed
to introducing more international flights and
continues implementing its open skies
policy to attract new foreign air carriers.
Notably, this included flights to Doha
(Qatar), Ankara (Turkey), Medina (Saudi
Arabia), Baku (Azerbaijan) and Dushanbe
(Tajikistan) during the spring and summer.
Alongside this, there would also be an
increase in flights from: Astana, Almaty,
Aktau, Turkistan and Atyrau to Istanbul;
from Astana and Almaty to Antalya; from
Almaty to Baku, Tbilisi, Phuket and Male.
Kazakhstan plans to open flights to
Pakistan, introducing new routes from
Almaty to Karachi and Lahore, and to
increase the number of flights to India
on the Almaty-Delhi route, to China on
the Almaty-Chengdu route, to the UK on
the Almaty-London route, as well as from
Almaty to Bodrum, Batumi, Heraklion,
Podgorica and from Astana to Tbilisi and
Podgorica. Flights are also expected to
resume on the Astana-Bishkek, Aktau-
Yerevan, Almaty-Samarkand, and
Shymkent-Kutaisi routes.
Air Astana launched twice-weekly flights
to Tel Aviv in September 2023 but had to
terminate these a month later due to the
conflict in the region.
Domestic market
There can be no doubt that the launch
of FlyArystan had a staggering impact on
Kazakhstan’s domestic market – both before,
during and after the pandemic – and also
aided the rapid recovery of the overall air
transport market. Following the launch of
the airline in May 2019, domestic passenger
traffic was boosted in the second half of the
year, increasing by 9% to 8.6 million for the
full year (2018: 7.9 million). Today,
Kazakhstan has the fastest growing
domestic market in the world.
Global aviation markets
Air passenger traffic
2023, and particularly the last quarter,
delivered strong results for both international
and domestic passenger traffic across all
regions. Projections are that, by the end
of 2024, global air passenger numbers
will have fully recovered to 2019 levels.
This could perhaps be the last time when
there will be any need to refer back
to pre-pandemic levels to gauge how well
the industry is performing. The continuing
Russia-Ukraine and more recent Middle East
wars, compounded by the ensuing Red Sea
situation, are all factors that will still need to
be taken into consideration.
And, while the recovery in travel is good
news, Willy Walsh, Director General of Air
Industry Transport Association, is keen to
point out that, in order to maximise the
benefits of air travel in the post-pandemic
world, governments need to take a
strategic approach. Putting cost-efficient
infrastructures in place to meet demand,
incentivising the production of sustainable
aviation fuel (SAF) to meet the 2050 target
for net-zero carbon emissions and adopting
regulations that deliver clear cost-benefits
– these all have a part to play in helping
airlines increase the global prosperity and
well-being of people and businesses.
Global passenger markets
Overall airline traffic, measured in revenue
passenger kilometres (RPKs), increased
36.9% year-on-year in 2023, and delivered
total revenues of USD 896 billion. With a
particularly strong last quarter, full year
traffic was within touching distance of
2019 levels at 94.1%. This is a significant
improvement over 2022 when it stood
at 68.7%. Overall capacity measured in
available seat-kilometres (ASKs) also grew,
by 24.1% year-on-year and to 94.4% of
pre-pandemic levels. Still under the 2019
threshold, but only by 0.3 ppt, the global
passenger load factor (PLF) stood at 82.3%.
1 Source: IATA Global Outlook for Air Transport, December 2023.
Air Astana’s and FlyArystan’s market
share in Kazakhstan
22 23 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
M A RK E T OVERVIE W
CONTINUED
An 11.5% spurt year-on-year in December
for global international CTKs, with growth
across all major trade routes, resulted in
international traffic levels in 2023 coming in
at just 2.2% below the previous year.
One of the last vestiges of the pandemic,
2023 saw the phasing-out of passenger
aircraft that had been temporarily converted
to cargo carriers (so-called semi-freighters)
as they were reconfigured and returned to
normal duties carrying passengers. Global
cargo capacity has expanded considerably
over the last two years as international
passenger flights resumed and schedules
increased exponentially, opening up the
opportunities for transporting cargo in the
belly-hold of passenger aircraft. Overall
cargo capacity, measured in available cargo
tonne kilometres (ACTKs), increased by 11.3%
compared with 2022 and was up 2.5% from
pre-pandemic levels. Passenger aircraft
belly-hold capacity accounted for 49% of
ACTKs, a massive hike from 20% in 2020 as
it continues to steal a march on the market
share of dedicated cargo aircraft.
This substantially expanded belly-hold
capacity has had a negative knock-on to
cargo load factors (CLF), affecting cargo
revenue and profitability for airlines.
Decreasing throughout the year, CLF closed
the year with a worldwide average of 44%,
Over the last five years, most of the domestic
growth has been driven by FlyArystan, which
accounted for 37% of domestic traffic in
Kazakhstan in 2023. Combined with Air
Astana’s 30% share, the Group commands
67% of the total domestic market.
Both of Kazakhstan’s major airports, at
Almaty (the largest airport) and Astana,
have experienced an increased flow in
domestic travellers since FlyArystan took
to the skies – a total of around 70% overall.
While Astana airport accounted for about 5%
of this, Almaty airport has seen its domestic
passengers rise from just 2.8 million in 2018
to over 5 million during 2023.
Cargo
Global overview
The decline in global air cargo demand
experienced in 2022 continued for most
of 2023. The challenges remained largely
the same: global and economic trade
depressed, the continuing Russia-Ukraine
war, inflation remaining high in key markets
and elevated global oil prices; the tension
in the Red Sea was added to the mix in Q4
with the full impact of this yet to unfold.
But it was not all doom and gloom
as global air cargo volumes surged
dramatically towards the end of 2023
indicating a possible return to pre-pandemic
levels heading into 2024. Rachel Fan of IATA
Sustainability and Economics is optimistic
about this and predicts that, while yields
are likely to decline, they will still be above
2019 levels: “Cargo revenue will also be
about 11% above 2019 and comprise 12% of
total industry revenue. In other words, 2024
will see sustained revenue growth and the
sector outperform pre-pandemic levels.”
2023 did not start well as industry-wide
cargo tonne-kilometres (CTKs) contracted
month by month until mid-way through the
year. However, although trade and exports
were still relatively sluggish, CTKs bounced
back, reporting double-digit drops in the
first half of 2023 but soaring to annual
average figures within 1.9% of 2022
traffic by the year end.
although on international routes this
reached 49.9%, up from 2019 levels by 0.8%.
An indicator of the balance of supply and
demand within the industry, this should
stabilise once passenger and cargo numbers
normalise to pre-pandemic levels.
Air Astana Group’s cargo growth in 2023
was mainly on the routes from China, Korea
and the UAE to Kazakhstan. The growth
corresponded with increased capacity
deployed in 2023. Cargo volumes from
Turkey were influenced by the economic
slowdown and limited belly capacity of
narrow-body aircraft.
Regional performance
As the year drew to a close, there was strong
momentum across all major trade routes with
positive outcomes year on year. The most
significant growth was experienced in the
Africa-Asia market, achieving double digits
on average, with a substantial boost of 37%
after China reopened its borders in February.
During the second half of the year, the
Europe-Asia, Europe-Middle East and Middle
East–Asia trade lanes led the way, particularly
towards the year end. This was in part due to
regional conflicts, particularly in the Red Sea
area, which disrupted conventional sea
freight routes.
While not all cargo is suitable for air transport,
this did result in a large number of
manufacturers and shippers opting for
alternative transportation methods.
The tail end of the year also saw an upturn
in cargo traffic in North America–Europe
and North America–Asia trade lanes, both
recording an increase in international CTKs
in December. The overall picture was,
however, the same: during 2023, air cargo
traffic was down on 2022. This was also the
case for trade lanes Within-Asia and
Within-Europe, despite an upward trend at
the year-end heralding the promise of
better times in 2024.
The prospects for 2024 are positive with a
projected growth of 3.5% in global trade, a
key economic indicator. IATA forecasts an
average increase in air cargo of 4.5%, with
the biggest rise in Middle East at 12.3% and
Africa trailing behind with growth at 1.5%.
Broadly speaking, this will mean that cargo
volumes are expected to reach 61 million
tonnes during the year; conversely, cargo
revenues are likely to continue to fall by a
total of USD 111 billion in all.
Predictions for 2024
On a positive note, IATA expects that
growth in passenger demand will continue
to rise in 2024, however, this will not be
without challenges and uncertainties. The
wars in Russia-Ukraine and the Middle East
look set to continue to impact air space and
push up oil prices.
While inflation is reducing, it and interest
rates still remain high and there is a global
labour shortage. Supply chain issues have
not abated for spare parts and even for
aircraft delivery.
On the regulatory front, rising costs
connected with compliance, passenger
rights, environmental initiatives and
accessibility requirements will all be a drain
on recovering profitability.
So much of the world’s economic outcomes
depend on the movement of goods and
people and is inextricably linked to air
transportation. While growth is expected to
be slower than that of 2023, IATA predicts
that global air traffic should finally recover
to reach pre-pandemic levels in 2024.
Sources:
1 IATA Global Outlook for Air Transport: A local sweet
spot (December 2023)
2 Asian Development Bank: Low-Cost Carrier
Opportunities, Air Transport Liberalization, And
Post-Pandemic Recovery In CAREC 1 (September 2023)
3 IATA Air Passenger Market Analysis (December 2023)
4 IATA Air Cargo Market Analysis (December 2023)
5 IATA Airlines magazine (4 January 2024)
6 IATA Air cargo press release (31 January 2024)
7 IATA Global air travel press release (31 January 2024)
8 McKinsey & Company How airlines can handle busier
summers – and comparatively quiet winters
9 The Astana Times
1 The Central Asia Regional Economic Cooperation Program
24 25 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
An 11.5% spurt year-on-year in December
for global international CTKs, with growth
across all major trade routes, resulted in
international traffic levels in 2023 coming in
at just 2.2% below the previous year.
One of the last vestiges of the pandemic,
2023 saw the phasing-out of passenger
aircraft that had been temporarily converted
to cargo carriers (so-called semi-freighters)
as they were reconfigured and returned to
normal duties carrying passengers. Global
cargo capacity has expanded considerably
over the last two years as international
passenger flights resumed and schedules
increased exponentially, opening up the
opportunities for transporting cargo in the
belly-hold of passenger aircraft. Overall
cargo capacity, measured in available cargo
tonne kilometres (ACTKs), increased by 11.3%
compared with 2022 and was up 2.5% from
pre-pandemic levels. Passenger aircraft
belly-hold capacity accounted for 49% of
ACTKs, a massive hike from 20% in 2020 as
it continues to steal a march on the market
share of dedicated cargo aircraft.
This substantially expanded belly-hold
capacity has had a negative knock-on to
cargo load factors (CLF), affecting cargo
revenue and profitability for airlines.
Decreasing throughout the year, CLF closed
the year with a worldwide average of 44%,
Over the last five years, most of the domestic
growth has been driven by FlyArystan, which
accounted for 37% of domestic traffic in
Kazakhstan in 2023. Combined with Air
Astana’s 30% share, the Group commands
67% of the total domestic market.
Both of Kazakhstan’s major airports, at
Almaty (the largest airport) and Astana,
have experienced an increased flow in
domestic travellers since FlyArystan took
to the skies – a total of around 70% overall.
While Astana airport accounted for about 5%
of this, Almaty airport has seen its domestic
passengers rise from just 2.8 million in 2018
to over 5 million during 2023.
Cargo
Global overview
The decline in global air cargo demand
experienced in 2022 continued for most
of 2023. The challenges remained largely
the same: global and economic trade
depressed, the continuing Russia-Ukraine
war, inflation remaining high in key markets
and elevated global oil prices; the tension
in the Red Sea was added to the mix in Q4
with the full impact of this yet to unfold.
But it was not all doom and gloom
as global air cargo volumes surged
dramatically towards the end of 2023
indicating a possible return to pre-pandemic
levels heading into 2024. Rachel Fan of IATA
Sustainability and Economics is optimistic
about this and predicts that, while yields
are likely to decline, they will still be above
2019 levels: “Cargo revenue will also be
about 11% above 2019 and comprise 12% of
total industry revenue. In other words, 2024
will see sustained revenue growth and the
sector outperform pre-pandemic levels.”
2023 did not start well as industry-wide
cargo tonne-kilometres (CTKs) contracted
month by month until mid-way through the
year. However, although trade and exports
were still relatively sluggish, CTKs bounced
back, reporting double-digit drops in the
first half of 2023 but soaring to annual
average figures within 1.9% of 2022
traffic by the year end.
although on international routes this
reached 49.9%, up from 2019 levels by 0.8%.
An indicator of the balance of supply and
demand within the industry, this should
stabilise once passenger and cargo numbers
normalise to pre-pandemic levels.
Air Astana Group’s cargo growth in 2023
was mainly on the routes from China, Korea
and the UAE to Kazakhstan. The growth
corresponded with increased capacity
deployed in 2023. Cargo volumes from
Turkey were influenced by the economic
slowdown and limited belly capacity of
narrow-body aircraft.
Regional performance
As the year drew to a close, there was strong
momentum across all major trade routes with
positive outcomes year on year. The most
significant growth was experienced in the
Africa-Asia market, achieving double digits
on average, with a substantial boost of 37%
after China reopened its borders in February.
During the second half of the year, the
Europe-Asia, Europe-Middle East and Middle
East–Asia trade lanes led the way, particularly
towards the year end. This was in part due to
regional conflicts, particularly in the Red Sea
area, which disrupted conventional sea
freight routes.
While not all cargo is suitable for air transport,
this did result in a large number of
manufacturers and shippers opting for
alternative transportation methods.
The tail end of the year also saw an upturn
in cargo traffic in North America–Europe
and North America–Asia trade lanes, both
recording an increase in international CTKs
in December. The overall picture was,
however, the same: during 2023, air cargo
traffic was down on 2022. This was also the
case for trade lanes Within-Asia and
Within-Europe, despite an upward trend at
the year-end heralding the promise of
better times in 2024.
The prospects for 2024 are positive with a
projected growth of 3.5% in global trade, a
key economic indicator. IATA forecasts an
average increase in air cargo of 4.5%, with
the biggest rise in Middle East at 12.3% and
Africa trailing behind with growth at 1.5%.
Broadly speaking, this will mean that cargo
volumes are expected to reach 61 million
tonnes during the year; conversely, cargo
revenues are likely to continue to fall by a
total of USD 111 billion in all.
Predictions for 2024
On a positive note, IATA expects that
growth in passenger demand will continue
to rise in 2024, however, this will not be
without challenges and uncertainties. The
wars in Russia-Ukraine and the Middle East
look set to continue to impact air space and
push up oil prices.
While inflation is reducing, it and interest
rates still remain high and there is a global
labour shortage. Supply chain issues have
not abated for spare parts and even for
aircraft delivery.
On the regulatory front, rising costs
connected with compliance, passenger
rights, environmental initiatives and
accessibility requirements will all be a drain
on recovering profitability.
So much of the world’s economic outcomes
depend on the movement of goods and
people and is inextricably linked to air
transportation. While growth is expected to
be slower than that of 2023, IATA predicts
that global air traffic should finally recover
to reach pre-pandemic levels in 2024.
Sources:
1 IATA Global Outlook for Air Transport: A local sweet
spot (December 2023)
2 Asian Development Bank: Low-Cost Carrier
Opportunities, Air Transport Liberalization, And
Post-Pandemic Recovery In CAREC 1 (September 2023)
3 IATA Air Passenger Market Analysis (December 2023)
4 IATA Air Cargo Market Analysis (December 2023)
5 IATA Airlines magazine (4 January 2024)
6 IATA Air cargo press release (31 January 2024)
7 IATA Global air travel press release (31 January 2024)
8 McKinsey & Company How airlines can handle busier
summers – and comparatively quiet winters
9 The Astana Times
1 The Central Asia Regional Economic Cooperation Program
24 25 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
STR ATEGY
Delivering
sustained growth
Growth
Meeting our ambitions
Our Group strategy of operating two airlines – full-service Air Astana and low-cost
carrier FlyArystan – enables us to make the most of untapped opportunities in
domestic, intra-region and international markets. Our planned fleet expansion
allied with advanced technical and training facilities will further enhance our
growth trajectory, operational efficiency and quality service offering.
Aided by the increased size of our fleet, we are expanding the reach of our flights to new life-style
destinations and exploring opportunities in all our markets as well as adding to the frequency of our
schedules to meet passenger demand and grow the business.
STR ATEGIC PILL A R S FLY ING HIGH – 202 3 HIGHLIGHTS
Fleet expansion continues
In line with our plans to grow the Group’s fleet, in 2023 we took
delivery of 6 new aircraft bringing the total fleet to 49 with an
average age of 5.3 years.
Meeting passengers’ needs
We now offer flights to new leisure, winter season and longer-stay
destinations, including the Maldives, Thailand, Montenegro, Greece,
Georgia, Turkey, Egypt, Saudi Arabia and the United Arab Emirates.
Developing mega-market potential
We are meeting the increasing demand for flights within our
domestic and near-home markets of the Central Asia and Caucasus
region, as well as neighbouring mega markets such as China
and India.
Frequency boosts numbers
‘Thickening’ routes by increasing the frequency of daily or weekly
flights is boosting passenger numbers, particularly to popular
destinations with winter sunshine in Asia and the Gulf.
K E Y PERFOR M A NCE
INDIC ATOR S (K PIs)
Total revenue
Net profit
Passenger numbers
Load factor
PRINCIPA L RISK S
Commercial risk
Human resources risk
Service quality risk
Credit risk
Liquidity risk
Jet fuel risk
IT risk
STA K EHOLDER S
Our people
Our passengers
Shareholders and potential investors
Government, regulators and local
authorities
Suppliers and business partners
Read more in Key performance indicators on p. 30 Read more in Risk management on p. 72 Read more in Stakeholder engagement on p. 16
A IMING HIGHER – 2024 PRIORITIE S
The Air Astana Group listings on the London Stock Exchange,
Astana International Exchange and Kazakhstan Stock Exchange
has attracted new Kazakh and international investment, which
will help drive our ambitious growth plans for the business
between 2024 and 2028.
During the next 12 months, we expect to take delivery of
seven A320neo family aircraft (4 x FlyArystan, 3 x Air Astana),
expanding the fleet to 56, in line with our plans to increase the
overall fleet size to 80 by 2028.
We plan to expand our route network by launching flights to
Kuala-Lumpur (Malaysia) and Seoul (South Korea) in 2024. Tokyo
(Japan) and Singapore are scheduled to be added in 2025–2026.
PILL A R S OF GROW TH
1. Untapped potential for air travel in Kazakhstan
Highly underserved market with low propensity to fly,
and significant opportunity for growth.
2. Opportunity in Central Asia and Caucasus region
The Air Astana Group is still the largest airline group in the
Central Asia and Caucasus region by revenue and fleet size and
is well positioned for strong growth opportunities in the region.
3. Significant opportunities through international expansion
Kazakhstan is strategically located within easy access to two
of the largest aviation markets in the world, India and China,
and with proximity to the Middle East and Europe.
GROW TH
Our focus
Expand the Group fleet to 80 by the
end of 2028: Air Astana 46 aircraft
and FlyArystan 34 aircraft
Grow the business at more than the
market rate
Further development of FlyArystan’s
services and expansion of Air
Astana’s international services
and intra-regional markets
with improved frequency
and connectivity
EFFICIENC Y
Our focus
Purchase more fuel-efficient and
modern aircraft to support our
sustainability objectives and
increase passenger comfort
Capital expenditure earmarked for
improved fleet maintenance and
training facilities of the Group
Major IT initiatives: to enhance
current and implement new
systems
Further development of digital
commerce and IT support for all
business units
E XCELLENCE
Our focus
Attract and retain the best
talent to support our ambitious
business plans
Continue enhancing our award-
winning customer experience
Implementation and revision of our
Low-Carbon Development
Programme to include our
commitment to net zero by 2050
Capitalise on the capabilities of our
world-class Training Centre to
maintain the highest standards
Read more on p. 27 Read more on p. 28 Read more on p. 29
27 Air Astana Integrated Report 2023 26 Air Astana Integrated Report 2023
Delivering
sustained growth
Growth
Meeting our ambitions
Our Group strategy of operating two airlines – full-service Air Astana and low-cost
carrier FlyArystan – enables us to make the most of untapped opportunities in
domestic, intra-region and international markets. Our planned fleet expansion
allied with advanced technical and training facilities will further enhance our
growth trajectory, operational efficiency and quality service offering.
Aided by the increased size of our fleet, we are expanding the reach of our flights to new life-style
destinations and exploring opportunities in all our markets as well as adding to the frequency of our
schedules to meet passenger demand and grow the business.
STR ATEGIC PILL A R S FLY ING HIGH – 202 3 HIGHLIGHTS
Fleet expansion continues
In line with our plans to grow the Group’s fleet, in 2023 we took
delivery of 6 new aircraft bringing the total fleet to 49 with an
average age of 5.3 years.
Meeting passengers’ needs
We now offer flights to new leisure, winter season and longer-stay
destinations, including the Maldives, Thailand, Montenegro, Greece,
Georgia, Turkey, Egypt, Saudi Arabia and the United Arab Emirates.
Developing mega-market potential
We are meeting the increasing demand for flights within our
domestic and near-home markets of the Central Asia and Caucasus
region, as well as neighbouring mega markets such as China
and India.
Frequency boosts numbers
‘Thickening’ routes by increasing the frequency of daily or weekly
flights is boosting passenger numbers, particularly to popular
destinations with winter sunshine in Asia and the Gulf.
K E Y PERFOR M A NCE
INDIC ATOR S (K PIs)
Total revenue
Net profit
Passenger numbers
Load factor
PRINCIPA L RISK S
Commercial risk
Human resources risk
Service quality risk
Credit risk
Liquidity risk
Jet fuel risk
IT risk
STA K EHOLDER S
Our people
Our passengers
Shareholders and potential investors
Government, regulators and local
authorities
Suppliers and business partners
Read more in Key performance indicators on p. 30 Read more in Risk management on p. 72 Read more in Stakeholder engagement on p. 16
A IMING HIGHER – 2024 PRIORITIE S
The Air Astana Group listings on the London Stock Exchange,
Astana International Exchange and Kazakhstan Stock Exchange
has attracted new Kazakh and international investment, which
will help drive our ambitious growth plans for the business
between 2024 and 2028.
During the next 12 months, we expect to take delivery of
seven A320neo family aircraft (4 x FlyArystan, 3 x Air Astana),
expanding the fleet to 56, in line with our plans to increase the
overall fleet size to 80 by 2028.
We plan to expand our route network by launching flights to
Kuala-Lumpur (Malaysia) and Seoul (South Korea) in 2024. Tokyo
(Japan) and Singapore are scheduled to be added in 2025–2026.
PILL A R S OF GROW TH
1. Untapped potential for air travel in Kazakhstan
Highly underserved market with low propensity to fly,
and significant opportunity for growth.
2. Opportunity in Central Asia and Caucasus region
The Air Astana Group is still the largest airline group in the
Central Asia and Caucasus region by revenue and fleet size and
is well positioned for strong growth opportunities in the region.
3. Significant opportunities through international expansion
Kazakhstan is strategically located within easy access to two
of the largest aviation markets in the world, India and China,
and with proximity to the Middle East and Europe.
GROW TH
Our focus
Expand the Group fleet to 80 by the
end of 2028: Air Astana 46 aircraft
and FlyArystan 34 aircraft
Grow the business at more than the
market rate
Further development of FlyArystan’s
services and expansion of Air
Astana’s international services
and intra-regional markets
with improved frequency
and connectivity
EFFICIENC Y
Our focus
Purchase more fuel-efficient and
modern aircraft to support our
sustainability objectives and
increase passenger comfort
Capital expenditure earmarked for
improved fleet maintenance and
training facilities of the Group
Major IT initiatives: to enhance
current and implement new
systems
Further development of digital
commerce and IT support for all
business units
E XCELLENCE
Our focus
Attract and retain the best
talent to support our ambitious
business plans
Continue enhancing our award-
winning customer experience
Implementation and revision of our
Low-Carbon Development
Programme to include our
commitment to net zero by 2050
Capitalise on the capabilities of our
world-class Training Centre to
maintain the highest standards
Read more on p. 27 Read more on p. 28 Read more on p. 29
27 Air Astana Integrated Report 2023 26 Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
STR ATEGY
CONTINUED
Efficiency Increasing
technology and expertise
Excellence Beyond
passenger expectations
Always achieving high levels of customer satisfaction is core to our quality service offering. Our
exceptional commercial performance, powered by the customer experience across all touchpoints,
also relies on our use of modern aircraft to increase passenger comfort and our single-minded
approach to training and upskilling our employees.
Our investment in both advanced and future technologies, together with our focus on building
inhouse maintenance expertise, growing the engineers to meet our expansion plans and providing
practical on-site training all help to reinforce our outstanding efficiency and safety records.
FLY ING HIGH – 202 3 HIGHLIGHTS
Investing in SAF
The Group is part of a research study, exploring the potential
for developing the production and consumption of a sustainable
aviation fuel in Kazakhstan, and will target 5% SAF blending
by 2030.
OHS certification confirmed
Air Astana passed the surveillance audit for its ISO 45001:2018
Occupational Health & Safety system, conducted by the British
Standards Institution, with certification extended to cover FlyArystan.
Flight simulator training
The L3 Harris A320 Full Flight Simulator Training was launched at
the Flight Training Centre in Astana during the summer: 364 pilots
have completed 2,315 simulator hours during 582 sessions.
Practical safety training
A Real Fire Fighting Trainer (RFFT) and Airbus 320 Family Cabin
Emergency Evacuation Trainer (CEET) have been installed at the
Flight Training Centre in Astana to provide local, practical training.
First six-year C-check completed
Since 2019, Air Astana has carried out C-checks on 24 Airbus family
aircraft and successfully completed its first complex, six-year
C-check on an Airbus A321 in 2023.
K PIs
CSAT
NPS
CO 2 emissions
On-time performance
PRINCIPA L RISK S
Safety risk
Aviation security risk
Human resources risk
Service quality risk
Cyber and information security risk
STA K EHOLDER S
Our passengers
Our people
Suppliers and business partners
Read more in Key performance indicators on p. 30 Read more in Risk management on p. 72 Read more in Stakeholder engagement on p. 16
K PIs
Operating profit
CASK
Net profit
PRINCIPA L RISK S
Health Safety and Environment
(HSE) risks
Operational risk
IT risk
STA K EHOLDER S
Our people
Suppliers and business partners
Read more in Key performance indicators on p. 30 Read more in Risk management on p. 72 Read more in Stakeholder engagement on p. 16
A IMING HIGHER – 2024 PRIORITIE S
The Group plans to update its Low-Carbon Development
Programme and commit to net zero by 2050, with a sustainability
roadmap and credible near-term targets for the next five years.
We are investing in a new internet booking engine, designed
to boost website return rates and e-commerce conversions
and enhance the overall digital experience.
Ensuring confidence in our customer data privacy is key and
we are committed to obtaining ISO 27701 certification for the
management and protection of personal data.
The Group plans to finalise critical parts of the Airline
Performance Excellence Programme (APEX) system.
We are in the process of expanding our human rights policies
to include a Diversity, Equity and Inclusion (DEI) Policy.
As part of our minimising our environmental impact, we are
developing a cabin waste management programme.
A IMING HIGHER – 2024 PRIORITIE S
Training on the L3 Harris A320 Full Flight Simulator Training
is expected to increase to 5,500–6,000 hours; the simulator’s
maximum annual capacity is 7,000-hours. The Group is currently
planning the purchase of a second simulator in 2025.
Approximately 40 cadets join the Ab-initio pilot training
programme each year, which was set up to fulfil the need
for a local supply of qualified pilots; a total of 270 cadets have
already graduated and the 2024 intake is expected to increase
to around 300.
Eight Airbus family aircraft are due for maintenance, three
of which involve a full six-year C-check, and the first 12-year
C-check is planned. Bringing C-checks in-house has already
reduced down-time by between approximately 14% and 18%.
The Group intends to offer C-checks to other aircraft operators
by 2025.
In July 2023, Pratt & Whitney (P&W) issued a recall of A320neo
engines due to contamination during manufacture. Air Astana
had already solved a number of related design problems and
has undertaken mitigating action ahead of the industry. During
2024, an estimated 34 engines will need to be removed and
alternative options are in place to avoid flight disruptions. We
are in advance discussions with P&W concerning compensation
and other support.
FLY ING HIGH – 202 3 HIGHLIGHTS
Airlines par excellence
The Group continues to be recognised for its award-winning levels of
customer service. In 2023, Air Astana was recognised as ‘Best Airline
in Central Asia and CIS’ at the Skytrax World Airline Awards for the
eleventh consecutive year and ‘Best Service in Central Asia and CIS’
for the second time. FlyArystan was also recognised by Skytrax as
‘Best low-cost carrier in Central Asia and CIS’ for the first time and
was rated four-star by Skytrax, one of the twelve LCCs in this
category globally. Air Astana received several awards in the period
by the APEX, including a five-star rating in the major airline category.
Improvement in OTP
The Group’s average OTP increased to 79.5%, which was higher
than that of the average comparable EU carriers at 67.9% and US
carriers at 77.2%.
Low-Carbon Development Programme
As we expand our fleet, we are replacing Embraers and older
Boeings with a new generation of Airbus aircraft, A320 and
A321neos, which will reduce fuel consumption, supporting reduced
CASK and aligning with the Group’s sustainability objectives.
NPS and CSAT ratings
Air Astana’s NPS and CSAT averages in 2023 were 46 and 79,
respectively, a 28% and 5% improvement against 2022 averages
of 36 and 75. FlyArystan’s NPS and CSAT averages in 2023 were
37 and 84, respectively, also an improvement of 16% and 2%
against 2022 averages of 32 and 82 respectively.
28 29 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
Efficiency Increasing
technology and expertise
Excellence Beyond
passenger expectations
Always achieving high levels of customer satisfaction is core to our quality service offering. Our
exceptional commercial performance, powered by the customer experience across all touchpoints,
also relies on our use of modern aircraft to increase passenger comfort and our single-minded
approach to training and upskilling our employees.
Our investment in both advanced and future technologies, together with our focus on building
inhouse maintenance expertise, growing the engineers to meet our expansion plans and providing
practical on-site training all help to reinforce our outstanding efficiency and safety records.
FLY ING HIGH – 202 3 HIGHLIGHTS
Investing in SAF
The Group is part of a research study, exploring the potential
for developing the production and consumption of a sustainable
aviation fuel in Kazakhstan, and will target 5% SAF blending
by 2030.
OHS certification confirmed
Air Astana passed the surveillance audit for its ISO 45001:2018
Occupational Health & Safety system, conducted by the British
Standards Institution, with certification extended to cover FlyArystan.
Flight simulator training
The L3 Harris A320 Full Flight Simulator Training was launched at
the Flight Training Centre in Astana during the summer: 364 pilots
have completed 2,315 simulator hours during 582 sessions.
Practical safety training
A Real Fire Fighting Trainer (RFFT) and Airbus 320 Family Cabin
Emergency Evacuation Trainer (CEET) have been installed at the
Flight Training Centre in Astana to provide local, practical training.
First six-year C-check completed
Since 2019, Air Astana has carried out C-checks on 24 Airbus family
aircraft and successfully completed its first complex, six-year
C-check on an Airbus A321 in 2023.
K PIs
CSAT
NPS
CO 2 emissions
On-time performance
PRINCIPA L RISK S
Safety risk
Aviation security risk
Human resources risk
Service quality risk
Cyber and information security risk
STA K EHOLDER S
Our passengers
Our people
Suppliers and business partners
Read more in Key performance indicators on p. 30 Read more in Risk management on p. 72 Read more in Stakeholder engagement on p. 16
K PIs
Operating profit
CASK
Net profit
PRINCIPA L RISK S
Health Safety and Environment
(HSE) risks
Operational risk
IT risk
STA K EHOLDER S
Our people
Suppliers and business partners
Read more in Key performance indicators on p. 30 Read more in Risk management on p. 72 Read more in Stakeholder engagement on p. 16
A IMING HIGHER – 2024 PRIORITIE S
The Group plans to update its Low-Carbon Development
Programme and commit to net zero by 2050, with a sustainability
roadmap and credible near-term targets for the next five years.
We are investing in a new internet booking engine, designed
to boost website return rates and e-commerce conversions
and enhance the overall digital experience.
Ensuring confidence in our customer data privacy is key and
we are committed to obtaining ISO 27701 certification for the
management and protection of personal data.
The Group plans to finalise critical parts of the Airline
Performance Excellence Programme (APEX) system.
We are in the process of expanding our human rights policies
to include a Diversity, Equity and Inclusion (DEI) Policy.
As part of our minimising our environmental impact, we are
developing a cabin waste management programme.
A IMING HIGHER – 2024 PRIORITIE S
Training on the L3 Harris A320 Full Flight Simulator Training
is expected to increase to 5,500–6,000 hours; the simulator’s
maximum annual capacity is 7,000-hours. The Group is currently
planning the purchase of a second simulator in 2025.
Approximately 40 cadets join the Ab-initio pilot training
programme each year, which was set up to fulfil the need
for a local supply of qualified pilots; a total of 270 cadets have
already graduated and the 2024 intake is expected to increase
to around 300.
Eight Airbus family aircraft are due for maintenance, three
of which involve a full six-year C-check, and the first 12-year
C-check is planned. Bringing C-checks in-house has already
reduced down-time by between approximately 14% and 18%.
The Group intends to offer C-checks to other aircraft operators
by 2025.
In July 2023, Pratt & Whitney (P&W) issued a recall of A320neo
engines due to contamination during manufacture. Air Astana
had already solved a number of related design problems and
has undertaken mitigating action ahead of the industry. During
2024, an estimated 34 engines will need to be removed and
alternative options are in place to avoid flight disruptions. We
are in advance discussions with P&W concerning compensation
and other support.
FLY ING HIGH – 202 3 HIGHLIGHTS
Airlines par excellence
The Group continues to be recognised for its award-winning levels of
customer service. In 2023, Air Astana was recognised as ‘Best Airline
in Central Asia and CIS’ at the Skytrax World Airline Awards for the
eleventh consecutive year and ‘Best Service in Central Asia and CIS’
for the second time. FlyArystan was also recognised by Skytrax as
‘Best low-cost carrier in Central Asia and CIS’ for the first time and
was rated four-star by Skytrax, one of the twelve LCCs in this
category globally. Air Astana received several awards in the period
by the APEX, including a five-star rating in the major airline category.
Improvement in OTP
The Group’s average OTP increased to 79.5%, which was higher
than that of the average comparable EU carriers at 67.9% and US
carriers at 77.2%.
Low-Carbon Development Programme
As we expand our fleet, we are replacing Embraers and older
Boeings with a new generation of Airbus aircraft, A320 and
A321neos, which will reduce fuel consumption, supporting reduced
CASK and aligning with the Group’s sustainability objectives.
NPS and CSAT ratings
Air Astana’s NPS and CSAT averages in 2023 were 46 and 79,
respectively, a 28% and 5% improvement against 2022 averages
of 36 and 75. FlyArystan’s NPS and CSAT averages in 2023 were
37 and 84, respectively, also an improvement of 16% and 2%
against 2022 averages of 32 and 82 respectively.
28 29 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
Total revenue
(USDm) 1,174.5
2022
2023
2021
2022A 1,016.2
1,174.5
1,032.4
761.8
Passenger numbers
(m) 8.1
2022
2023
2021
7.4
8.1
6.6
Net Adjusted Debt
(USDm) 445.3
2022
2023
2021
492.0
445.3
562.8
On-time performance
(%) 79
2022
2023
2021
74
79
82
Net profit/(loss)
(USDm) 68.7
2022A
2023
2022
68.7
36.1
56.5
78.4
36.1 2021
Load factor
(%) 83
2022
2023
2021
83
83
80
CASK
(US cents) 5.9
2022A
2023
2022
5.6
5.9
5.6
2021 5.1
RASK
(US cents) 6.6
2022A
2023
2022
6.6
36.1
6.4
6.5
5.8 2021
CO 2 emissions
(tonne/‘000 RPK) 0.076
2022
2023
2021
0.077
0.076
0.080 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Measuring our
performance
We believe that our KPIs are an invaluable tool for tracking
our performance over a three-year period, both for us as
a business and to give stakeholders an accurate picture
of our development.
Link to strategy
Growth Efficiency Excellence
FIN A NCIA L K PIs
NON-FIN A NCIA L K PIs
Our long-term growth plans for the business
are reliant upon increasing total revenue,
which will enable the Group to continue
expanding its fleet and network as well as
further enhancing the passenger experience.
We will only be successful in achieving our
long-term growth plans by attracting more
passengers to fly with our airlines and, in
doing so, boost both revenue and profit.
OTP is an important factor in passenger
airline choice and we are pleased to report
an improvement in OTP, which is also above
the average for comparable airlines.
It is vital that we do not lose sight of the need
to focus on continuing cost reduction and
increased efficiencies in our drive to reap the
greatest benefit from sales generation.
Maximising the number of passengers on
each flight is crucial to delivering the best
economic returns for the business and, as
such, increasing and maintaining a high load
factor is essential.
Cost of available seat kilometre (CASK) is
crucial to driving profitability and we are
proud to be amongst the most cost-effective
airlines in the world.
RASK (Revenue per ASK) shows how much
revenue each seat kilometre has generated for
the airline. RASK is calculated by dividing Total
revenue and other income by ASKs (available
seat kilometres) and is measured in US cents.
We are a committed contributor to sustainable
aviation, implementing fuel-efficient flight
plans and responsible practices, as well
as exploring alternative energy sources, to
both minimise our environmental impact
and improve our operational efficiency.
Link to strategy
Link to strategy
The Air Astana Group defines Net debt as
loans and lease liabilities less cash and cash
equivalents. Net debt decreased steadily since
2021 resulting in a comfortable net debt
position and decline of the Net Debt/Adjusted
EBITDAR ratio.
Link to strategy
Link to strategy
Link to strategy
Link to strategy
Link to strategy Link to strategy
Link to strategy
K E Y PERFOR M A NCE INDIC ATOR S
Note:
2022A are adjusted figures that exclude extraordinary market event (EME) and gain from fuel hedging (FH).
30 31 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
(USDm) 1,174.5
2022
2023
2021
2022A 1,016.2
1,174.5
1,032.4
761.8
Passenger numbers
(m) 8.1
2022
2023
2021
7.4
8.1
6.6
Net Adjusted Debt
(USDm) 445.3
2022
2023
2021
492.0
445.3
562.8
On-time performance
(%) 79
2022
2023
2021
74
79
82
Net profit/(loss)
(USDm) 68.7
2022A
2023
2022
68.7
36.1
56.5
78.4
36.1 2021
Load factor
(%) 83
2022
2023
2021
83
83
80
CASK
(US cents) 5.9
2022A
2023
2022
5.6
5.9
5.6
2021 5.1
RASK
(US cents) 6.6
2022A
2023
2022
6.6
36.1
6.4
6.5
5.8 2021
CO 2 emissions
(tonne/‘000 RPK) 0.076
2022
2023
2021
0.077
0.076
0.080 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Measuring our
performance
We believe that our KPIs are an invaluable tool for tracking
our performance over a three-year period, both for us as
a business and to give stakeholders an accurate picture
of our development.
Link to strategy
Growth Efficiency Excellence
FIN A NCIA L K PIs
NON-FIN A NCIA L K PIs
Our long-term growth plans for the business
are reliant upon increasing total revenue,
which will enable the Group to continue
expanding its fleet and network as well as
further enhancing the passenger experience.
We will only be successful in achieving our
long-term growth plans by attracting more
passengers to fly with our airlines and, in
doing so, boost both revenue and profit.
OTP is an important factor in passenger
airline choice and we are pleased to report
an improvement in OTP, which is also above
the average for comparable airlines.
It is vital that we do not lose sight of the need
to focus on continuing cost reduction and
increased efficiencies in our drive to reap the
greatest benefit from sales generation.
Maximising the number of passengers on
each flight is crucial to delivering the best
economic returns for the business and, as
such, increasing and maintaining a high load
factor is essential.
Cost of available seat kilometre (CASK) is
crucial to driving profitability and we are
proud to be amongst the most cost-effective
airlines in the world.
RASK (Revenue per ASK) shows how much
revenue each seat kilometre has generated for
the airline. RASK is calculated by dividing Total
revenue and other income by ASKs (available
seat kilometres) and is measured in US cents.
We are a committed contributor to sustainable
aviation, implementing fuel-efficient flight
plans and responsible practices, as well
as exploring alternative energy sources, to
both minimise our environmental impact
and improve our operational efficiency.
Link to strategy
Link to strategy
The Air Astana Group defines Net debt as
loans and lease liabilities less cash and cash
equivalents. Net debt decreased steadily since
2021 resulting in a comfortable net debt
position and decline of the Net Debt/Adjusted
EBITDAR ratio.
Link to strategy
Link to strategy
Link to strategy
Link to strategy
Link to strategy Link to strategy
Link to strategy
K E Y PERFOR M A NCE INDIC ATOR S
Note:
2022A are adjusted figures that exclude extraordinary market event (EME) and gain from fuel hedging (FH).
30 31 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
4.4
4.1
3.5
2023 2022 2021
+26%
Number of
passengers (m)
80 81 78
2023 2022 2021
+2pp
Passenger load
factor (%) STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
OPER ATING RE VIE W
Growing
with pride
The operational impacts of the ongoing Ukraine
war and more recent the Israel-Hamas war in
2023 have largely been limited to re-routings due
to airspace closures, although both conflicts have
pushed up oil prices impacting airlines globally.
The Air Astana Group demonstrated operational and financial
resilience throughout the COVID-19 crisis and its agile and proactive
management has continued to engineer a resounding performance
during the last year.
During 2023, the Air Astana Group carried 8.1 million passengers
on around 55 thousand flights on 91 routes across 21 countries,
compared with 7.3 million passengers on around 52 thousand flights
on 88 routes across 16 countries in the previous year. The Group’s two
differentiated but complementary brands allow the airline to target
different customer markets and geographies, providing choice across
a range of customer needs and travel purposes. As a result, the
Group has established itself as the leading airline in Kazakhstan,
with a combined market share in domestic, intra-regional and
international routes of 67%, 40% and 47%, respectively.
This in turn delivered further healthy financial returns
with total revenue for the Group increasing to USD 1.18 million
(2022: USD 1.03 million) and operating profit up to USD 136.0 million
(2022: USD 148.7 million). CASK was 5.9 cents for the year (2022:
5.6 cents) but a more realistic picture without the ratchet in fuel
costs reduced CASK ex-fuel to 4.3 cents (2022: 4.2 cents).
Air Astana
Air Astana remains Kazakhstan’s flag carrier and largest airline
brand in terms of both revenue and fleet size. However, its operating
model has changed considerably since it was launched in 2002, with
the COVID-19 pandemic and more recent international conflicts
requiring agile responses to unprecedented situations. The frenetic
world of business travel and transfers is now a thing of the past
with virtual meetings largely the norm. Sanctions following Russia’s
invasion of Ukraine brought cancelled flights and disrupted supply
chains. Reduced international connectivity due to restricted airspace
over Ukraine and the Israeli crisis required rerouting flights, adding
time and expense to services that were just beginning to recover.
As a full-service airline brand, Air Astana operates scheduled and
charter, point-to-point and transit, short-haul and long-haul air
travel and cargo services. In 2023, from its two principal hubs at
the airports in Almaty and Astana, its fleet of 30 narrow-body
aircraft served on a total of 50 routes (36 international and 14
domestic routes) covering 36 destinations, including seasonal
and charters.
The airline’s bounce-back from the pandemic has been
stratospheric. In part this was due to the rigid financial discipline
and measures taken to control costs but, more significantly, it
was the pragmatic yet innovative solutions within the seemingly
ever-changing landscape. While the borders to Kazakhstan were
closed, Air Astana joined forces with FlyArystan to expand the
Group’s share of the domestic market and continued this upward
trajectory, today carrying 8.1 million passengers, compared with
5.1 million in 2019.
As the world began to re-open, Air Astana tapped into the
population’s desire to travel further afield, offering new leisure,
winter season and longer-stay destinations including flights to the
Maldives, Thailand, Montenegro, Greece, Georgia, Turkey, Egypt and
the United Arab Emirates.
During 2023, the airline introduced direct flights from Almaty to
Jeddah in Saudi Arabia with its rich and diverse cultural heritage.
Passengers travelling to Jeddah are also offered convenient
connections from other cities in Kazakhstan, as well as from
Tashkent, Dushanbe and Bishkek. Tourists journeying from Saudi
Arabia are able to explore Kazakhstan’s vast natural beauty.
Alongside its developing lifestyle business, Air Astana has taken
advantage of the easy access and potential for regional and
international travel within its near-markets of Central Asia and
Caucus region and neighbouring mega markets.
Prior to the pandemic, Air Astana operated regular flights to China:
between 2002 and 2020, more than 1,100,000 passengers were
transported across this route. Flights to Beijing from Almaty resumed
towards the end of 2022 and from Astana in March 2023, with the
frequency increased on both routes during 2023.
There are significant growth opportunities to be gained by
thickening routes – that is increasing the frequencies to daily
or twice daily – as well as expanding its route network to include
additional lifestyle destinations each year. For 2024, Air Astana
plans to launch routes to Kuala Lumpur (Malaysia) and Seoul
(South Korea) from Astana.
Air Astana delivered another strong year
of growth in 2023 with record passenger
numbers and increased capacity. All our
markets continue to perform well and
we have demonstrated our ability to grow
the business and maintain sector-leading
margins while managing cost headwinds
across the industry.
Peter Foster
CEO of Air Astana JSC
OUR FULL-SERVICE C A RRIER BR A ND
PASSENGERS CARRIED BY AIR ASTANA IN 2023
m
ROUTE S
50 2022: 48
DE STIN ATIONS
36
AVA IL ABLE SE AT
K ILOME TRE S (A SK)
12,491 2022: 11,394
RE VENUE PA SSENGER
K ILOME TRE S (RPK)
10,007 2022: 9,233
32 33 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
4.1
3.5
2023 2022 2021
+26%
Number of
passengers (m)
80 81 78
2023 2022 2021
+2pp
Passenger load
factor (%) STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
OPER ATING RE VIE W
Growing
with pride
The operational impacts of the ongoing Ukraine
war and more recent the Israel-Hamas war in
2023 have largely been limited to re-routings due
to airspace closures, although both conflicts have
pushed up oil prices impacting airlines globally.
The Air Astana Group demonstrated operational and financial
resilience throughout the COVID-19 crisis and its agile and proactive
management has continued to engineer a resounding performance
during the last year.
During 2023, the Air Astana Group carried 8.1 million passengers
on around 55 thousand flights on 91 routes across 21 countries,
compared with 7.3 million passengers on around 52 thousand flights
on 88 routes across 16 countries in the previous year. The Group’s two
differentiated but complementary brands allow the airline to target
different customer markets and geographies, providing choice across
a range of customer needs and travel purposes. As a result, the
Group has established itself as the leading airline in Kazakhstan,
with a combined market share in domestic, intra-regional and
international routes of 67%, 40% and 47%, respectively.
This in turn delivered further healthy financial returns
with total revenue for the Group increasing to USD 1.18 million
(2022: USD 1.03 million) and operating profit up to USD 136.0 million
(2022: USD 148.7 million). CASK was 5.9 cents for the year (2022:
5.6 cents) but a more realistic picture without the ratchet in fuel
costs reduced CASK ex-fuel to 4.3 cents (2022: 4.2 cents).
Air Astana
Air Astana remains Kazakhstan’s flag carrier and largest airline
brand in terms of both revenue and fleet size. However, its operating
model has changed considerably since it was launched in 2002, with
the COVID-19 pandemic and more recent international conflicts
requiring agile responses to unprecedented situations. The frenetic
world of business travel and transfers is now a thing of the past
with virtual meetings largely the norm. Sanctions following Russia’s
invasion of Ukraine brought cancelled flights and disrupted supply
chains. Reduced international connectivity due to restricted airspace
over Ukraine and the Israeli crisis required rerouting flights, adding
time and expense to services that were just beginning to recover.
As a full-service airline brand, Air Astana operates scheduled and
charter, point-to-point and transit, short-haul and long-haul air
travel and cargo services. In 2023, from its two principal hubs at
the airports in Almaty and Astana, its fleet of 30 narrow-body
aircraft served on a total of 50 routes (36 international and 14
domestic routes) covering 36 destinations, including seasonal
and charters.
The airline’s bounce-back from the pandemic has been
stratospheric. In part this was due to the rigid financial discipline
and measures taken to control costs but, more significantly, it
was the pragmatic yet innovative solutions within the seemingly
ever-changing landscape. While the borders to Kazakhstan were
closed, Air Astana joined forces with FlyArystan to expand the
Group’s share of the domestic market and continued this upward
trajectory, today carrying 8.1 million passengers, compared with
5.1 million in 2019.
As the world began to re-open, Air Astana tapped into the
population’s desire to travel further afield, offering new leisure,
winter season and longer-stay destinations including flights to the
Maldives, Thailand, Montenegro, Greece, Georgia, Turkey, Egypt and
the United Arab Emirates.
During 2023, the airline introduced direct flights from Almaty to
Jeddah in Saudi Arabia with its rich and diverse cultural heritage.
Passengers travelling to Jeddah are also offered convenient
connections from other cities in Kazakhstan, as well as from
Tashkent, Dushanbe and Bishkek. Tourists journeying from Saudi
Arabia are able to explore Kazakhstan’s vast natural beauty.
Alongside its developing lifestyle business, Air Astana has taken
advantage of the easy access and potential for regional and
international travel within its near-markets of Central Asia and
Caucus region and neighbouring mega markets.
Prior to the pandemic, Air Astana operated regular flights to China:
between 2002 and 2020, more than 1,100,000 passengers were
transported across this route. Flights to Beijing from Almaty resumed
towards the end of 2022 and from Astana in March 2023, with the
frequency increased on both routes during 2023.
There are significant growth opportunities to be gained by
thickening routes – that is increasing the frequencies to daily
or twice daily – as well as expanding its route network to include
additional lifestyle destinations each year. For 2024, Air Astana
plans to launch routes to Kuala Lumpur (Malaysia) and Seoul
(South Korea) from Astana.
Air Astana delivered another strong year
of growth in 2023 with record passenger
numbers and increased capacity. All our
markets continue to perform well and
we have demonstrated our ability to grow
the business and maintain sector-leading
margins while managing cost headwinds
across the industry.
Peter Foster
CEO of Air Astana JSC
OUR FULL-SERVICE C A RRIER BR A ND
PASSENGERS CARRIED BY AIR ASTANA IN 2023
m
ROUTE S
50 2022: 48
DE STIN ATIONS
36
AVA IL ABLE SE AT
K ILOME TRE S (A SK)
12,491 2022: 11,394
RE VENUE PA SSENGER
K ILOME TRE S (RPK)
10,007 2022: 9,233
32 33 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
3.7
3.2 3.1
2023 2022 2021
+19%
Number of
passengers (m)
89
87
83
2023 2022 2021
+6pp
Passenger load
factor (%) STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
OPER ATING RE VIE W CONTINUED
Growing
with pride
FlyArystan
FlyArystan was one of the first LCCs in Central Asia, launching
in 2019 ahead of the COVID pandemic and border closures.
To some extent, this played to its strengths as it was able to offer
its customers consistently low fares and stimulate demand in
Kazakhstan’s underserved domestic airline market. This approach
at a time of crisis contributed significantly to a behavioural change
towards domestic air travel among the population and continues
to boost local market growth. In 2018, domestic traffic totalled 4.3
million passengers with propensity to travel low at 0.24. By 2022,
this had risen to 0.42 and the number of passengers increased
by approximately 88% to 8.1 million. During the same period,
FlyArystan’s compound annual growth rate (CAGR) in this sector
was 61%. It operated on 30 routes and, together with Air Astana,
it commanded 67% of the overall domestic market in 2023.
FlyArystan currently operates 18 narrow-body aircraft from
the Group’s five bases across Kazakhstan (Almaty, Astana,
Shymkent, Aktau and Atyrau), offering scheduled short-haul and
medium-haul, point-to-point air travel in Kazakhstan and further
into the Caucasus, Central Asia, Turkey, the Middle East, China
and India. This diversified base strategy provides FlyArystan
with access to key international destinations, such as Doha in
Qatar and Istanbul in Turkey. In 2023, it operated a point-to-point
network on 27 international routes.
FlyArystan’s mission is to remain the leading LCC of Central Asia
by leveraging its diversified base strategy and to continue to
expand its Central Asia and Caucasus network. At the same
time, it plans to exploit further network growth opportunities
in China, India, Saudi Arabia, Pakistan, Oman and Europe by
increasing capacity on existing routes, adding new routes and
offering low fares to stimulate demand. By employing a blue
ocean strategy of targeting underserved international routes
within a three-hour flight range, it aims to become the sole
operator of these routes, creating customer affinity with the
FlyArystan brand and closing off the competition.
Cargo division
The Air Astana Group offers cargo and mail
transportation services throughout its route
network, utilising available space on both
Air Astana and FlyArystan aircraft, but
always mindful of the need to maintain
on-time departures. In 2023, the majority
of cargo revenue was generated on the
Seoul-Almaty and Dubai-Almaty routes
using B767-300 aircraft. During 2023, some
cargo flow from China to Kazakhstan also
returned as our scheduled flights on the
Beijing-Almaty route resumed and are
almost back to daily frequency.
Air Astana joined CASS IATA in India and
China, which widened distribution and
enabled simplified billing and accounts
settlements in those markets.
The Group complies with IATA cargo
requirements and the cargo rules and
regulations of local Kazakhstan and relevant
foreign civil aviation authorities. Where the
Group does have its own established cargo
operations, it promotes its services through
agency agreements with international
cargo sales agents and freight forwarders.
The routes which cater mainly to the leisure
market, such as Phuket-Almaty, which
usually do not attract point-to-point cargo
flows, were supported by cargo from China
and Korea using interline arrangements
with partner airlines, and by cargo from
Malaysia using truck delivery.
The high quality of service offered by the
Air Astana Group is a major reason for the
support and cooperation of freight
forwarders in Kazakhstan.
Codeshare partnerships and
interline arrangements
Strategic partnerships with other airlines
enable Air Astana to offer its passengers
more flexibility, convenience and choice
of flights. Co-operation through codeshare
and interline arrangements, as well as
marketing initiatives, loyalty programme
reciprocity or benefit sharing, and enhanced
service levels at airports, including aircraft
and engine maintenance, enable the
airlines to enhance its overall network
and increase the reach of the passenger
itineraries that it is able to offer.
Its partnership strategy is to work with
carriers that provide the most compelling
distribution and opportunities from the hub
from which Air Astana operates. Since its
first agreement in 2005, the airline has
steadily grown ties with other international
carriers in Asia and Europe and currently
has seven code-share airlines and 84
interline agreements.
These include code-share agreements
with Asiana Airlines, Bangkok Airways,
Cathay Pacific, KLM Royal Dutch Airlines,
Lufthansa and Turkish Airlines. Most
recently, in 2023, Air Astana signed a
codeshare partnership agreement with
Azerbaijan Airlines (AZAL), with the airlines
operating joint flights on the Baku-Almaty-
Baku route five times a week.
FlyArystan has quickly established itself as
the leading LCC in the region; the airline was
recognised globally as the best LCC in Central
Asia and CIS by Skytrax in 2023. FlyArystan
has successfully introduced the global LCC
model into Central Asia and has quickly won
appeal with a combination of route density
and low fares. As the airline begins its
expansion to near-home markets the growth
trajectory remains strong. The demand for
Low Fare travel is a consistent theme in all
markets and one that FlyArystan is positioned
to capitalise on in Central Asia.
Adrian Hamilton-Manns
President of FlyArystan JSC
OUR LOW- COST C A RRIER BR A ND
ROUTE S
57 2022: 40
DE STIN ATIONS
27
A SK
5,199 2022: 4,527
RPK
4,639 2022: 3,926
CODE-SH A RE PA RTNER S
m PASSENGERS CARRIED BY FLYARYSTAN IN 2023
35 Air Astana Integrated Report 2023 34 Air Astana Integrated Report 2023
3.2 3.1
2023 2022 2021
+19%
Number of
passengers (m)
89
87
83
2023 2022 2021
+6pp
Passenger load
factor (%) STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
OPER ATING RE VIE W CONTINUED
Growing
with pride
FlyArystan
FlyArystan was one of the first LCCs in Central Asia, launching
in 2019 ahead of the COVID pandemic and border closures.
To some extent, this played to its strengths as it was able to offer
its customers consistently low fares and stimulate demand in
Kazakhstan’s underserved domestic airline market. This approach
at a time of crisis contributed significantly to a behavioural change
towards domestic air travel among the population and continues
to boost local market growth. In 2018, domestic traffic totalled 4.3
million passengers with propensity to travel low at 0.24. By 2022,
this had risen to 0.42 and the number of passengers increased
by approximately 88% to 8.1 million. During the same period,
FlyArystan’s compound annual growth rate (CAGR) in this sector
was 61%. It operated on 30 routes and, together with Air Astana,
it commanded 67% of the overall domestic market in 2023.
FlyArystan currently operates 18 narrow-body aircraft from
the Group’s five bases across Kazakhstan (Almaty, Astana,
Shymkent, Aktau and Atyrau), offering scheduled short-haul and
medium-haul, point-to-point air travel in Kazakhstan and further
into the Caucasus, Central Asia, Turkey, the Middle East, China
and India. This diversified base strategy provides FlyArystan
with access to key international destinations, such as Doha in
Qatar and Istanbul in Turkey. In 2023, it operated a point-to-point
network on 27 international routes.
FlyArystan’s mission is to remain the leading LCC of Central Asia
by leveraging its diversified base strategy and to continue to
expand its Central Asia and Caucasus network. At the same
time, it plans to exploit further network growth opportunities
in China, India, Saudi Arabia, Pakistan, Oman and Europe by
increasing capacity on existing routes, adding new routes and
offering low fares to stimulate demand. By employing a blue
ocean strategy of targeting underserved international routes
within a three-hour flight range, it aims to become the sole
operator of these routes, creating customer affinity with the
FlyArystan brand and closing off the competition.
Cargo division
The Air Astana Group offers cargo and mail
transportation services throughout its route
network, utilising available space on both
Air Astana and FlyArystan aircraft, but
always mindful of the need to maintain
on-time departures. In 2023, the majority
of cargo revenue was generated on the
Seoul-Almaty and Dubai-Almaty routes
using B767-300 aircraft. During 2023, some
cargo flow from China to Kazakhstan also
returned as our scheduled flights on the
Beijing-Almaty route resumed and are
almost back to daily frequency.
Air Astana joined CASS IATA in India and
China, which widened distribution and
enabled simplified billing and accounts
settlements in those markets.
The Group complies with IATA cargo
requirements and the cargo rules and
regulations of local Kazakhstan and relevant
foreign civil aviation authorities. Where the
Group does have its own established cargo
operations, it promotes its services through
agency agreements with international
cargo sales agents and freight forwarders.
The routes which cater mainly to the leisure
market, such as Phuket-Almaty, which
usually do not attract point-to-point cargo
flows, were supported by cargo from China
and Korea using interline arrangements
with partner airlines, and by cargo from
Malaysia using truck delivery.
The high quality of service offered by the
Air Astana Group is a major reason for the
support and cooperation of freight
forwarders in Kazakhstan.
Codeshare partnerships and
interline arrangements
Strategic partnerships with other airlines
enable Air Astana to offer its passengers
more flexibility, convenience and choice
of flights. Co-operation through codeshare
and interline arrangements, as well as
marketing initiatives, loyalty programme
reciprocity or benefit sharing, and enhanced
service levels at airports, including aircraft
and engine maintenance, enable the
airlines to enhance its overall network
and increase the reach of the passenger
itineraries that it is able to offer.
Its partnership strategy is to work with
carriers that provide the most compelling
distribution and opportunities from the hub
from which Air Astana operates. Since its
first agreement in 2005, the airline has
steadily grown ties with other international
carriers in Asia and Europe and currently
has seven code-share airlines and 84
interline agreements.
These include code-share agreements
with Asiana Airlines, Bangkok Airways,
Cathay Pacific, KLM Royal Dutch Airlines,
Lufthansa and Turkish Airlines. Most
recently, in 2023, Air Astana signed a
codeshare partnership agreement with
Azerbaijan Airlines (AZAL), with the airlines
operating joint flights on the Baku-Almaty-
Baku route five times a week.
FlyArystan has quickly established itself as
the leading LCC in the region; the airline was
recognised globally as the best LCC in Central
Asia and CIS by Skytrax in 2023. FlyArystan
has successfully introduced the global LCC
model into Central Asia and has quickly won
appeal with a combination of route density
and low fares. As the airline begins its
expansion to near-home markets the growth
trajectory remains strong. The demand for
Low Fare travel is a consistent theme in all
markets and one that FlyArystan is positioned
to capitalise on in Central Asia.
Adrian Hamilton-Manns
President of FlyArystan JSC
OUR LOW- COST C A RRIER BR A ND
ROUTE S
57 2022: 40
DE STIN ATIONS
27
A SK
5,199 2022: 4,527
RPK
4,639 2022: 3,926
CODE-SH A RE PA RTNER S
m PASSENGERS CARRIED BY FLYARYSTAN IN 2023
35 Air Astana Integrated Report 2023 34 Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
OPER ATING RE VIE W
CONTINUED
Continuous
improvement
and efficiency
While the Air Astana Group has a strong focus on
ensuring future growth, this is not at the expense
of continued efficiency or excellence. Specific
planned investments are focused on engineering
and maintenance, pilot training, ground handling
and catering, and spare engines.
Some of these strategies were initially put in place to maintain
control of the supply chain and insourced essential services but
have become core components of the total customer offering and,
in the case of engineering and maintenance, provide opportunities
to generate revenue by providing services to third parties.
A planned fleet simplification programme will contribute
to operational efficiency. Fleet expansion is tactically focused
on narrow-body Airbus A320/A321neo aircraft, which are more
fuel-efficient than the classic generation, supporting reduced CASK
and aligning with the Group’s sustainability objectives. Redelivery
of the remaining Embraer aircraft by 2025 and Boeing 767 by 2026
will also drive fleet simplification, which will generate synergies
and lower the cost of pilot training and maintenance.
Fleet
The Group’s plans for future capacity and passenger comfort are
inextricably linked with the expansion and simplification of a
fuel-efficient, eco-friendly fleet, straddling all three strategic pillars:
growth, efficiency and excellence.
The Group took delivery of the latest of its Airbus A321LR aircraft
in October 2023 and Airbus A320neo in November 2023. As at
31 December 2023, the Group fleet has increased to a total of 49
aircraft (43 in 2022), comprising 41 narrow-body Airbus A320 family
aircraft, 5 narrow-body Embraer E190-E2 aircraft and 3 wide-body
Boeing 767 aircraft (31 operated by Air Astana and 18 by FlyArystan
(under a single Air Operator Certificate (AOC).
Newer, more modern and eco-friendly aircraft reduce costs to the
business and its impact on the environment. As an example, Airbus
A320neo family of aircraft can deliver up to 20% reduction in fuel
consumption, 20% reduction in CO 2 (NO X ) emissions and reduce
noise levels by 50%, compared with the previous generation of
A320ceo aircraft. With additions in recent years and in 2023, the
Group’s operating fleet now has an average age of 5.3 years.
Allowing for planned aircraft returns and further acquisitions, the
Group plans to further increase the fleet to 80 aircraft by the end
of 2028, with Air Astana operating 46 and FlyArystan 34 aircraft.
Achieving this will require the delivery of an additional 48 aircraft
between 2024 and 2028, for which 22 operating leases are already
committed by 2026: 19 Airbus aircraft (11 A320neo and eight
A321neo aircraft) and three Boeing 787-9 Dreamliner aircraft.
Maintenance and repair
Air Astana’s engineering and maintenance department consists
of approximately 900 staff, based in Almaty and Astana airports
with line maintenance stations in Atyrau, Aktau and Shymkent.
It is responsible for all maintenance and technical services, aircraft
delivery/redelivery, workshop support, engineering sales and
cabin cleaning across the entire Air Astana Group fleet, as well as
engineering training. (FlyArystan outsources all of its engineering
and maintenance to Air Astana.)
The engineering and maintenance department holds an AAK
certificate and EASA Part 145 certificate under which it is approved to
perform line and base maintenance services on its aircraft. Under its
other National Aviation Administration certificates and EASA Part 145
approval, Air Astana also provides maintenance services to more
than 22 other international and domestic airlines, including Asiana,
DHL, Air Arabia, VietJet, Jazeera Airways, Lufthansa, Qatar Airways,
Wizz Air, Fly Dubai, Air China and Turkish Airlines, as well as Qazaq
Air and SCAT Airlines. The Training Academy also delivers Airbus
A320 family training for different engine configurations within
the Air Astana and FlyArystan fleet in accordance with its EASA
Part 147 approval.
The simplification of the Group fleet
has created opportunities for efficient,
insourced routine and non-routine
maintenance functions. In 2019, Air Astana
became the first airline in Kazakhstan
able to independently perform heavy
maintenance C1 and C2 checks on the
Airbus A320 family of aircraft at its
engineering bases in Almaty and Astana.
After successfully completing its first six-year
C-check towards the end of 2023 Air Astana
now carries out all C-checks on the Airbus
A320 family, including FlyArystan’s aircraft
The first 12-year C-check is planned for 2024.
The six-year check is very complex,
it took more than 20 days and involved
7,800 man-hours undertaken by highly
qualified mechanics and engineers holding
international certificates and EASA Part 66
licenses, including those trained on Air
Astana’s aviation technician training
programme. The airline received the
approval for this type of work earlier in
2023, following an international EASA audit.
The Group estimates that bringing C-checks
in-house will result in annual savings of
approximately USD 3.0 million and has
already reduced aircraft ground time by
between 14% and 18%.
The Group plans to expand its maintenance
capacity in line with its anticipated fleet
growth. This will require extending the
current hangar space at Astana airport and
building a larger hangar at Almaty airport in
order to accommodate two Boeing 787s or
five Airbus A320s at a time. As its C-check
experience grows, the Group intends to offer
C-checks to other aircraft operators by 2025.
Air Astana Training Academy
The Air Astana Group’s Training Academy,
located at Almaty, was established to
develop a centre of excellence for learning
and development within the Group in terms
of both operational and personal skills
development training, and externally for
the wider aviation industry in the CIS.
It is the only EASA Part 147 certified
training facility for engineering in
Kazakhstan, delivering Parts 147/145
theoretical and practical training. In
collaboration with the Flight Training Centre
(see below), the Training Academy delivers
all aspects of operational training:
The Training Academy offers
approximately 79 programmes in
engineering, ground and in-flight
services based on international
standards (ICAO, IATA, and EASA
147/145), which are accredited by the
AAK and therefore also made available
to external organisations.
The new Flight Training Centre, based
at Astana Airport, was commissioned in
2023 and enables training on a L3 Harris
Reality Seven A320 Full-Flight Simulator.
It is the first of its kind in Kazakhstan
and has a 7,000-hour annual training
capacity, which the Group estimates will
reduce travel time to external training
facilities by approximately 25%, saving
over 1,000 pilot days. Procedural training
for Aerosim fixed-base trainers, which
are supported by the simulator, is also
carried out. The Group is currently
planning the purchase of a second
simulator in 2025.
Advanced cabin safety training at the
Training Academy means that the Group
does not rely on third-party providers for
initial or tri-annual crew training for its
Airbus fleet. Using a Cabin Emergency
Evacuation Trainer, supplied by Skyart,
and a Real Fire-Fighting Trainer, supplied
by Flame Aviation, for A320 family
aircraft, rather than sending pilots and
crew to Germany and Turkey for training,
will result in significant savings. The
Group also intends to provide safety and
emergency procedures training to other
airlines in Kazakhstan in the future.
Launched in 2020, as part of the
‘Learning/Career Pathway’ for the pilot
community, an internal leadership
programme course for captains, ‘Leading
for Command’ is run on a regular basis
for newly promoted Captains.
The Group instigated the Pilot Ab-Initio
Cadet Programme in 2008 to fulfil the
need for a local supply of qualified
pilots. Approximately 20 cadets join the
programme each year and 270 cadets
have since graduated, with a significant
number joining flight crews and some
already promoted to captain. The size of
the annual intake will be increased in
2024 to meet the ongoing demand for
qualified pilots.
All crew undertake training, including
safety and emergency procedures, first
aid and dangerous goods. The Training
Academy also provides promotion
training for crew moving to business
class or other roles within the business.
Having completed two EASA Part 66
programmes for trainee mechanics
between 2018 and 2022, in August 2023,
the Training Academy also introduced an
apprenticeship programme. New recruits
participate in a five-year course and earn
international and local certifications with
a further option to pursue the EASA B1/
B2 licensed qualification. The Group’s
Maintenance Standards department
employs airworthiness engineers,
who provide mentoring of standards
performance and co-ordinate training
within the EASA Part 147 programme.
37 Air Astana Integrated Report 2023 36 Air Astana Integrated Report 2023
Continuous
improvement
and efficiency
While the Air Astana Group has a strong focus on
ensuring future growth, this is not at the expense
of continued efficiency or excellence. Specific
planned investments are focused on engineering
and maintenance, pilot training, ground handling
and catering, and spare engines.
Some of these strategies were initially put in place to maintain
control of the supply chain and insourced essential services but
have become core components of the total customer offering and,
in the case of engineering and maintenance, provide opportunities
to generate revenue by providing services to third parties.
A planned fleet simplification programme will contribute
to operational efficiency. Fleet expansion is tactically focused
on narrow-body Airbus A320/A321neo aircraft, which are more
fuel-efficient than the classic generation, supporting reduced CASK
and aligning with the Group’s sustainability objectives. Redelivery
of the remaining Embraer aircraft by 2025 and Boeing 767 by 2026
will also drive fleet simplification, which will generate synergies
and lower the cost of pilot training and maintenance.
Fleet
The Group’s plans for future capacity and passenger comfort are
inextricably linked with the expansion and simplification of a
fuel-efficient, eco-friendly fleet, straddling all three strategic pillars:
growth, efficiency and excellence.
The Group took delivery of the latest of its Airbus A321LR aircraft
in October 2023 and Airbus A320neo in November 2023. As at
31 December 2023, the Group fleet has increased to a total of 49
aircraft (43 in 2022), comprising 41 narrow-body Airbus A320 family
aircraft, 5 narrow-body Embraer E190-E2 aircraft and 3 wide-body
Boeing 767 aircraft (31 operated by Air Astana and 18 by FlyArystan
(under a single Air Operator Certificate (AOC).
Newer, more modern and eco-friendly aircraft reduce costs to the
business and its impact on the environment. As an example, Airbus
A320neo family of aircraft can deliver up to 20% reduction in fuel
consumption, 20% reduction in CO 2 (NO X ) emissions and reduce
noise levels by 50%, compared with the previous generation of
A320ceo aircraft. With additions in recent years and in 2023, the
Group’s operating fleet now has an average age of 5.3 years.
Allowing for planned aircraft returns and further acquisitions, the
Group plans to further increase the fleet to 80 aircraft by the end
of 2028, with Air Astana operating 46 and FlyArystan 34 aircraft.
Achieving this will require the delivery of an additional 48 aircraft
between 2024 and 2028, for which 22 operating leases are already
committed by 2026: 19 Airbus aircraft (11 A320neo and eight
A321neo aircraft) and three Boeing 787-9 Dreamliner aircraft.
Maintenance and repair
Air Astana’s engineering and maintenance department consists
of approximately 900 staff, based in Almaty and Astana airports
with line maintenance stations in Atyrau, Aktau and Shymkent.
It is responsible for all maintenance and technical services, aircraft
delivery/redelivery, workshop support, engineering sales and
cabin cleaning across the entire Air Astana Group fleet, as well as
engineering training. (FlyArystan outsources all of its engineering
and maintenance to Air Astana.)
The engineering and maintenance department holds an AAK
certificate and EASA Part 145 certificate under which it is approved to
perform line and base maintenance services on its aircraft. Under its
other National Aviation Administration certificates and EASA Part 145
approval, Air Astana also provides maintenance services to more
than 22 other international and domestic airlines, including Asiana,
DHL, Air Arabia, VietJet, Jazeera Airways, Lufthansa, Qatar Airways,
Wizz Air, Fly Dubai, Air China and Turkish Airlines, as well as Qazaq
Air and SCAT Airlines. The Training Academy also delivers Airbus
A320 family training for different engine configurations within
the Air Astana and FlyArystan fleet in accordance with its EASA
Part 147 approval.
The simplification of the Group fleet
has created opportunities for efficient,
insourced routine and non-routine
maintenance functions. In 2019, Air Astana
became the first airline in Kazakhstan
able to independently perform heavy
maintenance C1 and C2 checks on the
Airbus A320 family of aircraft at its
engineering bases in Almaty and Astana.
After successfully completing its first six-year
C-check towards the end of 2023 Air Astana
now carries out all C-checks on the Airbus
A320 family, including FlyArystan’s aircraft
The first 12-year C-check is planned for 2024.
The six-year check is very complex,
it took more than 20 days and involved
7,800 man-hours undertaken by highly
qualified mechanics and engineers holding
international certificates and EASA Part 66
licenses, including those trained on Air
Astana’s aviation technician training
programme. The airline received the
approval for this type of work earlier in
2023, following an international EASA audit.
The Group estimates that bringing C-checks
in-house will result in annual savings of
approximately USD 3.0 million and has
already reduced aircraft ground time by
between 14% and 18%.
The Group plans to expand its maintenance
capacity in line with its anticipated fleet
growth. This will require extending the
current hangar space at Astana airport and
building a larger hangar at Almaty airport in
order to accommodate two Boeing 787s or
five Airbus A320s at a time. As its C-check
experience grows, the Group intends to offer
C-checks to other aircraft operators by 2025.
Air Astana Training Academy
The Air Astana Group’s Training Academy,
located at Almaty, was established to
develop a centre of excellence for learning
and development within the Group in terms
of both operational and personal skills
development training, and externally for
the wider aviation industry in the CIS.
It is the only EASA Part 147 certified
training facility for engineering in
Kazakhstan, delivering Parts 147/145
theoretical and practical training. In
collaboration with the Flight Training Centre
(see below), the Training Academy delivers
all aspects of operational training:
The Training Academy offers
approximately 79 programmes in
engineering, ground and in-flight
services based on international
standards (ICAO, IATA, and EASA
147/145), which are accredited by the
AAK and therefore also made available
to external organisations.
The new Flight Training Centre, based
at Astana Airport, was commissioned in
2023 and enables training on a L3 Harris
Reality Seven A320 Full-Flight Simulator.
It is the first of its kind in Kazakhstan
and has a 7,000-hour annual training
capacity, which the Group estimates will
reduce travel time to external training
facilities by approximately 25%, saving
over 1,000 pilot days. Procedural training
for Aerosim fixed-base trainers, which
are supported by the simulator, is also
carried out. The Group is currently
planning the purchase of a second
simulator in 2025.
Advanced cabin safety training at the
Training Academy means that the Group
does not rely on third-party providers for
initial or tri-annual crew training for its
Airbus fleet. Using a Cabin Emergency
Evacuation Trainer, supplied by Skyart,
and a Real Fire-Fighting Trainer, supplied
by Flame Aviation, for A320 family
aircraft, rather than sending pilots and
crew to Germany and Turkey for training,
will result in significant savings. The
Group also intends to provide safety and
emergency procedures training to other
airlines in Kazakhstan in the future.
Launched in 2020, as part of the
‘Learning/Career Pathway’ for the pilot
community, an internal leadership
programme course for captains, ‘Leading
for Command’ is run on a regular basis
for newly promoted Captains.
The Group instigated the Pilot Ab-Initio
Cadet Programme in 2008 to fulfil the
need for a local supply of qualified
pilots. Approximately 20 cadets join the
programme each year and 270 cadets
have since graduated, with a significant
number joining flight crews and some
already promoted to captain. The size of
the annual intake will be increased in
2024 to meet the ongoing demand for
qualified pilots.
All crew undertake training, including
safety and emergency procedures, first
aid and dangerous goods. The Training
Academy also provides promotion
training for crew moving to business
class or other roles within the business.
Having completed two EASA Part 66
programmes for trainee mechanics
between 2018 and 2022, in August 2023,
the Training Academy also introduced an
apprenticeship programme. New recruits
participate in a five-year course and earn
international and local certifications with
a further option to pursue the EASA B1/
B2 licensed qualification. The Group’s
Maintenance Standards department
employs airworthiness engineers,
who provide mentoring of standards
performance and co-ordinate training
within the EASA Part 147 programme.
37 Air Astana Integrated Report 2023 36 Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
OPER ATING RE VIE W
CONTINUED
A winning
customer
experience
The Air Astana Group prides itself on providing
excellence across every aspect of the services
that it offers. This is reflected back by the high
levels of customer loyalty experienced by its
airlines and the external recognition and awards
received from international associations and
passenger forums alike.
Both Air Astana and FlyArystan have received awards for their
quality of service during the last 12 months. It was particularly
pleasing that both airlines received accolades in the Skytrax World
Airline Awards. Air Astana was once again recognised as the ‘Best
Airline in Central Asia and CIS’ – for the eleventh time and eighth
consecutive success between 2012 and 2023 1 . It also won the
award for ‘Best Airline Staff Service in Central Asia and CIS’, a
testimony to the combined airline staff service across both the
airport and the onboard experience. FlyArystan was recognised as
the ‘Best Low-Cost Airline in Central Asia and CIS’ and also as ‘Most
Improved Airline in Central Asia and CIS’, which is determined by an
airline’s change in global rating and performance improvement
across the award categories.
Air Astana is ranked among the Top 50 airlines in the world by
Skytrax having increased its position from 37 in 2022 (43 in 2021).
Despite being a relatively new kid on the block, FlyArystan was
certified as a four-star LCC at the end of 2022. For the third time,
Air Astana received both the Five Star Major Airline Award from
APEX and won the TripAdvisor Travellers’ Choice Award in
category ‘Regional Airlines in Asia’.
Other awards in 2023
The Group was also delighted that Air Astana received an APEX Award
in the ‘Best entertainment system in Central and South Asia’ for the
second time in 2023, having won the same award in the previous
year. APEX is a global non-profit international organisation that awards
prizes in the international airline industry, based on passenger surveys
with opinions collected in partnership with TripIt, a leading travel app.
As part of Air Astana’s in-flight service, passengers can relax
and enjoy watching the latest movie releases, TV series and
documentaries in different languages and listen to music and
podcasts to suit every taste; there is also an excellent selection
of children’s entertainment. Within the media library, the airline
introduced an accessibility section with content suitable for both
hearing and visually impaired passengers.
On-time performance
OTP calculations are based on on-time
departures and indicate how reliable an
airline is with delivering on its commitment
to published schedule. This comes high on
the list of passengers’ criteria for airline
choice and therefore is key to the Group’s
customer service offering.
The rapid revival in international air travel
found airlines struggling to meet demand
while experiencing a shortage of employees
at airports and pressures on supply-chain
post COVID-19. In order to improve, the
Group introduced new measures including
restrictions on personal leave and training
for operational crew during busy periods and
improving communications with domestic
airports to identify planned construction
work that could potentially disrupt OTP.
These initiatives positively impacted the
Group’s average OTP in 2023, seeing it
increase to 79.5%. OTP for the individual
airlines both improved with Air Astana
delivering 81%, compared with 74% in 2022,
and FlyArystan 78%, up from 75%. OTP
across the board was higher than that of the
average comparable EU carriers at 68.8%
and US carriers at 79.5%.
Customer experience
Air Astana has developed an integrated
programme for customer experience
improvement, which co-ordinated across
its service delivery teams under the
management of a dedicated Customer
Experience team. Quantitative and
qualitative metrics are used to measure
customer satisfaction, with a particular
focus on industry-adopted indicators Net
Promoter Score (NPS) and Customer
Satisfaction Rating (CSAT).
As well as onboard data collected by the
airline, customers are able to complete an
online survey voluntarily after each flight.
Data is then monitored and any necessary
follow-up actions reported to the relevant
business units. Air Astana access more
accurate, detailed and up-to-date information
through Power BI application, which
examines results of NPS and CSAT by route,
date, age, gender, purpose of travel, Nomad
Club tier, journey stages and touchpoints.
All responsible managers are able to view
the onboard survey and post-flight survey
results that are updated every 7 and 6 hours
respectively through the comprehensively
visualised Power BI Dashboard.
Access to the post-flight survey results
is also available to every responsible
manager and is updated every six hours.
The Group has also implemented a ‘mystery
shopper’ programme, which analyses all
customer touchpoints.
These data sets enable the Group to
prioritise its efforts in product and services
development, driving a positive customer
experience, a high level of customer
satisfaction and increased customer loyalty.
In 2023, one outcome was an initiative to
relaunch the frequent flyer programme
in order to make it more attractive, user
friendly and with upgraded redemption
benefits. To align the customer experience,
the Customer Experience team also covers
product development and premium services
development, meeting regularly with
colleagues in In-Flight Services, Ground
Services and the Commercial business unit.
In 2023, Air Astana’s NPS and CSAT
averages were 46 and 79, respectively.
These compare with 36 and 75 in
2022, respectively.
FlyArystan currently tracks customer
satisfaction every month based on
feedback from passenger surveys. In
comparison with leading low-cost carriers
worldwide FlyArystan has significantly high
performance, based on customer responses
in relation to price and quality of service.
Its NPS and CSAT averages in 2023 were
37 and 84, respectively.
1 The Skytrax World Airline Awards were not held in 2020.
SKYTRAX ‘BEST AIRLINE IN CENTRAL ASIA
AND CIS’ AWARDS
39 Air Astana Integrated Report 2023 38 Air Astana Integrated Report 2023
A winning
customer
experience
The Air Astana Group prides itself on providing
excellence across every aspect of the services
that it offers. This is reflected back by the high
levels of customer loyalty experienced by its
airlines and the external recognition and awards
received from international associations and
passenger forums alike.
Both Air Astana and FlyArystan have received awards for their
quality of service during the last 12 months. It was particularly
pleasing that both airlines received accolades in the Skytrax World
Airline Awards. Air Astana was once again recognised as the ‘Best
Airline in Central Asia and CIS’ – for the eleventh time and eighth
consecutive success between 2012 and 2023 1 . It also won the
award for ‘Best Airline Staff Service in Central Asia and CIS’, a
testimony to the combined airline staff service across both the
airport and the onboard experience. FlyArystan was recognised as
the ‘Best Low-Cost Airline in Central Asia and CIS’ and also as ‘Most
Improved Airline in Central Asia and CIS’, which is determined by an
airline’s change in global rating and performance improvement
across the award categories.
Air Astana is ranked among the Top 50 airlines in the world by
Skytrax having increased its position from 37 in 2022 (43 in 2021).
Despite being a relatively new kid on the block, FlyArystan was
certified as a four-star LCC at the end of 2022. For the third time,
Air Astana received both the Five Star Major Airline Award from
APEX and won the TripAdvisor Travellers’ Choice Award in
category ‘Regional Airlines in Asia’.
Other awards in 2023
The Group was also delighted that Air Astana received an APEX Award
in the ‘Best entertainment system in Central and South Asia’ for the
second time in 2023, having won the same award in the previous
year. APEX is a global non-profit international organisation that awards
prizes in the international airline industry, based on passenger surveys
with opinions collected in partnership with TripIt, a leading travel app.
As part of Air Astana’s in-flight service, passengers can relax
and enjoy watching the latest movie releases, TV series and
documentaries in different languages and listen to music and
podcasts to suit every taste; there is also an excellent selection
of children’s entertainment. Within the media library, the airline
introduced an accessibility section with content suitable for both
hearing and visually impaired passengers.
On-time performance
OTP calculations are based on on-time
departures and indicate how reliable an
airline is with delivering on its commitment
to published schedule. This comes high on
the list of passengers’ criteria for airline
choice and therefore is key to the Group’s
customer service offering.
The rapid revival in international air travel
found airlines struggling to meet demand
while experiencing a shortage of employees
at airports and pressures on supply-chain
post COVID-19. In order to improve, the
Group introduced new measures including
restrictions on personal leave and training
for operational crew during busy periods and
improving communications with domestic
airports to identify planned construction
work that could potentially disrupt OTP.
These initiatives positively impacted the
Group’s average OTP in 2023, seeing it
increase to 79.5%. OTP for the individual
airlines both improved with Air Astana
delivering 81%, compared with 74% in 2022,
and FlyArystan 78%, up from 75%. OTP
across the board was higher than that of the
average comparable EU carriers at 68.8%
and US carriers at 79.5%.
Customer experience
Air Astana has developed an integrated
programme for customer experience
improvement, which co-ordinated across
its service delivery teams under the
management of a dedicated Customer
Experience team. Quantitative and
qualitative metrics are used to measure
customer satisfaction, with a particular
focus on industry-adopted indicators Net
Promoter Score (NPS) and Customer
Satisfaction Rating (CSAT).
As well as onboard data collected by the
airline, customers are able to complete an
online survey voluntarily after each flight.
Data is then monitored and any necessary
follow-up actions reported to the relevant
business units. Air Astana access more
accurate, detailed and up-to-date information
through Power BI application, which
examines results of NPS and CSAT by route,
date, age, gender, purpose of travel, Nomad
Club tier, journey stages and touchpoints.
All responsible managers are able to view
the onboard survey and post-flight survey
results that are updated every 7 and 6 hours
respectively through the comprehensively
visualised Power BI Dashboard.
Access to the post-flight survey results
is also available to every responsible
manager and is updated every six hours.
The Group has also implemented a ‘mystery
shopper’ programme, which analyses all
customer touchpoints.
These data sets enable the Group to
prioritise its efforts in product and services
development, driving a positive customer
experience, a high level of customer
satisfaction and increased customer loyalty.
In 2023, one outcome was an initiative to
relaunch the frequent flyer programme
in order to make it more attractive, user
friendly and with upgraded redemption
benefits. To align the customer experience,
the Customer Experience team also covers
product development and premium services
development, meeting regularly with
colleagues in In-Flight Services, Ground
Services and the Commercial business unit.
In 2023, Air Astana’s NPS and CSAT
averages were 46 and 79, respectively.
These compare with 36 and 75 in
2022, respectively.
FlyArystan currently tracks customer
satisfaction every month based on
feedback from passenger surveys. In
comparison with leading low-cost carriers
worldwide FlyArystan has significantly high
performance, based on customer responses
in relation to price and quality of service.
Its NPS and CSAT averages in 2023 were
37 and 84, respectively.
1 The Skytrax World Airline Awards were not held in 2020.
SKYTRAX ‘BEST AIRLINE IN CENTRAL ASIA
AND CIS’ AWARDS
39 Air Astana Integrated Report 2023 38 Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
A winning
customer experience
The Voice of the Customer
During 2023, Air Astana hosted its first The
Voice of the Customer forum, inviting over
250 frequent flyer members of its Nomad
Club loyalty programme to meet with top
management and share their experience of
every stage of interacting with Air Astana,
from booking tickets to arriving at their
final destination. By talking directly to its
customers, the airline was able to conduct
an in-depth study of their expectations, to
discuss their opinions at every stage of the
journey and learn how they felt about
performance, products and services.
While the airline constantly strives to respond
to customer feedback through questionnaires
and surveys, this opened the door to a new
era of interaction in which they could also be
architects of its future high-quality offering.
The session was extremely productive and
many of the suggestions put forward have
already been taken on board. These included
the functionality of the mobile app and
website to make it more intuitive to use,
to be able to book multi-flight routes, to
receive notifications about flight delays and
changes and generally to speed up booking
transactions. This exchange of ideas was
invaluable to Air Astana in helping it to adapt
its services and products to meet customers’
expectations and modern trends in aviation.
Managing the day-to-day
Listening to feedback from customers
and enacting change where possible is
crucial to Air Astana’s aim to make its flights
a convenient and pleasurable experience.
This year saw the introduction of the CRM
system (Zendesk) to enhance the premium
services segment and day-to-day service
recovery. This has eliminated unnecessary
bureaucracy, streamlined internal
communications and played a pivotal role in
facilitating a more efficient and effective
handling of customer queries.
Issues connected with flight delays
make up a large proportion of customer
complaints each year. In 2023, frontline
staff were equipped with the tools and
authority to promptly address and resolve
any customer queries. The electronic
vouchers (e-vouchers) introduced to instantly
compensate customers for service disruptions
have proved invaluable. These can be used as
a payment method for future ticket purchases
or ancillary products through air Astana’s
website or app.
These strategic implementations notably
improved service recovery and disruption
management efficiency during 2023. And
this also contributed significantly to making
the customer service experience more
seamless and responsive with a resulting
30% reduction in customer complaints
compared with the previous year.
Summer `23 Taskforce
The summer is always the busiest time of
year with thousands of customers flocking to
get away for their holidays and increasingly
so with Air Astana’s expanding schedule of
flights to lifestyle destinations. To provide
assistance to our customers during check-in
and pre-flight procedures and also support
front-line teams, the airline launched a
Summer’23 Taskforce Volunteer Group project,
which ran for three months from June.
Back-office volunteers in branded T-shirts,
emblazoned with a ‘We Care’ motto,
actively engaged in responding to
passengers` requests and needs during
peak times, as well as during delays and
scheduled disruptions, to resolve their
issues on-the-spot and minimise the
burden on check-in agents. The volunteers
helped manage check-in queues to speed
up the process and reduce waiting time.
During delays they provided water for
customers, helped ground service staff with
passenger accommodation, issued meal
vouchers and accompanied customers.
The project was another aspect of Air Astana
demonstrating its commitment to creating a
definitive customer experience with
proactive assistance and reassurance as
needed. This was positively reflected in
customer satisfaction feedback on their
experience at the airport before their flights.
Major IT investments and
digitalisation
The Air Astana Group considers itself to be
a digital leader among airlines in the Central
Asia and Caucasus regions. In order to
streamline processes, reduce bureaucracy
and increase efficiency, the Group launched
its Airline Performance Excellence (APEX)
programme during the COVID-19 pandemic.
This enables it to have ready access to
information and to simulate scenarios,
particularly during periods of rapid change.
Since then, several budget and forecast
modules have been initiated to manage
fixed costs, variable costs, HR, operational
costs, as well as procurement planning
automation with stock controls and accrual
management systems. As part of the
continuous improvement process and
as a fully functioning part of the Group’s
strategic planning process, the next
phase is to enhance the forecasting
ability within these modules.
The Group is also investing in a new
internet booking engine, which is designed
to boost the return rate of website visitors
and e-commerce conversions and enhance
the overall digital experience through faster
performance and a more modern user-
friendly interface. Functionality
improvements will include:
The convenience of allowing website
users to locate their nearest airport,
select ‘low-fare days’ and store
passenger and credit card details, all of
which will simplify and speed up the
booking process and help to strengthen
customer loyalty.
Enhancements are being made to the
Nomad loyalty programme, which will
facilitate easier user registration for the
loyalty programme and clearer options
for redeeming accrued points.
A wider variety of ancillary products will
be displayed during the booking process
to promote an increased uptake of these
high-margin additional extras.
OPER ATING RE VIE W CONTINUED 40 41 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
customer experience
The Voice of the Customer
During 2023, Air Astana hosted its first The
Voice of the Customer forum, inviting over
250 frequent flyer members of its Nomad
Club loyalty programme to meet with top
management and share their experience of
every stage of interacting with Air Astana,
from booking tickets to arriving at their
final destination. By talking directly to its
customers, the airline was able to conduct
an in-depth study of their expectations, to
discuss their opinions at every stage of the
journey and learn how they felt about
performance, products and services.
While the airline constantly strives to respond
to customer feedback through questionnaires
and surveys, this opened the door to a new
era of interaction in which they could also be
architects of its future high-quality offering.
The session was extremely productive and
many of the suggestions put forward have
already been taken on board. These included
the functionality of the mobile app and
website to make it more intuitive to use,
to be able to book multi-flight routes, to
receive notifications about flight delays and
changes and generally to speed up booking
transactions. This exchange of ideas was
invaluable to Air Astana in helping it to adapt
its services and products to meet customers’
expectations and modern trends in aviation.
Managing the day-to-day
Listening to feedback from customers
and enacting change where possible is
crucial to Air Astana’s aim to make its flights
a convenient and pleasurable experience.
This year saw the introduction of the CRM
system (Zendesk) to enhance the premium
services segment and day-to-day service
recovery. This has eliminated unnecessary
bureaucracy, streamlined internal
communications and played a pivotal role in
facilitating a more efficient and effective
handling of customer queries.
Issues connected with flight delays
make up a large proportion of customer
complaints each year. In 2023, frontline
staff were equipped with the tools and
authority to promptly address and resolve
any customer queries. The electronic
vouchers (e-vouchers) introduced to instantly
compensate customers for service disruptions
have proved invaluable. These can be used as
a payment method for future ticket purchases
or ancillary products through air Astana’s
website or app.
These strategic implementations notably
improved service recovery and disruption
management efficiency during 2023. And
this also contributed significantly to making
the customer service experience more
seamless and responsive with a resulting
30% reduction in customer complaints
compared with the previous year.
Summer `23 Taskforce
The summer is always the busiest time of
year with thousands of customers flocking to
get away for their holidays and increasingly
so with Air Astana’s expanding schedule of
flights to lifestyle destinations. To provide
assistance to our customers during check-in
and pre-flight procedures and also support
front-line teams, the airline launched a
Summer’23 Taskforce Volunteer Group project,
which ran for three months from June.
Back-office volunteers in branded T-shirts,
emblazoned with a ‘We Care’ motto,
actively engaged in responding to
passengers` requests and needs during
peak times, as well as during delays and
scheduled disruptions, to resolve their
issues on-the-spot and minimise the
burden on check-in agents. The volunteers
helped manage check-in queues to speed
up the process and reduce waiting time.
During delays they provided water for
customers, helped ground service staff with
passenger accommodation, issued meal
vouchers and accompanied customers.
The project was another aspect of Air Astana
demonstrating its commitment to creating a
definitive customer experience with
proactive assistance and reassurance as
needed. This was positively reflected in
customer satisfaction feedback on their
experience at the airport before their flights.
Major IT investments and
digitalisation
The Air Astana Group considers itself to be
a digital leader among airlines in the Central
Asia and Caucasus regions. In order to
streamline processes, reduce bureaucracy
and increase efficiency, the Group launched
its Airline Performance Excellence (APEX)
programme during the COVID-19 pandemic.
This enables it to have ready access to
information and to simulate scenarios,
particularly during periods of rapid change.
Since then, several budget and forecast
modules have been initiated to manage
fixed costs, variable costs, HR, operational
costs, as well as procurement planning
automation with stock controls and accrual
management systems. As part of the
continuous improvement process and
as a fully functioning part of the Group’s
strategic planning process, the next
phase is to enhance the forecasting
ability within these modules.
The Group is also investing in a new
internet booking engine, which is designed
to boost the return rate of website visitors
and e-commerce conversions and enhance
the overall digital experience through faster
performance and a more modern user-
friendly interface. Functionality
improvements will include:
The convenience of allowing website
users to locate their nearest airport,
select ‘low-fare days’ and store
passenger and credit card details, all of
which will simplify and speed up the
booking process and help to strengthen
customer loyalty.
Enhancements are being made to the
Nomad loyalty programme, which will
facilitate easier user registration for the
loyalty programme and clearer options
for redeeming accrued points.
A wider variety of ancillary products will
be displayed during the booking process
to promote an increased uptake of these
high-margin additional extras.
OPER ATING RE VIE W CONTINUED 40 41 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
SUSTA IN ABILIT Y
Growing
our business responsibly
At Air Astana, we understand that
our operations have a profound
impact on the environment.
We are committed to mitigating
these impacts to ensure a
sustainable and responsible
future for the aviation industry.
In the face of global challenges and an
ever-changing landscape, sustainability
has become a cornerstone of our corporate
strategy. We recognise that it is imperative
to balance our growth with the need to
safeguard the natural world, reduce our
carbon footprint and contribute to the
well-being of the communities we serve.
Throughout 2023, we demonstrated a
steadfast commitment to environmental
stewardship. Our emphasis on fuel
efficiency, technological advancements
and sustainable practices has not only
improved operational efficiency but
has also positioned us as a committed
contributor to sustainable aviation. We have
prioritised exploring alternative energy
sources and implementing fuel-efficient
flight plans to minimise environmental
impact, demonstrating our dedication to
responsible and environmentally
conscious practices.
Our dedication to sustainability extends
beyond operational considerations.
We actively engage with employees,
partners and stakeholders to foster a
culture of responsibility and environmental
consciousness.
Our approach to sustainability
The Air Astana Group strives to become
the leading environmentally sustainable
and socially responsible air carrier in the CIS
and Central Asia. To address the impact of
its business on the environment and in
the communities where it operates, the
Air Astana Group takes a multifaceted
approach to sustainability, which includes
reducing emissions, waste management,
resources conservation (such as energy)
and supporting local communities.
ESG Strategy
In February 2023, the Group approved a fully
integrated ESG Strategy for 2023–2032. It is
built on best practice and international
standards, takes into consideration already
planned or ongoing steps of the Group in the
field of sustainability and is guided by the
United Nations’ Sustainable Development
Goals (SDGs). The Group has identified six
priority SDGs: Quality Education (SDG 4),
Gender Equality (SDG 5), Decent Work
and Economic Growth (SDG 8), Reduced
Inequalities (SDG 10), Climate Action (SDG 13)
and Partnerships for the Goals (SDG 17).
By promoting awareness and education on
sustainable practices, we aim to inspire
positive change within and beyond our
Company.
In collaboration with business partners and
regulatory authorities, we are taking part in
a research study exploring the potential of
producing and using sustainable aviation
fuel in Kazakhstan. This collaborative effort
reflects our commitment to understanding
and advancing sustainable practices within
the aviation sector. Recognising the
significance of collective action in
addressing global challenges to create
a more sustainable and resilient future,
we are proud of our contribution to this
groundbreaking research initiative.
Our accomplishments during the last year
underpin the ongoing commitment required
on our sustainability journey. We remain
steadfast in pursuit of excellence, seeking
innovative solutions and partnerships that
will help drive further progress. Our vision
for a sustainable future is not just a goal
but a responsibility that we embrace
with determination.
As part of this programme, the Group is
replacing Airbus family aircraft with new
generation A320 and A321neos. Airbus
specifies that these can reduce fuel
consumption by up to 20%, CO 2 (NO X )
emissions by 20% and aircraft noise by
50% compared with the previous
generation of A320ceo family aircraft. In
recent years, the Group has taken proactive
measures to lower its CO 2 emissions,
reducing from 0.122 CO 2 emissions per RPK
in 2016 to 0.076 in 2023. A saving of 38%,
this compares favourably with equivalent
international network carriers and LCCs.
The Group is currently committed to
achieving net zero by 2060. However,
during 2024, the Group plans to update its
LCDP and reconsider this commitment to
net zero by 2050 in line with the long-term
goal adopted by the International Civil
Aviation Organisation, accompanied by
a sustainability roadmap with credible
near-term targets for the next five years.
These will be independently verified by a
third party as science-based targets (SBTi),
aligned with the mitigation objectives of
the Paris Agreement.
In line with the recent Association of Asia
Pacific Airlines resolution, the Group has
also set a target of achieving a collective
5% SAF blending by 2030 (subject to SAF
availability on the market). This target may
be adjusted if required following the
LCDP update.
Prioritising specific SDGs has allowed us to
craft the ESG Strategy that is not only more
targeted but also more effective and better
suited to the distinctive challenges and
opportunities within the airline sector.
While we have a particular focus on these
six SDGs, we are not neglecting the rest.
All 17 SDGs are essential for a sustainable
future and merit our attention. However,
within the intricate framework of this
industry, we have made a strategic choice
to allocate efforts towards those SDGs that
most closely match the core operations and
capabilities, and where we have the
potential to make a significant impact.
The ESG Strategy’s Action Plan includes
short-, medium- and long-term initiatives
that target:
Addressing environmental and social
concerns in a proactive and transparent
manner
Providing a systematic approach to
managing ESG issues
Providing measurable and
understandable data to investors
Complying with international
requirements for sustainable
development
Monitoring the ESG agenda
Long-term financial well-being.
Low-Carbon Development Programme
To set goals for reducing its GHG emissions,
the Group has developed a Low-Carbon
Development Programme (LCDP) for
2023–2032. This is incorporated into the
Group’s ESG Strategy and is consistent with
Kazakhstan’s aim to achieve carbon
neutrality by 2060.
OUR SIX PRIORITY UN SDGS
42 43 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
Growing
our business responsibly
At Air Astana, we understand that
our operations have a profound
impact on the environment.
We are committed to mitigating
these impacts to ensure a
sustainable and responsible
future for the aviation industry.
In the face of global challenges and an
ever-changing landscape, sustainability
has become a cornerstone of our corporate
strategy. We recognise that it is imperative
to balance our growth with the need to
safeguard the natural world, reduce our
carbon footprint and contribute to the
well-being of the communities we serve.
Throughout 2023, we demonstrated a
steadfast commitment to environmental
stewardship. Our emphasis on fuel
efficiency, technological advancements
and sustainable practices has not only
improved operational efficiency but
has also positioned us as a committed
contributor to sustainable aviation. We have
prioritised exploring alternative energy
sources and implementing fuel-efficient
flight plans to minimise environmental
impact, demonstrating our dedication to
responsible and environmentally
conscious practices.
Our dedication to sustainability extends
beyond operational considerations.
We actively engage with employees,
partners and stakeholders to foster a
culture of responsibility and environmental
consciousness.
Our approach to sustainability
The Air Astana Group strives to become
the leading environmentally sustainable
and socially responsible air carrier in the CIS
and Central Asia. To address the impact of
its business on the environment and in
the communities where it operates, the
Air Astana Group takes a multifaceted
approach to sustainability, which includes
reducing emissions, waste management,
resources conservation (such as energy)
and supporting local communities.
ESG Strategy
In February 2023, the Group approved a fully
integrated ESG Strategy for 2023–2032. It is
built on best practice and international
standards, takes into consideration already
planned or ongoing steps of the Group in the
field of sustainability and is guided by the
United Nations’ Sustainable Development
Goals (SDGs). The Group has identified six
priority SDGs: Quality Education (SDG 4),
Gender Equality (SDG 5), Decent Work
and Economic Growth (SDG 8), Reduced
Inequalities (SDG 10), Climate Action (SDG 13)
and Partnerships for the Goals (SDG 17).
By promoting awareness and education on
sustainable practices, we aim to inspire
positive change within and beyond our
Company.
In collaboration with business partners and
regulatory authorities, we are taking part in
a research study exploring the potential of
producing and using sustainable aviation
fuel in Kazakhstan. This collaborative effort
reflects our commitment to understanding
and advancing sustainable practices within
the aviation sector. Recognising the
significance of collective action in
addressing global challenges to create
a more sustainable and resilient future,
we are proud of our contribution to this
groundbreaking research initiative.
Our accomplishments during the last year
underpin the ongoing commitment required
on our sustainability journey. We remain
steadfast in pursuit of excellence, seeking
innovative solutions and partnerships that
will help drive further progress. Our vision
for a sustainable future is not just a goal
but a responsibility that we embrace
with determination.
As part of this programme, the Group is
replacing Airbus family aircraft with new
generation A320 and A321neos. Airbus
specifies that these can reduce fuel
consumption by up to 20%, CO 2 (NO X )
emissions by 20% and aircraft noise by
50% compared with the previous
generation of A320ceo family aircraft. In
recent years, the Group has taken proactive
measures to lower its CO 2 emissions,
reducing from 0.122 CO 2 emissions per RPK
in 2016 to 0.076 in 2023. A saving of 38%,
this compares favourably with equivalent
international network carriers and LCCs.
The Group is currently committed to
achieving net zero by 2060. However,
during 2024, the Group plans to update its
LCDP and reconsider this commitment to
net zero by 2050 in line with the long-term
goal adopted by the International Civil
Aviation Organisation, accompanied by
a sustainability roadmap with credible
near-term targets for the next five years.
These will be independently verified by a
third party as science-based targets (SBTi),
aligned with the mitigation objectives of
the Paris Agreement.
In line with the recent Association of Asia
Pacific Airlines resolution, the Group has
also set a target of achieving a collective
5% SAF blending by 2030 (subject to SAF
availability on the market). This target may
be adjusted if required following the
LCDP update.
Prioritising specific SDGs has allowed us to
craft the ESG Strategy that is not only more
targeted but also more effective and better
suited to the distinctive challenges and
opportunities within the airline sector.
While we have a particular focus on these
six SDGs, we are not neglecting the rest.
All 17 SDGs are essential for a sustainable
future and merit our attention. However,
within the intricate framework of this
industry, we have made a strategic choice
to allocate efforts towards those SDGs that
most closely match the core operations and
capabilities, and where we have the
potential to make a significant impact.
The ESG Strategy’s Action Plan includes
short-, medium- and long-term initiatives
that target:
Addressing environmental and social
concerns in a proactive and transparent
manner
Providing a systematic approach to
managing ESG issues
Providing measurable and
understandable data to investors
Complying with international
requirements for sustainable
development
Monitoring the ESG agenda
Long-term financial well-being.
Low-Carbon Development Programme
To set goals for reducing its GHG emissions,
the Group has developed a Low-Carbon
Development Programme (LCDP) for
2023–2032. This is incorporated into the
Group’s ESG Strategy and is consistent with
Kazakhstan’s aim to achieve carbon
neutrality by 2060.
OUR SIX PRIORITY UN SDGS
42 43 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Divisional heads of business areas
Develop and implement initiatives.
Senior Management Team
Drives the implementation of sustainability principles as well as ensuring the plans
are in place for stakeholder engagement and progressing initiatives.
Compliance and Sustainability Department
Oversees development and implementation of sustainability objectives,
with the roll-out of initiatives delegated to department heads.
SUSTA IN ABILIT Y CONTINUED
Sustainability governance
The Board of Directors has overall
responsibility for the sustainable
development of the Group and delegates
the oversight of ESG risks and issues to the
ESG Committee. Where there are crossovers
on ESG matters, the ESG Committee liaises
with other Board Committees; for example,
with the Audit Committee on reporting
ESG-related risks and with the Nomination
and Remuneration Committee. Day-to-day
accountability for ESG is the remit of the
President and CEO. The development and
implementation of sustainability objectives
in general is overseen by the Compliance
and Sustainability department, with the
roll-out of initiatives delegated to
department heads.
Details of the activities of the ESG Committee
are set out on page 98 of this Integrated
Report. In 2022 the Board undertook an ESG
training session. ESG training for the Senior
Management Team was held in March 2023
and followed up by training sessions for
employees during the year.
The Group’s development strategy
and decision-making are based on
sustainable development principles
pertaining to openness, accountability,
transparency, ethical behaviour, interests
of stakeholders, justice, human rights and
zero tolerance of corruption.
These form the foundation of our
approach to risk management, planning,
human resources management, investment
activities, reporting and operational
activities.
Ethics and compliance
The sustainable development of our
business is based on the principles of
openness, accountability, transparency,
ethical behaviour, justice, respect for human
rights and zero tolerance for corruption.
We operate our business with honesty and
integrity, actively promoting a culture of
ethical behaviour and compliance through
our HEART (Hospitable, Efficient, Active,
Reliable, Trustworthy) and CHARM (Creative,
Happy, Agile, Reliable, Modern) values in
Air Astana and FlyArystan, respectively.
This approach has helped us to foster
longstanding and trusted relationships
with our business partners. Our Ethics
and Compliance Framework comprises
a number of policies that support this
ethos. The Compliance and Sustainability
Department supplies quarterly reports on
these for review by the Company’s Board of
Directors and the Audit Committee:
Code of Conduct
Speak-Up Policy
Corporate Fraud Prevention Policy
Anti-Corruption Policy
Policy for Prevention and Resolution
of Conflicts of Interest.
An online Code of Conduct training
course was developed in 2021 and made
available to employees during 2022. In
2023, the Compliance team revised the
Code of Conduct and the corresponding
online course with newly added topics
on human rights and harassment, which
emphasise our commitment to upholding
the fundamental principles of human rights
and treating all individuals with dignity and
respect, as well as providing a safe and
respectful workplace for all employees.
A total of 3,050 employees successfully
completed Code of Conduct training online,
which included sections on the Company’s
anti-corruption practices. Of these
participants, 2,995 were based within
Kazakhstan, while 55 were stationed at
international locations. In addition, 174
top- and middle-level management levels
participated in this training. The induction
training for 655 new hires also incorporated
anti-corruption elements.
A variety of communication channels
is used to maintain and strengthen the
compliance culture within the Group and
the mindsets of employees. These include
articles available through the Group’s
mobile app and social networks.
In 2023, the Compliance team conducted
an annual assessment of corruption risks in
line with legal requirements for combating
corruption in the Republic of Kazakhstan.
This procedure scrutinises operational
activities across all departments with
inherent corruption risks, ensuring
comprehensive coverage, with specific
focus on those business processes most
vulnerable to such risks – procurement,
finance, recruitment, appraisal, promotion
and dismissal of employees. This thorough
assessment, conducted based on
methodology detailed in the Risk
Management section of this Integrated
Report, showed that the majority of
the corruption risks within the Group’s
operational scope are categorised as
‘very low’ to ‘low’ levels and is affirmation
of the effective measures employed in
the management and minimisation of
corruption risks. The process engaged
62 people from the top and middle
management. During the analysis,
employees not only covered the (re)
assessment of potential corruption risks
and updates on risk management actions,
but were also thoroughly briefed on
anti-corruption methods and policies
to ensure a robust understanding and
implementation of the anti-corruption
framework at all levels within the Company.
In our commitment to transparency and
ethical conduct, in 2023, there were four
reported and confirmed incidents of petty
corruption. These incidents all related to the
improper clearance of excess baggage for a
fee paid directly to the check-in agents. In
line with our zero-tolerance policy towards
corruption and our dedication to uphold
the highest standards of integrity, all the
employees involved in these incidents were
either dismissed or subjected to disciplinary
action. It is noteworthy that during this
period there were no instances where
contracts with business partners were
terminated or not renewed due to
Sanctions compliance
In response to Russia-related sanctions
imposed by the US, UK and EU, Air Astana
Group continued to exercise in-house
initiatives, including the daily monitoring
of sanctions updates and manual screening
of counterparties for sanctions-related
exposures.
In 2023, a new edition of the Sanctions
Policy was issued to ensure compliance
with the latest changes in international
sanctions, including specific instructions
for the Group’s departments.
Beyond implementing measures to prevent
sanctions, the Compliance team has also
played a crucial role in examining, evaluating
and mitigating additional compliance risks.
This includes reinforcing anti-corruption
activities, conducting due diligence on third
parties and other related practices.
Reinforcing a compliance culture
We continue to operate a whistleblowing
facility (Hotline) – open to employees or
third parties such as customers, business
partners and other stakeholders – in order
to prevent cases of fraud, corruption,
discrimination, unethical behaviour and
other breaches relating to our activities.
For the purpose of confidentiality and
anonymity, an independent external
operator processes all the messages
received across various reporting channels.
Through the relevant reports sent to the
Compliance and Sustainability Department
for further investigation, any legislative
and/or Code of Conduct violations can be
quickly identified.
In 2023, while there were some concerns
raised via whistleblowing communication
channels, which were all promptly
communicated to the Board of Directors for
thorough review, we are pleased to report
that none of these concerns were deemed
critical, highlighting our robust governance
framework and our commitment to
proactively addressing issues. This approach
aligns with our dedication to transparency,
ethical conduct and sustainability.
HOW WE GOVERN OUR E SG STR ATEGY
Board of Directors of Air Astana
The Board is taking ultimate responsibility and providing oversight of management
actions. The Board receives quarterly updates on ESG matters.
ESG Committee
The Committee
oversees all ESG-
related matters;
recommends to the
Board on development
and approval of the
Company’s ESG
Strategy as well as
analysis and
evaluation of its
implementation.
Nomination and
Remuneration
Committee
The Committee
oversees that
remuneration policy
and practices are
designed to support
the ESG Strategy and
promote long-term
sustainable success.
Audit Committee
The Committee is
responsible for
reviewing ESG-related
financial information
and disclosures,
ensuring ESG-related
risks are effectively
embedded in the risk
management system,
and overseeing a
whistleblower
mechanism for any
violations or concerns
related to ESG practices.
44 45 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
Develop and implement initiatives.
Senior Management Team
Drives the implementation of sustainability principles as well as ensuring the plans
are in place for stakeholder engagement and progressing initiatives.
Compliance and Sustainability Department
Oversees development and implementation of sustainability objectives,
with the roll-out of initiatives delegated to department heads.
SUSTA IN ABILIT Y CONTINUED
Sustainability governance
The Board of Directors has overall
responsibility for the sustainable
development of the Group and delegates
the oversight of ESG risks and issues to the
ESG Committee. Where there are crossovers
on ESG matters, the ESG Committee liaises
with other Board Committees; for example,
with the Audit Committee on reporting
ESG-related risks and with the Nomination
and Remuneration Committee. Day-to-day
accountability for ESG is the remit of the
President and CEO. The development and
implementation of sustainability objectives
in general is overseen by the Compliance
and Sustainability department, with the
roll-out of initiatives delegated to
department heads.
Details of the activities of the ESG Committee
are set out on page 98 of this Integrated
Report. In 2022 the Board undertook an ESG
training session. ESG training for the Senior
Management Team was held in March 2023
and followed up by training sessions for
employees during the year.
The Group’s development strategy
and decision-making are based on
sustainable development principles
pertaining to openness, accountability,
transparency, ethical behaviour, interests
of stakeholders, justice, human rights and
zero tolerance of corruption.
These form the foundation of our
approach to risk management, planning,
human resources management, investment
activities, reporting and operational
activities.
Ethics and compliance
The sustainable development of our
business is based on the principles of
openness, accountability, transparency,
ethical behaviour, justice, respect for human
rights and zero tolerance for corruption.
We operate our business with honesty and
integrity, actively promoting a culture of
ethical behaviour and compliance through
our HEART (Hospitable, Efficient, Active,
Reliable, Trustworthy) and CHARM (Creative,
Happy, Agile, Reliable, Modern) values in
Air Astana and FlyArystan, respectively.
This approach has helped us to foster
longstanding and trusted relationships
with our business partners. Our Ethics
and Compliance Framework comprises
a number of policies that support this
ethos. The Compliance and Sustainability
Department supplies quarterly reports on
these for review by the Company’s Board of
Directors and the Audit Committee:
Code of Conduct
Speak-Up Policy
Corporate Fraud Prevention Policy
Anti-Corruption Policy
Policy for Prevention and Resolution
of Conflicts of Interest.
An online Code of Conduct training
course was developed in 2021 and made
available to employees during 2022. In
2023, the Compliance team revised the
Code of Conduct and the corresponding
online course with newly added topics
on human rights and harassment, which
emphasise our commitment to upholding
the fundamental principles of human rights
and treating all individuals with dignity and
respect, as well as providing a safe and
respectful workplace for all employees.
A total of 3,050 employees successfully
completed Code of Conduct training online,
which included sections on the Company’s
anti-corruption practices. Of these
participants, 2,995 were based within
Kazakhstan, while 55 were stationed at
international locations. In addition, 174
top- and middle-level management levels
participated in this training. The induction
training for 655 new hires also incorporated
anti-corruption elements.
A variety of communication channels
is used to maintain and strengthen the
compliance culture within the Group and
the mindsets of employees. These include
articles available through the Group’s
mobile app and social networks.
In 2023, the Compliance team conducted
an annual assessment of corruption risks in
line with legal requirements for combating
corruption in the Republic of Kazakhstan.
This procedure scrutinises operational
activities across all departments with
inherent corruption risks, ensuring
comprehensive coverage, with specific
focus on those business processes most
vulnerable to such risks – procurement,
finance, recruitment, appraisal, promotion
and dismissal of employees. This thorough
assessment, conducted based on
methodology detailed in the Risk
Management section of this Integrated
Report, showed that the majority of
the corruption risks within the Group’s
operational scope are categorised as
‘very low’ to ‘low’ levels and is affirmation
of the effective measures employed in
the management and minimisation of
corruption risks. The process engaged
62 people from the top and middle
management. During the analysis,
employees not only covered the (re)
assessment of potential corruption risks
and updates on risk management actions,
but were also thoroughly briefed on
anti-corruption methods and policies
to ensure a robust understanding and
implementation of the anti-corruption
framework at all levels within the Company.
In our commitment to transparency and
ethical conduct, in 2023, there were four
reported and confirmed incidents of petty
corruption. These incidents all related to the
improper clearance of excess baggage for a
fee paid directly to the check-in agents. In
line with our zero-tolerance policy towards
corruption and our dedication to uphold
the highest standards of integrity, all the
employees involved in these incidents were
either dismissed or subjected to disciplinary
action. It is noteworthy that during this
period there were no instances where
contracts with business partners were
terminated or not renewed due to
Sanctions compliance
In response to Russia-related sanctions
imposed by the US, UK and EU, Air Astana
Group continued to exercise in-house
initiatives, including the daily monitoring
of sanctions updates and manual screening
of counterparties for sanctions-related
exposures.
In 2023, a new edition of the Sanctions
Policy was issued to ensure compliance
with the latest changes in international
sanctions, including specific instructions
for the Group’s departments.
Beyond implementing measures to prevent
sanctions, the Compliance team has also
played a crucial role in examining, evaluating
and mitigating additional compliance risks.
This includes reinforcing anti-corruption
activities, conducting due diligence on third
parties and other related practices.
Reinforcing a compliance culture
We continue to operate a whistleblowing
facility (Hotline) – open to employees or
third parties such as customers, business
partners and other stakeholders – in order
to prevent cases of fraud, corruption,
discrimination, unethical behaviour and
other breaches relating to our activities.
For the purpose of confidentiality and
anonymity, an independent external
operator processes all the messages
received across various reporting channels.
Through the relevant reports sent to the
Compliance and Sustainability Department
for further investigation, any legislative
and/or Code of Conduct violations can be
quickly identified.
In 2023, while there were some concerns
raised via whistleblowing communication
channels, which were all promptly
communicated to the Board of Directors for
thorough review, we are pleased to report
that none of these concerns were deemed
critical, highlighting our robust governance
framework and our commitment to
proactively addressing issues. This approach
aligns with our dedication to transparency,
ethical conduct and sustainability.
HOW WE GOVERN OUR E SG STR ATEGY
Board of Directors of Air Astana
The Board is taking ultimate responsibility and providing oversight of management
actions. The Board receives quarterly updates on ESG matters.
ESG Committee
The Committee
oversees all ESG-
related matters;
recommends to the
Board on development
and approval of the
Company’s ESG
Strategy as well as
analysis and
evaluation of its
implementation.
Nomination and
Remuneration
Committee
The Committee
oversees that
remuneration policy
and practices are
designed to support
the ESG Strategy and
promote long-term
sustainable success.
Audit Committee
The Committee is
responsible for
reviewing ESG-related
financial information
and disclosures,
ensuring ESG-related
risks are effectively
embedded in the risk
management system,
and overseeing a
whistleblower
mechanism for any
violations or concerns
related to ESG practices.
44 45 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
SUSTA IN ABILIT Y
CONTINUED
violations related to corruption, nor were
there any public legal cases regarding
corruption brought against the Group or its
employees. Our steadfast commitment to
combating corruption in all its forms is
unwavering, as we continue to enforce
rigorous policies and procedures to prevent
such unethical practices.
All employees are required to declare
any conflicts of interest at the recruitment
stage, when changing their job position or
voluntarily due to personal circumstances. The
process was automated in December 2022
and launched in January 2023. The high level
of conflict-of-interest declarations completed
underscores employees’ commitment to
transparency, ethical conduct and the Group’s
values. It also reflects collective dedication
to maintaining a work environment that is
free from potential conflicts of interest and
upholding the highest standards of integrity.
We continue to use online platforms that
allow us to assess the trustworthiness of
(prospective) business partners, thereby
reducing potential compliance risks
(apart from sanctions-related risks).
Customer privacy
Respecting the confidentiality of each
customer, we take the responsibility for
the protection of received personal data
very seriously. We only collect personal
information about our customers that is
necessary to enable us to deliver and
enhance the quality of our service. We are
stringent in following the principles of
personal data processing: lawfulness, fairness
and transparency; purpose limitation; data
minimisation; accuracy; storage limitation;
integrity and confidentiality; accountability.
Our Privacy Policy is based on the
requirements of the Law of the Republic
of Kazakhstan on personal data and its
protection as well as on other applicable local
and international data privacy legislation.
General terms and conditions related to the
protection of customer privacy are disclosed
on our website.
During 2023, there were no breaches
of customer privacy.
Materiality
Our first materiality assessment was carried
out in 2020. During 2023, we carried out
another assessment in order to update the
Group’s list of material topics. No changes in
material topics were identified as a result of
the assessment and these remain aligned
with our ESG Strategy.
Our approach to materiality assessment
is based on a comprehensive analysis of
external and internal resources, and includes
an online survey of stakeholders, review of
reports of peer companies, review of media
publications and an analysis of global trends
(so-called ‘megatrends’). Based on the
overall analysis, we have identified 20
material topics: those key areas that are the
most important to both the Group and its
stakeholders.
The table opposite shows how we have
aligned the material topics identified
with the priorities of our ESG Strategy
and progress on the initiatives we have
put in place.
Sustainability risks
As part of its remit, delegated from the
Board of Directors, the ESG Committee is
responsible for overseeing all aspects of ESG
risk management, which is implemented
through the Risk Management Policy.
The Risk Management Policy is based on
the best international practices in risk
management and is in accord with the ‘COSO
Enterprise Risk Management framework –
Integrating with Strategy and Performance’.
It is implemented across the business
through the Corporate Risk Management
System (CRMS). Fundamental to governance,
performance management and internal
controls, the CRMS is also key to minimising
risks to sustainability, resilience and agility.
This is vital in helping the Group adapt to
fluctuating business situations by mitigating
negative outcomes.
During 2023, particular attention was
paid to ESG and climate-related risks during
the Group’s standard risk identification and
assessment process. Full details of the Group’s
climate-related risks and opportunities can be
found in the TCFD section on page 53. Physical
climate-related risks are covered in the Risk
management section on page 78.
Relevant SDGs
Priorities and main initiatives of the ESG Strategy
PRIORIT Y A RE A A N D
M ATERIA L ISSUE S COMMITMENTS 1 STATUS
Environmental impact
management
13 17
Energy (p. 50)
Emissions (p. 51)
Waste management (p. 52)
Environmental compliance (p. 53)
Medium-term initiatives:
• Develop an Environmental Policy In progress
• Develop a cabin waste management programme In progress
Reduction of greenhouse
gas emissions
13 17
Emissions (p. 51)
Short-term initiatives:
• Reduction of CO 2 emissions in accordance with the LCDP In progress
• Conduct research independently or in co-operation with local/international
organisations on the possibility of production and use of SAF in Kazakhstan
In progress
Medium-term initiatives:
• Feasibility analysis on the launch of a programme under a carbon
offsetting mechanism
In progress
Long-term initiatives:
• Calculate Scope 3 indirect GHG emissions In progress
• Achieve the GHG emission reduction target by 2032 in line with the LCDP In progress
Corporate social responsibility
10
Long-term initiatives:
• Increase the annual volume of financial resources allocated for charity In progress
• Ensure an increase in the number of cities covered under the programme for the
socio-economic development of regions and the local community In progress
Human rights
5 8 10
Employment (p. 60)
Short-term initiatives:
• Develop a Human Rights Policy in line with the International Bill of Human Rights Implemented
• Make a statement about Modern Slavery Implemented
• Develop a policy to counter gender inequality and harassment within the Group,
as well as an employee grievance mechanism to address labour issues and
gender-based violence
Implemented
• Develop a Sexual Harassment Policy Implemented
• Develop a policy to support freedom of association and workforce diversification Implemented
Medium-term initiatives:
• Develop a Diversity, Equity and Inclusion (DEI) Policy In progress
1 The timeframe used equates to: Short – 1 year (2023), Medium – from 2024 to 2026, Long – from 2027 to 2032.
46 47 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
violations related to corruption, nor were
there any public legal cases regarding
corruption brought against the Group or its
employees. Our steadfast commitment to
combating corruption in all its forms is
unwavering, as we continue to enforce
rigorous policies and procedures to prevent
such unethical practices.
All employees are required to declare
any conflicts of interest at the recruitment
stage, when changing their job position or
voluntarily due to personal circumstances. The
process was automated in December 2022
and launched in January 2023. The high level
of conflict-of-interest declarations completed
underscores employees’ commitment to
transparency, ethical conduct and the Group’s
values. It also reflects collective dedication
to maintaining a work environment that is
free from potential conflicts of interest and
upholding the highest standards of integrity.
We continue to use online platforms that
allow us to assess the trustworthiness of
(prospective) business partners, thereby
reducing potential compliance risks
(apart from sanctions-related risks).
Customer privacy
Respecting the confidentiality of each
customer, we take the responsibility for
the protection of received personal data
very seriously. We only collect personal
information about our customers that is
necessary to enable us to deliver and
enhance the quality of our service. We are
stringent in following the principles of
personal data processing: lawfulness, fairness
and transparency; purpose limitation; data
minimisation; accuracy; storage limitation;
integrity and confidentiality; accountability.
Our Privacy Policy is based on the
requirements of the Law of the Republic
of Kazakhstan on personal data and its
protection as well as on other applicable local
and international data privacy legislation.
General terms and conditions related to the
protection of customer privacy are disclosed
on our website.
During 2023, there were no breaches
of customer privacy.
Materiality
Our first materiality assessment was carried
out in 2020. During 2023, we carried out
another assessment in order to update the
Group’s list of material topics. No changes in
material topics were identified as a result of
the assessment and these remain aligned
with our ESG Strategy.
Our approach to materiality assessment
is based on a comprehensive analysis of
external and internal resources, and includes
an online survey of stakeholders, review of
reports of peer companies, review of media
publications and an analysis of global trends
(so-called ‘megatrends’). Based on the
overall analysis, we have identified 20
material topics: those key areas that are the
most important to both the Group and its
stakeholders.
The table opposite shows how we have
aligned the material topics identified
with the priorities of our ESG Strategy
and progress on the initiatives we have
put in place.
Sustainability risks
As part of its remit, delegated from the
Board of Directors, the ESG Committee is
responsible for overseeing all aspects of ESG
risk management, which is implemented
through the Risk Management Policy.
The Risk Management Policy is based on
the best international practices in risk
management and is in accord with the ‘COSO
Enterprise Risk Management framework –
Integrating with Strategy and Performance’.
It is implemented across the business
through the Corporate Risk Management
System (CRMS). Fundamental to governance,
performance management and internal
controls, the CRMS is also key to minimising
risks to sustainability, resilience and agility.
This is vital in helping the Group adapt to
fluctuating business situations by mitigating
negative outcomes.
During 2023, particular attention was
paid to ESG and climate-related risks during
the Group’s standard risk identification and
assessment process. Full details of the Group’s
climate-related risks and opportunities can be
found in the TCFD section on page 53. Physical
climate-related risks are covered in the Risk
management section on page 78.
Relevant SDGs
Priorities and main initiatives of the ESG Strategy
PRIORIT Y A RE A A N D
M ATERIA L ISSUE S COMMITMENTS 1 STATUS
Environmental impact
management
13 17
Energy (p. 50)
Emissions (p. 51)
Waste management (p. 52)
Environmental compliance (p. 53)
Medium-term initiatives:
• Develop an Environmental Policy In progress
• Develop a cabin waste management programme In progress
Reduction of greenhouse
gas emissions
13 17
Emissions (p. 51)
Short-term initiatives:
• Reduction of CO 2 emissions in accordance with the LCDP In progress
• Conduct research independently or in co-operation with local/international
organisations on the possibility of production and use of SAF in Kazakhstan
In progress
Medium-term initiatives:
• Feasibility analysis on the launch of a programme under a carbon
offsetting mechanism
In progress
Long-term initiatives:
• Calculate Scope 3 indirect GHG emissions In progress
• Achieve the GHG emission reduction target by 2032 in line with the LCDP In progress
Corporate social responsibility
10
Long-term initiatives:
• Increase the annual volume of financial resources allocated for charity In progress
• Ensure an increase in the number of cities covered under the programme for the
socio-economic development of regions and the local community In progress
Human rights
5 8 10
Employment (p. 60)
Short-term initiatives:
• Develop a Human Rights Policy in line with the International Bill of Human Rights Implemented
• Make a statement about Modern Slavery Implemented
• Develop a policy to counter gender inequality and harassment within the Group,
as well as an employee grievance mechanism to address labour issues and
gender-based violence
Implemented
• Develop a Sexual Harassment Policy Implemented
• Develop a policy to support freedom of association and workforce diversification Implemented
Medium-term initiatives:
• Develop a Diversity, Equity and Inclusion (DEI) Policy In progress
1 The timeframe used equates to: Short – 1 year (2023), Medium – from 2024 to 2026, Long – from 2027 to 2032.
46 47 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
SUSTA IN ABILIT Y
CONTINUED
Priorities and main initiatives of the ESG Strategy continued
PRIORIT Y A RE A A N D
M ATERIA L ISSUE S COMMITMENTS STATUS
H&S practices
8
Occupational health and safety (p. 56)
Aviation safety management systems (p. 58)
Medium-term initiatives:
• Develop a policy for the safe operation of ground transport In progress
Long-term initiatives:
• Ensure a reduction in the total accident rate (TAR) per 1,000 employees
annually – 3.9 by 2024, 3.8 by 2025, 3.7 by 2026, 3.6 by 2027
In progress
• Increase the number of behavioural observations (BO) – 200 by 2024, 250 by 2025,
300 by 2026, 250 by 2027
In progress
Human resource management
4 5 8 10
Employment (p. 60)
Training and development (p. 63)
Medium-term initiatives:
• Conduct ESG training for employees Implemented
• Conduct ESG training for the Company’s Board of Directors and top management Implemented
• Ensure the availability of a certified GRI specialist In progress
• Ensure the availability of a certified professional responsible for disclosing
information on climate risk management
In progress
Long-term initiatives:
• Support the annual increase in the number of employees with disabilities recruited In progress
• Reduce staff turnover to 10% from 12% In progress
Product safety and quality
8
Innovation and digitalisation (p. 41)
Service quality (p. 38)
On-time flight performance (p. 39)
Fleet technological improvements (p. 36)
Long-term initiatives:
• 83%–85% OTP In progress
International ESG maturity
assessment
17
Medium-term initiatives:
• Receive an ESG rating In progress
• Disclose information according to the Climate Disclosure Project (CDP)
climate questionnaire
In progress
Maturity of ESG reporting
practices
17
Short-term initiatives:
• Develop the sustainability part of the Integrated Report in accordance with the
updated GRI standard (2021)
In progress
• Update the materiality assessment Implemented
• Integrate priority SDGs into reporting practices In progress
• Verify the sustainability section of the Integrated Report by an independent
party (annually)
Implemented
Medium-term initiatives:
• Devise standard preparation procedure for the development of the sustainability
section of the Integrated Report as well the ESG data collection system
In progress
• Ensure compliance of information disclosure with the recommendations
of Kazakhstan Stock Exchanges (KASE/AIX)
In progress
• Ensure that corporate governance disclosures comply with MSCI and Sustainalytics
recommendations
In progress
Long-term initiatives:
• Disclose information in accordance with the SASB industry standard for aviation In progress
PRIORIT Y A RE A A N D
M ATERIA L ISSUE S COMMITMENTS STATUS
Climate change risks
17
Emissions (p. 51)
Environmental compliance (p. 53)
Short-term initiatives:
• Conduct an initial disclosure of information on climate risk management in
accordance with the TCFD in the 2023 Integrated Report
Implemented
Medium-term initiatives:
• Information disclosure on climate risk management improved in accordance with
the TCFD recommendations
In progress
• Integrate climate risks into the corporate risk register, business strategy and
financial plan of the Group
In progress
Supply chain
10 13 17
Procurement practices (p. 65)
Long-term initiatives:
• Develop and approve the Supplier Code in relation to ESG In progress
Ensuring data privacy
8
Customer privacy (p. 46)
Medium-term initiatives:
• Obtain certification in for the management and protection of personal data –
ISO 27701
In progress
Long-term initiatives:
• Initiate and ensure the implementation of initiatives aimed at improving the
privacy of personal data
In progress
Corporate governance
8
Corporate governance (p. 80)
Ethics and compliance (p. 45)
Short-term initiatives:
• Develop a policy/statement about political neutrality Implemented
Medium-term initiatives:
• Align the composition of Board of Directors with the best international ESG
practice in relation to diversity (for example: MSCI)
In progress
Strategic management
8
Strategy (p. 26)
Economic performance (p. 167)
Passenger turnover (p. 31)
Short-term initiatives:
• Initiate revisions of the ESG Strategy implementation plan regularly, to take into
account changes in the external and internal environment
Implemented
Medium-term initiatives:
• Integrate the essential SDGs into strategic planning In progress
Long-term initiatives:
• Approve the ESG Strategy for the period 2033 –2060 In progress
Stakeholder engagement
17
Stakeholder engagement (p. 16)
Short-term initiatives:
• Develop an ESG section on the website In progress
• Consider joining local associations/international ESG communities In progress
• Consider the possibilities of developing co-operation with partners In progress
• Develop a stakeholder engagement plan In progress
Medium-term initiatives:
• Develop an initiative for interaction between top management and employees In progress
Long-term initiatives:
• Ensure an increase in the number of joint sustainable development projects with
partners and stakeholders
In progress
48 49 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
Priorities and main initiatives of the ESG Strategy continued
PRIORIT Y A RE A A N D
M ATERIA L ISSUE S COMMITMENTS STATUS
H&S practices
8
Occupational health and safety (p. 56)
Aviation safety management systems (p. 58)
Medium-term initiatives:
• Develop a policy for the safe operation of ground transport In progress
Long-term initiatives:
• Ensure a reduction in the total accident rate (TAR) per 1,000 employees
annually – 3.9 by 2024, 3.8 by 2025, 3.7 by 2026, 3.6 by 2027
In progress
• Increase the number of behavioural observations (BO) – 200 by 2024, 250 by 2025,
300 by 2026, 250 by 2027
In progress
Human resource management
4 5 8 10
Employment (p. 60)
Training and development (p. 63)
Medium-term initiatives:
• Conduct ESG training for employees Implemented
• Conduct ESG training for the Company’s Board of Directors and top management Implemented
• Ensure the availability of a certified GRI specialist In progress
• Ensure the availability of a certified professional responsible for disclosing
information on climate risk management
In progress
Long-term initiatives:
• Support the annual increase in the number of employees with disabilities recruited In progress
• Reduce staff turnover to 10% from 12% In progress
Product safety and quality
8
Innovation and digitalisation (p. 41)
Service quality (p. 38)
On-time flight performance (p. 39)
Fleet technological improvements (p. 36)
Long-term initiatives:
• 83%–85% OTP In progress
International ESG maturity
assessment
17
Medium-term initiatives:
• Receive an ESG rating In progress
• Disclose information according to the Climate Disclosure Project (CDP)
climate questionnaire
In progress
Maturity of ESG reporting
practices
17
Short-term initiatives:
• Develop the sustainability part of the Integrated Report in accordance with the
updated GRI standard (2021)
In progress
• Update the materiality assessment Implemented
• Integrate priority SDGs into reporting practices In progress
• Verify the sustainability section of the Integrated Report by an independent
party (annually)
Implemented
Medium-term initiatives:
• Devise standard preparation procedure for the development of the sustainability
section of the Integrated Report as well the ESG data collection system
In progress
• Ensure compliance of information disclosure with the recommendations
of Kazakhstan Stock Exchanges (KASE/AIX)
In progress
• Ensure that corporate governance disclosures comply with MSCI and Sustainalytics
recommendations
In progress
Long-term initiatives:
• Disclose information in accordance with the SASB industry standard for aviation In progress
PRIORIT Y A RE A A N D
M ATERIA L ISSUE S COMMITMENTS STATUS
Climate change risks
17
Emissions (p. 51)
Environmental compliance (p. 53)
Short-term initiatives:
• Conduct an initial disclosure of information on climate risk management in
accordance with the TCFD in the 2023 Integrated Report
Implemented
Medium-term initiatives:
• Information disclosure on climate risk management improved in accordance with
the TCFD recommendations
In progress
• Integrate climate risks into the corporate risk register, business strategy and
financial plan of the Group
In progress
Supply chain
10 13 17
Procurement practices (p. 65)
Long-term initiatives:
• Develop and approve the Supplier Code in relation to ESG In progress
Ensuring data privacy
8
Customer privacy (p. 46)
Medium-term initiatives:
• Obtain certification in for the management and protection of personal data –
ISO 27701
In progress
Long-term initiatives:
• Initiate and ensure the implementation of initiatives aimed at improving the
privacy of personal data
In progress
Corporate governance
8
Corporate governance (p. 80)
Ethics and compliance (p. 45)
Short-term initiatives:
• Develop a policy/statement about political neutrality Implemented
Medium-term initiatives:
• Align the composition of Board of Directors with the best international ESG
practice in relation to diversity (for example: MSCI)
In progress
Strategic management
8
Strategy (p. 26)
Economic performance (p. 167)
Passenger turnover (p. 31)
Short-term initiatives:
• Initiate revisions of the ESG Strategy implementation plan regularly, to take into
account changes in the external and internal environment
Implemented
Medium-term initiatives:
• Integrate the essential SDGs into strategic planning In progress
Long-term initiatives:
• Approve the ESG Strategy for the period 2033 –2060 In progress
Stakeholder engagement
17
Stakeholder engagement (p. 16)
Short-term initiatives:
• Develop an ESG section on the website In progress
• Consider joining local associations/international ESG communities In progress
• Consider the possibilities of developing co-operation with partners In progress
• Develop a stakeholder engagement plan In progress
Medium-term initiatives:
• Develop an initiative for interaction between top management and employees In progress
Long-term initiatives:
• Ensure an increase in the number of joint sustainable development projects with
partners and stakeholders
In progress
48 49 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Environment
202 3 HIGHLIGHTS
The Company has been participating in a research study
on the potential for the production and consumption of
SAF in the Republic of Kazakhstan.
Exposure analysis of Physical climate risks and transitional
climate risks has been conducted. Calculation of the
financial magnitude of short-, medium- and long-term
consequences for the most material risks and
prioritisation of these risks, as well as opportunities
related to climate, are progressing.
Compliance with the requirements of the Ecological Code
of the Republic of Kazakhstan.
M ATERIA L ISSUE S
Energy
Emissions
Effluents and waste
Environmental compliance
GUIDELINE S WE FOLLOW
Republic of Kazakhstan legislation : Ecological Code 2021;
Directive 2003/87/EC, Law of the No. 588 ‘On electric power’
(9 July 2004); Order of the Minister of Energy No. 230 ‘On
approval of the rules for the installation of electrical
installations’ (20 March 2015); Order of the Minister for
Investments and Development No. 406 ‘On establishing
requirements for the energy efficiency of buildings,
structures and their elements’ (31 March 2015).
Other: Health, Safety and Environmental Protection Policy;
TCFD; ICAO Annex 16, Volume IV CORSIA.
Approach
We are committed to reducing our environmental impact and
developing initiatives to avoid or reduce man-made climate change.
As part of this, we have invested significantly in developing our
environmental protection management system adopting best
practice and following local and international standards. By
implementing our environmental protection plans, we are better
able to make efficient use of resources within the business in order
to control and monitor the impact of our activities.
Kazakhstan aims to achieve carbon neutrality by 2060. In 2023,
we started the roll-out of a Low-Carbon Development Programme
(LCDP) for 2023–2032, which is incorporated into the Group’s ESG
Strategy. Consistent with the ICAO Assembly goal, adopted in 2022,
we plan to update the LCDP during 2024 to align with its net zero
by 2050 commitment.
We encourage the efficient use of resources across our operations
– both in our offices and in flight. We have fuel-efficiency practices
in place in order to optimise jet fuel usage and minimise GHG
emissions. We are also taking part in a research study to explore
the potential for developing the production and consumption of
SAF in Kazakhstan. We now have efficient waste management
procedures and have developed an electronic document
management system to reduce paper consumption.
We regularly communicate about the Group’s operations and CO 2
emissions in order to underline the importance of environmental
responsibility for the business. We also involve employees in a
range of green initiatives to reinforce this and raise their levels of
environmental awareness. Various aspects of our ESG agenda are
incorporated into the ESG training for all employees to ensure that
they are fully immersed in this aspect of the Group’s culture.
Energy
The Group’s primary source of indirect GHG emissions is its
consumption of purchased electricity and heating. These emissions
do not contribute significantly to the Group’s overall emissions. The
table opposite details the annual energy consumption for all owned
and rented premises over a three-year period.
The increase in consumption was driven by higher capacity
utilisation, the commissioning of new buildings, such as the launch
of the new Flight Training Centre in Astana, and new de-icing fluid
storage sites.
In 2022, the Group successfully passed an energy audit, which was
conducted under the framework of Kazakhstan’s Energy Efficiency
Law with some minor areas for improvement outlined and agreed.
Implementation of energy efficiency measures are in hand with a
contract signed for repair and construction works to replace the
evacuation doors in the Group’s main office building.
The works have been postponed until April
2024 and will be carried out along with
other planned measures during the year;
this will not impact the overall the 5-year
implementation plan. The next energy audit
will be conducted in 2027.
Although the Group does not currently use
renewable energy sources, we are actively
exploring alternative energy resources.
Emissions
Air travel contributes to the acceleration
of climate change through the release of
greenhouse gases (GHGs). The Air Astana
Group is focused on reducing carbon
emissions classified as either direct (Scope 1)
or indirect (Scopes 2 and 3) under the
Greenhouse Gas Protocol. Direct emissions
are GHG emissions from sources owned
and/or operated by the reporting company.
Indirect emissions are emissions that result
from the activities of the reporting company
but are emitted to the atmosphere from
sources owned and/or controlled by
another company.
As well as continuous monitoring of its GHG
emissions, the Group’s efforts to reduce
GHG emissions include implementing
cost-effective and safe ways to increase
fuel efficiency, technological improvements
and switching to more fuel-efficient aircraft
that emit less CO 2 . It also encompasses
operational optimisation through route
planning, aircraft weight reduction and
training pilots in fuel-efficient flying.
Direct emissions constitute the majority of
the Group’s total GHG emissions. The main
source of direct GHG emissions (Scope 1) is
CO 2 emissions from the combustion of jet
fuel. The Group has developed CO 2 Emissions
Monitoring and Reporting Instructions, which
prescribe the methodology of accounting
for CO 2 emissions from the combustion of
jet fuel.
The Group is compliant with the following
CO 2 monitoring schemes, with emissions
verified by an independent environmental
accredited verification, certification and
auditing body:
EU ETS – European Union Emission
Trading Scheme (includes all flights
performed within the European Union)
CORSIA – Carbon Offsetting and
Reduction Scheme for International
Aviation (includes international flights).
Currently, Air Astana Group accounts
for Scope 1 GHG emissions. Scope 2 GHG
emissions will be disclosed in the Integrated
Annual Report for 2024 and Scope 3
emissions will be reported from 2027.
We have developed and, during the
year, began implementing a Low-Carbon
Development Programme (LCDP) for
2023–2032, which sets targets for minimising
CO 2 emissions from our operations. We have
committed to updating the LCDP in 2024
with a goal of attaining net zero by 2050.
With fuel combustion such a major contributor
to our direct emissions (Scope 1), we are
partnering with the EBRD and KazMunaiGas
in a research study to explore the potential for
developing the production and consumption
of SAF in Kazakhstan. We are also closely
monitoring industry standards, trends and
stakeholder demands since the future use of
SAF may be mandated for arrivals/departures
by particular countries. Aligning with recent
Association of Asia Pacific Airlines resolution,
the Group will target 5% SAF blending by
2030 and this will be incorporated into the
updated LCDP. In addition, as part of its
strategic partnership with PetroChina
International Kazakhstan to supply Jet A-1
fuel, the Group also intends to import
SAF directly from China.
SUSTA IN ABILIT Y CONTINUED
Energy consumption
2023 2022 2021
Electricity (GJ) 14,958 (7,950) 11,282 (7,336) 12,828 (6,865)
Heating (Gcal) 3,262 (286) 1,558 1 (257) 1,960 (273)
1 This represents the heating consumption for all owned and rented premises, as determined through the Energy Audit.
The bracket figure is that for owned premises only.
Reduction in CO 2 emissions
(ton)/’000 RPK
0.150
0.125
0.075
0.100
0.05
2016 2017 2018 2019 2020 2021 2022 2023
51 Air Astana Integrated Report 2023 50 Air Astana Integrated Report 2023
202 3 HIGHLIGHTS
The Company has been participating in a research study
on the potential for the production and consumption of
SAF in the Republic of Kazakhstan.
Exposure analysis of Physical climate risks and transitional
climate risks has been conducted. Calculation of the
financial magnitude of short-, medium- and long-term
consequences for the most material risks and
prioritisation of these risks, as well as opportunities
related to climate, are progressing.
Compliance with the requirements of the Ecological Code
of the Republic of Kazakhstan.
M ATERIA L ISSUE S
Energy
Emissions
Effluents and waste
Environmental compliance
GUIDELINE S WE FOLLOW
Republic of Kazakhstan legislation : Ecological Code 2021;
Directive 2003/87/EC, Law of the No. 588 ‘On electric power’
(9 July 2004); Order of the Minister of Energy No. 230 ‘On
approval of the rules for the installation of electrical
installations’ (20 March 2015); Order of the Minister for
Investments and Development No. 406 ‘On establishing
requirements for the energy efficiency of buildings,
structures and their elements’ (31 March 2015).
Other: Health, Safety and Environmental Protection Policy;
TCFD; ICAO Annex 16, Volume IV CORSIA.
Approach
We are committed to reducing our environmental impact and
developing initiatives to avoid or reduce man-made climate change.
As part of this, we have invested significantly in developing our
environmental protection management system adopting best
practice and following local and international standards. By
implementing our environmental protection plans, we are better
able to make efficient use of resources within the business in order
to control and monitor the impact of our activities.
Kazakhstan aims to achieve carbon neutrality by 2060. In 2023,
we started the roll-out of a Low-Carbon Development Programme
(LCDP) for 2023–2032, which is incorporated into the Group’s ESG
Strategy. Consistent with the ICAO Assembly goal, adopted in 2022,
we plan to update the LCDP during 2024 to align with its net zero
by 2050 commitment.
We encourage the efficient use of resources across our operations
– both in our offices and in flight. We have fuel-efficiency practices
in place in order to optimise jet fuel usage and minimise GHG
emissions. We are also taking part in a research study to explore
the potential for developing the production and consumption of
SAF in Kazakhstan. We now have efficient waste management
procedures and have developed an electronic document
management system to reduce paper consumption.
We regularly communicate about the Group’s operations and CO 2
emissions in order to underline the importance of environmental
responsibility for the business. We also involve employees in a
range of green initiatives to reinforce this and raise their levels of
environmental awareness. Various aspects of our ESG agenda are
incorporated into the ESG training for all employees to ensure that
they are fully immersed in this aspect of the Group’s culture.
Energy
The Group’s primary source of indirect GHG emissions is its
consumption of purchased electricity and heating. These emissions
do not contribute significantly to the Group’s overall emissions. The
table opposite details the annual energy consumption for all owned
and rented premises over a three-year period.
The increase in consumption was driven by higher capacity
utilisation, the commissioning of new buildings, such as the launch
of the new Flight Training Centre in Astana, and new de-icing fluid
storage sites.
In 2022, the Group successfully passed an energy audit, which was
conducted under the framework of Kazakhstan’s Energy Efficiency
Law with some minor areas for improvement outlined and agreed.
Implementation of energy efficiency measures are in hand with a
contract signed for repair and construction works to replace the
evacuation doors in the Group’s main office building.
The works have been postponed until April
2024 and will be carried out along with
other planned measures during the year;
this will not impact the overall the 5-year
implementation plan. The next energy audit
will be conducted in 2027.
Although the Group does not currently use
renewable energy sources, we are actively
exploring alternative energy resources.
Emissions
Air travel contributes to the acceleration
of climate change through the release of
greenhouse gases (GHGs). The Air Astana
Group is focused on reducing carbon
emissions classified as either direct (Scope 1)
or indirect (Scopes 2 and 3) under the
Greenhouse Gas Protocol. Direct emissions
are GHG emissions from sources owned
and/or operated by the reporting company.
Indirect emissions are emissions that result
from the activities of the reporting company
but are emitted to the atmosphere from
sources owned and/or controlled by
another company.
As well as continuous monitoring of its GHG
emissions, the Group’s efforts to reduce
GHG emissions include implementing
cost-effective and safe ways to increase
fuel efficiency, technological improvements
and switching to more fuel-efficient aircraft
that emit less CO 2 . It also encompasses
operational optimisation through route
planning, aircraft weight reduction and
training pilots in fuel-efficient flying.
Direct emissions constitute the majority of
the Group’s total GHG emissions. The main
source of direct GHG emissions (Scope 1) is
CO 2 emissions from the combustion of jet
fuel. The Group has developed CO 2 Emissions
Monitoring and Reporting Instructions, which
prescribe the methodology of accounting
for CO 2 emissions from the combustion of
jet fuel.
The Group is compliant with the following
CO 2 monitoring schemes, with emissions
verified by an independent environmental
accredited verification, certification and
auditing body:
EU ETS – European Union Emission
Trading Scheme (includes all flights
performed within the European Union)
CORSIA – Carbon Offsetting and
Reduction Scheme for International
Aviation (includes international flights).
Currently, Air Astana Group accounts
for Scope 1 GHG emissions. Scope 2 GHG
emissions will be disclosed in the Integrated
Annual Report for 2024 and Scope 3
emissions will be reported from 2027.
We have developed and, during the
year, began implementing a Low-Carbon
Development Programme (LCDP) for
2023–2032, which sets targets for minimising
CO 2 emissions from our operations. We have
committed to updating the LCDP in 2024
with a goal of attaining net zero by 2050.
With fuel combustion such a major contributor
to our direct emissions (Scope 1), we are
partnering with the EBRD and KazMunaiGas
in a research study to explore the potential for
developing the production and consumption
of SAF in Kazakhstan. We are also closely
monitoring industry standards, trends and
stakeholder demands since the future use of
SAF may be mandated for arrivals/departures
by particular countries. Aligning with recent
Association of Asia Pacific Airlines resolution,
the Group will target 5% SAF blending by
2030 and this will be incorporated into the
updated LCDP. In addition, as part of its
strategic partnership with PetroChina
International Kazakhstan to supply Jet A-1
fuel, the Group also intends to import
SAF directly from China.
SUSTA IN ABILIT Y CONTINUED
Energy consumption
2023 2022 2021
Electricity (GJ) 14,958 (7,950) 11,282 (7,336) 12,828 (6,865)
Heating (Gcal) 3,262 (286) 1,558 1 (257) 1,960 (273)
1 This represents the heating consumption for all owned and rented premises, as determined through the Energy Audit.
The bracket figure is that for owned premises only.
Reduction in CO 2 emissions
(ton)/’000 RPK
0.150
0.125
0.075
0.100
0.05
2016 2017 2018 2019 2020 2021 2022 2023
51 Air Astana Integrated Report 2023 50 Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Environment
SUSTA IN ABILIT Y CONTINUED
GHG emissions
An increase in both domestic and
international flights in 2023 inevitably
also led to an overall increase in our CO 2
emissions – by 9%. However, we are able
to report a slight reduction in RPK and ASK
CO 2 emissions intensity, due to aircraft
modernisation, route optimisation and
various pilot techniques to reduce
fuel consumption.
Waste management
The Group’s waste management
programme is centered around reduction,
recycling and disposal, using third parties
as necessary. Involving employees and
customers in waste reduction and recycling
initiatives has helped to raise awareness
and increase responsiveness both onboard
our aircraft and in our offices.
As part of reducing in-flight waste,
Air Astana has incorporated its in-flight
entertainment programme, KCTV, into its
onboard magazine, Tengri. Copies of this
are now located in seat pockets without any
plastic packaging. Since 2020, the Group has
sourced biodegradable materials for in-flight
products, including switching from plastic to
wood for drink stirrers, replacing onboard
cups with recyclable cups, using paper belly
bands instead of plastic bags for blankets
and packaging the majority of its amenity
kits in bamboo and craft paper. We are also
encouraging onboard teams and passengers
to think about usage. We encourage
passengers to use our ‘MyPress’ service,
which gives access to the wide range of
newspapers and magazines in different
languages and helps decrease the need
for paper copies onboard.
Task Force on Climate-related Financial Disclosures (TCFD)
GOVERN A NCE
Disclose the organisation’s governance around climate-related risks and opportunities.
TCFD recommendation Progress to date
(a) Describe the Board’s
oversight of climate-related
risks and opportunities
The Air Astana Group acknowledges the significance of managing climate-related risks and opportunities,
initiating the first steps in this direction in 2022 and working on further advancements. Ensuring the long-term
sustainability of the Group relies heavily on the Board’s oversight of climate-related matters. This involves
establishing clear strategies and targets, endorsing climate-related policies and initiatives, monitoring and
reporting on associated risks and opportunities, implementing effective risk management practices and
engaging stakeholders to align with evolving environmental dynamics.
The primary responsibility for overseeing climate-related risks, along with other risks, lies with the Air Astana
Board of Directors. The Audit Committee has delegated responsibility for the efficacy of the risk management
framework. Additionally, the Risk Committee, acting as an advisory body to the Group’s CEO, conducts preliminary
assessments of risk management issues, including those related to climate. The frequency of informing the Audit
Committee and the Board of Directors about risk management activities is detailed in the Risk Management
section of this Integrated Report, located on page 70.
The Board of Directors also holds overall accountability for the sustainable development of the Group and
entrusts the stewardship of this responsibility to the ESG Committee. The ESG Committee collaborates with
other Board Committees to address specific overlaps in ESG matters, including partnering with the Audit
Committee regarding climate-related risks and opportunities.
(b) Describe management’s role
in assessing and managing
climate-related risks and
opportunities
The active involvement of management in evaluating and addressing climate-related risks is vital to the
Group’s operations. Through proactive measures to mitigate these risks and seize opportunities, the Group
can enhance its resilience and sustain growth amidst an increasingly uncertain global landscape.
The CEO bears the day-to-day responsibility for overseeing the sustainable development and climate
governance within the Group. Working closely with the Senior Management Team, together they steer efforts
to identify, assess and manage climate-related risks effectively. The Risk Committee, serving as an advisory
body to the CEO, plays a pivotal role in these endeavours. Its key functions encompass identifying and
assessing climate-related risks, as well as monitoring and reporting on them. Collaboratively, the Risk
Committee and Senior Management Team develop and implement actions to manage climate-related risks,
ensuring alignment with the Group’s strategic objectives.
Further development
• Enhance the incorporation of climate-related risks and opportunities within our corporate governance, strategy and operations.
• Engage a broader spectrum of employees throughout the Group to heighten awareness regarding climate-related risks and opportunities,
advocating for diligent management practices.
The Group has implemented recycling
initiatives to reduce other waste across all
its activities. This includes the safe disposal
of PET bottles and used batteries and using
wastewater to wash wheels and brakes.
By improving its business processes and
embracing digitalisation, the Group has also
reduced the volume of paper it uses.
To encourage employee engagement, the
Group has developed social projects linked
to its waste management initiatives; it is
also keen to raise awareness of waste
reduction among all stakeholders.
With the aim of promoting sustainability
and waste reduction through innovative
repurposing, it has initiated Upcycling for
the Future, a project that creates sculptures
from the decommissioned aircraft parts from
Boeing 767 and Airbus A320. FlyArystan has
also introduced an initiative to transform
expired life jackets into shopping bags, with
proceeds from sales donated to charity.
CO 2 emissions
2023 2022 2021
CO 2 emissions intensity (tonnes CO 2 per RPK 1
) 0.076 0.077 0.080
CO 2 emissions intensity (tonnes CO 2 per ASK 2
) 0.063 0.064 0.064
CO 2 emissions (tonnes of CO 2
) 1,115,142 1,015,507 3 836,429
Company-specific metric (seat kilometres) 17,689,651 15,921,347 13,063,678
Company-specific metric (revenue kilometres) 14,646, 227 13,159,168 10,410,181
1. Available Seat Kilometres (ASK) – a measure of an airline’s carrying capacity to generate revenue, taken from
multiplying the available seats on any given aircraft by the number of kilometres flown on a given flight
(Capacity x Distance).
2. Revenue Passenger Kilometres (RPK) – a way of calculating the number of kilometres travelled by paying customers,
by multiplying the number of paying passengers by the distance travelled (Passengers carried x Distance).
3 544,621 tons of CO 2 were verified by VERIFAVIA (Singapore) Pte Ltd on international flights only.
The total volume of direct emissions of greenhouse gases and other pollutants
into the atmosphere from other sources owned by the Group
Pollutants 2023 2022 2021
Sulfate oxides, tonnes 3.96 3.17 3.85
Nitrogen oxides, tonnes 9.68 8.39 10.26
Hydrocarbons, tonnes 2.44 2.16 2.63
Carbon oxides, tonnes 11.63 9.22 11.39
Other substances, tonnes 1.61 11.06 3.39
Waste disposal in Almaty and Astana
Type of waste/unit Disposal method 2023 2022 2021
Hazardous waste, tonnes Third-party disposal 11.79 8.15 5.39
Non-hazardous waste,
tonnes Recycling 39.05 30.74 45.95
Solid household waste,
thousand tonnes Waste dumping 2,945 2,789 2,563
Scrap metal, tonnes Recycling 0.399 3.187 –
Total, tonnes 2,996.02 2,831.47 2,614.34
Total expenses for environmental protection
Expenses (USD) 2023 2022 2021
Environmental protection 129,178 43,529 52,836
Negative impact on the environment 379,925 299,298 299,480
Hazardous waste disposal 1,951 918 918
Transfer of household waste 86,831 82,092 79,055
Environmental compliance
Air Astana Group complies with the
requirements of environmental laws
and regulations. The requirements of the
Ecological Code came into force in 2021
and have been incorporated into our
environmental protection management
system. No significant fines or penalties
were issued for non-compliance with
environmental laws and regulations during
2023, nor during the previous three years.
52 53 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
SUSTA IN ABILIT Y CONTINUED
GHG emissions
An increase in both domestic and
international flights in 2023 inevitably
also led to an overall increase in our CO 2
emissions – by 9%. However, we are able
to report a slight reduction in RPK and ASK
CO 2 emissions intensity, due to aircraft
modernisation, route optimisation and
various pilot techniques to reduce
fuel consumption.
Waste management
The Group’s waste management
programme is centered around reduction,
recycling and disposal, using third parties
as necessary. Involving employees and
customers in waste reduction and recycling
initiatives has helped to raise awareness
and increase responsiveness both onboard
our aircraft and in our offices.
As part of reducing in-flight waste,
Air Astana has incorporated its in-flight
entertainment programme, KCTV, into its
onboard magazine, Tengri. Copies of this
are now located in seat pockets without any
plastic packaging. Since 2020, the Group has
sourced biodegradable materials for in-flight
products, including switching from plastic to
wood for drink stirrers, replacing onboard
cups with recyclable cups, using paper belly
bands instead of plastic bags for blankets
and packaging the majority of its amenity
kits in bamboo and craft paper. We are also
encouraging onboard teams and passengers
to think about usage. We encourage
passengers to use our ‘MyPress’ service,
which gives access to the wide range of
newspapers and magazines in different
languages and helps decrease the need
for paper copies onboard.
Task Force on Climate-related Financial Disclosures (TCFD)
GOVERN A NCE
Disclose the organisation’s governance around climate-related risks and opportunities.
TCFD recommendation Progress to date
(a) Describe the Board’s
oversight of climate-related
risks and opportunities
The Air Astana Group acknowledges the significance of managing climate-related risks and opportunities,
initiating the first steps in this direction in 2022 and working on further advancements. Ensuring the long-term
sustainability of the Group relies heavily on the Board’s oversight of climate-related matters. This involves
establishing clear strategies and targets, endorsing climate-related policies and initiatives, monitoring and
reporting on associated risks and opportunities, implementing effective risk management practices and
engaging stakeholders to align with evolving environmental dynamics.
The primary responsibility for overseeing climate-related risks, along with other risks, lies with the Air Astana
Board of Directors. The Audit Committee has delegated responsibility for the efficacy of the risk management
framework. Additionally, the Risk Committee, acting as an advisory body to the Group’s CEO, conducts preliminary
assessments of risk management issues, including those related to climate. The frequency of informing the Audit
Committee and the Board of Directors about risk management activities is detailed in the Risk Management
section of this Integrated Report, located on page 70.
The Board of Directors also holds overall accountability for the sustainable development of the Group and
entrusts the stewardship of this responsibility to the ESG Committee. The ESG Committee collaborates with
other Board Committees to address specific overlaps in ESG matters, including partnering with the Audit
Committee regarding climate-related risks and opportunities.
(b) Describe management’s role
in assessing and managing
climate-related risks and
opportunities
The active involvement of management in evaluating and addressing climate-related risks is vital to the
Group’s operations. Through proactive measures to mitigate these risks and seize opportunities, the Group
can enhance its resilience and sustain growth amidst an increasingly uncertain global landscape.
The CEO bears the day-to-day responsibility for overseeing the sustainable development and climate
governance within the Group. Working closely with the Senior Management Team, together they steer efforts
to identify, assess and manage climate-related risks effectively. The Risk Committee, serving as an advisory
body to the CEO, plays a pivotal role in these endeavours. Its key functions encompass identifying and
assessing climate-related risks, as well as monitoring and reporting on them. Collaboratively, the Risk
Committee and Senior Management Team develop and implement actions to manage climate-related risks,
ensuring alignment with the Group’s strategic objectives.
Further development
• Enhance the incorporation of climate-related risks and opportunities within our corporate governance, strategy and operations.
• Engage a broader spectrum of employees throughout the Group to heighten awareness regarding climate-related risks and opportunities,
advocating for diligent management practices.
The Group has implemented recycling
initiatives to reduce other waste across all
its activities. This includes the safe disposal
of PET bottles and used batteries and using
wastewater to wash wheels and brakes.
By improving its business processes and
embracing digitalisation, the Group has also
reduced the volume of paper it uses.
To encourage employee engagement, the
Group has developed social projects linked
to its waste management initiatives; it is
also keen to raise awareness of waste
reduction among all stakeholders.
With the aim of promoting sustainability
and waste reduction through innovative
repurposing, it has initiated Upcycling for
the Future, a project that creates sculptures
from the decommissioned aircraft parts from
Boeing 767 and Airbus A320. FlyArystan has
also introduced an initiative to transform
expired life jackets into shopping bags, with
proceeds from sales donated to charity.
CO 2 emissions
2023 2022 2021
CO 2 emissions intensity (tonnes CO 2 per RPK 1
) 0.076 0.077 0.080
CO 2 emissions intensity (tonnes CO 2 per ASK 2
) 0.063 0.064 0.064
CO 2 emissions (tonnes of CO 2
) 1,115,142 1,015,507 3 836,429
Company-specific metric (seat kilometres) 17,689,651 15,921,347 13,063,678
Company-specific metric (revenue kilometres) 14,646, 227 13,159,168 10,410,181
1. Available Seat Kilometres (ASK) – a measure of an airline’s carrying capacity to generate revenue, taken from
multiplying the available seats on any given aircraft by the number of kilometres flown on a given flight
(Capacity x Distance).
2. Revenue Passenger Kilometres (RPK) – a way of calculating the number of kilometres travelled by paying customers,
by multiplying the number of paying passengers by the distance travelled (Passengers carried x Distance).
3 544,621 tons of CO 2 were verified by VERIFAVIA (Singapore) Pte Ltd on international flights only.
The total volume of direct emissions of greenhouse gases and other pollutants
into the atmosphere from other sources owned by the Group
Pollutants 2023 2022 2021
Sulfate oxides, tonnes 3.96 3.17 3.85
Nitrogen oxides, tonnes 9.68 8.39 10.26
Hydrocarbons, tonnes 2.44 2.16 2.63
Carbon oxides, tonnes 11.63 9.22 11.39
Other substances, tonnes 1.61 11.06 3.39
Waste disposal in Almaty and Astana
Type of waste/unit Disposal method 2023 2022 2021
Hazardous waste, tonnes Third-party disposal 11.79 8.15 5.39
Non-hazardous waste,
tonnes Recycling 39.05 30.74 45.95
Solid household waste,
thousand tonnes Waste dumping 2,945 2,789 2,563
Scrap metal, tonnes Recycling 0.399 3.187 –
Total, tonnes 2,996.02 2,831.47 2,614.34
Total expenses for environmental protection
Expenses (USD) 2023 2022 2021
Environmental protection 129,178 43,529 52,836
Negative impact on the environment 379,925 299,298 299,480
Hazardous waste disposal 1,951 918 918
Transfer of household waste 86,831 82,092 79,055
Environmental compliance
Air Astana Group complies with the
requirements of environmental laws
and regulations. The requirements of the
Ecological Code came into force in 2021
and have been incorporated into our
environmental protection management
system. No significant fines or penalties
were issued for non-compliance with
environmental laws and regulations during
2023, nor during the previous three years.
52 53 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Environment
SUSTA IN ABILIT Y CONTINUED
Task Force on Climate-related Financial Disclosures (TCFD) continued
STR ATEGY
Disclose the actual and potential impacts of climate-related risks and opportunities on the organisation’s businesses, strategy, and financial planning
where such information is material.
TCFD recommendation Progress to date
(a) Describe the climate-related
risks and opportunities the
organisation has identified
over the short, medium
and long term
In 2022, the Group identified physical risks, which are described in the Risk Management section of this
Integrated Report on page 78.
The Group is currently undertaking a project covering both physical and transitional risk assessments,
including pinpointing possible opportunities. Part of the scope is to carry out a risk and opportunities
assessment in order to identify material physical and transitional risks and recognise potential climate
sensitivities. This includes material risks mapping to determine impacts to the business over the short-,
medium- and long-term.
(b) Describe the impact of
climate-related risks and
opportunities on the
organisation’s business, strategy
and financial planning
The impact of identified physical risks on the Group’s business is described in the Risk Management section
of this Integrated Report on page 78.
The Group is currently undertaking a project covering both physical and transitional risk assessments,
including pinpointing possible opportunities. Part of the scope is to perform both qualitative and quantitative
(where possible) analyses of identified material and transitional risks and opportunities to assess the impact
on Group operations over the short-, medium- and long term.
(c) Describe the resilience of the
organisation’s strategy, taking
into consideration different
climate-related scenarios,
including a 2°C or lower scenario
The Group is currently undertaking a project covering both physical and transitional risk assessments,
including pinpointing possible opportunities. Part of the scope is quantitative material physical and
transitional risk analysis to assess the impact on the Group’s operations and financial performance. This takes
into consideration the following scenarios:
• Analysis of identified physical climate-related risks, including Representative Concentration Pathway (RCP)
2.6, RCP 4.5 and RCP 8.6 scenarios over 2030- and 2060-time horizons. Analysis covers both exposure and
vulnerability (where possible) of the 29 most material flight destinations
• Analysis of transitional climate-related risks, including Network for Greening the Financial System (NGFS) 1
scenarios over 2030- and 2060-time horizons, in particular: Nationally Determined Contributions (NDCs),
Delayed transition, Below 2°C and Net Zero 2050.
Further development
• Disclose results of climate-related risks and opportunities assessment, and scenario analysis including identified climate-related risks and
opportunities impact over 2030- and 2060-time horizons, and resilience of the Group’s strategy taking into consideration RCP and NGFS scenarios.
• Upon completion of climate-related risks and opportunities assessment and scenario analysis to update corporate governance documentation to
ensure incorporation of scenario analysis into strategic and financial planning.
• Disclose detailed description of the process used to determine materiality of identified risks and opportunities.
• Disclose methodology of scenario analysis performed.
• Disclose the Group’s consideration of how its strategies might change (if appropriate) to address identified risks and opportunities.
1 Network for Greening the Financial System.
Task Force on Climate-related Financial Disclosures (TCFD) continued
RISK M A N AGEMENT
Disclose how the organisation identifies, assesses, and manages climate-related risks.
TCFD recommendation Progress to date
(a) Describe the organisation’s
processes for identifying and
assessing climate-related risks
and opportunities
The Air Astana Group’s approach to identifying and assessing climate-related risks is integrated within the
Group’s overall risk management framework, making it consistent with the methodology used to identify and
assess all other types of risks faced by the Group. The processes of identification and assessment of the
Group’s risks are described in the Risk Management section of this Integrated Report on page 71.
(b) Describe the organisation’s
processes for managing climate-
related risks and opportunities
Measures for managing climate-related risks are described in the Risk Management section of this Integrated
Report on page 78.
(c) Describe how processes for
identifying, assessing and
managing climate-related risks
are incorporated into the business
overall risk management.
The identification, assessment and management of climate-related risks are incorporated into the overall risk
management of the Air Astana Group and are conducted within its CRMS described in the Risk Management
section of this Integrated Report on page 70.
Further development
• Upon completion of ongoing climate-related risks and opportunities assessment to update corporate risk registry and risk map with identified risk
universe, along with qualitative and quantitative (where possible) description of its impact.
• Update processes of ownership and responsibilities in relation to climate-related risks (if necessary) at business unit, management and Board levels.
• Disclose processes of assessment and prioritisation criteria on likelihood, magnitude, time horizon etc. in relation to climate-related risks.
ME TRIC S A N D TA RGE TS
Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material.
TCFD recommendation Progress to date
(a) Disclose the metrics used
by the organisation to assess
the climate-related risks and
opportunities in line with its
strategy and risk management
process
The key metrics used by the Group to assess the climate-related risks are:
• Total CO 2 emissions (tonnes) from aircraft operations
• CO 2 emissions intensity (Total CO 2 emissions/ASK)
• CO 2 emissions intensity (Total CO 2 emissions/RPK)
• Electricity consumption
• Heating consumption
• Volume of recycled waste
• Volume of disposed waste.
These are disclosed on pages 51–52 within the Sustainability section of this Integrated Report.
(b) Disclose Scope 1, Scope 2,
and if appropriate, Scope 3 GHG
and the related risks
Our Scope 1 GHG emissions are set out on page 51 of the Sustainability section of this Integrated Report.
While Scope 2 emissions are not a major portion of our total emissions and are not currently disclosed,
we acknowledge the importance of such disclosure and are planning to do so in 2024. Currently,
measuring Scope 3 emissions is unfeasible, but preparations are in hand to include them from 2027.
(c) Describe the targets used
by the organisation to manage
climate-related risks and
opportunities and performance
against targets
In our ESG Strategy for 2023–2032, we have set short-, medium- and long-term targets to manage climate-
related risks and opportunities. The key targets are to:
• Reduce CO 2 emissions in accordance with the Group’s Low-Carbon Development Programme for 2023–2032
• Calculate and disclose Scope 3 emissions (long-term target).
Further development
• To measure and disclose Scope 2 and Scope 3 emissions.
54 55 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
SUSTA IN ABILIT Y CONTINUED
Task Force on Climate-related Financial Disclosures (TCFD) continued
STR ATEGY
Disclose the actual and potential impacts of climate-related risks and opportunities on the organisation’s businesses, strategy, and financial planning
where such information is material.
TCFD recommendation Progress to date
(a) Describe the climate-related
risks and opportunities the
organisation has identified
over the short, medium
and long term
In 2022, the Group identified physical risks, which are described in the Risk Management section of this
Integrated Report on page 78.
The Group is currently undertaking a project covering both physical and transitional risk assessments,
including pinpointing possible opportunities. Part of the scope is to carry out a risk and opportunities
assessment in order to identify material physical and transitional risks and recognise potential climate
sensitivities. This includes material risks mapping to determine impacts to the business over the short-,
medium- and long-term.
(b) Describe the impact of
climate-related risks and
opportunities on the
organisation’s business, strategy
and financial planning
The impact of identified physical risks on the Group’s business is described in the Risk Management section
of this Integrated Report on page 78.
The Group is currently undertaking a project covering both physical and transitional risk assessments,
including pinpointing possible opportunities. Part of the scope is to perform both qualitative and quantitative
(where possible) analyses of identified material and transitional risks and opportunities to assess the impact
on Group operations over the short-, medium- and long term.
(c) Describe the resilience of the
organisation’s strategy, taking
into consideration different
climate-related scenarios,
including a 2°C or lower scenario
The Group is currently undertaking a project covering both physical and transitional risk assessments,
including pinpointing possible opportunities. Part of the scope is quantitative material physical and
transitional risk analysis to assess the impact on the Group’s operations and financial performance. This takes
into consideration the following scenarios:
• Analysis of identified physical climate-related risks, including Representative Concentration Pathway (RCP)
2.6, RCP 4.5 and RCP 8.6 scenarios over 2030- and 2060-time horizons. Analysis covers both exposure and
vulnerability (where possible) of the 29 most material flight destinations
• Analysis of transitional climate-related risks, including Network for Greening the Financial System (NGFS) 1
scenarios over 2030- and 2060-time horizons, in particular: Nationally Determined Contributions (NDCs),
Delayed transition, Below 2°C and Net Zero 2050.
Further development
• Disclose results of climate-related risks and opportunities assessment, and scenario analysis including identified climate-related risks and
opportunities impact over 2030- and 2060-time horizons, and resilience of the Group’s strategy taking into consideration RCP and NGFS scenarios.
• Upon completion of climate-related risks and opportunities assessment and scenario analysis to update corporate governance documentation to
ensure incorporation of scenario analysis into strategic and financial planning.
• Disclose detailed description of the process used to determine materiality of identified risks and opportunities.
• Disclose methodology of scenario analysis performed.
• Disclose the Group’s consideration of how its strategies might change (if appropriate) to address identified risks and opportunities.
1 Network for Greening the Financial System.
Task Force on Climate-related Financial Disclosures (TCFD) continued
RISK M A N AGEMENT
Disclose how the organisation identifies, assesses, and manages climate-related risks.
TCFD recommendation Progress to date
(a) Describe the organisation’s
processes for identifying and
assessing climate-related risks
and opportunities
The Air Astana Group’s approach to identifying and assessing climate-related risks is integrated within the
Group’s overall risk management framework, making it consistent with the methodology used to identify and
assess all other types of risks faced by the Group. The processes of identification and assessment of the
Group’s risks are described in the Risk Management section of this Integrated Report on page 71.
(b) Describe the organisation’s
processes for managing climate-
related risks and opportunities
Measures for managing climate-related risks are described in the Risk Management section of this Integrated
Report on page 78.
(c) Describe how processes for
identifying, assessing and
managing climate-related risks
are incorporated into the business
overall risk management.
The identification, assessment and management of climate-related risks are incorporated into the overall risk
management of the Air Astana Group and are conducted within its CRMS described in the Risk Management
section of this Integrated Report on page 70.
Further development
• Upon completion of ongoing climate-related risks and opportunities assessment to update corporate risk registry and risk map with identified risk
universe, along with qualitative and quantitative (where possible) description of its impact.
• Update processes of ownership and responsibilities in relation to climate-related risks (if necessary) at business unit, management and Board levels.
• Disclose processes of assessment and prioritisation criteria on likelihood, magnitude, time horizon etc. in relation to climate-related risks.
ME TRIC S A N D TA RGE TS
Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material.
TCFD recommendation Progress to date
(a) Disclose the metrics used
by the organisation to assess
the climate-related risks and
opportunities in line with its
strategy and risk management
process
The key metrics used by the Group to assess the climate-related risks are:
• Total CO 2 emissions (tonnes) from aircraft operations
• CO 2 emissions intensity (Total CO 2 emissions/ASK)
• CO 2 emissions intensity (Total CO 2 emissions/RPK)
• Electricity consumption
• Heating consumption
• Volume of recycled waste
• Volume of disposed waste.
These are disclosed on pages 51–52 within the Sustainability section of this Integrated Report.
(b) Disclose Scope 1, Scope 2,
and if appropriate, Scope 3 GHG
and the related risks
Our Scope 1 GHG emissions are set out on page 51 of the Sustainability section of this Integrated Report.
While Scope 2 emissions are not a major portion of our total emissions and are not currently disclosed,
we acknowledge the importance of such disclosure and are planning to do so in 2024. Currently,
measuring Scope 3 emissions is unfeasible, but preparations are in hand to include them from 2027.
(c) Describe the targets used
by the organisation to manage
climate-related risks and
opportunities and performance
against targets
In our ESG Strategy for 2023–2032, we have set short-, medium- and long-term targets to manage climate-
related risks and opportunities. The key targets are to:
• Reduce CO 2 emissions in accordance with the Group’s Low-Carbon Development Programme for 2023–2032
• Calculate and disclose Scope 3 emissions (long-term target).
Further development
• To measure and disclose Scope 2 and Scope 3 emissions.
54 55 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
SUSTA IN ABILIT Y
CONTINUED
Health & safety
202 3 HIGHLIGHTS
Compliance with ISO 45001:2018
Continued to demonstrate adherence to the highest
international safety standards and best practice by
successfully passing its 9th IATA Operational Safety
Audit (IOSA).
Successfully passed the annual on-site EASA Part 145
audit in Almaty, Shymkent and Astana bases.
Renewed our EASA Part 147 (Maintenance Training
Organisation).
M ATERIA L ISSUE S
Occupational health and safety
Flight safety management systems
GUIDELINE S WE FOLLOW
Republic of Kazakhstan legislation: Labour Code; Law
‘On use of airspace’, as well as applicable Ministers’ Orders.
Other: Health, Safety and Environmental Protection Policy;
Certificate of Registration for Occupational Health and
Safety Management System; Safety Management Manual
(Part I – Corporate Management, Part II – Safety Compliance
Programmes, Part III – FRMS, Part IV – CSC Working Procedures,
Part V – Compliance Monitoring); Manual on Prevention of Use
of Unauthorised Substances; ISO 45001:2018; ICAO Annex 19
and Doc 9859; EASA Part TCO, Part 145/147; Part CAMO; IOSA
ISARPS; Aviation Safety Compliance Policy.
Approach
Safety is a key objective for the Group with adherence to high
standards and continuous improvement rigorously applied across
all our daily business activities. Our Occupational Health and Safety
(OHS) system is based on best practice and international standards
and complies with all aspects of the Labour Code of the Republic of
Kazakhstan and other legislative documents.
Occupational health and safety
Our OHS is certified to ISO 45001:2018. In July 2023, Air Astana
passed the surveillance audit conducted by the British Standards
Institution (BSI) certification body. This included the extension of
the certification area to cover FlyArystan. The audit team concluded
that the top management process is generally working well.
Compliance with ISO 45001:2018 is generally confirmed.
In September 2023, Air Astana passed an internal audit undertaken
by the Samruk-Kazyna Fund. The members of the commission are
representatives of the Fund’s portfolio companies. The purpose of
the audit is to ensure the exchange of experience and introduction
of best practice in occupational safety.
Occupational safety activities undertaken during the year included 23
Air Astana employees at CEO-1 and CEO-2 levels passing the NEBOSH
Leadership Excellence course.
A range of other health and safety activities were carried out during
the year: 141 employees undertook certified online training in health
and safety; 738 employees were trained in industrial safety; 165
employees were trained in fire technical minimum; annual
professional health check-ups were organised for employees
working in harmful and/or hazardous conditions; health and safety
instructions by occupation and type of activity were updated.
We undertook a project to improve the quality of protective
clothing and footwear. A contract has been signed with a new
company for the supply of winter and summer personal protective
equipment with improved features, which take account of
comments received from operational employees surveyed.
Alcohol and drug checks were conducted aimed at prevention
of use of unauthorised substances in the workplace by the
Group’s employees. The checks were conducted among
employees of operational departments, including flight and cabin
crew members, engineering & maintenance, as well as ground
operations staff – in all Kazakhstan regions and at international
stations. In 2023, the total number of tests conducted was
5,067: 690 were drug tests and 4,377 were alcohol tests.
Fire safety
All newly hired employees complete
an introductory fire safety briefing upon
joining the business. Subsequently, they
received an initial fire safety briefing
at their workplace, conducted by the
department safety officer. These briefings
are repeated annually, supplemented by
targeted and ad hoc sessions as necessary.
Fire technical minimum course was
conducted with certificates valid for three
years, after which retraining is mandatory
in 2023. There were 18 fire evacuation drills
at the Group’s facilities. There have been no
fire incidents across the Group. Primary fire
extinguishing equipment such as powder and
carbon dioxide portable fire extinguishers, fire
shields and fire hydrants are available at all
our facilities. Additionally, automatic fire
extinguishing systems, including gas, foam,
drencher, sprinkler and powder, are installed
in various premises such as hangars, server
rooms, archives and warehouses.
This comprehensive setup reflects our
commitment to maintaining a safe
working environment.
In 2022, the Group became a participant
of the global Vision Zero initiative to
prioritise the safety, health and well-being
of employees, with a personal commitment
from the Group’s CEO to ensure best practice
in occupational safety and safe working
conditions for employees. During 2023, as
part of the implementation of the Vision Zero
concept, a number of employees took part
in training courses at the Samruk Business
Academy: 7 Air Astana employees attended
a course for internal trainers; 3,196
employees participated in one on the
occupational safety culture in the airline.
We also conducted an employee survey
to assess the implementation of the seven
golden rules of Vision Zero within the Group
and to develop a plan for further action,
as well as introducing self-assessment
for compliance.
Seven Golden Rules for Vision Zero
1. Take leadership – demonstrate
commitment
2. Identify hazards – control risks
3. Define targets – develop programs
4. Ensure a safe and healthy system –
be well-organised
5. Ensure safety and health in machines,
equipment and workplaces
6. Improve qualifications – develop
competence
7. Invest in people – motivate by
participation
We continued with the implementation
of visually identifying hazardous areas.
Visual safety is a key component in
ensuring safety procedures are incorporated
across the business; for example, special
markings to designate door-opening zones.
Employees of Health, Safety and
Environment (HSE) division worked out
memos for visitors, which can be obtained
by scanning the QR code at the entrance
to the office.
The memos contain information on the
place of collection in case of emergency,
phone numbers for emergency services
and schemes of safe movement in the
vicinity of the Company’s offices.
Our annual ‘Safety Awards – Occupational
Health and Safety Recognition’ once again
rewarded those employees who made the
greatest contribution to improving the safety
culture, knowledge and competencies.
These awards recognise employees who
have shown engagement with and
enthusiasm and commitment to health
and safety issues during the year.
Starting from 2023, workplace briefings
(primary, repeated, targeted, unscheduled),
along with the paper version, are also
conducted in the airline’s electronic
document management system –
ELMA. The briefing is signed by an
electronic digital signature. This process
is implemented as part of the digitalisation
of the Company’s business processes.
Reported accidents
In 2023, HSE received 185 OHS reports
summarising incidents and hazardous
working conditions with suggestions
on how to improve these.
2023 2022 2021
Number of incidents 41 112 124
Number of accidents 29 17 25
Number of employees 6,499 6,184 5,551
Total accident rate (TAR) 4.46 2.75 4.50
Lost time injury frequency rate (LTIFR) 3.24 2.78 4.37
Fatal injury rate (FIFR) – – –
Accident severity ratio 40.17 25.40 68.07
Occupational morbidity ratio – – –
57 Air Astana Integrated Report 2023 56 Air Astana Integrated Report 2023
Health & safety
202 3 HIGHLIGHTS
Compliance with ISO 45001:2018
Continued to demonstrate adherence to the highest
international safety standards and best practice by
successfully passing its 9th IATA Operational Safety
Audit (IOSA).
Successfully passed the annual on-site EASA Part 145
audit in Almaty, Shymkent and Astana bases.
Renewed our EASA Part 147 (Maintenance Training
Organisation).
M ATERIA L ISSUE S
Occupational health and safety
Flight safety management systems
GUIDELINE S WE FOLLOW
Republic of Kazakhstan legislation: Labour Code; Law
‘On use of airspace’, as well as applicable Ministers’ Orders.
Other: Health, Safety and Environmental Protection Policy;
Certificate of Registration for Occupational Health and
Safety Management System; Safety Management Manual
(Part I – Corporate Management, Part II – Safety Compliance
Programmes, Part III – FRMS, Part IV – CSC Working Procedures,
Part V – Compliance Monitoring); Manual on Prevention of Use
of Unauthorised Substances; ISO 45001:2018; ICAO Annex 19
and Doc 9859; EASA Part TCO, Part 145/147; Part CAMO; IOSA
ISARPS; Aviation Safety Compliance Policy.
Approach
Safety is a key objective for the Group with adherence to high
standards and continuous improvement rigorously applied across
all our daily business activities. Our Occupational Health and Safety
(OHS) system is based on best practice and international standards
and complies with all aspects of the Labour Code of the Republic of
Kazakhstan and other legislative documents.
Occupational health and safety
Our OHS is certified to ISO 45001:2018. In July 2023, Air Astana
passed the surveillance audit conducted by the British Standards
Institution (BSI) certification body. This included the extension of
the certification area to cover FlyArystan. The audit team concluded
that the top management process is generally working well.
Compliance with ISO 45001:2018 is generally confirmed.
In September 2023, Air Astana passed an internal audit undertaken
by the Samruk-Kazyna Fund. The members of the commission are
representatives of the Fund’s portfolio companies. The purpose of
the audit is to ensure the exchange of experience and introduction
of best practice in occupational safety.
Occupational safety activities undertaken during the year included 23
Air Astana employees at CEO-1 and CEO-2 levels passing the NEBOSH
Leadership Excellence course.
A range of other health and safety activities were carried out during
the year: 141 employees undertook certified online training in health
and safety; 738 employees were trained in industrial safety; 165
employees were trained in fire technical minimum; annual
professional health check-ups were organised for employees
working in harmful and/or hazardous conditions; health and safety
instructions by occupation and type of activity were updated.
We undertook a project to improve the quality of protective
clothing and footwear. A contract has been signed with a new
company for the supply of winter and summer personal protective
equipment with improved features, which take account of
comments received from operational employees surveyed.
Alcohol and drug checks were conducted aimed at prevention
of use of unauthorised substances in the workplace by the
Group’s employees. The checks were conducted among
employees of operational departments, including flight and cabin
crew members, engineering & maintenance, as well as ground
operations staff – in all Kazakhstan regions and at international
stations. In 2023, the total number of tests conducted was
5,067: 690 were drug tests and 4,377 were alcohol tests.
Fire safety
All newly hired employees complete
an introductory fire safety briefing upon
joining the business. Subsequently, they
received an initial fire safety briefing
at their workplace, conducted by the
department safety officer. These briefings
are repeated annually, supplemented by
targeted and ad hoc sessions as necessary.
Fire technical minimum course was
conducted with certificates valid for three
years, after which retraining is mandatory
in 2023. There were 18 fire evacuation drills
at the Group’s facilities. There have been no
fire incidents across the Group. Primary fire
extinguishing equipment such as powder and
carbon dioxide portable fire extinguishers, fire
shields and fire hydrants are available at all
our facilities. Additionally, automatic fire
extinguishing systems, including gas, foam,
drencher, sprinkler and powder, are installed
in various premises such as hangars, server
rooms, archives and warehouses.
This comprehensive setup reflects our
commitment to maintaining a safe
working environment.
In 2022, the Group became a participant
of the global Vision Zero initiative to
prioritise the safety, health and well-being
of employees, with a personal commitment
from the Group’s CEO to ensure best practice
in occupational safety and safe working
conditions for employees. During 2023, as
part of the implementation of the Vision Zero
concept, a number of employees took part
in training courses at the Samruk Business
Academy: 7 Air Astana employees attended
a course for internal trainers; 3,196
employees participated in one on the
occupational safety culture in the airline.
We also conducted an employee survey
to assess the implementation of the seven
golden rules of Vision Zero within the Group
and to develop a plan for further action,
as well as introducing self-assessment
for compliance.
Seven Golden Rules for Vision Zero
1. Take leadership – demonstrate
commitment
2. Identify hazards – control risks
3. Define targets – develop programs
4. Ensure a safe and healthy system –
be well-organised
5. Ensure safety and health in machines,
equipment and workplaces
6. Improve qualifications – develop
competence
7. Invest in people – motivate by
participation
We continued with the implementation
of visually identifying hazardous areas.
Visual safety is a key component in
ensuring safety procedures are incorporated
across the business; for example, special
markings to designate door-opening zones.
Employees of Health, Safety and
Environment (HSE) division worked out
memos for visitors, which can be obtained
by scanning the QR code at the entrance
to the office.
The memos contain information on the
place of collection in case of emergency,
phone numbers for emergency services
and schemes of safe movement in the
vicinity of the Company’s offices.
Our annual ‘Safety Awards – Occupational
Health and Safety Recognition’ once again
rewarded those employees who made the
greatest contribution to improving the safety
culture, knowledge and competencies.
These awards recognise employees who
have shown engagement with and
enthusiasm and commitment to health
and safety issues during the year.
Starting from 2023, workplace briefings
(primary, repeated, targeted, unscheduled),
along with the paper version, are also
conducted in the airline’s electronic
document management system –
ELMA. The briefing is signed by an
electronic digital signature. This process
is implemented as part of the digitalisation
of the Company’s business processes.
Reported accidents
In 2023, HSE received 185 OHS reports
summarising incidents and hazardous
working conditions with suggestions
on how to improve these.
2023 2022 2021
Number of incidents 41 112 124
Number of accidents 29 17 25
Number of employees 6,499 6,184 5,551
Total accident rate (TAR) 4.46 2.75 4.50
Lost time injury frequency rate (LTIFR) 3.24 2.78 4.37
Fatal injury rate (FIFR) – – –
Accident severity ratio 40.17 25.40 68.07
Occupational morbidity ratio – – –
57 Air Astana Integrated Report 2023 56 Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
SUSTA IN ABILIT Y
CONTINUED
Health & safety
The Group has an OHS Committee, which
includes all employees at CEO-1,-2,-3 levels 1
.
Employees of these positions were included
in the OHS Committee due to the high level
of responsibility in decision-making by the
Committee. Employees at other levels
contribute to the decisions made by the
Committee by participating in health and
safety surveys. In addition, they participate in
internal audit procedures for the occupational
health and safety management system.
The IQSMS system has been implemented
for instant processing of occupational health
and safety requests, while more significant
requests are discussed at the OHS Committee
meetings. The Committee holds monthly
sessions with a primary focus on discussing
working conditions. In the reporting year, a
decision was made to standardise personal
protective equipment. Additionally, a decision
was made to enhance the restrooms for
employees working on the airport platform
to ensure comfortable conditions.
Mental health
In 2021, Air Astana Group successfully
launched the ‘Consultation with a
psychologist’ employee benefit. This is
proving more increasingly popular with
employees as a means to improve and
maintain psychological health. Sessions
are conducted by practicing analytical
psychologists and psychotherapists. In
2023, more than 1,000 sessions were held,
an increase of 83% over 2022.
We provide this benefit to our employees
for a number of reasons. Firstly, taking care
of the well-being and health of employees is
a priority. Providing access to psychological
support helps employees effectively deal
with stress, conflict and other emotional
issues and is directly related to their
productivity, motivation and overall
well-being in the workplace.
Aviation Administration of Kazakhstan
(AAK) – AOC renewal audit; scheduled
inspection of Aviation Security;
certification inspection of MRO on all Air
Astana’s bases; inspection of Air Astana
Aviation Training Centre; scheduled
en route and ramp inspection.
Turkish Directorate General of Civil
Aviation – renewal approval of line
maintenance of customer aircraft.
Seychelles Civil Aviation Authorities –
audit of Almaty Line Maintenance Station.
Irish Aviation Authorities – conducted
Aircraft Certificate of Airworthiness
renewals for 43 aircraft.
EASA – Part 145 and Part 147
renewals audits.
Ramp inspections – Air Astana
operations and aircraft underwent
20 European Civil Aviation Conference
(ECAC) SAFA (Safety Assessment of
Foreign Aircraft) and 6 ramp (non-ECAC)
inspections. Airline SAFA weighted
average in 2023 was 0.11, significantly
lower than the national and
industry average.
Within the internal compliance monitoring
programme, nearly 260 compliance audits
were conducted by Air Astana based on IOSA
SARPS and national regulations. Compliance
monitoring is also supported by membership
of the IATA Fuel Quality Pool (IFQP).
Safety programmes
In 2023, Air Astana’s flight data monitoring
analysed more than 99% of flights. The
purpose is to identify, measure and assess
existing operational risks and take relevant
mitigation measures with an emphasis on
trends and root causes. Elements of evidence-
based training (i.e. data and lessons learnt
from both the flight management system
and safety investigations reports) have been
incorporated into the Training System for
pilots and produced positive outcomes.
Secondly, we recognise that the modern work
environment can be demanding and this
proactive approach helps to create a healthy
and supportive work environment where
employees can function effectively and
achieve their professional goals.
This is also very much part of our corporate
social responsibility – our role as a caring
employer from both a professional and
personal perspective, helping to strengthen
the bond with our employees and promote
a positive of the business.
We promote the services across a number
of internal channels of communication and
employees are guaranteed anonymity and
confidentiality if accessing psychological
assistance. Our managers also actively
recommend these services and emphasise
their importance for well-being and
professional development. We are also
planning to conduct anonymous surveys
or reviews among employees to assess the
effectiveness of psychological assistance
services, which will help us understand how
effective they are and whether they can
be improved.
Flight safety management systems
Implementation and maintenance
of the highest safety standards is one of
the Group’s core values. Our management
approach goes beyond simple compliance
with safety requirements: we actively
cultivate a culture of safety in our
employees’ minds and across all internal
processes, and look to continuously improve
and embrace international best practice.
Our Safety Management System (SMS) aims
to identify the potential hazards connected
with aviation operations and mitigate these
risks to acceptable levels. The SMS covers
all organisational tiers, with specific safety
programmes compiled for the operating
activities of flight operations, cabin crew,
engineering and maintenance, and
ground services.
We continue to encourage hazards and
error reporting by operational staff as an
important element of our safety culture.
Over the year more than 3,300 safety
reports were registered, which enabled us
to maintain an accurate perception of risk.
During 2023, Corporate Safety Compliance
(CSC) department developed an interactive
weekly safety report for all operational
departments, including direct access to
update information on safety occurrences.
The ‘Prevention of Use of Unauthorised
Substances’ programme for safety sensitive
aviation activity staff (SSAA) continued
in 2023. In September 2023, mandatory
Unauthorised Substances training for all
operational staff was launched. In addition
to regular publications on the Air Astana
app and Instagram, the first survey about
Unauthorised Substances took place to
assess awareness about the programme
and identify areas for improvement.
Alongside this, to demonstrate leadership
participation to all SSAA staff members,
we ran a promotional campaign in 2023
entitled: ‘Managers get checked as well’.
Our Fatigue Risk Management (FRM)
programme enables Crew Planning & Control
to estimate the alertness of crews and make
necessary adjustments to rostering based on
trends. In addition, the self-assessment tool,
Crew Strain application (CSA) was increasingly
used by flight and cabin crew members to
provide feedback on experienced fatigue
levels, workload, roster and rest conditions,
particularly during the busy summer months.
A specialist consultancy has been contracted
to advise on further development of the FRM
programme and a review of training modules
is ongoing.
A process of efficient communication
between departments and stakeholders on
the management of change and relevant
risk assessment (RA) continued. The most
common RAs carried out in 2023 related
to aerodrome changes, conflict zones,
regulatory changes and specific changes
to FlyArystan operations, as well as for new
routes and/or destinations including charter
and scheduled flights.
Since we began operating on 15 May 2002,
we have operated 704,000 cycles and carried
74 million passengers safely with no accident
during passenger or cargo operations.
Compliance with the highest
safety standards
In the most recent IOSA renewal audit, Air
Astana Group demonstrated its adherence
to the highest international standards and
best safety practice for the ninth time.
During the 2023 audit, the documentation
and implementation of nearly 1,000 IOSA
standards and recommended practices
were verified for all operational activities.
Air Astana has had European Aviation
Safety Agency’s (EASA) Part 145 approval to
maintain its fleet in accordance with EASA
requirements since 2003. The on-site EASA
Part-145 renewal audit took place in Almaty,
Shymkent and Astana in June 2023. As a
holder of an EASA Part 145 certificate, we
carry out full maintenance services on our
own aircraft and additionally provide line
maintenance services to 20 other air
carriers. We have also been certified as
an EASA Part 147 Maintenance Training
Organisation since 2015; the renewal audit
was carried out in September 2023.
We were the first operator to be audited
under the EASA Third Country Operations
(TCO) certification in December 2015.
The authorisation remains compliant
with EASA Part-TCO, as well as with
UK TCO authorisation obtained in 2022.
Our operations are in compliance with
appropriate standards of safety and security
regulated by the Aviation Administration of
the Republic of Kazakhstan (AAK) as state
of operator and, under ICAO Article 83bis
agreement, the Irish Aviation Authority
(IAA) as state of registry responsible for
airworthiness.
During 2023, Air Astana underwent
a number of external regulatory
inspections or renewals:
We made further progress with enhancing
the Wildlife Hazard Management Plan in
2023, focusing on Almaty airport. UK experts,
contracted by Air Astana, conducted training
sessions for all employees involved in
controlling birdstrikes. A follow-up visit
found increased consistency in effective
actions taken at the major airport used by
Air Astana and a decrease in birdstrike rates.
A cautiously optimistic assessment needs to
be verified in the next season.
While the relevant airport operators
are responsible for security screening of
passengers and baggage at the Group’s
domestic and international airports, the
Air Astana Group trains its staff to remain
vigilant in identifying potential security
breaches and in dealing with unruly
passengers. In 2023, Air Astana Group
implemented additional baggage screening
to detect undeclared dangerous goods
transportation at certain airports.
Air Astana is a major contributor to a number
of international safety organisations and
programmes, set up to enhance safety and
operational efficiency and including IATA
Global Aviation Data Management. Through
our membership of the Association of Asia
Pacific Airlines, we participate in safety and
security workgroups, which allows us to stay
abreast of the latest technology, innovations
and processes, while also ensuring that
safety programme managers interact with
leading professionals. Similarly, membership
of Flight Safety Foundation (since 2004) and
the International Society of Air Safety
Investigators (since 2009) stimulates an
environment conducive to improvement.
In October 2023, Air Astana hosted its
7th Regional Safety Seminar to promote
and encourage safety within the region 1
.
Entitled ‘Proactive Safety: Organisational and
Human Factors’, the seminar aimed to share
knowledge, experience and best practice
within the aviation industry. It was attended
by representatives from 8 different countries,
19 speakers and over 125 participants from
other airlines, aircraft manufacturers,
international organisations and regulators.
1 CIS and Central Asia countries. 1 CEO-1 Vice presidents; CEO-2 Directors, senior managers; CEO-3 Managers.
58 59 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
Health & safety
The Group has an OHS Committee, which
includes all employees at CEO-1,-2,-3 levels 1
.
Employees of these positions were included
in the OHS Committee due to the high level
of responsibility in decision-making by the
Committee. Employees at other levels
contribute to the decisions made by the
Committee by participating in health and
safety surveys. In addition, they participate in
internal audit procedures for the occupational
health and safety management system.
The IQSMS system has been implemented
for instant processing of occupational health
and safety requests, while more significant
requests are discussed at the OHS Committee
meetings. The Committee holds monthly
sessions with a primary focus on discussing
working conditions. In the reporting year, a
decision was made to standardise personal
protective equipment. Additionally, a decision
was made to enhance the restrooms for
employees working on the airport platform
to ensure comfortable conditions.
Mental health
In 2021, Air Astana Group successfully
launched the ‘Consultation with a
psychologist’ employee benefit. This is
proving more increasingly popular with
employees as a means to improve and
maintain psychological health. Sessions
are conducted by practicing analytical
psychologists and psychotherapists. In
2023, more than 1,000 sessions were held,
an increase of 83% over 2022.
We provide this benefit to our employees
for a number of reasons. Firstly, taking care
of the well-being and health of employees is
a priority. Providing access to psychological
support helps employees effectively deal
with stress, conflict and other emotional
issues and is directly related to their
productivity, motivation and overall
well-being in the workplace.
Aviation Administration of Kazakhstan
(AAK) – AOC renewal audit; scheduled
inspection of Aviation Security;
certification inspection of MRO on all Air
Astana’s bases; inspection of Air Astana
Aviation Training Centre; scheduled
en route and ramp inspection.
Turkish Directorate General of Civil
Aviation – renewal approval of line
maintenance of customer aircraft.
Seychelles Civil Aviation Authorities –
audit of Almaty Line Maintenance Station.
Irish Aviation Authorities – conducted
Aircraft Certificate of Airworthiness
renewals for 43 aircraft.
EASA – Part 145 and Part 147
renewals audits.
Ramp inspections – Air Astana
operations and aircraft underwent
20 European Civil Aviation Conference
(ECAC) SAFA (Safety Assessment of
Foreign Aircraft) and 6 ramp (non-ECAC)
inspections. Airline SAFA weighted
average in 2023 was 0.11, significantly
lower than the national and
industry average.
Within the internal compliance monitoring
programme, nearly 260 compliance audits
were conducted by Air Astana based on IOSA
SARPS and national regulations. Compliance
monitoring is also supported by membership
of the IATA Fuel Quality Pool (IFQP).
Safety programmes
In 2023, Air Astana’s flight data monitoring
analysed more than 99% of flights. The
purpose is to identify, measure and assess
existing operational risks and take relevant
mitigation measures with an emphasis on
trends and root causes. Elements of evidence-
based training (i.e. data and lessons learnt
from both the flight management system
and safety investigations reports) have been
incorporated into the Training System for
pilots and produced positive outcomes.
Secondly, we recognise that the modern work
environment can be demanding and this
proactive approach helps to create a healthy
and supportive work environment where
employees can function effectively and
achieve their professional goals.
This is also very much part of our corporate
social responsibility – our role as a caring
employer from both a professional and
personal perspective, helping to strengthen
the bond with our employees and promote
a positive of the business.
We promote the services across a number
of internal channels of communication and
employees are guaranteed anonymity and
confidentiality if accessing psychological
assistance. Our managers also actively
recommend these services and emphasise
their importance for well-being and
professional development. We are also
planning to conduct anonymous surveys
or reviews among employees to assess the
effectiveness of psychological assistance
services, which will help us understand how
effective they are and whether they can
be improved.
Flight safety management systems
Implementation and maintenance
of the highest safety standards is one of
the Group’s core values. Our management
approach goes beyond simple compliance
with safety requirements: we actively
cultivate a culture of safety in our
employees’ minds and across all internal
processes, and look to continuously improve
and embrace international best practice.
Our Safety Management System (SMS) aims
to identify the potential hazards connected
with aviation operations and mitigate these
risks to acceptable levels. The SMS covers
all organisational tiers, with specific safety
programmes compiled for the operating
activities of flight operations, cabin crew,
engineering and maintenance, and
ground services.
We continue to encourage hazards and
error reporting by operational staff as an
important element of our safety culture.
Over the year more than 3,300 safety
reports were registered, which enabled us
to maintain an accurate perception of risk.
During 2023, Corporate Safety Compliance
(CSC) department developed an interactive
weekly safety report for all operational
departments, including direct access to
update information on safety occurrences.
The ‘Prevention of Use of Unauthorised
Substances’ programme for safety sensitive
aviation activity staff (SSAA) continued
in 2023. In September 2023, mandatory
Unauthorised Substances training for all
operational staff was launched. In addition
to regular publications on the Air Astana
app and Instagram, the first survey about
Unauthorised Substances took place to
assess awareness about the programme
and identify areas for improvement.
Alongside this, to demonstrate leadership
participation to all SSAA staff members,
we ran a promotional campaign in 2023
entitled: ‘Managers get checked as well’.
Our Fatigue Risk Management (FRM)
programme enables Crew Planning & Control
to estimate the alertness of crews and make
necessary adjustments to rostering based on
trends. In addition, the self-assessment tool,
Crew Strain application (CSA) was increasingly
used by flight and cabin crew members to
provide feedback on experienced fatigue
levels, workload, roster and rest conditions,
particularly during the busy summer months.
A specialist consultancy has been contracted
to advise on further development of the FRM
programme and a review of training modules
is ongoing.
A process of efficient communication
between departments and stakeholders on
the management of change and relevant
risk assessment (RA) continued. The most
common RAs carried out in 2023 related
to aerodrome changes, conflict zones,
regulatory changes and specific changes
to FlyArystan operations, as well as for new
routes and/or destinations including charter
and scheduled flights.
Since we began operating on 15 May 2002,
we have operated 704,000 cycles and carried
74 million passengers safely with no accident
during passenger or cargo operations.
Compliance with the highest
safety standards
In the most recent IOSA renewal audit, Air
Astana Group demonstrated its adherence
to the highest international standards and
best safety practice for the ninth time.
During the 2023 audit, the documentation
and implementation of nearly 1,000 IOSA
standards and recommended practices
were verified for all operational activities.
Air Astana has had European Aviation
Safety Agency’s (EASA) Part 145 approval to
maintain its fleet in accordance with EASA
requirements since 2003. The on-site EASA
Part-145 renewal audit took place in Almaty,
Shymkent and Astana in June 2023. As a
holder of an EASA Part 145 certificate, we
carry out full maintenance services on our
own aircraft and additionally provide line
maintenance services to 20 other air
carriers. We have also been certified as
an EASA Part 147 Maintenance Training
Organisation since 2015; the renewal audit
was carried out in September 2023.
We were the first operator to be audited
under the EASA Third Country Operations
(TCO) certification in December 2015.
The authorisation remains compliant
with EASA Part-TCO, as well as with
UK TCO authorisation obtained in 2022.
Our operations are in compliance with
appropriate standards of safety and security
regulated by the Aviation Administration of
the Republic of Kazakhstan (AAK) as state
of operator and, under ICAO Article 83bis
agreement, the Irish Aviation Authority
(IAA) as state of registry responsible for
airworthiness.
During 2023, Air Astana underwent
a number of external regulatory
inspections or renewals:
We made further progress with enhancing
the Wildlife Hazard Management Plan in
2023, focusing on Almaty airport. UK experts,
contracted by Air Astana, conducted training
sessions for all employees involved in
controlling birdstrikes. A follow-up visit
found increased consistency in effective
actions taken at the major airport used by
Air Astana and a decrease in birdstrike rates.
A cautiously optimistic assessment needs to
be verified in the next season.
While the relevant airport operators
are responsible for security screening of
passengers and baggage at the Group’s
domestic and international airports, the
Air Astana Group trains its staff to remain
vigilant in identifying potential security
breaches and in dealing with unruly
passengers. In 2023, Air Astana Group
implemented additional baggage screening
to detect undeclared dangerous goods
transportation at certain airports.
Air Astana is a major contributor to a number
of international safety organisations and
programmes, set up to enhance safety and
operational efficiency and including IATA
Global Aviation Data Management. Through
our membership of the Association of Asia
Pacific Airlines, we participate in safety and
security workgroups, which allows us to stay
abreast of the latest technology, innovations
and processes, while also ensuring that
safety programme managers interact with
leading professionals. Similarly, membership
of Flight Safety Foundation (since 2004) and
the International Society of Air Safety
Investigators (since 2009) stimulates an
environment conducive to improvement.
In October 2023, Air Astana hosted its
7th Regional Safety Seminar to promote
and encourage safety within the region 1
.
Entitled ‘Proactive Safety: Organisational and
Human Factors’, the seminar aimed to share
knowledge, experience and best practice
within the aviation industry. It was attended
by representatives from 8 different countries,
19 speakers and over 125 participants from
other airlines, aircraft manufacturers,
international organisations and regulators.
1 CIS and Central Asia countries. 1 CEO-1 Vice presidents; CEO-2 Directors, senior managers; CEO-3 Managers.
58 59 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
SUSTA IN ABILIT Y
CONTINUED
Our people
To enhance awareness of aviation
professions among the population,
we organised over 100 online and offline
events, engaging with schools, universities
and external partners/communities. This
proactive approach significantly increased
the number of job applications at all levels,
particularly among young people.
This helped us to expand our internship
programmes, offering opportunities to
acquire hands-on skills for a fulfilling career
within aviation, including operations,
maintenance, marketing, finance and
information technology. Interns actively
contribute to real-life projects, execute
tasks aligned with their areas of interest
and augment their expertise through
dedicated education and training. Since the
introduction of the internship programme
in 2018, approximately 1,000 interns have
successfully completed the programme,
securing employment within the Air Astana
and progressing in their careers.
The continued development of internship
programmes underscores Air Astana’s
dedication to attracting and nurturing talented
young professionals, positioning them to play
pivotal roles in the Company’s sustained
success within the aviation industry.
In 2023, the Group employed 6,499 people
(2022: 6,184). We took on a total of 1,077
new employees during the year: 725 at
Almaty; 345 across other Kazakhstan cities;
and 7 at international stations. The gender
split across new employees was 543
women and 534 men.
The age profile of the Group remains
relatively young with more than 90%
younger than 40: aged under 30 – 2,669;
aged 30–50 – 3,257; aged over 50 – 573.
The turnover rate from the total number of
employees is 12.3% (2022: 12.0%), which is
within the normal range 1 .
Diversity and equal opportunities
We promote diversity and equal opportunity
in the workplace, believing that every
employee should be able to fulfil their
potential, regardless of gender, age,
nationality, religion or physical characteristics.
We consider that cultural diversity and success
go hand in hand: different nationalities bring
different perspectives and experiences,
broadening our thinking and ideas, which are
valuable assets to the Group.
We provide equal opportunities for
men and women regardless of age
or nationality, creating a truly diverse
workforce of highly skilled people across
many countries and continents. We employ
3,884 women and 2,615 men, from different
nationalities and ethnic groups with
diverse backgrounds, faiths and beliefs.
This, in turn, provides a stimulating and
fair working environment for everyone.
While continuing to address any traditional
peculiarities, we believe strongly that
gender and diversity should not be barriers
to career progression within the Group. At
the senior management level, comprising
40 people, the gender split currently is 45%
female and 55% male.
Remuneration for each category of
employees is set regardless of gender.
Our position on equality also includes
entitlement to parental leave regardless of
gender, although in practice more women
than men exercise this right. During 2023,
71 men and 948 women took parental leave.
The total number of employees who
returned to work in the reporting period
after parental leave ended was 954 (male –
64, female – 890). Return to work: male –
90%, female – 94%. All 954 were still
employed 12 months later. We believe
that professional growth and development
should be the right of all our employees,
including those with disabilities.
We continue to look for opportunities
to organise occupancy, so in June 2023,
a person with disabilities joined us
as an intern.
We are proud to have created an inclusive
and friendly work environment, which has
also led to improved team productivity and
provided equal opportunities now and in
the future.
In 2023 there were no registered cases
of discrimination.
202 3 HIGHLIGHTS
In 2023, Air Astana achieved recognition as the ‘Most
Attractive Employer’ within the transportation sector and
ranked second among 100 companies in Kazakhstan.
This year, we honoured 215 employees with 10th
anniversary awards and 50 employees with 20th
anniversary awards.
M ATERIA L ISSUE S
Employment
Training and development
Procurement practices
GUIDELINE S WE FOLLOW
Republic of Kazakhstan legislation: Labour Code; Law ‘On
procurement of individual entities of the quasi-public sector’;
Customs Law; National Economics Ministry rules and orders;
Customs Union Committee resolutions; authorised permits
of the National Security Committee, the Ministries of Digital
Development, Defense and Aerospace Industry (Committee
of Telecommunication), the Committee of Industrial
Development and Industrial Safety of the Ministry of
Investment and Development, the Committee of State
Income of the Ministry of Finance; Tax Law.
Other: Group strategy; Corporate goals and values; Conditions
of service; Code of Ethics; Anti-corruption Policy; Policy for
prevention and settlement of conflict of interest; regulations
of the Procurement and Supply Department; procurement
procedure of Samruk-Kazyna JSC and organisations where
at least 50% of voting Shares (equity interest) of which are
directly or indirectly owned by Samruk-Kazyna JSC on the
right of property or trust management; special procurement
procedure for Air Astana JSC and organisations with 50%
or more of voting shares (participatory interests) directly
or indirectly owned by Air Astana JSC under the right of
ownership or trust management; labour codes of countries
where we base our employees; Collective agreements with
trade unions; IATA Standards; EASA regulations; National
standards; ICAO regulations; Incoterms 2020; Dangerous
Goods Regulations of IATA; Rules of Cargo Insurance; Eurasian
Economic Union Treaty; Customs Clearance Procedure.
Employees
Approach
The long-term sustainable success of the Group’s business depends
on the expertise, skills and motivation of our employees. As a
socially responsible organisation, we recruit, appraise and reward
employees based on merit and enable them to develop to their
maximum potential. Our workplace environment – based on our
corporate HEART and CHARM values – is one where recognition,
development and equality all thrive to ensure that we attract and
retain talented people. We operate our business with the highest
standards of integrity and ethics, which is also reflected in the
transparency and fairness of our recruitment process.
Employment
In 2023, Air Astana achieved recognition as the ‘Most Attractive
Employer’ within the transportation sector and ranked second among
100 companies in Kazakhstan with more than 1,000 employees, as
revealed by The Talentist, an extensive employer brand perception
study. This is commissioned by ANCOR and conducted by the
independent research company IPSOS, targeting the working-age
population of the country.
During 2023, our focus on operational excellence continued,
marked by the resumption of a global pilot selection process and
the inclusion of cadets from the AB-initio training programme.
Additionally, the Engineering and Maintenance apprentice
programme was reinstated.
Pilot Training
Programme
TOTA L NUMBER OF
GR ADUATE S SINCE THE STA RT
OF THE PROGR A MME
274
GROW TH IN THE NUMBER
OF C ADE TS IN 202 3
19
PL A NNED GROW TH IN 2024
40
Aviation Technician
Training Programme
TOTA L NUMBER OF
GR ADUATE S SINCE THE STA RT
OF THE PROGR A MME
22
GROW TH IN THE NUMBER
OF C ADE TS IN 202 3
10
1 As determined by the Company.
Our people remain at the heart of our operations.
As one of the major employers in Kazakhstan, we
pride ourselves on attracting and retaining some
of the best talents, thanks to our strong focus on
recognition, development and equality. In 2023,
we continued to drive operational excellence
through investing in our people – particularly in our
training programmes and employee engagement,
underpinning our continued success in delivering
best-in-class services.
Yevgeniya Ni
Chief Human Resources Office
61 Air Astana Integrated Report 2023 60 Air Astana Integrated Report 2023
Our people
To enhance awareness of aviation
professions among the population,
we organised over 100 online and offline
events, engaging with schools, universities
and external partners/communities. This
proactive approach significantly increased
the number of job applications at all levels,
particularly among young people.
This helped us to expand our internship
programmes, offering opportunities to
acquire hands-on skills for a fulfilling career
within aviation, including operations,
maintenance, marketing, finance and
information technology. Interns actively
contribute to real-life projects, execute
tasks aligned with their areas of interest
and augment their expertise through
dedicated education and training. Since the
introduction of the internship programme
in 2018, approximately 1,000 interns have
successfully completed the programme,
securing employment within the Air Astana
and progressing in their careers.
The continued development of internship
programmes underscores Air Astana’s
dedication to attracting and nurturing talented
young professionals, positioning them to play
pivotal roles in the Company’s sustained
success within the aviation industry.
In 2023, the Group employed 6,499 people
(2022: 6,184). We took on a total of 1,077
new employees during the year: 725 at
Almaty; 345 across other Kazakhstan cities;
and 7 at international stations. The gender
split across new employees was 543
women and 534 men.
The age profile of the Group remains
relatively young with more than 90%
younger than 40: aged under 30 – 2,669;
aged 30–50 – 3,257; aged over 50 – 573.
The turnover rate from the total number of
employees is 12.3% (2022: 12.0%), which is
within the normal range 1 .
Diversity and equal opportunities
We promote diversity and equal opportunity
in the workplace, believing that every
employee should be able to fulfil their
potential, regardless of gender, age,
nationality, religion or physical characteristics.
We consider that cultural diversity and success
go hand in hand: different nationalities bring
different perspectives and experiences,
broadening our thinking and ideas, which are
valuable assets to the Group.
We provide equal opportunities for
men and women regardless of age
or nationality, creating a truly diverse
workforce of highly skilled people across
many countries and continents. We employ
3,884 women and 2,615 men, from different
nationalities and ethnic groups with
diverse backgrounds, faiths and beliefs.
This, in turn, provides a stimulating and
fair working environment for everyone.
While continuing to address any traditional
peculiarities, we believe strongly that
gender and diversity should not be barriers
to career progression within the Group. At
the senior management level, comprising
40 people, the gender split currently is 45%
female and 55% male.
Remuneration for each category of
employees is set regardless of gender.
Our position on equality also includes
entitlement to parental leave regardless of
gender, although in practice more women
than men exercise this right. During 2023,
71 men and 948 women took parental leave.
The total number of employees who
returned to work in the reporting period
after parental leave ended was 954 (male –
64, female – 890). Return to work: male –
90%, female – 94%. All 954 were still
employed 12 months later. We believe
that professional growth and development
should be the right of all our employees,
including those with disabilities.
We continue to look for opportunities
to organise occupancy, so in June 2023,
a person with disabilities joined us
as an intern.
We are proud to have created an inclusive
and friendly work environment, which has
also led to improved team productivity and
provided equal opportunities now and in
the future.
In 2023 there were no registered cases
of discrimination.
202 3 HIGHLIGHTS
In 2023, Air Astana achieved recognition as the ‘Most
Attractive Employer’ within the transportation sector and
ranked second among 100 companies in Kazakhstan.
This year, we honoured 215 employees with 10th
anniversary awards and 50 employees with 20th
anniversary awards.
M ATERIA L ISSUE S
Employment
Training and development
Procurement practices
GUIDELINE S WE FOLLOW
Republic of Kazakhstan legislation: Labour Code; Law ‘On
procurement of individual entities of the quasi-public sector’;
Customs Law; National Economics Ministry rules and orders;
Customs Union Committee resolutions; authorised permits
of the National Security Committee, the Ministries of Digital
Development, Defense and Aerospace Industry (Committee
of Telecommunication), the Committee of Industrial
Development and Industrial Safety of the Ministry of
Investment and Development, the Committee of State
Income of the Ministry of Finance; Tax Law.
Other: Group strategy; Corporate goals and values; Conditions
of service; Code of Ethics; Anti-corruption Policy; Policy for
prevention and settlement of conflict of interest; regulations
of the Procurement and Supply Department; procurement
procedure of Samruk-Kazyna JSC and organisations where
at least 50% of voting Shares (equity interest) of which are
directly or indirectly owned by Samruk-Kazyna JSC on the
right of property or trust management; special procurement
procedure for Air Astana JSC and organisations with 50%
or more of voting shares (participatory interests) directly
or indirectly owned by Air Astana JSC under the right of
ownership or trust management; labour codes of countries
where we base our employees; Collective agreements with
trade unions; IATA Standards; EASA regulations; National
standards; ICAO regulations; Incoterms 2020; Dangerous
Goods Regulations of IATA; Rules of Cargo Insurance; Eurasian
Economic Union Treaty; Customs Clearance Procedure.
Employees
Approach
The long-term sustainable success of the Group’s business depends
on the expertise, skills and motivation of our employees. As a
socially responsible organisation, we recruit, appraise and reward
employees based on merit and enable them to develop to their
maximum potential. Our workplace environment – based on our
corporate HEART and CHARM values – is one where recognition,
development and equality all thrive to ensure that we attract and
retain talented people. We operate our business with the highest
standards of integrity and ethics, which is also reflected in the
transparency and fairness of our recruitment process.
Employment
In 2023, Air Astana achieved recognition as the ‘Most Attractive
Employer’ within the transportation sector and ranked second among
100 companies in Kazakhstan with more than 1,000 employees, as
revealed by The Talentist, an extensive employer brand perception
study. This is commissioned by ANCOR and conducted by the
independent research company IPSOS, targeting the working-age
population of the country.
During 2023, our focus on operational excellence continued,
marked by the resumption of a global pilot selection process and
the inclusion of cadets from the AB-initio training programme.
Additionally, the Engineering and Maintenance apprentice
programme was reinstated.
Pilot Training
Programme
TOTA L NUMBER OF
GR ADUATE S SINCE THE STA RT
OF THE PROGR A MME
274
GROW TH IN THE NUMBER
OF C ADE TS IN 202 3
19
PL A NNED GROW TH IN 2024
40
Aviation Technician
Training Programme
TOTA L NUMBER OF
GR ADUATE S SINCE THE STA RT
OF THE PROGR A MME
22
GROW TH IN THE NUMBER
OF C ADE TS IN 202 3
10
1 As determined by the Company.
Our people remain at the heart of our operations.
As one of the major employers in Kazakhstan, we
pride ourselves on attracting and retaining some
of the best talents, thanks to our strong focus on
recognition, development and equality. In 2023,
we continued to drive operational excellence
through investing in our people – particularly in our
training programmes and employee engagement,
underpinning our continued success in delivering
best-in-class services.
Yevgeniya Ni
Chief Human Resources Office
61 Air Astana Integrated Report 2023 60 Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
SUSTA IN ABILIT Y
CONTINUED
Our people
Freedom of association
The Group acknowledges the right of
employees to join trade unions, which protect
and support their interests, and conducts
negotiations with three trade unions:
1. A non-governmental organisation (NGO)
‘Local Trade Union of Aviation Workers
of Kazakhstan’.
2. NGO ‘Local Air Astana Pilot Labour Union’.
3. ‘AVIATOR Pilot Labour Union of Air
Astana JSC’.
In 2023 10% of employees belonged to
trade unions.
The Group always strives to prevent
labour disputes before they arise.
The internal labour regulations outline
the procedures for employees to address
grievances in relation to working conditions,
recommendations or other issues within
the Group. Direct supervisors, department
heads and overseeing business partners
are involved in resolving issues/problems.
Additionally, internal mediators are engaged
to facilitate the resolution of employee
problems. Trade unions, in turn, exist
to balance the opinions of employee
representatives and participate in
committees within the framework
of labour legislation. Every employee
of the Group is informed that they may
join a trade union at any time.
In 2023, between employee representatives
and employer representatives, a Collective
Agreement was signed for a three-year
term. A joint document titled ‘Agreement
on the Conciliation Commission for the
Resolution of Individual Labour Disputes
was also signed.
Competitive salaries and benefits
In order to attract and retain a highly
skilled and motivated workforce, the Group
provides fixed and variable pay as well as
short-term and long-term benefits that are
competitive and merit-based. All employees
undergo an annual performance appraisal
and, as a result, have their salaries reviewed.
In 2023, 60% of those who were appraised
were female and 40% male. Eligible
employees are notified of any changes to
their salary (effective from 1 March each year)
In 2023, as part of our internal communication
programme, as well as business-related
information, we paid special attention to the
hobbies of employees, inviting them to share
their stories in order to find like-minded
people and popularise sports and art among
colleagues. We have also focused on
employees’ well-being, inviting them to
participate in a corporate 4-month challenge
in sports, social and self-development
areas, which had significant impact on
youth engagement.
Twice a year, we partner with Gallup to
conduct an employee engagement survey.
The most recent of these took place in
November 2023 with employee engagement
assessed at 4.13 (with five being the highest
score), a slight improvement on 4.10 in 2022.
Recognition culture
Listening and responding to feedback
has always been an important part of
our corporate culture. We launched the
KC Recognition platform to stimulate this
practice across all levels of the business.
In 2023, colleagues sent 24,000 thank you
messages to each other. Employees receive
HEART coins for each recognition, which can
be spent on coffee, books and promotional
products in our online shop. At our annual
HEART ceremony, 150 best employees –
who were nominated by their colleagues –
received HEART Awards; the 20 best-of-the-
best employees also received a special
prize – a 7-day family holiday.
Breakfast with the CEO is a very special
occasion during the year, which celebrates
employees’ 10th and 20th work anniversaries.
This year, we honoured 215 employees with
10th anniversary awards and 50 employees
with 20th anniversary awards.
Human rights
The Group is committed to promoting
and upholding human rights, including
the eradication of slavery in all its forms.
We truly believe that slavery, forced or
compulsory labour and human trafficking
are serious violations of human rights
that have no place in our operations.
We are firmly committed to operating in
a responsible and ethical manner, and to
ensuring that our business practices do not
through the electronic document
management system.
The aviation global market recovery in
2022 and shortage of pilots prompted us to
review pilot salaries gradually in 2022 and
2023. Alongside this, we also focused on
incentive programmes for operational staff.
Following the principles of responsible
management, the Group closely monitors
the economic dynamics of the market
and actively supports the welfare of
its employees. In 2023, the Group took
measures to increase salaries for employees
in working and junior positions.
Our benefits package is available to all
employees, whether permanent, temporary
or part-time. However, some benefits are
only available after passing the probation
period. Our employee benefits package
includes:
Corporate pension plan
Health and medical insurance
Loss-of-licence insurance for pilots
Mental health support through the
services of psychologists
Discounts on flights with Group or
partner airlines
Shuttle bus for commuting to and
from work
Discounts for gym membership and
in restaurants, bars and hotels
Support for various sporting activities
(football and volleyball teams, etc.).
contribute to any form of modern slavery.
At Air Astana, we are proud to report that
we have not identified any instances of
slavery, forced or compulsory labour or
human trafficking in our operations.
Training and development
Talent management
Talent management is a strategic and
systematic process of identifying, attracting
and planning for employees with high
potential and leadership aspirations. The
development and improvement of their skills
and competencies is a prerequisite for the
sustainable development of the Group. Our
talent management programme focuses on
search and selection, talent development and
retention, people performance management,
succession planning and leadership
development, and culture and values.
KC Talents
As a part of talent management process, the
KC Talents programme was introduced in 2010
with the strapline: ‘We are looking for people
to drive the future’. The programme is aimed
at identifying and developing future leaders
among non-management employees. Over
the last 13 years, 48 talents have participated
in the Group-sponsored training programme
at the Cranfield School of Management in the
UK, the Corporate University of Samruk-
Kazyna and De Montfort University
Kazakhstan. This successful programme has
seen more than 60% of its participants
promoted over that period.
In 2023, 14 bright talents were selected
to join the programme with bespoke
training provided jointly by De Montfort
University Kazakhstan and Air Astana
Training Academy. The University covered
key business modules including finance,
marketing, HR, project management,
strategic management and corporate
governance. The Training Academy focused
on behavioural skills including but not
limited to: communication techniques,
influencing styles, networking, flexible
leadership, feedback skills, conflict and
change management and public speaking.
Additional support was also provided
through individual coaching sessions by
external specialists and mentoring from
senior and top managers within the Group.
In line with national labour legislation,
compensation is paid to employees when
they reach retirement age and their
contract is terminated, the amount paid
depending on the length of service at
that stage:
Two months’ salary for employment
of up to 10 years’ uninterrupted service
Three months’ salary for employment
of more than 10 years’ uninterrupted
service.
If an employee participates in the corporate
pension plan and reaches pension age in
accordance with the labour legislation of the
Republic of Kazakhstan and upon dismissal
of an employee aged 58 years or more, the
employee receives the full payment provided
by the terms of the plan. The interest rate
was 14.05% per annum; the annual effective
interest rate is 15.2% in 2023.
Employee engagement
Internal communication remains the key
element for engaging with employees.
Alongside the monthly communication from
CEO distributed via the corporate mobile app,
we connected with our colleagues through
other channels, such as Instagram and
chatbots, and conducted regular pulse
surveys. Our annual Management Conference
was once again also streamed via YouTube
and available to all employees.
The KC Talents 2023 group completed their
training in April 2024.
Succession planning
Succession planning in the Group plays an
important role in ensuring stability and
business continuity. Moving employees into
key positions minimises risks and prevents
the loss of valuable experience and
knowledge. The focus is on the long-term
perspective of the organisation, its growth
and development, helping to build a
successful future. At the same time, this
approach attracts highly qualified specialists
who see the prospects and stability offered
by the Group. The Group has established a
system to identify and develop potential
leaders within the organisation, contributing
to the development of a leadership culture
and increasing the efficiency of the
organisation itself. We have a rolling
development programme for Senior
Management, which includes leadership
training at Henley Business School in the UK
and individual coaching sessions with
executive coaches.
Internship programmes
We have had an internship programme in
place since 2018 and its ongoing development
demonstrates our commitment to attracting
and developing talented young professionals,
who will be nurtured to contribute to our
continued success.
Internship programmes cover a number
of business functions, including operations,
maintenance, marketing, finance and
information technology. Interns are given
the chance to work alongside experienced
professionals and gain the practical skills
necessary for a successful career in the
aviation industry. They have the opportunity
to participate in real-world projects, perform
tasks related to their area of interest and
expand their knowledge and skills through
education and training. To date, some 1,000
interns have participated in the programme
and many have remained as full-time
employees with Air Astana Group.
62 63 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
Our people
Freedom of association
The Group acknowledges the right of
employees to join trade unions, which protect
and support their interests, and conducts
negotiations with three trade unions:
1. A non-governmental organisation (NGO)
‘Local Trade Union of Aviation Workers
of Kazakhstan’.
2. NGO ‘Local Air Astana Pilot Labour Union’.
3. ‘AVIATOR Pilot Labour Union of Air
Astana JSC’.
In 2023 10% of employees belonged to
trade unions.
The Group always strives to prevent
labour disputes before they arise.
The internal labour regulations outline
the procedures for employees to address
grievances in relation to working conditions,
recommendations or other issues within
the Group. Direct supervisors, department
heads and overseeing business partners
are involved in resolving issues/problems.
Additionally, internal mediators are engaged
to facilitate the resolution of employee
problems. Trade unions, in turn, exist
to balance the opinions of employee
representatives and participate in
committees within the framework
of labour legislation. Every employee
of the Group is informed that they may
join a trade union at any time.
In 2023, between employee representatives
and employer representatives, a Collective
Agreement was signed for a three-year
term. A joint document titled ‘Agreement
on the Conciliation Commission for the
Resolution of Individual Labour Disputes
was also signed.
Competitive salaries and benefits
In order to attract and retain a highly
skilled and motivated workforce, the Group
provides fixed and variable pay as well as
short-term and long-term benefits that are
competitive and merit-based. All employees
undergo an annual performance appraisal
and, as a result, have their salaries reviewed.
In 2023, 60% of those who were appraised
were female and 40% male. Eligible
employees are notified of any changes to
their salary (effective from 1 March each year)
In 2023, as part of our internal communication
programme, as well as business-related
information, we paid special attention to the
hobbies of employees, inviting them to share
their stories in order to find like-minded
people and popularise sports and art among
colleagues. We have also focused on
employees’ well-being, inviting them to
participate in a corporate 4-month challenge
in sports, social and self-development
areas, which had significant impact on
youth engagement.
Twice a year, we partner with Gallup to
conduct an employee engagement survey.
The most recent of these took place in
November 2023 with employee engagement
assessed at 4.13 (with five being the highest
score), a slight improvement on 4.10 in 2022.
Recognition culture
Listening and responding to feedback
has always been an important part of
our corporate culture. We launched the
KC Recognition platform to stimulate this
practice across all levels of the business.
In 2023, colleagues sent 24,000 thank you
messages to each other. Employees receive
HEART coins for each recognition, which can
be spent on coffee, books and promotional
products in our online shop. At our annual
HEART ceremony, 150 best employees –
who were nominated by their colleagues –
received HEART Awards; the 20 best-of-the-
best employees also received a special
prize – a 7-day family holiday.
Breakfast with the CEO is a very special
occasion during the year, which celebrates
employees’ 10th and 20th work anniversaries.
This year, we honoured 215 employees with
10th anniversary awards and 50 employees
with 20th anniversary awards.
Human rights
The Group is committed to promoting
and upholding human rights, including
the eradication of slavery in all its forms.
We truly believe that slavery, forced or
compulsory labour and human trafficking
are serious violations of human rights
that have no place in our operations.
We are firmly committed to operating in
a responsible and ethical manner, and to
ensuring that our business practices do not
through the electronic document
management system.
The aviation global market recovery in
2022 and shortage of pilots prompted us to
review pilot salaries gradually in 2022 and
2023. Alongside this, we also focused on
incentive programmes for operational staff.
Following the principles of responsible
management, the Group closely monitors
the economic dynamics of the market
and actively supports the welfare of
its employees. In 2023, the Group took
measures to increase salaries for employees
in working and junior positions.
Our benefits package is available to all
employees, whether permanent, temporary
or part-time. However, some benefits are
only available after passing the probation
period. Our employee benefits package
includes:
Corporate pension plan
Health and medical insurance
Loss-of-licence insurance for pilots
Mental health support through the
services of psychologists
Discounts on flights with Group or
partner airlines
Shuttle bus for commuting to and
from work
Discounts for gym membership and
in restaurants, bars and hotels
Support for various sporting activities
(football and volleyball teams, etc.).
contribute to any form of modern slavery.
At Air Astana, we are proud to report that
we have not identified any instances of
slavery, forced or compulsory labour or
human trafficking in our operations.
Training and development
Talent management
Talent management is a strategic and
systematic process of identifying, attracting
and planning for employees with high
potential and leadership aspirations. The
development and improvement of their skills
and competencies is a prerequisite for the
sustainable development of the Group. Our
talent management programme focuses on
search and selection, talent development and
retention, people performance management,
succession planning and leadership
development, and culture and values.
KC Talents
As a part of talent management process, the
KC Talents programme was introduced in 2010
with the strapline: ‘We are looking for people
to drive the future’. The programme is aimed
at identifying and developing future leaders
among non-management employees. Over
the last 13 years, 48 talents have participated
in the Group-sponsored training programme
at the Cranfield School of Management in the
UK, the Corporate University of Samruk-
Kazyna and De Montfort University
Kazakhstan. This successful programme has
seen more than 60% of its participants
promoted over that period.
In 2023, 14 bright talents were selected
to join the programme with bespoke
training provided jointly by De Montfort
University Kazakhstan and Air Astana
Training Academy. The University covered
key business modules including finance,
marketing, HR, project management,
strategic management and corporate
governance. The Training Academy focused
on behavioural skills including but not
limited to: communication techniques,
influencing styles, networking, flexible
leadership, feedback skills, conflict and
change management and public speaking.
Additional support was also provided
through individual coaching sessions by
external specialists and mentoring from
senior and top managers within the Group.
In line with national labour legislation,
compensation is paid to employees when
they reach retirement age and their
contract is terminated, the amount paid
depending on the length of service at
that stage:
Two months’ salary for employment
of up to 10 years’ uninterrupted service
Three months’ salary for employment
of more than 10 years’ uninterrupted
service.
If an employee participates in the corporate
pension plan and reaches pension age in
accordance with the labour legislation of the
Republic of Kazakhstan and upon dismissal
of an employee aged 58 years or more, the
employee receives the full payment provided
by the terms of the plan. The interest rate
was 14.05% per annum; the annual effective
interest rate is 15.2% in 2023.
Employee engagement
Internal communication remains the key
element for engaging with employees.
Alongside the monthly communication from
CEO distributed via the corporate mobile app,
we connected with our colleagues through
other channels, such as Instagram and
chatbots, and conducted regular pulse
surveys. Our annual Management Conference
was once again also streamed via YouTube
and available to all employees.
The KC Talents 2023 group completed their
training in April 2024.
Succession planning
Succession planning in the Group plays an
important role in ensuring stability and
business continuity. Moving employees into
key positions minimises risks and prevents
the loss of valuable experience and
knowledge. The focus is on the long-term
perspective of the organisation, its growth
and development, helping to build a
successful future. At the same time, this
approach attracts highly qualified specialists
who see the prospects and stability offered
by the Group. The Group has established a
system to identify and develop potential
leaders within the organisation, contributing
to the development of a leadership culture
and increasing the efficiency of the
organisation itself. We have a rolling
development programme for Senior
Management, which includes leadership
training at Henley Business School in the UK
and individual coaching sessions with
executive coaches.
Internship programmes
We have had an internship programme in
place since 2018 and its ongoing development
demonstrates our commitment to attracting
and developing talented young professionals,
who will be nurtured to contribute to our
continued success.
Internship programmes cover a number
of business functions, including operations,
maintenance, marketing, finance and
information technology. Interns are given
the chance to work alongside experienced
professionals and gain the practical skills
necessary for a successful career in the
aviation industry. They have the opportunity
to participate in real-world projects, perform
tasks related to their area of interest and
expand their knowledge and skills through
education and training. To date, some 1,000
interns have participated in the programme
and many have remained as full-time
employees with Air Astana Group.
62 63 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
SUSTA IN ABILIT Y
CONTINUED
Our people
Training Academy
A strong emphasis in 2023 has been
on increasing the focus on our leadership
programme, Leadership Essentials, widening
our E-learning capabilities and offering
bespoke skill development modules for
the business. The aim of the Leadership
Essentials programme is for current and
newly promoted leaders to attend and gain
job-relevant skills in people management
and leadership. In 2023, 271 managers
completed the full course of modules.
Training Needs Analyses and Surveys
were conducted internally in order to
identify skills training and then to design
bespoke skill development modules,
which took into account the needs of
employees across the business.
External, specially designed courses were
delivered on Negotiation skills and Supplier
Management for Ground Services and an
Enhancing Sales Performance workshop for
local and overseas Sales teams. For the 2023
Talent group, the Academy designed and
delivered key modules specifically focused
on core topics based on psychometric
assessment results that highlighted key
development needs. Within the Academy
team itself, a recurrent advanced Train the
Trainer programme for the Academy team
was completed to promote best practice
in Training delivery.
Our blended training approach continues
to promote efficiency and productivity with
self-learning education growth; 115 webinars
and 5 new corporate courses (average
feedback score – 9.1 out of 10) were
completed. There are now 118 self-learning
materials within our online library providing
access to high quality self-learning courses,
books and materials that are all aligned to the
HEART values and corporate competencies.
An online Book Club (Be HEART Be SMART)
was launched to encourage discussion and
self-development.
In 2023, the Academy received an award
from the public ITeachMe Foundation
for ‘Inspiring Partnership’. Our trainers
conducted classroom/online courses
in public speaking with many of the
participants having various degrees
of disability.
A new international competency-based
training approach for mandatory dangerous
goods transportation has been developed
in line with ICAO and IATA standards and
approved by the AAK.
The installation of a Real Fire Fighting
Trainer (RFFT) has already been delivered
and set up and an Airbus 320 family Cabin
Emergency Evacuation Trainer (CEET) was
designed in 2023 with plans for it to be in
place in Q1 2024 at the Flight Training
Centre in Astana. These two simulators
provide practical training for Airbus 320
flight and cabin crew members in safety
and emergency procedures, including
evacuation procedures in different scenarios
such as pilot incapacitation, aircraft
decompression, cabin fires and landing/
ditching emergencies.
Customer experience
Our customer experience training teams
have run several projects, all of which
enhanced the experience our customers
received at each stage of the journey.
Customer experience and service training
was provided for 125 business class flight
attendants, 58 pursers and 63 in-flight
supervisors, who were newly promoted.
A tailored service skills programme for the
‘Shanyraq’ Business Lounge agents was
run with a focus on our premium customers
and our Lost & Found agents were taken
through effective service recovery
techniques. It is also important not to forget
our internal customer experience: the team
completed customised programmes for the
HR Staff Service Centre, Cleaning Services
and Security Services units in order to
establish and maintain an enhanced
employee experience.
Our partnership co-operation over the years
has resulted in hundreds of young people
gaining self-confidence in communications
and public speaking.
Average training hours per employee in
2023 was 6.32 hours (for total employees)
and 7.35 hours (for active employees).
All employees have equal access to the
self-learning and development tools via
Learning Management System (LMS)
regardless of position, length of service
or gender. The total number of training
hours delivered for operational personnel
in 2023 was 40,872; for administration
and managerial personnel – 3,824 hours.
The average number of training hours per
operational personnel – 8.5 training hours/
person; per administration and managerial
personnel – 4.9 training hours/person.
Labour practice
Six ‘Kazakhstan Labour Legislation’
webinars were delivered in 2023 for
supervisory and managerial personnel.
The total number of webinar hours
provided was 48; 740 employees attended
the webinars. All webinars were recorded,
and a self-enrolment option is available for
all employees.
Operational training
Within operational training, our initial
courses include both regulatory safety
training and customer service training for
front line employees, with 252 Ground
Services employees and 193 cabin crew
completing this training. Annual recurrent
training modules were also completed by
506 existing Ground Services employees
and 1,251 cabin crew; 83 cabin attendants
completed promotion training. Within
Engineering & Maintenance courses for Part
147, Part 145, Type Training, LEAP CFM and
68 ATO courses were completed.
All Flight Operations training programmes
meet Kazakhstan regulatory requirements
and ICAO standards, as well as IOSA
requirements. All 560 current pilots
completed annual recurrent ground and
simulator training in accordance with
Operational Manual Part D (OM-D).
Suppliers
Approach
To meet our operational need for quality
goods and services delivered in a timely
manner we have developed a broad-based
supply chain. We have built long-term
relationships with many of our suppliers, who
range from start-ups and small businesses to
large multinational companies.
Procurement practices
The Air Astana Group procurement process
is based on international best practice. We
adhere to the principles of transparency
and providing equal opportunities to all
potential suppliers within a framework that
includes procurement procedures,
management standards and rules.
Wherever possible, the Group is committed
to including organisations in its procurement
process who employ disabled people. This
year, the Group reached agreements for the
supply of archive file folders and mattress
cover from organisations for disabled people.
The Group has incorporated anti-corruption
clauses, and the ethical practices required
from suppliers, along with reliability
clauses, into all suppliers’ contracts.
2023 was once again a difficult period,
characterised by both economic and
geopolitical issues. There were substantial
disruptions to routes, although alternative
logistics options opened up for main
suppliers from Europe and the US into
Kazakhstan. The ongoing Ukraine-Russian
conflict still created significant obstacles for
on-ground deliveries of oversize and heavy
shipments through these territories forcing
the Group to seek other delivery options.
Twelve Ab-initio pilot cadets graduated; 28
First Officers attended ‘Enhanced Command
Selection & Command Upgrade Training’
during the year and 82 pilots completed
initial type rating courses on A320
and B767.
We recruited and trained 126 new pilots.
Six new type rating examiners, five type
rating instructors and thirteen Line Training
Instructors successfully completed training
programmes.
A new programme, ‘Running the Show’
was launched in May 2023 to prepare First
Officers for future commander roles with 77
participating to date. An Upset Prevention
and Recovery Training (UPRT) programme
was also introduced in 2023. Upset
Prevention and Recovery Training (UPRT)
provides pilots with the ability to prevent
an aircraft from entering and recovering
from challenging spatial attitudes, placing
particular emphasis on developing manual
piloting skills to enhance safety. The
International Development of Technology
organisation provided training for subject
matter expert instructors and, in future,
UPRT will be a part of simulator training and
checks, run by our own instructors. From
the beginning of 2024, crew members will
each undertake an extra simulator session
of 4 hours. Since the L3 Harris A320 Full
Flight Simulator Training was launched at
the Flight Training Centre in Astana during
the summer of 2023, 372 pilots have
attended training and completed 2,296
simulator hours during 578 sessions). The
2024 forecast is for simulator utilisation to
increase to 5,500–6,000 hours.
During 2023, the Training Academy
successfully passed an IOSA audit to
renew the IATA membership. The Training
Academy was also successful in passing an
AOC audit for compliance with operational
training requirements conducted by the
national supervisory body, the AAK, and
its certification as an accredited Aviation
Training Organisation (ATO) was renewed.
This permits the Academy to continue
delivering 79 approved operational training
courses for Air Astana Group employees
and external clients for the next two years.
The southern route via Georgia and
Azerbaijan is not economically viable with
double the turnaround time for critical parts
and material. However, the Group’s priority
is to rigorously follow and be compliant
with EU and US sanctions imposed on
Russia, and we need to find a balance
between economic efficiency, effectiveness
and on-time deliveries while, at the same
time, searching for the best way to satisfy
our business and operational needs.
Air Astana Group promotes its sustainability
values throughout its supply chain. During
2023, the Group developed its Procurement
Standard, which includes criteria for suppliers
as part of sustainable development and
includes supporting human rights,
combating modern slavery, embracing
diversity and inclusion, preventing corruption
and minimising environmental impact.
Approval of the Procurement Standard is
expected in the Q1 of 2024.
Purchases from local suppliers
The Group is committed to sourcing
goods and services from local suppliers.
As per our geographical definition, ‘local’
pertains to the Republic of Kazakhstan,
where our significant operations are based.
We recognise the importance of supporting
the local economy and fostering sustainable
development within our community by
prioritising partnerships with suppliers from
Kazakhstan. Through this approach, we aim
to contribute to the socio-economic growth
of the country while ensuring the efficient
procurement of essential goods and
services for our operations.
2023 2022 2021
Percentage of the procurement budget used for
significant locations of operation 1 that is spent on
suppliers local to operations (percentage of
products and services purchased locally)
31% 26% 33%
1 The territory of the Republic of Kazakhstan.
64 65 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
Our people
Training Academy
A strong emphasis in 2023 has been
on increasing the focus on our leadership
programme, Leadership Essentials, widening
our E-learning capabilities and offering
bespoke skill development modules for
the business. The aim of the Leadership
Essentials programme is for current and
newly promoted leaders to attend and gain
job-relevant skills in people management
and leadership. In 2023, 271 managers
completed the full course of modules.
Training Needs Analyses and Surveys
were conducted internally in order to
identify skills training and then to design
bespoke skill development modules,
which took into account the needs of
employees across the business.
External, specially designed courses were
delivered on Negotiation skills and Supplier
Management for Ground Services and an
Enhancing Sales Performance workshop for
local and overseas Sales teams. For the 2023
Talent group, the Academy designed and
delivered key modules specifically focused
on core topics based on psychometric
assessment results that highlighted key
development needs. Within the Academy
team itself, a recurrent advanced Train the
Trainer programme for the Academy team
was completed to promote best practice
in Training delivery.
Our blended training approach continues
to promote efficiency and productivity with
self-learning education growth; 115 webinars
and 5 new corporate courses (average
feedback score – 9.1 out of 10) were
completed. There are now 118 self-learning
materials within our online library providing
access to high quality self-learning courses,
books and materials that are all aligned to the
HEART values and corporate competencies.
An online Book Club (Be HEART Be SMART)
was launched to encourage discussion and
self-development.
In 2023, the Academy received an award
from the public ITeachMe Foundation
for ‘Inspiring Partnership’. Our trainers
conducted classroom/online courses
in public speaking with many of the
participants having various degrees
of disability.
A new international competency-based
training approach for mandatory dangerous
goods transportation has been developed
in line with ICAO and IATA standards and
approved by the AAK.
The installation of a Real Fire Fighting
Trainer (RFFT) has already been delivered
and set up and an Airbus 320 family Cabin
Emergency Evacuation Trainer (CEET) was
designed in 2023 with plans for it to be in
place in Q1 2024 at the Flight Training
Centre in Astana. These two simulators
provide practical training for Airbus 320
flight and cabin crew members in safety
and emergency procedures, including
evacuation procedures in different scenarios
such as pilot incapacitation, aircraft
decompression, cabin fires and landing/
ditching emergencies.
Customer experience
Our customer experience training teams
have run several projects, all of which
enhanced the experience our customers
received at each stage of the journey.
Customer experience and service training
was provided for 125 business class flight
attendants, 58 pursers and 63 in-flight
supervisors, who were newly promoted.
A tailored service skills programme for the
‘Shanyraq’ Business Lounge agents was
run with a focus on our premium customers
and our Lost & Found agents were taken
through effective service recovery
techniques. It is also important not to forget
our internal customer experience: the team
completed customised programmes for the
HR Staff Service Centre, Cleaning Services
and Security Services units in order to
establish and maintain an enhanced
employee experience.
Our partnership co-operation over the years
has resulted in hundreds of young people
gaining self-confidence in communications
and public speaking.
Average training hours per employee in
2023 was 6.32 hours (for total employees)
and 7.35 hours (for active employees).
All employees have equal access to the
self-learning and development tools via
Learning Management System (LMS)
regardless of position, length of service
or gender. The total number of training
hours delivered for operational personnel
in 2023 was 40,872; for administration
and managerial personnel – 3,824 hours.
The average number of training hours per
operational personnel – 8.5 training hours/
person; per administration and managerial
personnel – 4.9 training hours/person.
Labour practice
Six ‘Kazakhstan Labour Legislation’
webinars were delivered in 2023 for
supervisory and managerial personnel.
The total number of webinar hours
provided was 48; 740 employees attended
the webinars. All webinars were recorded,
and a self-enrolment option is available for
all employees.
Operational training
Within operational training, our initial
courses include both regulatory safety
training and customer service training for
front line employees, with 252 Ground
Services employees and 193 cabin crew
completing this training. Annual recurrent
training modules were also completed by
506 existing Ground Services employees
and 1,251 cabin crew; 83 cabin attendants
completed promotion training. Within
Engineering & Maintenance courses for Part
147, Part 145, Type Training, LEAP CFM and
68 ATO courses were completed.
All Flight Operations training programmes
meet Kazakhstan regulatory requirements
and ICAO standards, as well as IOSA
requirements. All 560 current pilots
completed annual recurrent ground and
simulator training in accordance with
Operational Manual Part D (OM-D).
Suppliers
Approach
To meet our operational need for quality
goods and services delivered in a timely
manner we have developed a broad-based
supply chain. We have built long-term
relationships with many of our suppliers, who
range from start-ups and small businesses to
large multinational companies.
Procurement practices
The Air Astana Group procurement process
is based on international best practice. We
adhere to the principles of transparency
and providing equal opportunities to all
potential suppliers within a framework that
includes procurement procedures,
management standards and rules.
Wherever possible, the Group is committed
to including organisations in its procurement
process who employ disabled people. This
year, the Group reached agreements for the
supply of archive file folders and mattress
cover from organisations for disabled people.
The Group has incorporated anti-corruption
clauses, and the ethical practices required
from suppliers, along with reliability
clauses, into all suppliers’ contracts.
2023 was once again a difficult period,
characterised by both economic and
geopolitical issues. There were substantial
disruptions to routes, although alternative
logistics options opened up for main
suppliers from Europe and the US into
Kazakhstan. The ongoing Ukraine-Russian
conflict still created significant obstacles for
on-ground deliveries of oversize and heavy
shipments through these territories forcing
the Group to seek other delivery options.
Twelve Ab-initio pilot cadets graduated; 28
First Officers attended ‘Enhanced Command
Selection & Command Upgrade Training’
during the year and 82 pilots completed
initial type rating courses on A320
and B767.
We recruited and trained 126 new pilots.
Six new type rating examiners, five type
rating instructors and thirteen Line Training
Instructors successfully completed training
programmes.
A new programme, ‘Running the Show’
was launched in May 2023 to prepare First
Officers for future commander roles with 77
participating to date. An Upset Prevention
and Recovery Training (UPRT) programme
was also introduced in 2023. Upset
Prevention and Recovery Training (UPRT)
provides pilots with the ability to prevent
an aircraft from entering and recovering
from challenging spatial attitudes, placing
particular emphasis on developing manual
piloting skills to enhance safety. The
International Development of Technology
organisation provided training for subject
matter expert instructors and, in future,
UPRT will be a part of simulator training and
checks, run by our own instructors. From
the beginning of 2024, crew members will
each undertake an extra simulator session
of 4 hours. Since the L3 Harris A320 Full
Flight Simulator Training was launched at
the Flight Training Centre in Astana during
the summer of 2023, 372 pilots have
attended training and completed 2,296
simulator hours during 578 sessions). The
2024 forecast is for simulator utilisation to
increase to 5,500–6,000 hours.
During 2023, the Training Academy
successfully passed an IOSA audit to
renew the IATA membership. The Training
Academy was also successful in passing an
AOC audit for compliance with operational
training requirements conducted by the
national supervisory body, the AAK, and
its certification as an accredited Aviation
Training Organisation (ATO) was renewed.
This permits the Academy to continue
delivering 79 approved operational training
courses for Air Astana Group employees
and external clients for the next two years.
The southern route via Georgia and
Azerbaijan is not economically viable with
double the turnaround time for critical parts
and material. However, the Group’s priority
is to rigorously follow and be compliant
with EU and US sanctions imposed on
Russia, and we need to find a balance
between economic efficiency, effectiveness
and on-time deliveries while, at the same
time, searching for the best way to satisfy
our business and operational needs.
Air Astana Group promotes its sustainability
values throughout its supply chain. During
2023, the Group developed its Procurement
Standard, which includes criteria for suppliers
as part of sustainable development and
includes supporting human rights,
combating modern slavery, embracing
diversity and inclusion, preventing corruption
and minimising environmental impact.
Approval of the Procurement Standard is
expected in the Q1 of 2024.
Purchases from local suppliers
The Group is committed to sourcing
goods and services from local suppliers.
As per our geographical definition, ‘local’
pertains to the Republic of Kazakhstan,
where our significant operations are based.
We recognise the importance of supporting
the local economy and fostering sustainable
development within our community by
prioritising partnerships with suppliers from
Kazakhstan. Through this approach, we aim
to contribute to the socio-economic growth
of the country while ensuring the efficient
procurement of essential goods and
services for our operations.
2023 2022 2021
Percentage of the procurement budget used for
significant locations of operation 1 that is spent on
suppliers local to operations (percentage of
products and services purchased locally)
31% 26% 33%
1 The territory of the Republic of Kazakhstan.
64 65 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
SUSTA IN ABILIT Y
CONTINUED
Communities
As a responsible corporate citizen, we
believe that it is important to nurture strong
relationships with our passengers, business
partners and also with communities where
we operate. We focus on initiatives that have
a meaningful impact on the communities we
serve: sustainability, inclusivity and long-term
positive outcomes.
Throughout the Company’s operations, we
have remained consistent in the approach
and methodology that we use to support
social projects:
Cooperation with local and national
charitable organisations and other
not-for-profit organisations
Individual charity – provision of targeted
support to population groups most in
need of assistance, including severely
ill children and veterans of the Great
Patriotic War
Employee involvement in charitable
activities through fundraising and
volunteering opportunities
Implementation of long-term corporate
social and environmental projects.
The criteria for the selection and identification
of charities and supporting projects are based
on bringing value to communities and
aligning with the Group’s ESG goals
and corporate values.
PROJEC TS IMPLEMENTED IN 2023
Project Description
Charity donation
of stationery
In collaboration with the Turksib District Akimat, through ‘The Road
to School’ project, we distributed backpacks filled with stationery
supplies to children from low-income families in Almaty.
Zhas Kyran programme ‘Zhas Kyran’ is an innovative programme that provides travel grants
to gifted schoolchildren from 7 to 17 years of age to participate in
international educational, scientific, sports and creative competitions
and contests within the Air Astana Group route network.
Provision of flight
tickets
We provide air tickets for children from families with limited financial
resources, flying for treatment or surgery, with cancer or cardiovascular
diseases that are incurable in Kazakhstan. Our assistance includes
providing air tickets to international destinations for both the child
and one accompanying adult. In addition to supporting children,
we assist medical centres in organising trips for foreign doctors
to Kazakhstan.
Community
sponsorship initiative
We provided support to various organisations, including: an
international organisation operating under the auspices of the United
Nations (UNICEF), Almaty International Women’s Club (AIWC), ‘Teplo’
charity foundation, Almaty Marathon and Public Foundation ‘DOM’.
New Year charity
support
The New Year charity event provided 230 children with
psychological, medical and pedagogical consultations and
psychology-pedagogical correction rooms.
Employees
volunteering in
charity projects
As part of the KC challenge, employees donated school backpacks
and stationery for their colleagues’ children and children from
disadvantaged families.
Children’s Day
celebration
We congratulated children on Children’s Day in Regional clinical
hospital and Kazakh Research Institute of Oncology and radiology
in Almaty; at Almaty and Astana airports we handed out specially
prepared gifts, such as travel kits and headphones.
Support for the
national football team
We supported the national football team at the matches with
Finland and Northern Ireland attended by 30,019 people. We set
up four branded fan zones and streamed an advertising video at
the match.
Almaty Marathon Over 80 employees took advantage of discounted tickets with
donations going to charity; many of their colleagues came out on
the day to cheer them on. This event attracts many tourists to
Kazakhstan, and we enabled foreign marathon participants to book
hotels in Almaty with a 10% discount.
FIN A NCIA L RE VIE W
Exceeding
market expectations
The results are presented on both a
statutory basis and adjusted to exclude the
impact of two factors in 2022: firstly, the
extraordinary market event (EME) of the
partial mobilisation in Russia in Q4 2022,
which resulted in a one-off inflow of
citizens from Russia to and through
Kazakhstan with a revenue impact of
USD 16.2 million; and secondly, a gain
from fuel hedging (FH) to the amount of
USD 12.1 million. It is management’s belief
that this adjustment better represents the
underlying performance of the Company.
Group revenue and other income
increased by USD 142.1 million or 13.8%
in 2023 to USD 1,174.5 million, compared to
USD 1,032.4 million in 2022. Excluding EME
in 2022, revenue and other income
increased by USD 158.3 million or 15.6%.
Adjusted EBITDAR grew by USD 12.4 million
or 4.3% to USD 300.8 million compared to
USD 288.4 million in 2022. Excluding EME
and FH, Adjusted EBITDAR increased by
USD 40.7 million or 15.7% compared to
USD 260.1 million in 2022.
Operating profit was USD 136.0 million
compared to USD 148.7 million in 2022.
Excluding the effect of EME and FH,
operating profit increased by USD 15.6
million or 12.9% from USD 120.4 million
in 2022.
Profit for the year was USD 68.7 million,
compared to USD 78.4 million in 2022.
Excluding EME and FH in 2022, profit
increased by USD 12.2 million or 21.5%.
Net finance expenses increased by USD 2.8
million or 8.8% to USD 35.1 million in 2023
compared to USD 32.3 million in 2022
primarily due to interest expense on lease
liabilities by USD 9.3 million as a result of
aircraft fleet expansion. However, interest
income on bank deposits increased by
USD 7.8 million.
Net foreign exchange loss for 2023
was USD 13.8 million, an improvement
of USD 1.3 million compared to a loss of
USD 15.1 million reported in 2022.
Total cash at the end of December 2023
was USD 274.0 million, an increase of
USD 21.1 million or 8.4% compared to end
of December 2022 (excluding available
facilities totalling USD 163.7 million).
Revenue drivers
The increase in 2023 revenue and other
income was achieved by 11.1% and 2.4%
growth in ASK and RASK respectively.
During 2023, international ASK growth of
15.5% outpaced the domestic growth of 5.9%
by almost three times. Both the Air Astana
and FlyArystan brands expanded in their
extended home market of Central Asia and
the Caucasus as well as nearby international
markets. While international ASK growth was
double digit across both brands, FlyArystan’s
international growth of 30.6% outpaced Air
Astana’s 13.6%. The recovery of airport
charges and the Kazakhstan Identity &
Security fee starting from June 2023 were
further contributors to the revenue increase.
Revenue drivers
Group (million USD) 2023 2022 Change (USD) Change, %
Revenue and other income
Passenger revenue 1,143.6 998.1 145.5 14.6%
Cargo and mail revenue 22.5 22.1 0.4 1.8%
Other income 8.4 12.1 (3.7) (30.8%)
Total revenue and other
income 1,174.5 1,032.4 1 142.1 13.8%
1 All financial information has been rounded up, so minor discrepancies may arise from the addition of these amounts.
2023 was the consecutive third
year of growth for the Group
across operational and financial
metrics despite the impacts
of the double crisis caused
by COVID-19 and the Russia-
Ukraine conflict.
Our competitive cost per available
seat kilometer (CASK), combined
with our three growth pillars,
where we continue untapping
opportunities within Kazakhstan,
Central Asia and Caucasus, and
the potential of nearby mega
markets including China and
India, enable us to look into the
future with confidence.
Ibrahim Canliel
CFO of Air Astana JSC
66 67 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
Communities
As a responsible corporate citizen, we
believe that it is important to nurture strong
relationships with our passengers, business
partners and also with communities where
we operate. We focus on initiatives that have
a meaningful impact on the communities we
serve: sustainability, inclusivity and long-term
positive outcomes.
Throughout the Company’s operations, we
have remained consistent in the approach
and methodology that we use to support
social projects:
Cooperation with local and national
charitable organisations and other
not-for-profit organisations
Individual charity – provision of targeted
support to population groups most in
need of assistance, including severely
ill children and veterans of the Great
Patriotic War
Employee involvement in charitable
activities through fundraising and
volunteering opportunities
Implementation of long-term corporate
social and environmental projects.
The criteria for the selection and identification
of charities and supporting projects are based
on bringing value to communities and
aligning with the Group’s ESG goals
and corporate values.
PROJEC TS IMPLEMENTED IN 2023
Project Description
Charity donation
of stationery
In collaboration with the Turksib District Akimat, through ‘The Road
to School’ project, we distributed backpacks filled with stationery
supplies to children from low-income families in Almaty.
Zhas Kyran programme ‘Zhas Kyran’ is an innovative programme that provides travel grants
to gifted schoolchildren from 7 to 17 years of age to participate in
international educational, scientific, sports and creative competitions
and contests within the Air Astana Group route network.
Provision of flight
tickets
We provide air tickets for children from families with limited financial
resources, flying for treatment or surgery, with cancer or cardiovascular
diseases that are incurable in Kazakhstan. Our assistance includes
providing air tickets to international destinations for both the child
and one accompanying adult. In addition to supporting children,
we assist medical centres in organising trips for foreign doctors
to Kazakhstan.
Community
sponsorship initiative
We provided support to various organisations, including: an
international organisation operating under the auspices of the United
Nations (UNICEF), Almaty International Women’s Club (AIWC), ‘Teplo’
charity foundation, Almaty Marathon and Public Foundation ‘DOM’.
New Year charity
support
The New Year charity event provided 230 children with
psychological, medical and pedagogical consultations and
psychology-pedagogical correction rooms.
Employees
volunteering in
charity projects
As part of the KC challenge, employees donated school backpacks
and stationery for their colleagues’ children and children from
disadvantaged families.
Children’s Day
celebration
We congratulated children on Children’s Day in Regional clinical
hospital and Kazakh Research Institute of Oncology and radiology
in Almaty; at Almaty and Astana airports we handed out specially
prepared gifts, such as travel kits and headphones.
Support for the
national football team
We supported the national football team at the matches with
Finland and Northern Ireland attended by 30,019 people. We set
up four branded fan zones and streamed an advertising video at
the match.
Almaty Marathon Over 80 employees took advantage of discounted tickets with
donations going to charity; many of their colleagues came out on
the day to cheer them on. This event attracts many tourists to
Kazakhstan, and we enabled foreign marathon participants to book
hotels in Almaty with a 10% discount.
FIN A NCIA L RE VIE W
Exceeding
market expectations
The results are presented on both a
statutory basis and adjusted to exclude the
impact of two factors in 2022: firstly, the
extraordinary market event (EME) of the
partial mobilisation in Russia in Q4 2022,
which resulted in a one-off inflow of
citizens from Russia to and through
Kazakhstan with a revenue impact of
USD 16.2 million; and secondly, a gain
from fuel hedging (FH) to the amount of
USD 12.1 million. It is management’s belief
that this adjustment better represents the
underlying performance of the Company.
Group revenue and other income
increased by USD 142.1 million or 13.8%
in 2023 to USD 1,174.5 million, compared to
USD 1,032.4 million in 2022. Excluding EME
in 2022, revenue and other income
increased by USD 158.3 million or 15.6%.
Adjusted EBITDAR grew by USD 12.4 million
or 4.3% to USD 300.8 million compared to
USD 288.4 million in 2022. Excluding EME
and FH, Adjusted EBITDAR increased by
USD 40.7 million or 15.7% compared to
USD 260.1 million in 2022.
Operating profit was USD 136.0 million
compared to USD 148.7 million in 2022.
Excluding the effect of EME and FH,
operating profit increased by USD 15.6
million or 12.9% from USD 120.4 million
in 2022.
Profit for the year was USD 68.7 million,
compared to USD 78.4 million in 2022.
Excluding EME and FH in 2022, profit
increased by USD 12.2 million or 21.5%.
Net finance expenses increased by USD 2.8
million or 8.8% to USD 35.1 million in 2023
compared to USD 32.3 million in 2022
primarily due to interest expense on lease
liabilities by USD 9.3 million as a result of
aircraft fleet expansion. However, interest
income on bank deposits increased by
USD 7.8 million.
Net foreign exchange loss for 2023
was USD 13.8 million, an improvement
of USD 1.3 million compared to a loss of
USD 15.1 million reported in 2022.
Total cash at the end of December 2023
was USD 274.0 million, an increase of
USD 21.1 million or 8.4% compared to end
of December 2022 (excluding available
facilities totalling USD 163.7 million).
Revenue drivers
The increase in 2023 revenue and other
income was achieved by 11.1% and 2.4%
growth in ASK and RASK respectively.
During 2023, international ASK growth of
15.5% outpaced the domestic growth of 5.9%
by almost three times. Both the Air Astana
and FlyArystan brands expanded in their
extended home market of Central Asia and
the Caucasus as well as nearby international
markets. While international ASK growth was
double digit across both brands, FlyArystan’s
international growth of 30.6% outpaced Air
Astana’s 13.6%. The recovery of airport
charges and the Kazakhstan Identity &
Security fee starting from June 2023 were
further contributors to the revenue increase.
Revenue drivers
Group (million USD) 2023 2022 Change (USD) Change, %
Revenue and other income
Passenger revenue 1,143.6 998.1 145.5 14.6%
Cargo and mail revenue 22.5 22.1 0.4 1.8%
Other income 8.4 12.1 (3.7) (30.8%)
Total revenue and other
income 1,174.5 1,032.4 1 142.1 13.8%
1 All financial information has been rounded up, so minor discrepancies may arise from the addition of these amounts.
2023 was the consecutive third
year of growth for the Group
across operational and financial
metrics despite the impacts
of the double crisis caused
by COVID-19 and the Russia-
Ukraine conflict.
Our competitive cost per available
seat kilometer (CASK), combined
with our three growth pillars,
where we continue untapping
opportunities within Kazakhstan,
Central Asia and Caucasus, and
the potential of nearby mega
markets including China and
India, enable us to look into the
future with confidence.
Ibrahim Canliel
CFO of Air Astana JSC
66 67 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
The efficient cost structure enabled the Group to outperform most of its peers in terms of cost per ASK.
Metrics are calendarised to December 2023 year-end, except for EasyJet CASK and Turkish Airlines CASK and EBITDAR margin, for which the chart is showing information for LTM Sep 2023.
Calendarisation for Ryanair is an estimate based on passenger number and load factor, given the lack of quarterly information on ASK. (1) Air Astana and FlyArystan are shown on
a standalone basis, including intragroup revenue. (2) EBITDAR does not have a standardised definition/method of calculation, and EBITDAR of Air Astana may not be comparable
to similarly titled metrics of other companies.
Cost per ASK in 2023
US$ cents
Lufthansa Air France-
KLM Group
IAG EasyJet Turkish
Airlines
Air Astana Qantas IndiGo Ryanair FlyArystan Wizz Air AirAsia
10.2
9.1 8.9
7.9 7.7 6.9 6.7
5.2 5.1 4.8 4.6
3.4 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Cargo revenue and mail revenue went up
by USD 0.4 million in total mainly due to a
2% increase in cargo volumes, cargo type
mix and increased co-mail revenue on
domestic routes.
Other income was lower by USD 3.7 million
due to insurance claims satisfied in
December 2022 totalling USD 4.6 million.
Cost drivers
Total operating costs increased by
USD 154.9 million or 17.5% compared
to 2022, or by USD 142.7 million or 15.9%
excluding FH. This mainly resulted from
the 11.1% increase in capacity year-on-year.
In 2023, fuel costs went up by USD 47.3
million or 20.4%. In the base year of 2022,
the Company recorded a fuel hedge gain
totalling USD 12.1 million, excluding which
the increase would have been USD 35.1
million or 14.4%. The fuel consumption
increased by 8.8% while average fuel cost
per metric ton in 2022 was USD 786, up
USD 32 or 4.2% compared to 2022.
Employee and crew costs increased by
USD 44.2 million or 29.7%, primarily
impacted by the adjustment of pilot
salaries which are broadly in line with the
international market. In addition, number
of employees across the Group increased
by 4.6% (number of operational personnel
increased by 5.1%, while number of
administrative personnel went up by 2.0%).
This cost base remains one of the lowest
in the industry.
The depreciation and amortisation cost
increased by USD 26.8 million or 19.9%,
primarily driven by the growth in the fleet.
This was partly offset by the engineering
and maintenance costs that were reduced by
USD 17.7 million or 14.1% in 2023. In addition,
in 2022 expenses for the repair of the thrust
reverser were booked while the insurance
claims reimbursement was recognised in
December 2022 in the amount of USD 4.6
million as other income.
Handling, landing fees and route charges,
and passenger service charges increased by
USD 20.8 million each or 24.5% and 25.9%
respectively. While this was impacted by
general inflation, the key source of the
cost growth was the higher increase
of international ASKs in comparison to
domestic (15.5% and 5.9% respectively).
Selling costs went up by USD 7.2 million or
21.6% compared to 2022 mainly due to
increased operations on higher cost
international stations.
Other costs increased by USD 5.5 million or
12.7% mainly due to increased expenses for
insurance by USD 2.7 million as a result of
fleet expansion and increased operations as
well as higher rates, and taxes by USD 2.5
million mainly due to a lower comparison
base in 2022 (adjustment of previously
posted accruals withholding tax from
non-resident companies) and increased
expenses in 2023 due to taxes paid in India
resulting from increased operations.
Mitigating industry-wide cost
headwinds
The global airline industry continued to
be impacted by cost inflationary pressures
in 2023. The Group CASK grew by 5.8%,
including the effect of: higher employee
expenses mainly arising from pilot and
crew salary increases; higher depreciation
expenses due to fleet expansion; and
higher passenger service expenses and
handling, landing fees and route charges
mainly due to increased operations on
international routes and inflation. The
fuel component of CASK grew by 8.4%,
impacted by non-recurring USD 12.1 million
gain from fuel hedging in 2022 and increase
in average fuel price by 4.2%. Excluding
fuel hedge gain in 2022, the total Group
CASK would have increased by 4.3% in
2023. Fuel burn per ASK improved by 2.1%.
Jet fuel prices and availability are subject to
market fluctuations, local and global refining
capacity, periods of market surplus and
shortage, as well as meteorological,
economic and political factors and events
occurring throughout the world, which the
Company can neither control nor accurately
predict. Fuel costs accounted for 27% of the
Group’s total operating expenses in 2023,
compared to 26% in 2022.
FIN A NCIA L RE VIE W CONTINUED
In 2023, the Group used approximately
348 thousand tonnes of jet fuel, compared to
320 thousand tonnes in 2022. The Company
continued to take delivery of aircraft
containing more fuel-efficient engines, such
as the Airbus A320neo, Airbus A321neo and
Airbus A321LRneo models, replacing older
aircraft. Additionally, the Company seeks to
manage fuel costs by procuring directly from
fuel producers and refineries in Kazakhstan
whenever possible, monitoring alternative
suppliers for domestic and international
stations, and training its pilots for efficient
fuel management.
Overall, the Company remains focused on
mitigating the cost headwinds, for example,
carefully managing its relationship with key
suppliers to ensure a high level of quality
and consistency of supply, while protecting
its cost position. Key suppliers for Air
Astana Group include its airports, caterers
and external maintenance providers.
Hedging strategy
Approximately 70% of the Company’s
fuel uplift is from Kazakhstan where it
sources primarily direct from the refineries
and manages the logistics including
transportation. As result of avoiding
intermediary organisations, the
Company benefits from reduced costs.
Approximately 30% of fuel is sourced
internationally, which the Company hedges
using call options. The Group has fully
hedged the anticipated international uplift
for the first half of 2024 with positions at
USD 80/bbl and USD 85/bbl.
Comfortable net debt position and
strong balance sheet
Group NAD / Adjusted EBITDAR reduced
from 1.7x in 2022 to 1.5x in 2023, driven by
organic cash generation and reduction in
year-end lease liability balance, comfortably
within the Company’s mid-term target of
less than 3.0x.
The Company also repaid the EBRD loans
of USD 47.7 million (including the loan of
USD 35 million taken in 2023) and the
finance lease deferrals of USD 21.6 million
ahead of schedule.
In 2023, the Company saw a reduction in
lease liabilities from USD 732.8 million to
USD 718.9 million despite growth in size of
fleet. This was driven by the voluntary early
repayment of EXIM deferrals and the
depreciation of capitalised leases of
existing aircraft.
The cash to sales ratio was at 23.3%,
excluding the available facilities of USD 163.7
million. Pro forma liquidity ratio was 37.3%,
including unutilised facilities in the amount
of USD 163.7 million (14% of revenue).
Outlook
The Group expects to report further growth
in 2024, underpinned by increased capacity
and fleet expansion. This comprises the net
addition of seven aircraft, increasing the
total fleet to 56 aircraft from 49 at 2023
year-end. The growth will be sustained
across both brands, in particular at
FlyArystan and on international routes.
The Group’s extended home market
of Central Asia and Caucasus remains a
leading growth opportunity, characterised
by low penetration for air travel and the
Group’s strong market position. In addition,
nearby mega markets including China and
India as well as lifestyle destinations in
Asia, Gulf, Turkey and Europe present
further growth opportunities for the Group.
While CASK is expected to outpace the
RASK in 2024, the mid-term EBITDAR
expectation is mid-to-high 20s EBITDAR
margin and the load factor to remain
broadly consistent with 2023.
In the medium term, financial robustness
is expected to continue, with the liquidity
ratio above 25% and the leverage below
3.0x NAD/EBITDAR.
Cost drivers
Group (million USD) 2023 2022 Change (USD) Change, %
Operating expenses
Fuel and oil costs 279.2 231.9 47.3 20.4%
Employee and crew costs 193.1 148.9 44.2 29.7%
Depreciation and amortization 162.0 135.2 26.8 19.9%
Engineering and maintenance 108.2 125.9 (17.7) (14.1%)
Handling, landing fees and route
charges 105.7 84.9 20.8 24.5%
Passenger service 101.1 80.3 20.8 25.9%
Selling costs 40.4 33.3 7.2 21.6%
Other 48.8 43.3 5.5 12.7%
Total operating expenses 1,038.5 883.7 154.9 17.5%
68 69 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
Metrics are calendarised to December 2023 year-end, except for EasyJet CASK and Turkish Airlines CASK and EBITDAR margin, for which the chart is showing information for LTM Sep 2023.
Calendarisation for Ryanair is an estimate based on passenger number and load factor, given the lack of quarterly information on ASK. (1) Air Astana and FlyArystan are shown on
a standalone basis, including intragroup revenue. (2) EBITDAR does not have a standardised definition/method of calculation, and EBITDAR of Air Astana may not be comparable
to similarly titled metrics of other companies.
Cost per ASK in 2023
US$ cents
Lufthansa Air France-
KLM Group
IAG EasyJet Turkish
Airlines
Air Astana Qantas IndiGo Ryanair FlyArystan Wizz Air AirAsia
10.2
9.1 8.9
7.9 7.7 6.9 6.7
5.2 5.1 4.8 4.6
3.4 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Cargo revenue and mail revenue went up
by USD 0.4 million in total mainly due to a
2% increase in cargo volumes, cargo type
mix and increased co-mail revenue on
domestic routes.
Other income was lower by USD 3.7 million
due to insurance claims satisfied in
December 2022 totalling USD 4.6 million.
Cost drivers
Total operating costs increased by
USD 154.9 million or 17.5% compared
to 2022, or by USD 142.7 million or 15.9%
excluding FH. This mainly resulted from
the 11.1% increase in capacity year-on-year.
In 2023, fuel costs went up by USD 47.3
million or 20.4%. In the base year of 2022,
the Company recorded a fuel hedge gain
totalling USD 12.1 million, excluding which
the increase would have been USD 35.1
million or 14.4%. The fuel consumption
increased by 8.8% while average fuel cost
per metric ton in 2022 was USD 786, up
USD 32 or 4.2% compared to 2022.
Employee and crew costs increased by
USD 44.2 million or 29.7%, primarily
impacted by the adjustment of pilot
salaries which are broadly in line with the
international market. In addition, number
of employees across the Group increased
by 4.6% (number of operational personnel
increased by 5.1%, while number of
administrative personnel went up by 2.0%).
This cost base remains one of the lowest
in the industry.
The depreciation and amortisation cost
increased by USD 26.8 million or 19.9%,
primarily driven by the growth in the fleet.
This was partly offset by the engineering
and maintenance costs that were reduced by
USD 17.7 million or 14.1% in 2023. In addition,
in 2022 expenses for the repair of the thrust
reverser were booked while the insurance
claims reimbursement was recognised in
December 2022 in the amount of USD 4.6
million as other income.
Handling, landing fees and route charges,
and passenger service charges increased by
USD 20.8 million each or 24.5% and 25.9%
respectively. While this was impacted by
general inflation, the key source of the
cost growth was the higher increase
of international ASKs in comparison to
domestic (15.5% and 5.9% respectively).
Selling costs went up by USD 7.2 million or
21.6% compared to 2022 mainly due to
increased operations on higher cost
international stations.
Other costs increased by USD 5.5 million or
12.7% mainly due to increased expenses for
insurance by USD 2.7 million as a result of
fleet expansion and increased operations as
well as higher rates, and taxes by USD 2.5
million mainly due to a lower comparison
base in 2022 (adjustment of previously
posted accruals withholding tax from
non-resident companies) and increased
expenses in 2023 due to taxes paid in India
resulting from increased operations.
Mitigating industry-wide cost
headwinds
The global airline industry continued to
be impacted by cost inflationary pressures
in 2023. The Group CASK grew by 5.8%,
including the effect of: higher employee
expenses mainly arising from pilot and
crew salary increases; higher depreciation
expenses due to fleet expansion; and
higher passenger service expenses and
handling, landing fees and route charges
mainly due to increased operations on
international routes and inflation. The
fuel component of CASK grew by 8.4%,
impacted by non-recurring USD 12.1 million
gain from fuel hedging in 2022 and increase
in average fuel price by 4.2%. Excluding
fuel hedge gain in 2022, the total Group
CASK would have increased by 4.3% in
2023. Fuel burn per ASK improved by 2.1%.
Jet fuel prices and availability are subject to
market fluctuations, local and global refining
capacity, periods of market surplus and
shortage, as well as meteorological,
economic and political factors and events
occurring throughout the world, which the
Company can neither control nor accurately
predict. Fuel costs accounted for 27% of the
Group’s total operating expenses in 2023,
compared to 26% in 2022.
FIN A NCIA L RE VIE W CONTINUED
In 2023, the Group used approximately
348 thousand tonnes of jet fuel, compared to
320 thousand tonnes in 2022. The Company
continued to take delivery of aircraft
containing more fuel-efficient engines, such
as the Airbus A320neo, Airbus A321neo and
Airbus A321LRneo models, replacing older
aircraft. Additionally, the Company seeks to
manage fuel costs by procuring directly from
fuel producers and refineries in Kazakhstan
whenever possible, monitoring alternative
suppliers for domestic and international
stations, and training its pilots for efficient
fuel management.
Overall, the Company remains focused on
mitigating the cost headwinds, for example,
carefully managing its relationship with key
suppliers to ensure a high level of quality
and consistency of supply, while protecting
its cost position. Key suppliers for Air
Astana Group include its airports, caterers
and external maintenance providers.
Hedging strategy
Approximately 70% of the Company’s
fuel uplift is from Kazakhstan where it
sources primarily direct from the refineries
and manages the logistics including
transportation. As result of avoiding
intermediary organisations, the
Company benefits from reduced costs.
Approximately 30% of fuel is sourced
internationally, which the Company hedges
using call options. The Group has fully
hedged the anticipated international uplift
for the first half of 2024 with positions at
USD 80/bbl and USD 85/bbl.
Comfortable net debt position and
strong balance sheet
Group NAD / Adjusted EBITDAR reduced
from 1.7x in 2022 to 1.5x in 2023, driven by
organic cash generation and reduction in
year-end lease liability balance, comfortably
within the Company’s mid-term target of
less than 3.0x.
The Company also repaid the EBRD loans
of USD 47.7 million (including the loan of
USD 35 million taken in 2023) and the
finance lease deferrals of USD 21.6 million
ahead of schedule.
In 2023, the Company saw a reduction in
lease liabilities from USD 732.8 million to
USD 718.9 million despite growth in size of
fleet. This was driven by the voluntary early
repayment of EXIM deferrals and the
depreciation of capitalised leases of
existing aircraft.
The cash to sales ratio was at 23.3%,
excluding the available facilities of USD 163.7
million. Pro forma liquidity ratio was 37.3%,
including unutilised facilities in the amount
of USD 163.7 million (14% of revenue).
Outlook
The Group expects to report further growth
in 2024, underpinned by increased capacity
and fleet expansion. This comprises the net
addition of seven aircraft, increasing the
total fleet to 56 aircraft from 49 at 2023
year-end. The growth will be sustained
across both brands, in particular at
FlyArystan and on international routes.
The Group’s extended home market
of Central Asia and Caucasus remains a
leading growth opportunity, characterised
by low penetration for air travel and the
Group’s strong market position. In addition,
nearby mega markets including China and
India as well as lifestyle destinations in
Asia, Gulf, Turkey and Europe present
further growth opportunities for the Group.
While CASK is expected to outpace the
RASK in 2024, the mid-term EBITDAR
expectation is mid-to-high 20s EBITDAR
margin and the load factor to remain
broadly consistent with 2023.
In the medium term, financial robustness
is expected to continue, with the liquidity
ratio above 25% and the leverage below
3.0x NAD/EBITDAR.
Cost drivers
Group (million USD) 2023 2022 Change (USD) Change, %
Operating expenses
Fuel and oil costs 279.2 231.9 47.3 20.4%
Employee and crew costs 193.1 148.9 44.2 29.7%
Depreciation and amortization 162.0 135.2 26.8 19.9%
Engineering and maintenance 108.2 125.9 (17.7) (14.1%)
Handling, landing fees and route
charges 105.7 84.9 20.8 24.5%
Passenger service 101.1 80.3 20.8 25.9%
Selling costs 40.4 33.3 7.2 21.6%
Other 48.8 43.3 5.5 12.7%
Total operating expenses 1,038.5 883.7 154.9 17.5%
68 69 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
RISK M A N AGEMENT
First line: Air Astana Group structural units and all employees
Within the risk management process, the main functions of the Group’s structural units are:
• Identification and assessment of risks, determination of a risk
response strategy, development and implementation of risk
management action plans, improvement of the CRMS within the
scope of supervised/performed operations
• Implementa tion, monitoring and improvement of control
procedures in the framework of entrusted business processes
• Compliance with the risk appetite within the competence
• Provision of reports on the implementation of risk management
action plans on risks to the Risk Management Unit
• Maintenance of a database of realised risks and business incidents
• Provision of timely and complete information on risks to interested
parties, including but not limited to the Risk Management Unit.
Third line: Internal Audit Service
The Group’s Internal Audit Service performs the following main functions relating to risk:
• Audit of risk management procedures and risk assessment
methods, and development of suggestions for enhancing the
efficiency of risk management procedures
• Submission of evaluation reports on the efficiency of the CRMS to
the Board of Directors
• Other functions in accordance with any approved regulations
The Internal Audit Service performs regular inspections to analyse
any gaps and shortcomings in the CRMS and these may involve
independent external consultants.
Board of Directors
Primary responsibility for risk oversight in the Group and risk management functions.
• Sets short- and long-term goals/objectives
• Approves the Risk Management Policy
• Approves other policies for managing specific risks
• Analyses the external auditor’s reports for improving internal control and
risk management
• Reviews and approves the quarterly Risk Register and Risk Map
• Approves the Group’s risk appetite and tolerance to risk
• Reviews reports from the head of the structural unit responsible for risk management
with description and analysis of the Group’s risks
• Reviews reports on the efficiency of the CRMS
Audit Committee
Acts in the interests of
shareholders and provides
oversight support to the Board
on the reliability and efficiency
of the CRMS
• Reviews quarterly reports
on changes to the Risk Map
• Reviews changes to the
Risk Register
• Reviews reports on risks
• Reviews risk appetite
annually
• Reviews quarterly reports
on realised risks
• Reviews reports on any
significant deviations from
the standard risk
management process
• Reviews reports on
non-compliance with
regulatory risk management
requirements as necessary
Risk Committee
An advisory-consultative body to the Group’s CEO,
the Risk Committee provides preliminary reviews
and makes recommendations for decision-making
on risk management issues.
It is responsible for the integrity and efficient
functioning of the CRMS and the development of
a risk control structure that ensures performance
and compliance with the Group’s policies.
• Approves the annual strategic plan for the CRMS
• Organises an efficient CRMS to enable the
identification and assessment of potential risks
• Reviews and approves the quarterly Risk
Register and Risk Map
• Reviews and provides preliminary approval
of the annual risk appetite
• Reviews quarterly reports on realised risks
• Reviews and approves the Key Risk Indicator
(KRI) panel annually and considers the status
of KRIs
• Reviews and approves the risk management
action plans on risks deemed ‘high’ and ‘very
high’ at least annually
• Reviews risk management reports and whether
adequate measures have been adopted
• Improves internal risk management procedures
RISK RE SPONSIBILITIE S
In order to provide a balanced approach to managing risk, the Group has adopted the Three Lines of Accountability model within
its operating structure.
RISK M A N AGEMENT FR A ME WORK
In order to drive the development and implementation of efficient risk management
practices and procedures, the CRMS sets out clearly defined roles and responsibilities for
the Board of Directors, Audit Committee, Company Management and each employee.
This also helps to reinforce a culture that is underpinned by risk-averse behaviours.
Integral to business resilience
and sustainability
Our risk management
processes help to
promote a corporate
culture that is
underpinned by risk-
averse behaviours.
Risk management is integral to
ensuring the long-term resilience and
sustainability of our business, as well
as providing a platform that enables
us to respond with agility to changing
circumstances. The Air Astana Group’s
Corporate Risk Management System (CRMS)
defines our daily operational activities,
encompassing governance, performance
management, and internal control practices.
The CRMS is also a valuable tool for
enabling both the Board of Directors and
Management to evaluate the Group’s
options for creating, enhancing and
realising value for its shareholders.
The CRMS was developed in line
with and incorporates international best
practice in risk management. This is further
strengthened by the Group’s adoption of
the ‘COSO Enterprise Risk Management
framework – Integrating with Strategy
and Performance’ as the basis for its Risk
Management Policy. In addition to the
integration of risk management across all
internal processes and functions, the Policy
ensures that risks are always taken into
consideration when setting strategies and
driving performance.
Second line: Risk Management Unit
The Risk Management Unit is responsible for ensuring and monitoring the implementation of effective risk management practices.
The main functions of the Risk Management Unit include, but are not limited to:
• Co-ordination of CRMS activities within the Group
• Notification to the Risk Committee and the Board of Directors of
any substantial deviations in risk management processes
• Provision of regular reports on risks to the shareholders
• Maintenance of a database of realised risks and external factors
capable of substantial influence on the Group’s risk profile
• Preparation of the strategic plan for the CRMS
• Control of the quarterly updates of the Risk Register, Risk Map and
risk management action plans for risks in red and dark red zones
• Control of the implementation of risk assessment with the
participation of the Group’s experts
• Proposals on risk appetite for preliminary approval by the
Risk Committee
• Preparation of consolidated reports on risks, submitted to the
Risk Committee, Audit Committee and Board of Directors
• Development, implementation and update (as appropriate) of the
risk management methodological basis, policies, rules and risk
monitoring procedures
• Provision for the integration of risk management within other
business processes and development of the risk management
culture within the Group
• Co-ordination of strategic investment projects in terms of sufficiency
of disclosure and analysis of risks
• Provision of methodological and consulting assistance about risk
management to employees
• Co-operation with the Internal Audit Service with regard to plan
formation, discussion of audit inspection results, exchange of
knowledge and methods
• Identification of any possible risks, actual or potential, negative
tendencies indicating increased risk, analysis of the factors causing
the risk and assessment of any expected loss.
70 71 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
First line: Air Astana Group structural units and all employees
Within the risk management process, the main functions of the Group’s structural units are:
• Identification and assessment of risks, determination of a risk
response strategy, development and implementation of risk
management action plans, improvement of the CRMS within the
scope of supervised/performed operations
• Implementa tion, monitoring and improvement of control
procedures in the framework of entrusted business processes
• Compliance with the risk appetite within the competence
• Provision of reports on the implementation of risk management
action plans on risks to the Risk Management Unit
• Maintenance of a database of realised risks and business incidents
• Provision of timely and complete information on risks to interested
parties, including but not limited to the Risk Management Unit.
Third line: Internal Audit Service
The Group’s Internal Audit Service performs the following main functions relating to risk:
• Audit of risk management procedures and risk assessment
methods, and development of suggestions for enhancing the
efficiency of risk management procedures
• Submission of evaluation reports on the efficiency of the CRMS to
the Board of Directors
• Other functions in accordance with any approved regulations
The Internal Audit Service performs regular inspections to analyse
any gaps and shortcomings in the CRMS and these may involve
independent external consultants.
Board of Directors
Primary responsibility for risk oversight in the Group and risk management functions.
• Sets short- and long-term goals/objectives
• Approves the Risk Management Policy
• Approves other policies for managing specific risks
• Analyses the external auditor’s reports for improving internal control and
risk management
• Reviews and approves the quarterly Risk Register and Risk Map
• Approves the Group’s risk appetite and tolerance to risk
• Reviews reports from the head of the structural unit responsible for risk management
with description and analysis of the Group’s risks
• Reviews reports on the efficiency of the CRMS
Audit Committee
Acts in the interests of
shareholders and provides
oversight support to the Board
on the reliability and efficiency
of the CRMS
• Reviews quarterly reports
on changes to the Risk Map
• Reviews changes to the
Risk Register
• Reviews reports on risks
• Reviews risk appetite
annually
• Reviews quarterly reports
on realised risks
• Reviews reports on any
significant deviations from
the standard risk
management process
• Reviews reports on
non-compliance with
regulatory risk management
requirements as necessary
Risk Committee
An advisory-consultative body to the Group’s CEO,
the Risk Committee provides preliminary reviews
and makes recommendations for decision-making
on risk management issues.
It is responsible for the integrity and efficient
functioning of the CRMS and the development of
a risk control structure that ensures performance
and compliance with the Group’s policies.
• Approves the annual strategic plan for the CRMS
• Organises an efficient CRMS to enable the
identification and assessment of potential risks
• Reviews and approves the quarterly Risk
Register and Risk Map
• Reviews and provides preliminary approval
of the annual risk appetite
• Reviews quarterly reports on realised risks
• Reviews and approves the Key Risk Indicator
(KRI) panel annually and considers the status
of KRIs
• Reviews and approves the risk management
action plans on risks deemed ‘high’ and ‘very
high’ at least annually
• Reviews risk management reports and whether
adequate measures have been adopted
• Improves internal risk management procedures
RISK RE SPONSIBILITIE S
In order to provide a balanced approach to managing risk, the Group has adopted the Three Lines of Accountability model within
its operating structure.
RISK M A N AGEMENT FR A ME WORK
In order to drive the development and implementation of efficient risk management
practices and procedures, the CRMS sets out clearly defined roles and responsibilities for
the Board of Directors, Audit Committee, Company Management and each employee.
This also helps to reinforce a culture that is underpinned by risk-averse behaviours.
Integral to business resilience
and sustainability
Our risk management
processes help to
promote a corporate
culture that is
underpinned by risk-
averse behaviours.
Risk management is integral to
ensuring the long-term resilience and
sustainability of our business, as well
as providing a platform that enables
us to respond with agility to changing
circumstances. The Air Astana Group’s
Corporate Risk Management System (CRMS)
defines our daily operational activities,
encompassing governance, performance
management, and internal control practices.
The CRMS is also a valuable tool for
enabling both the Board of Directors and
Management to evaluate the Group’s
options for creating, enhancing and
realising value for its shareholders.
The CRMS was developed in line
with and incorporates international best
practice in risk management. This is further
strengthened by the Group’s adoption of
the ‘COSO Enterprise Risk Management
framework – Integrating with Strategy
and Performance’ as the basis for its Risk
Management Policy. In addition to the
integration of risk management across all
internal processes and functions, the Policy
ensures that risks are always taken into
consideration when setting strategies and
driving performance.
Second line: Risk Management Unit
The Risk Management Unit is responsible for ensuring and monitoring the implementation of effective risk management practices.
The main functions of the Risk Management Unit include, but are not limited to:
• Co-ordination of CRMS activities within the Group
• Notification to the Risk Committee and the Board of Directors of
any substantial deviations in risk management processes
• Provision of regular reports on risks to the shareholders
• Maintenance of a database of realised risks and external factors
capable of substantial influence on the Group’s risk profile
• Preparation of the strategic plan for the CRMS
• Control of the quarterly updates of the Risk Register, Risk Map and
risk management action plans for risks in red and dark red zones
• Control of the implementation of risk assessment with the
participation of the Group’s experts
• Proposals on risk appetite for preliminary approval by the
Risk Committee
• Preparation of consolidated reports on risks, submitted to the
Risk Committee, Audit Committee and Board of Directors
• Development, implementation and update (as appropriate) of the
risk management methodological basis, policies, rules and risk
monitoring procedures
• Provision for the integration of risk management within other
business processes and development of the risk management
culture within the Group
• Co-ordination of strategic investment projects in terms of sufficiency
of disclosure and analysis of risks
• Provision of methodological and consulting assistance about risk
management to employees
• Co-operation with the Internal Audit Service with regard to plan
formation, discussion of audit inspection results, exchange of
knowledge and methods
• Identification of any possible risks, actual or potential, negative
tendencies indicating increased risk, analysis of the factors causing
the risk and assessment of any expected loss.
70 71 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
RISK M A N AGEMENT
CONTINUED
Significant risks
We categorise risks depending
on their possible level of impact
on our ability to successfully
meet our strategic objectives.
These are classified from ‘low’ to
‘very high’ risk; there are certain
risks, that if realised, could have
severe consequences for
the business.
The table opposite outlines
the potential risks facing the
Group along with any mitigating
actions. It also highlights the
assessment of and any changes
in risk exposure during 2023.
Description of risk
Effective safety management is critical
to minimise the potential for incidents
or accidents. The resulting effects of
such events could have a significant
adverse impact on the Group.
Link to
strategy
Risk impact
level
Risk exposure
trend
Mitigation actions
For the purpose of mitigating risks
related to flight safety, the Group has
established a safety management and
compliance monitoring system, through
which it conducts compliance and
performance-monitoring audits, and
sets and monitors safety performance
indicators. The Group has an effective
human factors training programme in
place. There is a specific emphasis on
procedural compliance. Specifically in
the area of flight operations training,
the Group has made a significant
investment in training of instructors
with a strong emphasis on
standardisation.
There are regular independent
assessments by regulatory authorities,
EASA, and CAC Kazakhstan as well as
industry assessments (IOSA).
Description of risk
Factors such as intensive market
competition, government intervention,
operational limitation, geopolitical
tensions and rising costs can create
challenges for the Group.
Link to
strategy
Risk impact
level
Risk exposure
trend
Mitigation actions
The last year continued to present
significant challenges and opportunities
for the aviation industry. Faced with a
rapidly changing travel landscape in
2023, the Air Astana Group responded
swiftly by increasing frequencies to
existing destinations and revising
winter and summer schedules. Air
Astana Group has a complex risk
response and closely monitors both the
domestic market and the worldwide
situation. The Group applies the
following measures: network
optimisation, frequency adjustment,
fleet and route optimisation.
Description of risk
The Group understands its moral and
ethical responsibility for the health
and safety of employees and is
consistent in its efforts to protect their
physical and mental well-being. In the
area of occupational health and safety,
the Group acts in compliance with
national, legal and other regulatory
requirements and international rules
of the aviation industry.
Link to
strategy
Risk impact
level
Risk exposure
trend
Mitigation actions
The Group has in place all the
procedures to provide a high level of
occupational safety. Employees are
aware of all the procedures and are kept
informed of any changes in instructions,
which are regularly updated in line with
Government guidelines.
In line with Ecological Code of the
Republic of Kazakhstan, the Group
issues an environmental impact
declaration for the quantity of its solid,
hazardous and non-hazardous waste.
The Group collects and sorts waste,
which is then transferred for:
• third-party disposal by specialised
companies (hazardous – waste oil,
used filters, rechargeable batteries,
worn tires, scrap metal, residues
of solvents, paintwork materials,
aggressive liquids, used mercury-
containing lamps, etc.)
• waste dumping (solid waste)
• scrap metal, paper waste and
PET recycling.
Description of risk
Consequences of aviation security risk
could adversely affect any airline’s
performance and reputation. Effective
aviation security risk management is,
therefore, essential to the Group.
Link to
strategy
Risk impact
level
Risk exposure
trend
Mitigation actions
The Group has all required aviation
security management policies and
procedures in place. The Aviation
Security Division reviews these policies
regularly. The Group provides training
on aviation security to all required
employees and for those whose duties
require access to the airport restricted
area. Airport audits are performed
regularly for compliance and ensuring
aviation security.
To reflect the escalation of geopolitical
tension, the Group has increased the
probability level of the risk since this
political instability has already had a
considerable impact on the Group.
However, the Group is committed to
ensuring resilience on all operational
fronts with safety and security being
the top priority at all times.
Description of risk
Air Astana Group’s Human Resources
Policy is designed to recruit and retain
qualified personnel who are capable
of performing their duties effectively
and productively in line with its
strategic goals and values and in
compliance with professional and
ethical regulations. The Group
considers its employees to be one
of the Company’s main assets.
Link to
strategy
Risk impact
level
Risk exposure
trend
Mitigation actions
The Group fosters equality in the
workplace, ensuring a discrimination-
free environment for people to thrive
regardless of gender, age, ethnicity,
religion or cultural background. Human
resources risk management covers key
areas including recruitment, retention
of key personnel, competitive salaries
and benefits, provision of seamless
access to resources and talent
development. The Group provides
training and self-development to
ensure employee satisfaction. The
Group’s corporate values remain a
priority as a vector of the working
environment.
SA FE T Y COMMERCIA L HE A LTH, SA FE T Y A ND
ENVIRONMENT
AVIATION SECURIT Y HUM A N RE SOURCE S
Link to strategy
Growth Efficiency Excellence
Risk impact level Risk exposure trend
Very high High Moderate Low No change Increase Decrease
(part of ESG risks)
72 73 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
Significant risks
We categorise risks depending
on their possible level of impact
on our ability to successfully
meet our strategic objectives.
These are classified from ‘low’ to
‘very high’ risk; there are certain
risks, that if realised, could have
severe consequences for
the business.
The table opposite outlines
the potential risks facing the
Group along with any mitigating
actions. It also highlights the
assessment of and any changes
in risk exposure during 2023.
Description of risk
Effective safety management is critical
to minimise the potential for incidents
or accidents. The resulting effects of
such events could have a significant
adverse impact on the Group.
Link to
strategy
Risk impact
level
Risk exposure
trend
Mitigation actions
For the purpose of mitigating risks
related to flight safety, the Group has
established a safety management and
compliance monitoring system, through
which it conducts compliance and
performance-monitoring audits, and
sets and monitors safety performance
indicators. The Group has an effective
human factors training programme in
place. There is a specific emphasis on
procedural compliance. Specifically in
the area of flight operations training,
the Group has made a significant
investment in training of instructors
with a strong emphasis on
standardisation.
There are regular independent
assessments by regulatory authorities,
EASA, and CAC Kazakhstan as well as
industry assessments (IOSA).
Description of risk
Factors such as intensive market
competition, government intervention,
operational limitation, geopolitical
tensions and rising costs can create
challenges for the Group.
Link to
strategy
Risk impact
level
Risk exposure
trend
Mitigation actions
The last year continued to present
significant challenges and opportunities
for the aviation industry. Faced with a
rapidly changing travel landscape in
2023, the Air Astana Group responded
swiftly by increasing frequencies to
existing destinations and revising
winter and summer schedules. Air
Astana Group has a complex risk
response and closely monitors both the
domestic market and the worldwide
situation. The Group applies the
following measures: network
optimisation, frequency adjustment,
fleet and route optimisation.
Description of risk
The Group understands its moral and
ethical responsibility for the health
and safety of employees and is
consistent in its efforts to protect their
physical and mental well-being. In the
area of occupational health and safety,
the Group acts in compliance with
national, legal and other regulatory
requirements and international rules
of the aviation industry.
Link to
strategy
Risk impact
level
Risk exposure
trend
Mitigation actions
The Group has in place all the
procedures to provide a high level of
occupational safety. Employees are
aware of all the procedures and are kept
informed of any changes in instructions,
which are regularly updated in line with
Government guidelines.
In line with Ecological Code of the
Republic of Kazakhstan, the Group
issues an environmental impact
declaration for the quantity of its solid,
hazardous and non-hazardous waste.
The Group collects and sorts waste,
which is then transferred for:
• third-party disposal by specialised
companies (hazardous – waste oil,
used filters, rechargeable batteries,
worn tires, scrap metal, residues
of solvents, paintwork materials,
aggressive liquids, used mercury-
containing lamps, etc.)
• waste dumping (solid waste)
• scrap metal, paper waste and
PET recycling.
Description of risk
Consequences of aviation security risk
could adversely affect any airline’s
performance and reputation. Effective
aviation security risk management is,
therefore, essential to the Group.
Link to
strategy
Risk impact
level
Risk exposure
trend
Mitigation actions
The Group has all required aviation
security management policies and
procedures in place. The Aviation
Security Division reviews these policies
regularly. The Group provides training
on aviation security to all required
employees and for those whose duties
require access to the airport restricted
area. Airport audits are performed
regularly for compliance and ensuring
aviation security.
To reflect the escalation of geopolitical
tension, the Group has increased the
probability level of the risk since this
political instability has already had a
considerable impact on the Group.
However, the Group is committed to
ensuring resilience on all operational
fronts with safety and security being
the top priority at all times.
Description of risk
Air Astana Group’s Human Resources
Policy is designed to recruit and retain
qualified personnel who are capable
of performing their duties effectively
and productively in line with its
strategic goals and values and in
compliance with professional and
ethical regulations. The Group
considers its employees to be one
of the Company’s main assets.
Link to
strategy
Risk impact
level
Risk exposure
trend
Mitigation actions
The Group fosters equality in the
workplace, ensuring a discrimination-
free environment for people to thrive
regardless of gender, age, ethnicity,
religion or cultural background. Human
resources risk management covers key
areas including recruitment, retention
of key personnel, competitive salaries
and benefits, provision of seamless
access to resources and talent
development. The Group provides
training and self-development to
ensure employee satisfaction. The
Group’s corporate values remain a
priority as a vector of the working
environment.
SA FE T Y COMMERCIA L HE A LTH, SA FE T Y A ND
ENVIRONMENT
AVIATION SECURIT Y HUM A N RE SOURCE S
Link to strategy
Growth Efficiency Excellence
Risk impact level Risk exposure trend
Very high High Moderate Low No change Increase Decrease
(part of ESG risks)
72 73 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
RISK M A N AGEMENT
CONTINUED
Description of risk
A high level of service standards is at the core of the Group’s
activities. Failure to provide high-quality services could lead
to damage to the Group’s reputation along with the loss of
customers and a reduction in the Air Astana and FlyArystan
Skytrax ratings.
Link to strategy
Risk impact level Risk exposure trend
Mitigation actions
Both Group airlines are committed to delivering an exceptional
end-to-end travel experience for their customers. The Group offers
extensive training programmes to ensure that all employees, who
communicate and interact with clients, are fully trained and
maintain their skills at a high level.
Employees undergo extensive training to instil high service
levels that meet Group standards.
Through data analysis, the Group is able to efficiently analyse
customer feedback and determine how customer satisfaction
scores are impacted by product and service changes across
different stages of travel.
Description of risk
Liquidity risk is one whereby the Group may not be able to meet
its present and future short-term cash obligations when they fall
due. The Group retains financial flexibility to pursue business
opportunities and adequate access to liquidity to mitigate the
effect of unforeseen events on cash flows.
Link to strategy
Risk impact level Risk exposure trend
Mitigation actions
The Group closely monitors its liquidity position via different
ratios (current ratio, cash to sales ratio) and continually seeks
opportunities to obtain banking and other available products
with the most favourable conditions.
Description of risk
The Group is exposed to credit risk, whereby a counterparty
could cause financial loss to the business by failing to fulfil its
obligation. The Group’s credit risk mainly arises from deposits
with banks and a financial institutions, those held by
counterparties, receivables from agents selling commercial air
transportation as well as other receivables. The Group uses
external ratings such as S&P Global Ratings (S&P) or its
equivalent in order to measure and monitor its credit risk
exposures toward financial institutions.
The default of a bank counterparty may adversely affect the
Group’s financial performance and stability. Due to macroeconomic
uncertainty and instability in the banking sector, the probability of
the risk was increased in order to pay more attention to mitigating
the credit risk.
Link to strategy
Risk impact level Risk exposure trend
Mitigation actions
The Group’s Cash Management Policy sets the limits and criteria for
counterparty banks. The Policy also sets standard procedures, such
as monitoring bank limit utilisation, actual or forecasted exposure
to accredited banks and for reporting to the Chief Accountant, Chief
Financial Officer, Treasury Committee and the Board of Directors
as applicable. The new limits for each bank are reviewed by the
Treasury Committee prior to approval by the Board of Directors.
The Policy is reviewed annually to ensure that it is fit for purpose. To
manage credit risk from other counterparties, the Group has policies
and stringent procedures in place, which are regularly implemented
and updated as necessary.
The Group’s Travel Agent Ticketing Authority Policy establishes
guidelines and criteria for authorising travel agents to issue
tickets. With this robust policy, the Group can ensure that
authorised agents have a sound financial standing and adhere
to specific standards, which reduces the likelihood of defaults.
Prepayments and cash deposits are required from direct agents,
which adds an additional layer of security and ensures that a
financial guarantee is in place, reducing the impact of defaults
or delayed payments.
Description of risk
Fuel expenses are one of the major costs for the Company and,
along with the whole industry, Air Astana is exposed to risks
related to the high volatility of fuel prices and related costs.
While fuel prices have moderated in 2023, they remain at
elevated levels. During 2023, the demand for oil recovered, but
sanctions on Russian oil arising from the Russian-Ukraine conflict
affected oil supplies.
As a consequence, jet fuel risk remains one of the most critical
risks for the Company.
Link to strategy
Risk impact level Risk exposure trend
Mitigation actions
For locally sourced fuel, the Group negotiates prices on a
competitive basis with Kazakhstani suppliers with agreed and
stable contracts. The Group also maintains ongoing negotiations
with suppliers regarding price reductions. Another important
aspect is the Group’s monitoring of alternative suppliers for
domestic and international stations. Where there are no
restrictions, the Group also applies a fuel surcharge on
international routes as an additional tool for reducing risk.
To reduce its overall consumption of fuel, the Group has added
new, more fuel-efficient aircraft to its fleet in recent years,
including the Airbus A320neo, Airbus A321neo and Airbus A321LR
(with a new engine option). Additionally, several of the pilot
training programmes include skills for efficient fuel
management.
The Group has partially hedged its international fuel uplift
exposure for 2023. This is aimed at reducing fluctuations in
fuel prices.
SERVICE QUA LIT Y LIQUIDIT Y CREDIT JE T FUEL
Link to strategy
Growth Efficiency Excellence
Risk impact level Risk exposure trend
Very high High Moderate Low No change Increase Decrease
74 75 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
Description of risk
A high level of service standards is at the core of the Group’s
activities. Failure to provide high-quality services could lead
to damage to the Group’s reputation along with the loss of
customers and a reduction in the Air Astana and FlyArystan
Skytrax ratings.
Link to strategy
Risk impact level Risk exposure trend
Mitigation actions
Both Group airlines are committed to delivering an exceptional
end-to-end travel experience for their customers. The Group offers
extensive training programmes to ensure that all employees, who
communicate and interact with clients, are fully trained and
maintain their skills at a high level.
Employees undergo extensive training to instil high service
levels that meet Group standards.
Through data analysis, the Group is able to efficiently analyse
customer feedback and determine how customer satisfaction
scores are impacted by product and service changes across
different stages of travel.
Description of risk
Liquidity risk is one whereby the Group may not be able to meet
its present and future short-term cash obligations when they fall
due. The Group retains financial flexibility to pursue business
opportunities and adequate access to liquidity to mitigate the
effect of unforeseen events on cash flows.
Link to strategy
Risk impact level Risk exposure trend
Mitigation actions
The Group closely monitors its liquidity position via different
ratios (current ratio, cash to sales ratio) and continually seeks
opportunities to obtain banking and other available products
with the most favourable conditions.
Description of risk
The Group is exposed to credit risk, whereby a counterparty
could cause financial loss to the business by failing to fulfil its
obligation. The Group’s credit risk mainly arises from deposits
with banks and a financial institutions, those held by
counterparties, receivables from agents selling commercial air
transportation as well as other receivables. The Group uses
external ratings such as S&P Global Ratings (S&P) or its
equivalent in order to measure and monitor its credit risk
exposures toward financial institutions.
The default of a bank counterparty may adversely affect the
Group’s financial performance and stability. Due to macroeconomic
uncertainty and instability in the banking sector, the probability of
the risk was increased in order to pay more attention to mitigating
the credit risk.
Link to strategy
Risk impact level Risk exposure trend
Mitigation actions
The Group’s Cash Management Policy sets the limits and criteria for
counterparty banks. The Policy also sets standard procedures, such
as monitoring bank limit utilisation, actual or forecasted exposure
to accredited banks and for reporting to the Chief Accountant, Chief
Financial Officer, Treasury Committee and the Board of Directors
as applicable. The new limits for each bank are reviewed by the
Treasury Committee prior to approval by the Board of Directors.
The Policy is reviewed annually to ensure that it is fit for purpose. To
manage credit risk from other counterparties, the Group has policies
and stringent procedures in place, which are regularly implemented
and updated as necessary.
The Group’s Travel Agent Ticketing Authority Policy establishes
guidelines and criteria for authorising travel agents to issue
tickets. With this robust policy, the Group can ensure that
authorised agents have a sound financial standing and adhere
to specific standards, which reduces the likelihood of defaults.
Prepayments and cash deposits are required from direct agents,
which adds an additional layer of security and ensures that a
financial guarantee is in place, reducing the impact of defaults
or delayed payments.
Description of risk
Fuel expenses are one of the major costs for the Company and,
along with the whole industry, Air Astana is exposed to risks
related to the high volatility of fuel prices and related costs.
While fuel prices have moderated in 2023, they remain at
elevated levels. During 2023, the demand for oil recovered, but
sanctions on Russian oil arising from the Russian-Ukraine conflict
affected oil supplies.
As a consequence, jet fuel risk remains one of the most critical
risks for the Company.
Link to strategy
Risk impact level Risk exposure trend
Mitigation actions
For locally sourced fuel, the Group negotiates prices on a
competitive basis with Kazakhstani suppliers with agreed and
stable contracts. The Group also maintains ongoing negotiations
with suppliers regarding price reductions. Another important
aspect is the Group’s monitoring of alternative suppliers for
domestic and international stations. Where there are no
restrictions, the Group also applies a fuel surcharge on
international routes as an additional tool for reducing risk.
To reduce its overall consumption of fuel, the Group has added
new, more fuel-efficient aircraft to its fleet in recent years,
including the Airbus A320neo, Airbus A321neo and Airbus A321LR
(with a new engine option). Additionally, several of the pilot
training programmes include skills for efficient fuel
management.
The Group has partially hedged its international fuel uplift
exposure for 2023. This is aimed at reducing fluctuations in
fuel prices.
SERVICE QUA LIT Y LIQUIDIT Y CREDIT JE T FUEL
Link to strategy
Growth Efficiency Excellence
Risk impact level Risk exposure trend
Very high High Moderate Low No change Increase Decrease
74 75 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
RISK M A N AGEMENT
CONTINUED
Description of risk
Risks that the Group could incur losses as a result of ineffective
operation activities (i.e. excess or shortage of operating fleet,
low on-time performance or pilot shortage risk).
Link to strategy
Risk impact level Risk exposure trend
Mitigation actions
The risk of not being able to carry out regular flight operations on
time due to technical or external reasons can lead to significant
costs and reputational damage. The Group undertakes regular
delay analysis and delay meetings.
The Group employs the required number of qualified pilots
in accordance with the annual plan. An effective recruitment
process has been put in place. Relevant training is provided to
ensure the highest professional standards are maintained.
Due to external engine issues, the Group pays more attention
to the fleet size risk. To manage the risks, the Company delivers
and redelivers aircraft in accordance with an approved fleet plan
and based on the market situation.
Description of risk
The core processes of the Group are dependent on IT services
and infrastructure.
Therefore, effective and resilient IT management is essential to
the Company.
Link to strategy
Risk impact level Risk exposure trend
Mitigation actions
To mitigate this risk, the Group uses a variety of required
systems and equipment. Regular updates of operational systems
and firewall software are conducted. All critical data is stored
appropriately, and online and offline backups are created and
monitored. In order to decrease the risk of virus and/or hacker
attacks, the Group uses antivirus systems and firewalls, limits
access to local and internet resources and regularly updates its
security systems and applications. Regular external audits
increase the Group’s resilience to internal and external
risk factors.
IT infrastructure is fully geared to support business continuity
within the best possible limits with redundancy and backup
systems in place.
Description of risk
Cyber risks are a top priority in the airline sector as the use of
technology is increasingly integrated into business processes.
With the increased reliance on technology, companies are now
more exposed to cyber-attacks that could lead to data leakage
and significant reputational and financial losses.
Link to strategy
Risk impact level Risk exposure trend
Mitigation actions
To manage these risks, the Group has robust cyber-security
measures in place. The Group has developed processes to comply
with the best industry practices and standards in information
security. Employees undergo regular training on information
security and familiarisation with the Information Security Policy
to enhance their awareness of information security.
Description of risk
Facing regulatory non-compliance, including sanctions breaches,
alongside risks of corruption, fraud, and unethical behaviour,
represents a risk for the Company. These issues can result
in legal penalties, financial losses and reputational harm,
underscoring the need for stringent compliance frameworks
and ethical governance.
Link to strategy
Risk impact level Risk exposure trend
Mitigation actions
The Group effectively manages risks related to non-compliance,
sanctions breaches, and unethical behaviour through a robust
Compliance Management System. This includes vigilant
monitoring of legislative updates, rigorous due diligence and
sanctions screening of all counterparties to ensure adherence to
legal and ethical standards. The system is bolstered by transparent
reporting mechanisms, such as whistleblowing lines.
Comprehensive training is provided to employees focusing on
corporate ethics, the prevention of conflicts of interest, sanctions
and compliance issues. Through these measures, along with
continuous monitoring and improvement processes, the Group
not only addresses potential and actual compliance risks but
also reinforces its commitment to upholding high standards of
integrity and ethical conduct, and safeguarding its reputation
and operational success.
OPER ATION A L IT INFR A STRUC TURE FA ILURE C Y BER A ND INFOR M ATION SECURIT Y COMPLIA NCE
Link to strategy
Growth Efficiency Excellence
Risk impact level Risk exposure trend
Very high High Moderate Low No change Increase Decrease
(part of ESG risks)
76 77 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
Description of risk
Risks that the Group could incur losses as a result of ineffective
operation activities (i.e. excess or shortage of operating fleet,
low on-time performance or pilot shortage risk).
Link to strategy
Risk impact level Risk exposure trend
Mitigation actions
The risk of not being able to carry out regular flight operations on
time due to technical or external reasons can lead to significant
costs and reputational damage. The Group undertakes regular
delay analysis and delay meetings.
The Group employs the required number of qualified pilots
in accordance with the annual plan. An effective recruitment
process has been put in place. Relevant training is provided to
ensure the highest professional standards are maintained.
Due to external engine issues, the Group pays more attention
to the fleet size risk. To manage the risks, the Company delivers
and redelivers aircraft in accordance with an approved fleet plan
and based on the market situation.
Description of risk
The core processes of the Group are dependent on IT services
and infrastructure.
Therefore, effective and resilient IT management is essential to
the Company.
Link to strategy
Risk impact level Risk exposure trend
Mitigation actions
To mitigate this risk, the Group uses a variety of required
systems and equipment. Regular updates of operational systems
and firewall software are conducted. All critical data is stored
appropriately, and online and offline backups are created and
monitored. In order to decrease the risk of virus and/or hacker
attacks, the Group uses antivirus systems and firewalls, limits
access to local and internet resources and regularly updates its
security systems and applications. Regular external audits
increase the Group’s resilience to internal and external
risk factors.
IT infrastructure is fully geared to support business continuity
within the best possible limits with redundancy and backup
systems in place.
Description of risk
Cyber risks are a top priority in the airline sector as the use of
technology is increasingly integrated into business processes.
With the increased reliance on technology, companies are now
more exposed to cyber-attacks that could lead to data leakage
and significant reputational and financial losses.
Link to strategy
Risk impact level Risk exposure trend
Mitigation actions
To manage these risks, the Group has robust cyber-security
measures in place. The Group has developed processes to comply
with the best industry practices and standards in information
security. Employees undergo regular training on information
security and familiarisation with the Information Security Policy
to enhance their awareness of information security.
Description of risk
Facing regulatory non-compliance, including sanctions breaches,
alongside risks of corruption, fraud, and unethical behaviour,
represents a risk for the Company. These issues can result
in legal penalties, financial losses and reputational harm,
underscoring the need for stringent compliance frameworks
and ethical governance.
Link to strategy
Risk impact level Risk exposure trend
Mitigation actions
The Group effectively manages risks related to non-compliance,
sanctions breaches, and unethical behaviour through a robust
Compliance Management System. This includes vigilant
monitoring of legislative updates, rigorous due diligence and
sanctions screening of all counterparties to ensure adherence to
legal and ethical standards. The system is bolstered by transparent
reporting mechanisms, such as whistleblowing lines.
Comprehensive training is provided to employees focusing on
corporate ethics, the prevention of conflicts of interest, sanctions
and compliance issues. Through these measures, along with
continuous monitoring and improvement processes, the Group
not only addresses potential and actual compliance risks but
also reinforces its commitment to upholding high standards of
integrity and ethical conduct, and safeguarding its reputation
and operational success.
OPER ATION A L IT INFR A STRUC TURE FA ILURE C Y BER A ND INFOR M ATION SECURIT Y COMPLIA NCE
Link to strategy
Growth Efficiency Excellence
Risk impact level Risk exposure trend
Very high High Moderate Low No change Increase Decrease
(part of ESG risks)
76 77 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
RISK M A N AGEMENT
CONTINUED
Managing climate-related risks Insurance
Air Astana Group remains
committed to addressing
climate-related risks and
fostering sustainable practices
in every facet of our operations.
As we reflect on the challenges and
achievements of the last year, it is evident
that the imperative to manage climate risks
has actually intensified. Beyond the direct
impact on our operations, climate change
We also employ insurance
as part of our suite of risk
management tools since this
enables us to share some risks
with other counterparties by
paying an advance premium.
We agree arrangements with insurance
companies that both comply with regulations
and our own policies, and provide effective
protection for the business. We purchase
financially sound insurance coverage
through a transparent process and
review this annually.
poses multifaceted challenges with
far-reaching financial, reputational and
operational implications. From supply chain
disruptions to the integrity of our flight
operations and safety procedures, the
spectrum of physical risks underscores the
urgency of our efforts.
In this section, we delve into our actions
to manage these risks effectively, ensuring
resilience in the face of environmental
uncertainty while reinforcing our dedication
to responsible stewardship.
Aviation insurance
Our aviation risks are placed in the
world’s leading insurance markets through
internationally reputable brokers. We cover
our aviation risks through the following
policies:
Aviation Hull, Total Loss Only, Spares
All Risks and Airline Liability Cover
Aircraft Repair and Operational Support
(Hull deductible) Cover
Aviation Hull and Spares ‘War and Allied
Perils’ Cover
Aviation War, Hijacking and Other Perils
Excess Liability Cover
It is important to mention that ongoing
efforts are being made to identify climate-
related risks and enhance actions aimed at
mitigating these.
We are committed to increasing our
efforts to mitigate climate change risks,
ensure responsible business practices, build
a diverse and inclusive workforce, and give
back to the people and the communities
where we operate. Please refer to the
TCFD section on pages 53–55 for
further information.
Non-aviation insurance
We also purchase a range of non-aviation
insurance policies. These range from
providing cover for our employees against
accidents and medical expenses to reducing
the financial risk of damage to our property,
interruptions to our business and
general liability.
PH YSIC A L
RISK
OPER ATION A L
IMPAC T MITIG ATION AC TIONS
Natural disasters
(volcanic
eruption/ash,
water flood,
hurricane,
tornado,
typhoon)
• Supply chain
• Flight operation
• Safety procedures
• On-time
performance
• Customer
satisfaction
(service quality)
• Maintaining a list of alternative suppliers and distribution channels in regions less prone to natural
disasters, reducing dependency on single-source suppliers located in high-risk areas
• Searching for alternative ways of delivering goods, spare parts (rail, truck) or considering alternative
suppliers located in other regions (if realised)
• Providing comprehensive training programmes for employees on disaster preparedness,
emergency response procedures and safety protocols to ensure a swift and coordinated response
during natural disasters
• Preparing a detailed plan for all departments immediately after the event; exploring possible
scenarios; supplying detailed information from station managers to the Control Centre to enable the
right decisions to be taken; informing flight dispatch and the crew about any dangerous areas
• Conducting post-event evaluations and debriefings following natural disasters to assess the
effectiveness of mitigation measures and identify areas for improvement
Fog, smog,
sandstorm
• Flight operation
• On-time
performance
• Customer
satisfaction
(service quality)
• Monitoring of Meteorological Aerodrome Reports/Terminal Aerodrome Forecast
• Detaining crew at hotel/home to minimise disruption to flight duty periods in case of unsuitable visibility
• Delaying flight with captain coordination to avoid flight diversion
• Consulting with airport weather service.
• Departure of flights according to weather conditions with probable delays with reference to the Terminal
Aerodrome Forecast.
• Equipping aircraft with state-of-the-art navigation and visibility systems to improve pilot situational
awareness and visibility during low-visibility conditions
Snow, ice
(unsuitable
runway surface)
• Flight operation
• Safety procedures
• On-time
performance
• Customer
satisfaction
(service quality)
• Monitoring of Global Reporting Format (GRF) and its updates
• Detaining crew at hotel/home to minimise disruption to flight duty periods in case of unsuitable runway
surface conditions
• Consulting with airport ground service in order to clarify actions to improve runway conditions or
requesting official letter about airport closure for snow removal from the runway
• Delaying flight with captain co-ordination to avoid flight diversion
• Implementing de-icing and anti-icing procedures for aircraft to prevent the accumulation of snow and
ice, ensuring safe takeoff and landing operations
• Departure of flights according to weather conditions with probable delays with reference to the GRF
High
temperature or
high atmospheric
pressure at
destination
airport
• Flight operation
• Safety procedures • Monitoring of Meteorological Aerodrome Reports
• Requesting calculation from Flight Dispatch for aircraft performance
• Reviewing restrictions for high outside air temperatures
• Considering aircraft type change; adding additional landing for refuelling; minimising payload;
delaying flight until temperature drops down
78 79 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
Managing climate-related risks Insurance
Air Astana Group remains
committed to addressing
climate-related risks and
fostering sustainable practices
in every facet of our operations.
As we reflect on the challenges and
achievements of the last year, it is evident
that the imperative to manage climate risks
has actually intensified. Beyond the direct
impact on our operations, climate change
We also employ insurance
as part of our suite of risk
management tools since this
enables us to share some risks
with other counterparties by
paying an advance premium.
We agree arrangements with insurance
companies that both comply with regulations
and our own policies, and provide effective
protection for the business. We purchase
financially sound insurance coverage
through a transparent process and
review this annually.
poses multifaceted challenges with
far-reaching financial, reputational and
operational implications. From supply chain
disruptions to the integrity of our flight
operations and safety procedures, the
spectrum of physical risks underscores the
urgency of our efforts.
In this section, we delve into our actions
to manage these risks effectively, ensuring
resilience in the face of environmental
uncertainty while reinforcing our dedication
to responsible stewardship.
Aviation insurance
Our aviation risks are placed in the
world’s leading insurance markets through
internationally reputable brokers. We cover
our aviation risks through the following
policies:
Aviation Hull, Total Loss Only, Spares
All Risks and Airline Liability Cover
Aircraft Repair and Operational Support
(Hull deductible) Cover
Aviation Hull and Spares ‘War and Allied
Perils’ Cover
Aviation War, Hijacking and Other Perils
Excess Liability Cover
It is important to mention that ongoing
efforts are being made to identify climate-
related risks and enhance actions aimed at
mitigating these.
We are committed to increasing our
efforts to mitigate climate change risks,
ensure responsible business practices, build
a diverse and inclusive workforce, and give
back to the people and the communities
where we operate. Please refer to the
TCFD section on pages 53–55 for
further information.
Non-aviation insurance
We also purchase a range of non-aviation
insurance policies. These range from
providing cover for our employees against
accidents and medical expenses to reducing
the financial risk of damage to our property,
interruptions to our business and
general liability.
PH YSIC A L
RISK
OPER ATION A L
IMPAC T MITIG ATION AC TIONS
Natural disasters
(volcanic
eruption/ash,
water flood,
hurricane,
tornado,
typhoon)
• Supply chain
• Flight operation
• Safety procedures
• On-time
performance
• Customer
satisfaction
(service quality)
• Maintaining a list of alternative suppliers and distribution channels in regions less prone to natural
disasters, reducing dependency on single-source suppliers located in high-risk areas
• Searching for alternative ways of delivering goods, spare parts (rail, truck) or considering alternative
suppliers located in other regions (if realised)
• Providing comprehensive training programmes for employees on disaster preparedness,
emergency response procedures and safety protocols to ensure a swift and coordinated response
during natural disasters
• Preparing a detailed plan for all departments immediately after the event; exploring possible
scenarios; supplying detailed information from station managers to the Control Centre to enable the
right decisions to be taken; informing flight dispatch and the crew about any dangerous areas
• Conducting post-event evaluations and debriefings following natural disasters to assess the
effectiveness of mitigation measures and identify areas for improvement
Fog, smog,
sandstorm
• Flight operation
• On-time
performance
• Customer
satisfaction
(service quality)
• Monitoring of Meteorological Aerodrome Reports/Terminal Aerodrome Forecast
• Detaining crew at hotel/home to minimise disruption to flight duty periods in case of unsuitable visibility
• Delaying flight with captain coordination to avoid flight diversion
• Consulting with airport weather service.
• Departure of flights according to weather conditions with probable delays with reference to the Terminal
Aerodrome Forecast.
• Equipping aircraft with state-of-the-art navigation and visibility systems to improve pilot situational
awareness and visibility during low-visibility conditions
Snow, ice
(unsuitable
runway surface)
• Flight operation
• Safety procedures
• On-time
performance
• Customer
satisfaction
(service quality)
• Monitoring of Global Reporting Format (GRF) and its updates
• Detaining crew at hotel/home to minimise disruption to flight duty periods in case of unsuitable runway
surface conditions
• Consulting with airport ground service in order to clarify actions to improve runway conditions or
requesting official letter about airport closure for snow removal from the runway
• Delaying flight with captain co-ordination to avoid flight diversion
• Implementing de-icing and anti-icing procedures for aircraft to prevent the accumulation of snow and
ice, ensuring safe takeoff and landing operations
• Departure of flights according to weather conditions with probable delays with reference to the GRF
High
temperature or
high atmospheric
pressure at
destination
airport
• Flight operation
• Safety procedures • Monitoring of Meteorological Aerodrome Reports
• Requesting calculation from Flight Dispatch for aircraft performance
• Reviewing restrictions for high outside air temperatures
• Considering aircraft type change; adding additional landing for refuelling; minimising payload;
delaying flight until temperature drops down
78 79 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
INTRODUC TION TO CORPOR ATE GOVERN A NCE
Continued
governance resilience
Dear shareholders, our recent
successful listing on three stock
exchanges will inevitably
increase visibility and attract
investors’ attention to our
business. In this regard, I would
like to assure you that the focus
on integrity and compliance
across every aspect of the
Group’s corporate governance
remains our priority.
Nurlan Zhakupov
Chairman of the Board of Directors
Resilience built on strong
governance
Air Astana Group’s ability to deliver
long-term success is dependent on a
number of unwavering principles. Central
to this is the adherence to international
and best practice standards for corporate
governance. We have our own Corporate
Governance Code (the Code), that was
developed in accordance with the UK
Corporate governance Code, Astana
International Financial Centre Market Rules
and Air Astana JSC Charter.
The Code is supported by robust
governance practices and our Board
of 9 members includes 4 Independent
Non-Executive Directors, who bring both
expertise and objectivity to the table. In its
oversight of the integrity and compliance
of the business, the Board is backed by an
exemplary senior management team with
an average of 15 years’ tenure with the
Group and joint experience of over 32 years
in the industry. Added to this, the Group
is instilled with a strong set of corporate
values and achieving excellence at
all levels.
Board changes and succession
During the year, there were a number of
changes to the representation of National
Welfare Fund Samruk-Kazyna JSC on the Air
Astana JSC Board of Directors. More details
about the Board changes can be found on
page 84 of the corporate governance report.
The composition of the other members of
the Board remained largely unchanged and
this continuity provides the Board with the
experience and knowledge of the business:
66% of the Board has over 4 years of being
immersed in the oversight of the Group’s
operational and financial activities. An
external evaluation of Board performance
was undertaken in early 2023 by Nestor
Advisors Ltd, a London-based corporate
governance advisory firm, and reported on
in full in last year’s Integrated Report.
The report commented that the composition
of the Board, through its highly skilled
members, had a healthy mix of international
and local expertise with the Independent
Directors actively contributing to
decision-making.
It made a number of recommendations
for the future including the Board adopting
a more strategic approach to planning
its oversight responsibilities and Director
development as part of its work throughout
the year. It also proposed the development
of a formalised succession planning process
for both senior executives and the Board.
These and other recommendations have
been implemented during the course of
the year.
Statement of compliance with applicable
corporate governance codes
The Company complies with the Corporate Governance Code approved by
the shareholders in 2019. The Code is based on Kazakhstan law and aligned
with the UK Corporate Governance Code.
The Code is aligned with the principles and standards of the AIFC
Market Rules and adopts certain principles from the UK Corporate
Governance Code. Some standards of the Code present more
granular guidance than that provided by the AIFC Market Rules and
UK Corporate Governance Code, particularly as they account for the
legal framework of the Republic of Kazakhstan that governs the
corporate affairs of the Company. By way of guidance, the
standards within the AIFC Market Rules set out best practice
standards relevant to each of the corporate governance principles
and are subject to a comply-or-explain disclosure requirement.
Other than as set out in the following paragraph, the standards
adopted in the Code adopt or, in some cases exceed, the threshold
requirements presented by the AIFC Market Rules.
Air Astana JSC acknowledges that Standard 20 of the AIFC Market
Rules recommends that the Chairman of a Board of Directors meet
the criteria for independence. However, as set out in the Charter and
as adopted by principle 2.5 of the Code, the largest shareholder of
the Company, from time to time, is entitled to appoint as Chair any
Director as a representative of such shareholder, provided always
that, at the time of appointment, such shareholder holds at least
30% of the share capital of the Company. In accordance with such
provisions, National Welfare Fund Samruk-Kazyna JSC, as the largest
shareholder at the date of this report, and holding on such date at
least 30% of the share capital of the Company, has appointed Mr.
Zhakupov, a representative of National Welfare Fund Samruk-Kazyna
JSC, as Chairman. Mr. Zhakupov does not meet the criteria of
independence.
While the Integrated Report covers the Air Astana Group’s activities
in 2023, the Group’s IPO in early 2024 took place before this went
to print and, since then, some changes have been instigated that
already have a bearing on the Group’s corporate structure and
governance. We have felt it prudent to flag the most relevant of
these throughout the corporate governance section.
In 2023, the Board agreed to obtain a separate Air Operator
Certificate (AOC) for FlyArystan and in September reached a number
of decisions about its future: FlyArystan became a separate legal
entity, 100% owned by Air Astana, and renamed FlyArystan JSC; a
separate Charter for FlyArystan was approved; the President and
members of the FlyArystan JSC Board of Directors were elected.
FlyArystan is now in the process of obtaining its own AOC and,
in the meantime, a corporate governance framework is being
developed in line with legal requirements.
A LIGNMENT WITH SEC TIONS OF THE 2018
UK CORPOR ATE GOVERN A NCE CODE
Board leadership and Company purpose
Information on the Company’s Board and Senior Leadership
Team, an overview of the work undertaken to promote the
long-term success of the Company and how the Board has
considered stakeholders’ interests.
Read more on p. 90
Division of responsibilities
Information on the governance framework of the Company.
Read more on p. 94
Composition, succession and evaluation
Overview of the composition of the Board and evaluation
process together with the report from the Nomination and
Remuneration Committee on its work during the year on
Board and Senior Management composition and
succession planning.
Read more on p. 96
Audit, risk and internal control
Overview of the framework for oversight of the Company’s
financial reporting and risk management and internal
controls together with the reports from the Audit Committee
on the work undertaken during the year.
Read more on p. 100
Remuneration
Report from the Nomination and Remuneration Committee
on overseeing the Company’s Remuneration Policies and
practices, performance outcomes and annual report
on remuneration.
Read more on p. 103
81 Air Astana Integrated Report 2023 80 Air Astana Integrated Report 2023
Continued
governance resilience
Dear shareholders, our recent
successful listing on three stock
exchanges will inevitably
increase visibility and attract
investors’ attention to our
business. In this regard, I would
like to assure you that the focus
on integrity and compliance
across every aspect of the
Group’s corporate governance
remains our priority.
Nurlan Zhakupov
Chairman of the Board of Directors
Resilience built on strong
governance
Air Astana Group’s ability to deliver
long-term success is dependent on a
number of unwavering principles. Central
to this is the adherence to international
and best practice standards for corporate
governance. We have our own Corporate
Governance Code (the Code), that was
developed in accordance with the UK
Corporate governance Code, Astana
International Financial Centre Market Rules
and Air Astana JSC Charter.
The Code is supported by robust
governance practices and our Board
of 9 members includes 4 Independent
Non-Executive Directors, who bring both
expertise and objectivity to the table. In its
oversight of the integrity and compliance
of the business, the Board is backed by an
exemplary senior management team with
an average of 15 years’ tenure with the
Group and joint experience of over 32 years
in the industry. Added to this, the Group
is instilled with a strong set of corporate
values and achieving excellence at
all levels.
Board changes and succession
During the year, there were a number of
changes to the representation of National
Welfare Fund Samruk-Kazyna JSC on the Air
Astana JSC Board of Directors. More details
about the Board changes can be found on
page 84 of the corporate governance report.
The composition of the other members of
the Board remained largely unchanged and
this continuity provides the Board with the
experience and knowledge of the business:
66% of the Board has over 4 years of being
immersed in the oversight of the Group’s
operational and financial activities. An
external evaluation of Board performance
was undertaken in early 2023 by Nestor
Advisors Ltd, a London-based corporate
governance advisory firm, and reported on
in full in last year’s Integrated Report.
The report commented that the composition
of the Board, through its highly skilled
members, had a healthy mix of international
and local expertise with the Independent
Directors actively contributing to
decision-making.
It made a number of recommendations
for the future including the Board adopting
a more strategic approach to planning
its oversight responsibilities and Director
development as part of its work throughout
the year. It also proposed the development
of a formalised succession planning process
for both senior executives and the Board.
These and other recommendations have
been implemented during the course of
the year.
Statement of compliance with applicable
corporate governance codes
The Company complies with the Corporate Governance Code approved by
the shareholders in 2019. The Code is based on Kazakhstan law and aligned
with the UK Corporate Governance Code.
The Code is aligned with the principles and standards of the AIFC
Market Rules and adopts certain principles from the UK Corporate
Governance Code. Some standards of the Code present more
granular guidance than that provided by the AIFC Market Rules and
UK Corporate Governance Code, particularly as they account for the
legal framework of the Republic of Kazakhstan that governs the
corporate affairs of the Company. By way of guidance, the
standards within the AIFC Market Rules set out best practice
standards relevant to each of the corporate governance principles
and are subject to a comply-or-explain disclosure requirement.
Other than as set out in the following paragraph, the standards
adopted in the Code adopt or, in some cases exceed, the threshold
requirements presented by the AIFC Market Rules.
Air Astana JSC acknowledges that Standard 20 of the AIFC Market
Rules recommends that the Chairman of a Board of Directors meet
the criteria for independence. However, as set out in the Charter and
as adopted by principle 2.5 of the Code, the largest shareholder of
the Company, from time to time, is entitled to appoint as Chair any
Director as a representative of such shareholder, provided always
that, at the time of appointment, such shareholder holds at least
30% of the share capital of the Company. In accordance with such
provisions, National Welfare Fund Samruk-Kazyna JSC, as the largest
shareholder at the date of this report, and holding on such date at
least 30% of the share capital of the Company, has appointed Mr.
Zhakupov, a representative of National Welfare Fund Samruk-Kazyna
JSC, as Chairman. Mr. Zhakupov does not meet the criteria of
independence.
While the Integrated Report covers the Air Astana Group’s activities
in 2023, the Group’s IPO in early 2024 took place before this went
to print and, since then, some changes have been instigated that
already have a bearing on the Group’s corporate structure and
governance. We have felt it prudent to flag the most relevant of
these throughout the corporate governance section.
In 2023, the Board agreed to obtain a separate Air Operator
Certificate (AOC) for FlyArystan and in September reached a number
of decisions about its future: FlyArystan became a separate legal
entity, 100% owned by Air Astana, and renamed FlyArystan JSC; a
separate Charter for FlyArystan was approved; the President and
members of the FlyArystan JSC Board of Directors were elected.
FlyArystan is now in the process of obtaining its own AOC and,
in the meantime, a corporate governance framework is being
developed in line with legal requirements.
A LIGNMENT WITH SEC TIONS OF THE 2018
UK CORPOR ATE GOVERN A NCE CODE
Board leadership and Company purpose
Information on the Company’s Board and Senior Leadership
Team, an overview of the work undertaken to promote the
long-term success of the Company and how the Board has
considered stakeholders’ interests.
Read more on p. 90
Division of responsibilities
Information on the governance framework of the Company.
Read more on p. 94
Composition, succession and evaluation
Overview of the composition of the Board and evaluation
process together with the report from the Nomination and
Remuneration Committee on its work during the year on
Board and Senior Management composition and
succession planning.
Read more on p. 96
Audit, risk and internal control
Overview of the framework for oversight of the Company’s
financial reporting and risk management and internal
controls together with the reports from the Audit Committee
on the work undertaken during the year.
Read more on p. 100
Remuneration
Report from the Nomination and Remuneration Committee
on overseeing the Company’s Remuneration Policies and
practices, performance outcomes and annual report
on remuneration.
Read more on p. 103
81 Air Astana Integrated Report 2023 80 Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
BOA RD OF DIREC TOR S
Confident leadership
NURL A N ZH A KUPOV N
Chairman of the Board of Directors,
representative of the shareholder
National Welfare Fund Samruk-Kazyna JSC
Appointed: December 2023
Qualifications and experience
Nurlan Zhakupov graduated from Moscow
State Institute of International Relations of
the Ministry of Foreign Affairs of the
Russian Federation: Candidate of economic
sciences; Master of Economics and Bachelor
of Economics (International Economic
Relations Department).
Prior to his appointment as the CEO of
National Welfare Fund Samruk-Kazyna JSC in
April 2023, Mr. Zhakupov served in a variety
of management and senior management
positions. He held the post of the Chief
Executive Officer of Kazakhstan Investment
Development Fund Management Company
Ltd, representative of Rothschild & Co in
Kazakhstan, Chief Executive Officer of
JSC SEC ASTANA, Managing Director for
Development and Investment and member
of the Management Board at NAC
Kazatomprom JSC. He previously held various
managerial positions in finance in Royal
Bank of Scotland, UBS BANK, Head of Astana
office, National Mining Company Tau-Ken
Samruk, Credit Suisse, Research, Investment
and Development Ltd, Chambishi Metals Plc,
Eurasian Industrial Association.
Other appointments
Chief Executive Officer of National Welfare
Fund Samruk-Kazyna JSC
Does not hold any shares in Air Astana.
PE TER FOSTER
Chief Executive Officer of Air Astana JSC
Appointed: August 2019
Qualifications and experience
Peter Foster entered the airline industry
immediately after graduating from
Cambridge University in 1982, as a
management trainee of John Swire and
Sons (HK) Ltd, the owners of Cathay Pacific
Airways Ltd. From 1982 to 1999 he served
in a variety of management and senior
management positions with Cathay Pacific
Airways in Hong Kong, Asia, Australia
and Europe, and underwent business
management training at INSEAD, France.
Mr. Foster left Cathay Pacific Airways in
1999 to head up the rehabilitation team
of Philippine Airlines Inc. He subsequently
served as Chief Executive Officer of Royal
Brunei Airlines from 2002 to 2005 prior to
his appointment as the CEO of Air Astana.
In the 2015 UK New Year’s Honours List,
Peter Foster was awarded Officer of the
Order of the British Empire (OBE) for his
services to British aviation in Kazakhstan.
Other appointments
Chairman of the Board of Directors of
FlyArystan JSC.
Does not hold any shares in Air Astana.
Key: A Audit Committee E ESG Committee
N Nomination and Remuneration Committee
S Strategic Planning Committee
T Treasury Committee
A IDA R RYSKULOV E S T
Non-Executive Director, representative of
the shareholder National Welfare Fund
Samruk-Kazyna JSC
Appointed: September 2023
Qualifications and experience
Aidar Ryskulov holds Master of Business
Administration degree from Nazarbayev
University (Executive MBA). He is a graduate
of Karaganda State University (named after
E.A. Buketov) majoring in finance and credit.
He has held senior positions in finance for
more than 20 years. He was a member of the
Board of Directors in various companies and
banks, including Sekerbank T.A.S. (Turkey),
Development Bank of Kazakhstan, Investment
Fund of Kazakhstan, Kazexportgarant, Alliance
Bank and Samruk-Kazyna Finance.
Other appointments
Managing Director for Economics and Finance
of Samruk-Kazyna JSC; Chairman of the Board
of Directors of QAZAQ AIR JSC; Member of the
Board of Directors of National Company
Kazakhstan TemirZholy JSC.
Does not hold any shares in Air Astana.
MY LE S WE STCOT T N S
Non-Executive Director, representative of
the shareholder BAE Systems
(Kazakhstan) Limited
Appointed: March 2018
Qualifications and experience
Myles Westcott is a Fellow of the Institute of
Chartered Accountants in England & Wales,
and a graduate of Bristol University. In 2001,
Mr. Westcott joined BAE Systems plc and has
since held a number of senior finance
positions within the company, across both
land and air sectors. During this period, his
responsibilities have included the financial
leadership of long-term, complex defence
contracts, cost reduction programmes,
systems implementations, business
integrations, UK and international customer
engagement. His early career was divided
between accountancy roles and financial
management across a variety of sectors,
including consultancy, retail and hospitality.
Other appointments
Group Financial Controller for BAE Systems.
Does not hold any shares in Air Astana.
SIMON WOOD E T
Non-Executive Director, representative of
the shareholder BAE Systems
(Kazakhstan) Limited
Appointed: January 2019
Qualifications and experience
Simon Wood joined BAE Systems in 1996
and has held a number of senior finance
positions within BAE Systems across a
number of sectors, including Military Aircraft,
Maritime, Land and Commercial Aircraft. In
addition to his functional role, Mr. Wood has
also had responsibility for Strategy and
Planning, Business Transformation and
Improvement, Systems Implementation,
Customer Relationship Management and
Operational Business Delivery.
Other appointments
CFO of BAE Systems Maritime and Land
Sector since March 2023; Member of the
Chartered Institute of Management
Accountants.
Does not hold any shares in Air Astana.
K EITH G A EBEL A T
Non-Executive Independent Director
Appointed: March 2020
Qualifications and experience
Keith Gaebel is a leading expert in financial
reporting and corporate governance.
During his 25 years’ experience with large
international chartered accounting firms, Mr.
Gaebel held various positions including the
Head of the Financial Reporting Group (FRG)
for the Commonwealth of Independent States
(PricewaterhouseCoopers – 2000 to 2004;
Ernst & Young – 2004 to 2008) and was a
Global Authority on various International
Financial Reporting Standards. In addition,
as a recognised world-class expert, he was
involved in the development of various
international financial reporting standards. As
Head of the FRG, he supported clients’ public
offerings by reviewing for compliance with
financial reporting and corporate governance.
Mr. Gaebel was the Ernst & Young Managing
Partner for Central Asia and Caucasus from
2008 to 2013.
Other appointments
Independent director in National Payment
Corporation of the National Bank of the
Republic of Kazakhstan JSC.
Does not hold any shares in Air Astana.
82 83 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
Confident leadership
NURL A N ZH A KUPOV N
Chairman of the Board of Directors,
representative of the shareholder
National Welfare Fund Samruk-Kazyna JSC
Appointed: December 2023
Qualifications and experience
Nurlan Zhakupov graduated from Moscow
State Institute of International Relations of
the Ministry of Foreign Affairs of the
Russian Federation: Candidate of economic
sciences; Master of Economics and Bachelor
of Economics (International Economic
Relations Department).
Prior to his appointment as the CEO of
National Welfare Fund Samruk-Kazyna JSC in
April 2023, Mr. Zhakupov served in a variety
of management and senior management
positions. He held the post of the Chief
Executive Officer of Kazakhstan Investment
Development Fund Management Company
Ltd, representative of Rothschild & Co in
Kazakhstan, Chief Executive Officer of
JSC SEC ASTANA, Managing Director for
Development and Investment and member
of the Management Board at NAC
Kazatomprom JSC. He previously held various
managerial positions in finance in Royal
Bank of Scotland, UBS BANK, Head of Astana
office, National Mining Company Tau-Ken
Samruk, Credit Suisse, Research, Investment
and Development Ltd, Chambishi Metals Plc,
Eurasian Industrial Association.
Other appointments
Chief Executive Officer of National Welfare
Fund Samruk-Kazyna JSC
Does not hold any shares in Air Astana.
PE TER FOSTER
Chief Executive Officer of Air Astana JSC
Appointed: August 2019
Qualifications and experience
Peter Foster entered the airline industry
immediately after graduating from
Cambridge University in 1982, as a
management trainee of John Swire and
Sons (HK) Ltd, the owners of Cathay Pacific
Airways Ltd. From 1982 to 1999 he served
in a variety of management and senior
management positions with Cathay Pacific
Airways in Hong Kong, Asia, Australia
and Europe, and underwent business
management training at INSEAD, France.
Mr. Foster left Cathay Pacific Airways in
1999 to head up the rehabilitation team
of Philippine Airlines Inc. He subsequently
served as Chief Executive Officer of Royal
Brunei Airlines from 2002 to 2005 prior to
his appointment as the CEO of Air Astana.
In the 2015 UK New Year’s Honours List,
Peter Foster was awarded Officer of the
Order of the British Empire (OBE) for his
services to British aviation in Kazakhstan.
Other appointments
Chairman of the Board of Directors of
FlyArystan JSC.
Does not hold any shares in Air Astana.
Key: A Audit Committee E ESG Committee
N Nomination and Remuneration Committee
S Strategic Planning Committee
T Treasury Committee
A IDA R RYSKULOV E S T
Non-Executive Director, representative of
the shareholder National Welfare Fund
Samruk-Kazyna JSC
Appointed: September 2023
Qualifications and experience
Aidar Ryskulov holds Master of Business
Administration degree from Nazarbayev
University (Executive MBA). He is a graduate
of Karaganda State University (named after
E.A. Buketov) majoring in finance and credit.
He has held senior positions in finance for
more than 20 years. He was a member of the
Board of Directors in various companies and
banks, including Sekerbank T.A.S. (Turkey),
Development Bank of Kazakhstan, Investment
Fund of Kazakhstan, Kazexportgarant, Alliance
Bank and Samruk-Kazyna Finance.
Other appointments
Managing Director for Economics and Finance
of Samruk-Kazyna JSC; Chairman of the Board
of Directors of QAZAQ AIR JSC; Member of the
Board of Directors of National Company
Kazakhstan TemirZholy JSC.
Does not hold any shares in Air Astana.
MY LE S WE STCOT T N S
Non-Executive Director, representative of
the shareholder BAE Systems
(Kazakhstan) Limited
Appointed: March 2018
Qualifications and experience
Myles Westcott is a Fellow of the Institute of
Chartered Accountants in England & Wales,
and a graduate of Bristol University. In 2001,
Mr. Westcott joined BAE Systems plc and has
since held a number of senior finance
positions within the company, across both
land and air sectors. During this period, his
responsibilities have included the financial
leadership of long-term, complex defence
contracts, cost reduction programmes,
systems implementations, business
integrations, UK and international customer
engagement. His early career was divided
between accountancy roles and financial
management across a variety of sectors,
including consultancy, retail and hospitality.
Other appointments
Group Financial Controller for BAE Systems.
Does not hold any shares in Air Astana.
SIMON WOOD E T
Non-Executive Director, representative of
the shareholder BAE Systems
(Kazakhstan) Limited
Appointed: January 2019
Qualifications and experience
Simon Wood joined BAE Systems in 1996
and has held a number of senior finance
positions within BAE Systems across a
number of sectors, including Military Aircraft,
Maritime, Land and Commercial Aircraft. In
addition to his functional role, Mr. Wood has
also had responsibility for Strategy and
Planning, Business Transformation and
Improvement, Systems Implementation,
Customer Relationship Management and
Operational Business Delivery.
Other appointments
CFO of BAE Systems Maritime and Land
Sector since March 2023; Member of the
Chartered Institute of Management
Accountants.
Does not hold any shares in Air Astana.
K EITH G A EBEL A T
Non-Executive Independent Director
Appointed: March 2020
Qualifications and experience
Keith Gaebel is a leading expert in financial
reporting and corporate governance.
During his 25 years’ experience with large
international chartered accounting firms, Mr.
Gaebel held various positions including the
Head of the Financial Reporting Group (FRG)
for the Commonwealth of Independent States
(PricewaterhouseCoopers – 2000 to 2004;
Ernst & Young – 2004 to 2008) and was a
Global Authority on various International
Financial Reporting Standards. In addition,
as a recognised world-class expert, he was
involved in the development of various
international financial reporting standards. As
Head of the FRG, he supported clients’ public
offerings by reviewing for compliance with
financial reporting and corporate governance.
Mr. Gaebel was the Ernst & Young Managing
Partner for Central Asia and Caucasus from
2008 to 2013.
Other appointments
Independent director in National Payment
Corporation of the National Bank of the
Republic of Kazakhstan JSC.
Does not hold any shares in Air Astana.
82 83 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
DIVER SIT Y OF THE BOA RD
Board gender 1
2
1. Female
2. Male
1
8
Board composition 1
2
3
1. Executive Directors
2. Non-Executive Directors
3. Non-Executive
Independent Directors
1
4
4
Board tenure
1
2
3
1. 0–2 years
2. 3–4 years
3. 5+ years
2
6
1 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
BOA RD OF DIREC TOR S CONTINUED
Key: A Audit Committee E ESG Committee
N Nomination and Remuneration Committee
S Strategic Planning Committee
T Treasury Committee DIVER SIT Y REL ATED DISCLOSURE S
We are mindful of the requirements in relation
to gender and ethnic diversity of the Board
of Directors. As mentioned in the Company’s
Prospectus, Samruk-Kazyna JSC and BAE Systems
Limited entered into the Voting Agreement with
respect to their Shares. In such agreement,
inter alia, Samruk-Kazyna JSC and BAE Systems
Limited have agreed on ensuring the continued
representation of Samruk-Kazyna by two
Directors until the later of the second anniversary
of completion of the Offering and the second
annual General Shareholders Meeting to be
held following completion of the Offering.
On or before the end of the three-month
period following completion of the Offering, BAE
Systems shall cause one of its Directors to resign,
and such Director shall be replaced by an
independent director nominated and appointed
in accordance with the Charter. Current Directors
were elected for a two-year term expiring in
2026. Diversity of the Board of Directors is a
priority for the Nomination and Remuneration
Committee. The Company includes Diversity of
the Board of Directors as a mid-long term target
in its ESG Strategy for 2027–2032.
BOA RD CH A NGE S IN 202 3
Nurzhan Baidauletov stepped down as Chairman of the Board on 12 September 2023 and Aidar Ryskulov was elected as Chairman
of the Board on behalf of the National Welfare Fund Samruk-Kazyna JSC in his place.
With effect from 11 December 2023, Mr. Ryskulov was replaced as Chairman of the Board by Nurlan Zhakupov (representing
Samruk-Kazyna JSC). Mr. Ryskulov remains a member of the Board and sits on the Treasury, ESG and Strategic Planning Committees.
Yerhar Zhanadil, a member of the Board of Directors (representing Samruk-Kazyna JSC), stepped down on 5 September 2023.
Saltanat Satzhan, a member of the Board of Directors (representing Samruk-Kazyna JSC) was elected on 5 September 2023 and
stepped down on 11 December 2023.
Following the IPO, members of the Board were reappointed for the next two years.
BOA RD MEE TINGS AT TENDA NCE IN 202 3
Member Position Meetings attended (total 12)
Nurlan Zhakupov Chairman of the Board, Non-Executive Director
Aidar Ryskulov Non-Executive Director
Myles Westcott Non-Executive Director
Simon Wood Non-Executive Director
Peter Foster Executive Director
Garry Kingshott Non-Executive Independent Director
Janet Heckman Non-Executive Independent Director
Keith Gaebel Non-Executive Independent Director
Yeldar Abdrazakov Non-Executive Independent Director
Nurzhan Baidauletov 1 Non-Executive Director
Saltanat Satzhan 2 Non-Executive Director
Yernar Zhanadil 3 Non-Executive Director
1 Nurzhan Baidauletov stepped down from the Board of Directors on 12 September 2023.
2 Saltanat Satzhan, Member of the Board of Directors from 5 September 2023 to 11 December 2023.
3 Yerhar Zhanadil, Member of the Board of Directors until 5 September 2023.
G A RRY K INGSHOT T N S
Non-Executive Independent Director
Appointed: August 2019
Qualifications and experience
After a successful early career in various
FMCG businesses from 1974 to 1990, Mr.
Kingshott transitioned into Aviation joining
Ansett Airlines (Australia) in 1990. He now
has 30 years’ combined experience in the
Aviation, Travel and Tourism and Airline
industries, spanning three continents. Most
recently Mr. Kingshott served Cebu Air Inc.
as Chief Executive from 2008 to 2016,
overseeing a successful IPO in 2010, and
served as a member of the Advisory Board
at Cebu Air Inc. until June 2022. Mr. Kingshott
has served as a Company Director/ Chairman
for a variety of businesses including Airlines,
Travel Agencies, National Tourism and
Financial Services.
Mr. Kingshott is a member of the Australian
Institute of Company Directors (MAICD).
Other appointments
None.
Does not hold any shares in Air Astana.
JA NE T HECK M A N A E N S
Non-Executive Independent Director
Appointed: January 2019
Qualifications and experience
Janet Heckman holds a Master of Science in
Foreign Service from Georgetown University
in Washington, D.C. Between 1980 and 2012
she held various positions at Citi with a
focus on corporate banking. She was the
Managing Director for Citi’s corporate and
investment banking activities in Algeria from
2008 to 2012. Ms. Heckman joined EBRD in
2012 as a Country Director for Kazakhstan.
She was a Managing Director for Southern
and Eastern Mediterranean (SEMED) for EBRD
from January 2017 to December 2019.
Other appointments
Non-executive independent director –
member of the Board of Directors of Astana
International Exchange (AIX); Non-executive
independent director – member of the
Supervisory Board of TBC Bank (Georgia)
PLC; Non-executive independent director –
member of the Board of Directors of
Citibank Kazakhstan JSC.
Does not hold any shares in Air Astana.
Y ELDA R ABDR A Z A KOV A E N
Non-Executive Independent Director
Appointed: March 2020
Qualifications and experience
Yeldar Abdrazakov holds a BA and MSc in
International Economic Relations from the
Akhmet Yassawi International Kazakh-
Turkish University, Almaty and has also
graduated the General Management
Programme at Harvard Business School,
Boston, USA.
Yeldar Abdrazakov has held senior roles
in commercial and investment banking for
over 28 years. He was Managing Director
from 1995 to 2003 at Kazkommertsbank
(KAZKOM); CEO from 2002 to 2004 at
Kazkommerts Securities; and founder and
CEO from 2004 at Centras Group. Yeldar is
a certified member of the international
Institute of Directors (IoD).
Other appointments
Chairman of the Board of Directors
of ForteBank JSC; Member of the Board
of Directors of KASE.
Does not hold any shares in Air Astana.
84 85 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
Board gender 1
2
1. Female
2. Male
1
8
Board composition 1
2
3
1. Executive Directors
2. Non-Executive Directors
3. Non-Executive
Independent Directors
1
4
4
Board tenure
1
2
3
1. 0–2 years
2. 3–4 years
3. 5+ years
2
6
1 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
BOA RD OF DIREC TOR S CONTINUED
Key: A Audit Committee E ESG Committee
N Nomination and Remuneration Committee
S Strategic Planning Committee
T Treasury Committee DIVER SIT Y REL ATED DISCLOSURE S
We are mindful of the requirements in relation
to gender and ethnic diversity of the Board
of Directors. As mentioned in the Company’s
Prospectus, Samruk-Kazyna JSC and BAE Systems
Limited entered into the Voting Agreement with
respect to their Shares. In such agreement,
inter alia, Samruk-Kazyna JSC and BAE Systems
Limited have agreed on ensuring the continued
representation of Samruk-Kazyna by two
Directors until the later of the second anniversary
of completion of the Offering and the second
annual General Shareholders Meeting to be
held following completion of the Offering.
On or before the end of the three-month
period following completion of the Offering, BAE
Systems shall cause one of its Directors to resign,
and such Director shall be replaced by an
independent director nominated and appointed
in accordance with the Charter. Current Directors
were elected for a two-year term expiring in
2026. Diversity of the Board of Directors is a
priority for the Nomination and Remuneration
Committee. The Company includes Diversity of
the Board of Directors as a mid-long term target
in its ESG Strategy for 2027–2032.
BOA RD CH A NGE S IN 202 3
Nurzhan Baidauletov stepped down as Chairman of the Board on 12 September 2023 and Aidar Ryskulov was elected as Chairman
of the Board on behalf of the National Welfare Fund Samruk-Kazyna JSC in his place.
With effect from 11 December 2023, Mr. Ryskulov was replaced as Chairman of the Board by Nurlan Zhakupov (representing
Samruk-Kazyna JSC). Mr. Ryskulov remains a member of the Board and sits on the Treasury, ESG and Strategic Planning Committees.
Yerhar Zhanadil, a member of the Board of Directors (representing Samruk-Kazyna JSC), stepped down on 5 September 2023.
Saltanat Satzhan, a member of the Board of Directors (representing Samruk-Kazyna JSC) was elected on 5 September 2023 and
stepped down on 11 December 2023.
Following the IPO, members of the Board were reappointed for the next two years.
BOA RD MEE TINGS AT TENDA NCE IN 202 3
Member Position Meetings attended (total 12)
Nurlan Zhakupov Chairman of the Board, Non-Executive Director
Aidar Ryskulov Non-Executive Director
Myles Westcott Non-Executive Director
Simon Wood Non-Executive Director
Peter Foster Executive Director
Garry Kingshott Non-Executive Independent Director
Janet Heckman Non-Executive Independent Director
Keith Gaebel Non-Executive Independent Director
Yeldar Abdrazakov Non-Executive Independent Director
Nurzhan Baidauletov 1 Non-Executive Director
Saltanat Satzhan 2 Non-Executive Director
Yernar Zhanadil 3 Non-Executive Director
1 Nurzhan Baidauletov stepped down from the Board of Directors on 12 September 2023.
2 Saltanat Satzhan, Member of the Board of Directors from 5 September 2023 to 11 December 2023.
3 Yerhar Zhanadil, Member of the Board of Directors until 5 September 2023.
G A RRY K INGSHOT T N S
Non-Executive Independent Director
Appointed: August 2019
Qualifications and experience
After a successful early career in various
FMCG businesses from 1974 to 1990, Mr.
Kingshott transitioned into Aviation joining
Ansett Airlines (Australia) in 1990. He now
has 30 years’ combined experience in the
Aviation, Travel and Tourism and Airline
industries, spanning three continents. Most
recently Mr. Kingshott served Cebu Air Inc.
as Chief Executive from 2008 to 2016,
overseeing a successful IPO in 2010, and
served as a member of the Advisory Board
at Cebu Air Inc. until June 2022. Mr. Kingshott
has served as a Company Director/ Chairman
for a variety of businesses including Airlines,
Travel Agencies, National Tourism and
Financial Services.
Mr. Kingshott is a member of the Australian
Institute of Company Directors (MAICD).
Other appointments
None.
Does not hold any shares in Air Astana.
JA NE T HECK M A N A E N S
Non-Executive Independent Director
Appointed: January 2019
Qualifications and experience
Janet Heckman holds a Master of Science in
Foreign Service from Georgetown University
in Washington, D.C. Between 1980 and 2012
she held various positions at Citi with a
focus on corporate banking. She was the
Managing Director for Citi’s corporate and
investment banking activities in Algeria from
2008 to 2012. Ms. Heckman joined EBRD in
2012 as a Country Director for Kazakhstan.
She was a Managing Director for Southern
and Eastern Mediterranean (SEMED) for EBRD
from January 2017 to December 2019.
Other appointments
Non-executive independent director –
member of the Board of Directors of Astana
International Exchange (AIX); Non-executive
independent director – member of the
Supervisory Board of TBC Bank (Georgia)
PLC; Non-executive independent director –
member of the Board of Directors of
Citibank Kazakhstan JSC.
Does not hold any shares in Air Astana.
Y ELDA R ABDR A Z A KOV A E N
Non-Executive Independent Director
Appointed: March 2020
Qualifications and experience
Yeldar Abdrazakov holds a BA and MSc in
International Economic Relations from the
Akhmet Yassawi International Kazakh-
Turkish University, Almaty and has also
graduated the General Management
Programme at Harvard Business School,
Boston, USA.
Yeldar Abdrazakov has held senior roles
in commercial and investment banking for
over 28 years. He was Managing Director
from 1995 to 2003 at Kazkommertsbank
(KAZKOM); CEO from 2002 to 2004 at
Kazkommerts Securities; and founder and
CEO from 2004 at Centras Group. Yeldar is
a certified member of the international
Institute of Directors (IoD).
Other appointments
Chairman of the Board of Directors
of ForteBank JSC; Member of the Board
of Directors of KASE.
Does not hold any shares in Air Astana.
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CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
SENIOR M A N AGEMENT TE A M
Strong management
with proven track record
IBR A HIM C A NLIEL
Chief Financial Officer
Years in the Company: 20
Ibrahim Canliel has been with Air Astana
since its early stages in 2003 and he has
served in a range of roles across the
company. Prior to his current role of Chief
Financial Officer since 2017, he served as
Senior Vice President Commercial Group,
Vice President and Senior Vice President
Marketing and Sales, Director
Commercial Planning.
He started his career over 35 years ago
in the travel industry and has 25 years of
aviation management experience. Prior to
joining Air Astana, he worked for KLM Royal
Dutch Airlines, Northwest Airlines, Alitalia,
briefly in the UAE and thereafter based in
Kazakhstan in charge of the Central Asia
and Caucasus region. He is currently
serving his eighth term as a Board
member at EUROBAK.
Ibrahim holds a Bachelor Degree in
Economics from Marmara University,
an MBA of the Bosphorus University and
more recently completed the Director’s
Programme at Cranfield University.
PE TER FOSTER
Chief Executive Officer of Air Astana JSC
See page 83
GERH A RD COE T ZEE
Chief Safety Compliance Officer
Years in the Company: 18
Gerhard started his career as a South
African Air Force navigator completing his
service in the position of Staff Officer Flight
Safety responsible for Accident Prevention
and Aviation Safety, including CRM,
programmes. He has practised and held
formal appointments in aviation safety and
flight operations management for the past
35 years, including as managing consultant
with BAE Systems for 7 years and with Air
Astana the past 16 years.
Gerhard helped establish the Safety
Management System in Air Astana at
start-up and, since 2008, is also responsible
for the Compliance Monitoring programme
managing an extended team of dedicated
staff. Gerhard’s contribution to safety and
operational performance has been formally
acknowledged by various organisations
including the SAAF, FAA and NIMA as well
as BAE Systems.
He holds an Honours degree in transport
economics from the University of South
Africa, is a qualified Air Accident Investigator
with qualifications in Aviation Safety
Programme Management, Crew Resource
Management and Flight Procedure Design.
FILIPPOS SIA K K A S
Chief Operating Officer
Years in the Company: 9
Filippos studied Business Management &
Accounting before undergoing Ab-initio
pilot training in the US in 1988. He
has 20 years of experience in airline
management and held senior positions in
flight operations and training for Olympic
Airways, which he joined in 1989. He left
Olympic in 2013 to join Air Astana.
At Air Astana, Filippos has focused on
transforming flight crew training with
innovative solutions such as world leading
practical crew resource management,
post-command upgrade training, self-
learning in low level training devices
and standardising the pilot selection
process. More recently, he managed the
procurement of a new Airbus A320 full
flight simulator in Astana, the first of its
kind in Kazakhstan, which will increase
pilot productivity and raise operational
and training standards. Since 2020 he has
been involved in decision making and
management of key operational and
business aspects, projects and targets.
Y E VGENIYA NI
Chief Human Resources Officer
Years in the Company: 22
Yevgeniya graduated from Karaganda
State University with a degree in foreign
languages and a degree in law. She started
her career at Air Astana as an Executive
Assistant to the President in 2002, and since
2005 heads the Human Resources and
Administration Department, responsible for
overall HR function and services including
Recruitment, Training, HSE, and Facilities
Management. Under her leadership, the
Company introduced a transparent system
of recruitment and corporate training, as
well as an employee performance appraisal
and remuneration system. The Company
holds the following HR awards: ‘WOW HR’ in
2018–2019, ‘Best HR brand in Central Asia’ in
2017–2020 (Headhunter), ‘Best HR Director’
in 2018–2019 (Growth Forum Kazakhstan),
‘Best Employer’ in 2016–2020 by Universum
and ‘Best Employer in Transport and
Logistics’ in 2020–2021 (Randstad
Employer Brand Research).
Yevgeniya is a certified Senior Professional
in Human Resources – International, member
of Airline People Directors Council (APDC)
and regularly takes part in professional
conferences as an expert and speaker.
Y ERDAULE T SH A M SHIY E V
Chief Government Relations Officer
Years in the Company: 22
Yerdaulet was one of Air Astana’s
first employees and has over 20 years’
experience in aviation. He joined the airline
as Chief Representative in the Beijing office
in 2002. In 2009 he was appointed Regional
General Manager China and Mongolia of Air
Astana. He currently holds the position of
Vice President, Strategy and Development.
Prior to joining Air Astana, Yerdaulet worked
at the Almaty International Airport and Air
Kazakhstan airline. He graduated from the
Beijing Language University and Academy
of Civil Aviation, Almaty.
PIY USH TAORI
Chief Digital and Information Officer
Years in the Company: 1
Piyush has a Bachelors’ degree in
Electronics Engineering and a Master’s
degree in Software Systems from Birla
Institute of Technology & Science, Pilani
in India. He joined Air Astana group as
CIO for FlyArystan in August 2023 and was
subsequently appointed Chief Digital and
Information Officer for the Air Astana Group.
Prior to joining Air Astana, Piyush worked
in Middle East for Emirates Airlines, Qatar
Airways and Gulf Air for well over two
decades. He held different IT management
and senior management roles in these
airlines, heading IT at Gulf Air just before
joining Air Astana. Piyush has substantial
experience of leading large teams and
managing large scale in-house software
development, including large product
development. In his previous roles, he
also led large-scale digital transformation
programmes, driving core modernisation
of IT infrastructure and cloud migration.
86 87 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
Strong management
with proven track record
IBR A HIM C A NLIEL
Chief Financial Officer
Years in the Company: 20
Ibrahim Canliel has been with Air Astana
since its early stages in 2003 and he has
served in a range of roles across the
company. Prior to his current role of Chief
Financial Officer since 2017, he served as
Senior Vice President Commercial Group,
Vice President and Senior Vice President
Marketing and Sales, Director
Commercial Planning.
He started his career over 35 years ago
in the travel industry and has 25 years of
aviation management experience. Prior to
joining Air Astana, he worked for KLM Royal
Dutch Airlines, Northwest Airlines, Alitalia,
briefly in the UAE and thereafter based in
Kazakhstan in charge of the Central Asia
and Caucasus region. He is currently
serving his eighth term as a Board
member at EUROBAK.
Ibrahim holds a Bachelor Degree in
Economics from Marmara University,
an MBA of the Bosphorus University and
more recently completed the Director’s
Programme at Cranfield University.
PE TER FOSTER
Chief Executive Officer of Air Astana JSC
See page 83
GERH A RD COE T ZEE
Chief Safety Compliance Officer
Years in the Company: 18
Gerhard started his career as a South
African Air Force navigator completing his
service in the position of Staff Officer Flight
Safety responsible for Accident Prevention
and Aviation Safety, including CRM,
programmes. He has practised and held
formal appointments in aviation safety and
flight operations management for the past
35 years, including as managing consultant
with BAE Systems for 7 years and with Air
Astana the past 16 years.
Gerhard helped establish the Safety
Management System in Air Astana at
start-up and, since 2008, is also responsible
for the Compliance Monitoring programme
managing an extended team of dedicated
staff. Gerhard’s contribution to safety and
operational performance has been formally
acknowledged by various organisations
including the SAAF, FAA and NIMA as well
as BAE Systems.
He holds an Honours degree in transport
economics from the University of South
Africa, is a qualified Air Accident Investigator
with qualifications in Aviation Safety
Programme Management, Crew Resource
Management and Flight Procedure Design.
FILIPPOS SIA K K A S
Chief Operating Officer
Years in the Company: 9
Filippos studied Business Management &
Accounting before undergoing Ab-initio
pilot training in the US in 1988. He
has 20 years of experience in airline
management and held senior positions in
flight operations and training for Olympic
Airways, which he joined in 1989. He left
Olympic in 2013 to join Air Astana.
At Air Astana, Filippos has focused on
transforming flight crew training with
innovative solutions such as world leading
practical crew resource management,
post-command upgrade training, self-
learning in low level training devices
and standardising the pilot selection
process. More recently, he managed the
procurement of a new Airbus A320 full
flight simulator in Astana, the first of its
kind in Kazakhstan, which will increase
pilot productivity and raise operational
and training standards. Since 2020 he has
been involved in decision making and
management of key operational and
business aspects, projects and targets.
Y E VGENIYA NI
Chief Human Resources Officer
Years in the Company: 22
Yevgeniya graduated from Karaganda
State University with a degree in foreign
languages and a degree in law. She started
her career at Air Astana as an Executive
Assistant to the President in 2002, and since
2005 heads the Human Resources and
Administration Department, responsible for
overall HR function and services including
Recruitment, Training, HSE, and Facilities
Management. Under her leadership, the
Company introduced a transparent system
of recruitment and corporate training, as
well as an employee performance appraisal
and remuneration system. The Company
holds the following HR awards: ‘WOW HR’ in
2018–2019, ‘Best HR brand in Central Asia’ in
2017–2020 (Headhunter), ‘Best HR Director’
in 2018–2019 (Growth Forum Kazakhstan),
‘Best Employer’ in 2016–2020 by Universum
and ‘Best Employer in Transport and
Logistics’ in 2020–2021 (Randstad
Employer Brand Research).
Yevgeniya is a certified Senior Professional
in Human Resources – International, member
of Airline People Directors Council (APDC)
and regularly takes part in professional
conferences as an expert and speaker.
Y ERDAULE T SH A M SHIY E V
Chief Government Relations Officer
Years in the Company: 22
Yerdaulet was one of Air Astana’s
first employees and has over 20 years’
experience in aviation. He joined the airline
as Chief Representative in the Beijing office
in 2002. In 2009 he was appointed Regional
General Manager China and Mongolia of Air
Astana. He currently holds the position of
Vice President, Strategy and Development.
Prior to joining Air Astana, Yerdaulet worked
at the Almaty International Airport and Air
Kazakhstan airline. He graduated from the
Beijing Language University and Academy
of Civil Aviation, Almaty.
PIY USH TAORI
Chief Digital and Information Officer
Years in the Company: 1
Piyush has a Bachelors’ degree in
Electronics Engineering and a Master’s
degree in Software Systems from Birla
Institute of Technology & Science, Pilani
in India. He joined Air Astana group as
CIO for FlyArystan in August 2023 and was
subsequently appointed Chief Digital and
Information Officer for the Air Astana Group.
Prior to joining Air Astana, Piyush worked
in Middle East for Emirates Airlines, Qatar
Airways and Gulf Air for well over two
decades. He held different IT management
and senior management roles in these
airlines, heading IT at Gulf Air just before
joining Air Astana. Piyush has substantial
experience of leading large teams and
managing large scale in-house software
development, including large product
development. In his previous roles, he
also led large-scale digital transformation
programmes, driving core modernisation
of IT infrastructure and cloud migration.
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CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
SENIOR M A N AGEMENT TE A M
CONTINUED
Y ULIYA LIM
Chief Compliance and Sustainability Officer
Years in the Company: 12
Yuliya has more than 17 years’ experience,
in both external and internal auditing,
having started her career in one of the Big
4 accountancy firms, specialising in banks
(including the National Bank of the RK) and
other financial institutions. In her role as
Chief Compliance and Sustainability Officer,
Yuliya is responsible for all matters related
to compliance (anti-corruption, sanctions,
ethics), economic security, ESG and
data privacy practices within Air Astana,
ensuring its continued growth
and excellence.
Yuliya graduated from Kazakhstani
Institute of Management, Economics and
Strategic Research (KIMEP) with an BA and
MA in Economics. She is in the process of
completing an MBA in Aviation Management
at Danube University Krems (Austria).
She holds a fellowship certificate from
the Association of Chartered Certified
Accountants (FCCA) and recently completed
the Leadership Programme as a part of
executive training at Henley Business
School (UK).
In September 2023, she became the Subject
Matter Expert at KZ Compliance Association,
contributing her substantial expertise to the
vibrant compliance community in Kazakhstan
and other neighbouring countries. Apart from
this, she is a frequent speaker at various
forums and conferences.
BELL A TOR MYSHE VA
Vice President, Corporate Communications
Years in the Company: 16
Bella has a Master’s degree in International
Relations. She has over 20 years’ experience
in the field of public relations and
information and culture. She has also taken
part in numerous training courses outside
Kazakhstan. Before joining Air Astana, she
worked in the representative Office of the
European Commission accredited in the
Republic of Kazakhstan, the Kyrgyz Republic
and the Republic of Tajikistan.
Y ERBOL AT BA ISA LY KOV
Senior Vice-President Revenue
Management and Commercial Planning
Years in the Company: 19
Yerbolat originally joined Air Astana in June
2004 as a flight attendant. After graduating
from the Eurasian National University named
after L.N. Gumilyov in 2005, he began his
career with the Company as a revenue
management analyst and further qualified
with a degree in Economics from the
Karaganda Economic University in 2008.
Between 2005 and 2011, Yerbolat held
various positions in the Revenue
Management department. From 2011
to 2014, he headed up the airline’s
representative office in the Republic of
Azerbaijan. In September 2014, he was
appointed manager of the Revenue
Management department and, in January
2016, he was promoted to Director of
Revenue Management. He also holds
an MBA in Aviation from Toulouse
Business School.
ZH A N A R N A IZ ABEKOVA
General Legal Counsel, Vice President
Legal Affairs
Years in the Company: 5
Zhanar joined Air Astana in 2019 as a
Legal Director and later served as general
Legal Counsel/VP Legal Affairs of Air Astana
Group. She has 23 years of legal experience
in various areas, including oil and gas,
telecommunications and more than
12 years in transport. Her areas of
expertise include mediation and dispute
resolution in civil and corporate law,
mergers and acquisitions, transport,
anti-monopoly, commercial, bankruptcy,
labour, insurance and intellectual property
law. Zhanar holds a Bachelor’s degree and
LLM in anti-monopoly law from the Kazakh
State Law University (Kazakhstan).
Zhanar is a member of the Board of the
Kazlogistics Union, member of various
working groups on discussion and
amendments to the legislation and
regularly takes part in professional
conferences as a speaker.
DILYA R A KUNK HOZH AY E VA
Vice President Procurement and Supply
Years in the Company: 18
Dilyara graduated from KIMEP University
with a degree in finance and management
and also holds a Master’s degree in Business
Administration (KIMEP University). Before
joining the airline industry, Dilyara was
employed in KIMEP University and in Ernst
and Young, Kazakhstan. She is also a
member of the Chartered Institute of
Procurement and Supply based in the
UK (certified MCIPS).
Dilyara started her career at Air Astana in
2006 and now heads the Procurement and
Supply Department which is responsible for
entire supply chain of the Airline, including
procurement, customs and logistics and
warehouse management.
K EITH WA RDLE
Vice President Engineering & Maintenance
Years in the Company: 10
Mr. Wardle was born in 1967 and is a
citizen of the United Kingdom. Keith’s
career began in 1985 with a Royal Air
Force aircraft engineering apprenticeship.
Following a successful military career Keith
became an aircraft maintenance licensed
engineer, working for BAE Systems and
later DHL Express. Since 2001 Keith has
worked in management roles for both
passenger and cargo airlines, including
management of aircraft maintenance
operations and oversight of contracted
maintenance for aircraft and engines,
later moving into the field of engineering
support. Fully conversant with aircraft
maintenance and airworthiness regulation,
Keith has worked in senior roles for airlines
in the UK, Germany and Dubai, with
assignments spanning the globe including,
Alaska, Chile, Saudi Arabia, China and New
Zealand. Mr. Wardle holds a First Class
Honours Degree in Aerospace Engineering
and MSc in Professional Engineering gained
at Kingston University, London.
88 89 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
Y ULIYA LIM
Chief Compliance and Sustainability Officer
Years in the Company: 12
Yuliya has more than 17 years’ experience,
in both external and internal auditing,
having started her career in one of the Big
4 accountancy firms, specialising in banks
(including the National Bank of the RK) and
other financial institutions. In her role as
Chief Compliance and Sustainability Officer,
Yuliya is responsible for all matters related
to compliance (anti-corruption, sanctions,
ethics), economic security, ESG and
data privacy practices within Air Astana,
ensuring its continued growth
and excellence.
Yuliya graduated from Kazakhstani
Institute of Management, Economics and
Strategic Research (KIMEP) with an BA and
MA in Economics. She is in the process of
completing an MBA in Aviation Management
at Danube University Krems (Austria).
She holds a fellowship certificate from
the Association of Chartered Certified
Accountants (FCCA) and recently completed
the Leadership Programme as a part of
executive training at Henley Business
School (UK).
In September 2023, she became the Subject
Matter Expert at KZ Compliance Association,
contributing her substantial expertise to the
vibrant compliance community in Kazakhstan
and other neighbouring countries. Apart from
this, she is a frequent speaker at various
forums and conferences.
BELL A TOR MYSHE VA
Vice President, Corporate Communications
Years in the Company: 16
Bella has a Master’s degree in International
Relations. She has over 20 years’ experience
in the field of public relations and
information and culture. She has also taken
part in numerous training courses outside
Kazakhstan. Before joining Air Astana, she
worked in the representative Office of the
European Commission accredited in the
Republic of Kazakhstan, the Kyrgyz Republic
and the Republic of Tajikistan.
Y ERBOL AT BA ISA LY KOV
Senior Vice-President Revenue
Management and Commercial Planning
Years in the Company: 19
Yerbolat originally joined Air Astana in June
2004 as a flight attendant. After graduating
from the Eurasian National University named
after L.N. Gumilyov in 2005, he began his
career with the Company as a revenue
management analyst and further qualified
with a degree in Economics from the
Karaganda Economic University in 2008.
Between 2005 and 2011, Yerbolat held
various positions in the Revenue
Management department. From 2011
to 2014, he headed up the airline’s
representative office in the Republic of
Azerbaijan. In September 2014, he was
appointed manager of the Revenue
Management department and, in January
2016, he was promoted to Director of
Revenue Management. He also holds
an MBA in Aviation from Toulouse
Business School.
ZH A N A R N A IZ ABEKOVA
General Legal Counsel, Vice President
Legal Affairs
Years in the Company: 5
Zhanar joined Air Astana in 2019 as a
Legal Director and later served as general
Legal Counsel/VP Legal Affairs of Air Astana
Group. She has 23 years of legal experience
in various areas, including oil and gas,
telecommunications and more than
12 years in transport. Her areas of
expertise include mediation and dispute
resolution in civil and corporate law,
mergers and acquisitions, transport,
anti-monopoly, commercial, bankruptcy,
labour, insurance and intellectual property
law. Zhanar holds a Bachelor’s degree and
LLM in anti-monopoly law from the Kazakh
State Law University (Kazakhstan).
Zhanar is a member of the Board of the
Kazlogistics Union, member of various
working groups on discussion and
amendments to the legislation and
regularly takes part in professional
conferences as a speaker.
DILYA R A KUNK HOZH AY E VA
Vice President Procurement and Supply
Years in the Company: 18
Dilyara graduated from KIMEP University
with a degree in finance and management
and also holds a Master’s degree in Business
Administration (KIMEP University). Before
joining the airline industry, Dilyara was
employed in KIMEP University and in Ernst
and Young, Kazakhstan. She is also a
member of the Chartered Institute of
Procurement and Supply based in the
UK (certified MCIPS).
Dilyara started her career at Air Astana in
2006 and now heads the Procurement and
Supply Department which is responsible for
entire supply chain of the Airline, including
procurement, customs and logistics and
warehouse management.
K EITH WA RDLE
Vice President Engineering & Maintenance
Years in the Company: 10
Mr. Wardle was born in 1967 and is a
citizen of the United Kingdom. Keith’s
career began in 1985 with a Royal Air
Force aircraft engineering apprenticeship.
Following a successful military career Keith
became an aircraft maintenance licensed
engineer, working for BAE Systems and
later DHL Express. Since 2001 Keith has
worked in management roles for both
passenger and cargo airlines, including
management of aircraft maintenance
operations and oversight of contracted
maintenance for aircraft and engines,
later moving into the field of engineering
support. Fully conversant with aircraft
maintenance and airworthiness regulation,
Keith has worked in senior roles for airlines
in the UK, Germany and Dubai, with
assignments spanning the globe including,
Alaska, Chile, Saudi Arabia, China and New
Zealand. Mr. Wardle holds a First Class
Honours Degree in Aerospace Engineering
and MSc in Professional Engineering gained
at Kingston University, London.
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CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
CORPOR ATE GOVERN A NCE REPORT
Board leadership and
Company purpose
Shareholders
Submitting matters for consideration
and resolution by the General Meeting of
shareholders pursuant to the law and/or
the Company’s Charter.
Strategy
Determining the Company’s development
priorities and approval of the long-term
development strategy, as well as
monitoring implementation of the
approved strategy.
Performance
Preliminary approval of the annual financial
statements of the Company or financial
statements for other relevant periods
and endorsing the Annual Report on the
performance of the Board of Directors,
as well as approving the Annual Report
of the Company.
We believe that our focus on excellence
will be the major driver to positioning
ourselves as one of the finest airline
groups in the world. It is one of the
pillars on which we have also built our
status as a major economic and social
enabler within Kazakhstan. This is also
true for our employees for whom we
have created a positive work environment
through our corporate values and a
culture of recognition. Our business
ethos is embedded throughout with our
commitment to our HEART and CHARM
values, which that rewards and provides
equal opportunities at every level.
Leading by example, our senior
management promote our strategy, values
and beliefs across the business to ensure
that our employees are fully engaged with
and positive about the Group’s vision for
the future.
In this connection, the members of the
Board of Directors are under an obligation to
disclose information with respect to persons
with whom they are affiliated. Under the JSC
Law, transactions with related parties require
the approval of the Board or shareholders
where the relevant member, if related or
affiliated to the related counterpart to the
transaction, would be prevented from voting
in such decision-making process.
Nurlan Zhakupov and Aidar Ryskulov have
been nominated for appointment to the
Board of Directors as representatives of the
National Welfare Fund Samruk-Kazyna JSC.
Samruk-Kazyna JSC may from time to time
acquire and hold interests in businesses that
compete directly or indirectly with Air Astana
JSC or with which Air Astana JSC conducts
business. As at the date of this report, Aidar
Ryskulov is appointed as chair of the board of
directors of Qazaq Air Joint Stock Company.
The role of the Board
The principles of the Air Astana Corporate
Governance Code (the Code) form the basis
on which the Company operates a safe,
sustainable and successful business in
order to generate long-term value for its
shareholder. Responsibility for upholding
these principles, allied with a watching
brief of all risks and internal controls, lies
with the Board of Directors. Day-to-day
management of the business is delegated
to the CEO whose activity is supported by
the executive team.
The principles of the Code are embedded
in Air Astana JSC’s corporate governance
framework and this serves as an aid to
achieving the Company’s aims. Within this
framework, the Board has responsibility for,
but is not limited to:
Our purpose, values and culture
For over 20 years, Air Astana has been
key to opening up Kazakhstan to the
world and vice versa through its flight
connections with its major neighbours
in Europe. Launching FlyArystan in 2019
to promote flights across the world’s
largest landlocked country has not
only increased mobility by significantly
reducing travelling times but created
closer links between communities.
This has in turn has bolstered economic
growth by enabling new employment
opportunities through emerging
small businesses and infrastructure
development through the opening
and expansion of local airports. With a
strong position in Kazakhstan’s domestic
market and in the neighbouring Central
Asia and Caucus regions, the Group is
now looking to expand international
flights within these mega markets.
Conflicts of interest
There are no potential conflicts of interest
between the duties of any Director or senior
management and the Company in terms of
their private interests and/or other duties,
except for those set out below. Neither are
there any arrangements or understandings
with the shareholders, customers, suppliers
or others that influenced the selection of
any Director or senior management.
Each of the members of the Board of
Directors has a statutory duty to perform his
or her duties in good faith, act in the best
interests of the Company and shareholders
and maintain confidentiality of all information
on the Company’s activities, including for
three years from ceasing to be a member.
Members are also required to monitor and,
to the extent possible, eliminate potential
conflicts of interest, including with respect to
the unlawful use of the Company’s assets
and their misuse in transactions with
related parties.
Expenditure
Decisions on entering into major transactions
(25% or more of the total amount of the
book value of the assets); and on increasing
the Company’s obligations by an amount
equal to 10% or more of its own capital.
Governance
Approval and overseeing Company policies
relating to risk management and internal
control systems, as well as compliance and
sustainability.
Stakeholder engagement
Understanding and taking into account the
interests of all stakeholders: shareholders;
employees; suppliers and business partners;
government, regulators and local authorities;
passengers.
To fully understand their perceptions, we
actively seek their opinions and gauge their
responses through a number of different
channels, including employee engagement
and pulse surveys, measures of health,
safety and well-being as well as diversity
indicators. Air Astana was, for example, the
first business in Kazakhstan to introduce an
internal pension programme, which was
well received and is a factor in retaining
talent. The Board plays an important role
in monitoring the results of engagement
surveys and regular compliance reviews
as part of its remit. OUR CULTURE
Our corporate culture reflects our core values and ambitions, as well as our
commitment to all our stakeholders. Excellence lies at the centre of all we do
and, by embedding it into our culture, we build an engaged and satisfied
workforce that is fully invested in our core values.
In the event of any transactional conflict that
arises between any duties to Air Astana JSC
and his other duties, or may possibly arise,
the Company is required to procure that the
transaction be authorised in accordance
with the JSC Law and the Charter without
his involvement.
There are no family relationships between
any of the Directors and/or Senior Managers.
OUR PURPOSE OUR STR ATEGY OUR VA LUE S
Connecting Kazakhstan
and the rest of Eurasia with
true Kazakh hospitality Growth Efficiency Excellence
Air Astana’s
HEART values:
Hospitable, Efficient,
Active, Reliable,
Trustworthy
FlyArystan’s
CHARM values:
Creative, Happy, Agile,
Reliable, Modern
90 91 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
Board leadership and
Company purpose
Shareholders
Submitting matters for consideration
and resolution by the General Meeting of
shareholders pursuant to the law and/or
the Company’s Charter.
Strategy
Determining the Company’s development
priorities and approval of the long-term
development strategy, as well as
monitoring implementation of the
approved strategy.
Performance
Preliminary approval of the annual financial
statements of the Company or financial
statements for other relevant periods
and endorsing the Annual Report on the
performance of the Board of Directors,
as well as approving the Annual Report
of the Company.
We believe that our focus on excellence
will be the major driver to positioning
ourselves as one of the finest airline
groups in the world. It is one of the
pillars on which we have also built our
status as a major economic and social
enabler within Kazakhstan. This is also
true for our employees for whom we
have created a positive work environment
through our corporate values and a
culture of recognition. Our business
ethos is embedded throughout with our
commitment to our HEART and CHARM
values, which that rewards and provides
equal opportunities at every level.
Leading by example, our senior
management promote our strategy, values
and beliefs across the business to ensure
that our employees are fully engaged with
and positive about the Group’s vision for
the future.
In this connection, the members of the
Board of Directors are under an obligation to
disclose information with respect to persons
with whom they are affiliated. Under the JSC
Law, transactions with related parties require
the approval of the Board or shareholders
where the relevant member, if related or
affiliated to the related counterpart to the
transaction, would be prevented from voting
in such decision-making process.
Nurlan Zhakupov and Aidar Ryskulov have
been nominated for appointment to the
Board of Directors as representatives of the
National Welfare Fund Samruk-Kazyna JSC.
Samruk-Kazyna JSC may from time to time
acquire and hold interests in businesses that
compete directly or indirectly with Air Astana
JSC or with which Air Astana JSC conducts
business. As at the date of this report, Aidar
Ryskulov is appointed as chair of the board of
directors of Qazaq Air Joint Stock Company.
The role of the Board
The principles of the Air Astana Corporate
Governance Code (the Code) form the basis
on which the Company operates a safe,
sustainable and successful business in
order to generate long-term value for its
shareholder. Responsibility for upholding
these principles, allied with a watching
brief of all risks and internal controls, lies
with the Board of Directors. Day-to-day
management of the business is delegated
to the CEO whose activity is supported by
the executive team.
The principles of the Code are embedded
in Air Astana JSC’s corporate governance
framework and this serves as an aid to
achieving the Company’s aims. Within this
framework, the Board has responsibility for,
but is not limited to:
Our purpose, values and culture
For over 20 years, Air Astana has been
key to opening up Kazakhstan to the
world and vice versa through its flight
connections with its major neighbours
in Europe. Launching FlyArystan in 2019
to promote flights across the world’s
largest landlocked country has not
only increased mobility by significantly
reducing travelling times but created
closer links between communities.
This has in turn has bolstered economic
growth by enabling new employment
opportunities through emerging
small businesses and infrastructure
development through the opening
and expansion of local airports. With a
strong position in Kazakhstan’s domestic
market and in the neighbouring Central
Asia and Caucus regions, the Group is
now looking to expand international
flights within these mega markets.
Conflicts of interest
There are no potential conflicts of interest
between the duties of any Director or senior
management and the Company in terms of
their private interests and/or other duties,
except for those set out below. Neither are
there any arrangements or understandings
with the shareholders, customers, suppliers
or others that influenced the selection of
any Director or senior management.
Each of the members of the Board of
Directors has a statutory duty to perform his
or her duties in good faith, act in the best
interests of the Company and shareholders
and maintain confidentiality of all information
on the Company’s activities, including for
three years from ceasing to be a member.
Members are also required to monitor and,
to the extent possible, eliminate potential
conflicts of interest, including with respect to
the unlawful use of the Company’s assets
and their misuse in transactions with
related parties.
Expenditure
Decisions on entering into major transactions
(25% or more of the total amount of the
book value of the assets); and on increasing
the Company’s obligations by an amount
equal to 10% or more of its own capital.
Governance
Approval and overseeing Company policies
relating to risk management and internal
control systems, as well as compliance and
sustainability.
Stakeholder engagement
Understanding and taking into account the
interests of all stakeholders: shareholders;
employees; suppliers and business partners;
government, regulators and local authorities;
passengers.
To fully understand their perceptions, we
actively seek their opinions and gauge their
responses through a number of different
channels, including employee engagement
and pulse surveys, measures of health,
safety and well-being as well as diversity
indicators. Air Astana was, for example, the
first business in Kazakhstan to introduce an
internal pension programme, which was
well received and is a factor in retaining
talent. The Board plays an important role
in monitoring the results of engagement
surveys and regular compliance reviews
as part of its remit. OUR CULTURE
Our corporate culture reflects our core values and ambitions, as well as our
commitment to all our stakeholders. Excellence lies at the centre of all we do
and, by embedding it into our culture, we build an engaged and satisfied
workforce that is fully invested in our core values.
In the event of any transactional conflict that
arises between any duties to Air Astana JSC
and his other duties, or may possibly arise,
the Company is required to procure that the
transaction be authorised in accordance
with the JSC Law and the Charter without
his involvement.
There are no family relationships between
any of the Directors and/or Senior Managers.
OUR PURPOSE OUR STR ATEGY OUR VA LUE S
Connecting Kazakhstan
and the rest of Eurasia with
true Kazakh hospitality Growth Efficiency Excellence
Air Astana’s
HEART values:
Hospitable, Efficient,
Active, Reliable,
Trustworthy
FlyArystan’s
CHARM values:
Creative, Happy, Agile,
Reliable, Modern
90 91 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
CORPOR ATE GOVERN A NCE REPORT
CONTINUED
BAE Systems PLC is a British organisation
involved in the development, delivery and
support of advanced defence, security and
aerospace systems on land, at sea, in the
air and in space. Its subsidiary, BAE Systems
(Kazakhstan) Limited, owned 49% of
Air Astana.
To facilitate the IPO offering in early 2024,
National Welfare Fund Samruk-Kazyna JSC
and BAE Systems (Kazakhstan) Limited
decreased their shares from 51% and 49%
to 41% and 17%, respectively, with the
remaining shares available for trading on
the open market.
Dialogue with shareholders
The Company actively engages with
shareholders to engender dialogue and
feedback. The Independent Directors on
the Board are tasked with ensuring that all
stakeholder interests are taken into account
in decision-making, having ascertained any
concerns or queries independent of the
shareholders and executive team.
Constructive use of the General Meeting
of shareholders
The General Meeting of shareholders
is the highest governing body of the
Company which has the authority to make
decisions on major issues concerning the
Company’s activities. Its functions and
activities are defined by the legislation of
the Republic of Kazakhstan, the provisions
of the Charter and internal documents.
The Board of Directors cannot of its own
initiative introduce any changes to the
agenda or propose a procedure for the
conduct of an extraordinary Meeting of
shareholders convened upon request of a
Major Shareholder. However, the Board of
Directors may include additional items onto
the agenda at its own discretion, subject to
further approval of the General Meeting of
Shareholders.
A range of other materials including
annual and interim reports, and other
announcements are all available on
Air Astana’s corporate website.
How the Board considers
stakeholders’ interests
The direction, management, performance
and sustainability of the business all
contribute to the Company realising its
long-term success. The responsibility for
overseeing and setting the Company’s
strategy and objectives falls within the
remit of the Board. It also needs to
understand and take account of the
interests of its stakeholders in all
Boardroom decision-making to factor
in the potential impacts on each group.
Relations with shareholders
Delivering on our financial obligations to
our shareholders is key to fostering good
relationships with them. Major shareholder
representatives sit on the Board of Directors
and are kept up to date with the Company’s
affairs in order to make a meaningful
contribution to all strategic decision-
making. The Chair of the Board of Directors
has effective channels in place to ensure
that any shareholder concerns or issues are
properly addressed.
Share ownership
During the preparation of the Integrated
Report, the Air Astana Group floated on
three stock exchanges. Achieving this also
required the restructuring of the overall
share ownership.
As of the end of 2023, Air Astana Group
was 51% owned by the National Welfare
Fund Samruk-Kazyna JSC, which was
established to improve the competitiveness
and stability of the national economy and
to mitigate external risks to domestic
economic growth.
Employee engagement
We are the leading employer in Kazakhstan,
employing 6,499 people across all our
operations. We recognise that the success
of our business relies on the dedication and
skill of our employees.
The Air Astana Group continually engages
with employees through various initiatives,
including employee pulse surveys, regular
communications from the Chief Executive
Officer and conferences held offline and
streamed via YouTube. To measure labour
relations, the Group partners with Gallup
to conduct Employee Social Stability Index
surveys bi-annually.
In response to the results of the Air Astana
Group’s various employee engagement
initiatives and the highest rate of inflation in
Kazakhstan for 12 years, the Group increased
salaries for the majority of employees in
2022 and 2023. Employee engagement
was 4.13, 4.10 and 3.85 out of five for 2023,
2022 and 2021.
One union represents the Air Astana Group’s
cabin crew, engineers and other employees,
while two other unions represent pilots. The
Group recognises the importance of actively
engaging with the labour unions and other
representative bodies across its operations
to promote the success of the business. The
Air Astana Group executes separate standard
employment agreements with its pilots,
cabin crew members and other personnel.
The Air Astana Group believes that, by
pursuing its corporate HEART values for
Air Astana and CHARM values for FlyArystan,
it has created a positive work environment
for its employees. It promotes a culture
of recognition, with a focus on training
and development, and provides equal
opportunities to ensure that it retains its
employees and attracts new talent.
Board activities in 2023
A RE A S OF FOCUS TOPIC S DISCUSSED
Strategy • Preliminary approval of the Business Plan (Development Plan) for 2023–2027
• Approval of the ESG Strategy for 2023–2032 and the Plan of initiatives (short-, mid-, long-term) aimed at the
achievement of goals and objectives set up in the ESG Strategy of Air Astana JSC
Risk management • Approval of the Risk Map and Risk Register on a quarterly basis
• Quarterly reports on the realised risks
• Report on internal analysis of corruption risks for 2022
Operations and finance • Reports on the results of financial and operational activity of the Company
• Regular reports: cash forecast update, update on status of IPO preparation, operational safety review
• Proposals from the CEO regarding the operating leases and major transactions
• Approval of the decisions of the CEO of Air Astana JSC on opening of bank accounts
• Quarterly treasury reports on placed deposits and bank exposure
• Annual banks review
• Approval of the credit limits for the accredited banks and inclusion of banks in the list of accredited banks
• Extending the tenor of the unsecured revolving credit line
• Preliminary approval of the annual consolidated financial statements of the Company for 2023
• Matters related to determining the amount of payment to the external auditor
• Approval of amendments to policies, including the special procurement procedure of the Company and
organisations with 50% or more of voting shares (participatory interests) directly or indirectly owned by the
Company under the right of ownership or trust, the Cash Management, Bank Risk and Treasury Reporting Policy,
Data Privacy Policy and Code of Conduct
Governance and compliance • Approval of the annual report on the activities of the Board of Directors and its Committees
• Approval of the Board of Directors’ and its Committees’ activity plans and schedule of meetings
• Reports on Hotline messages and internal investigations.
• Report on compliance matters for 2023
• Reports on the activities of the Internal Audit Service
• Matters related to the Internal Audit Service: internal documents regulating their activity, performance appraisal,
changes in the staff and remuneration
• Preliminarily approval of the amended Regulations of the Audit Committee of the Board of Directors
• Report on the external evaluation of the effectiveness of the Board of Directors
• Matters related to the terms of the payment of IPO Bonus to the CEO of Air Astana JSC
People • Considering the Nomination and Remuneration Committee’s recommendations with regards to salary changes,
determination of the terms of payment and amount of payment of the bonuses to the employees of the Company
whose remuneration shall be determined by the Board of Directors (the CEO, the Head and employees of the
Internal Audit Service, Chief Accountant and Corporate Secretary of the Company).
Matters related to
subsidiaries (FlyArystan JSC)
• Agreeing with the proposal of the CEO of Air Astana JSC regarding acquiring a separate AOC for the low-cost
airline of the Company (FlyArystan)
• Changing the corporate name of Aviation Company ‘Air Kazakhstan’ JSC to FlyArystan Joint-Stock Company
• Approval of the Charter of FlyArystan JSC
• Election of the CEO of FlyArystan JSC
• Board of Directors of FlyArystan JSC: determining the number of members and the terms of office, electing
members of the Board of Directors
• Placement of the shares of FlyArystan JSC
• Operating leases and major transactions
92 93 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
BAE Systems PLC is a British organisation
involved in the development, delivery and
support of advanced defence, security and
aerospace systems on land, at sea, in the
air and in space. Its subsidiary, BAE Systems
(Kazakhstan) Limited, owned 49% of
Air Astana.
To facilitate the IPO offering in early 2024,
National Welfare Fund Samruk-Kazyna JSC
and BAE Systems (Kazakhstan) Limited
decreased their shares from 51% and 49%
to 41% and 17%, respectively, with the
remaining shares available for trading on
the open market.
Dialogue with shareholders
The Company actively engages with
shareholders to engender dialogue and
feedback. The Independent Directors on
the Board are tasked with ensuring that all
stakeholder interests are taken into account
in decision-making, having ascertained any
concerns or queries independent of the
shareholders and executive team.
Constructive use of the General Meeting
of shareholders
The General Meeting of shareholders
is the highest governing body of the
Company which has the authority to make
decisions on major issues concerning the
Company’s activities. Its functions and
activities are defined by the legislation of
the Republic of Kazakhstan, the provisions
of the Charter and internal documents.
The Board of Directors cannot of its own
initiative introduce any changes to the
agenda or propose a procedure for the
conduct of an extraordinary Meeting of
shareholders convened upon request of a
Major Shareholder. However, the Board of
Directors may include additional items onto
the agenda at its own discretion, subject to
further approval of the General Meeting of
Shareholders.
A range of other materials including
annual and interim reports, and other
announcements are all available on
Air Astana’s corporate website.
How the Board considers
stakeholders’ interests
The direction, management, performance
and sustainability of the business all
contribute to the Company realising its
long-term success. The responsibility for
overseeing and setting the Company’s
strategy and objectives falls within the
remit of the Board. It also needs to
understand and take account of the
interests of its stakeholders in all
Boardroom decision-making to factor
in the potential impacts on each group.
Relations with shareholders
Delivering on our financial obligations to
our shareholders is key to fostering good
relationships with them. Major shareholder
representatives sit on the Board of Directors
and are kept up to date with the Company’s
affairs in order to make a meaningful
contribution to all strategic decision-
making. The Chair of the Board of Directors
has effective channels in place to ensure
that any shareholder concerns or issues are
properly addressed.
Share ownership
During the preparation of the Integrated
Report, the Air Astana Group floated on
three stock exchanges. Achieving this also
required the restructuring of the overall
share ownership.
As of the end of 2023, Air Astana Group
was 51% owned by the National Welfare
Fund Samruk-Kazyna JSC, which was
established to improve the competitiveness
and stability of the national economy and
to mitigate external risks to domestic
economic growth.
Employee engagement
We are the leading employer in Kazakhstan,
employing 6,499 people across all our
operations. We recognise that the success
of our business relies on the dedication and
skill of our employees.
The Air Astana Group continually engages
with employees through various initiatives,
including employee pulse surveys, regular
communications from the Chief Executive
Officer and conferences held offline and
streamed via YouTube. To measure labour
relations, the Group partners with Gallup
to conduct Employee Social Stability Index
surveys bi-annually.
In response to the results of the Air Astana
Group’s various employee engagement
initiatives and the highest rate of inflation in
Kazakhstan for 12 years, the Group increased
salaries for the majority of employees in
2022 and 2023. Employee engagement
was 4.13, 4.10 and 3.85 out of five for 2023,
2022 and 2021.
One union represents the Air Astana Group’s
cabin crew, engineers and other employees,
while two other unions represent pilots. The
Group recognises the importance of actively
engaging with the labour unions and other
representative bodies across its operations
to promote the success of the business. The
Air Astana Group executes separate standard
employment agreements with its pilots,
cabin crew members and other personnel.
The Air Astana Group believes that, by
pursuing its corporate HEART values for
Air Astana and CHARM values for FlyArystan,
it has created a positive work environment
for its employees. It promotes a culture
of recognition, with a focus on training
and development, and provides equal
opportunities to ensure that it retains its
employees and attracts new talent.
Board activities in 2023
A RE A S OF FOCUS TOPIC S DISCUSSED
Strategy • Preliminary approval of the Business Plan (Development Plan) for 2023–2027
• Approval of the ESG Strategy for 2023–2032 and the Plan of initiatives (short-, mid-, long-term) aimed at the
achievement of goals and objectives set up in the ESG Strategy of Air Astana JSC
Risk management • Approval of the Risk Map and Risk Register on a quarterly basis
• Quarterly reports on the realised risks
• Report on internal analysis of corruption risks for 2022
Operations and finance • Reports on the results of financial and operational activity of the Company
• Regular reports: cash forecast update, update on status of IPO preparation, operational safety review
• Proposals from the CEO regarding the operating leases and major transactions
• Approval of the decisions of the CEO of Air Astana JSC on opening of bank accounts
• Quarterly treasury reports on placed deposits and bank exposure
• Annual banks review
• Approval of the credit limits for the accredited banks and inclusion of banks in the list of accredited banks
• Extending the tenor of the unsecured revolving credit line
• Preliminary approval of the annual consolidated financial statements of the Company for 2023
• Matters related to determining the amount of payment to the external auditor
• Approval of amendments to policies, including the special procurement procedure of the Company and
organisations with 50% or more of voting shares (participatory interests) directly or indirectly owned by the
Company under the right of ownership or trust, the Cash Management, Bank Risk and Treasury Reporting Policy,
Data Privacy Policy and Code of Conduct
Governance and compliance • Approval of the annual report on the activities of the Board of Directors and its Committees
• Approval of the Board of Directors’ and its Committees’ activity plans and schedule of meetings
• Reports on Hotline messages and internal investigations.
• Report on compliance matters for 2023
• Reports on the activities of the Internal Audit Service
• Matters related to the Internal Audit Service: internal documents regulating their activity, performance appraisal,
changes in the staff and remuneration
• Preliminarily approval of the amended Regulations of the Audit Committee of the Board of Directors
• Report on the external evaluation of the effectiveness of the Board of Directors
• Matters related to the terms of the payment of IPO Bonus to the CEO of Air Astana JSC
People • Considering the Nomination and Remuneration Committee’s recommendations with regards to salary changes,
determination of the terms of payment and amount of payment of the bonuses to the employees of the Company
whose remuneration shall be determined by the Board of Directors (the CEO, the Head and employees of the
Internal Audit Service, Chief Accountant and Corporate Secretary of the Company).
Matters related to
subsidiaries (FlyArystan JSC)
• Agreeing with the proposal of the CEO of Air Astana JSC regarding acquiring a separate AOC for the low-cost
airline of the Company (FlyArystan)
• Changing the corporate name of Aviation Company ‘Air Kazakhstan’ JSC to FlyArystan Joint-Stock Company
• Approval of the Charter of FlyArystan JSC
• Election of the CEO of FlyArystan JSC
• Board of Directors of FlyArystan JSC: determining the number of members and the terms of office, electing
members of the Board of Directors
• Placement of the shares of FlyArystan JSC
• Operating leases and major transactions
92 93 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
CORPOR ATE GOVERN A NCE REPORT
CONTINUED
Division of
responsibilities
Air Astana JSC is committed to maintaining high standards of
corporate governance.
The aims of the Company’s corporate governance framework are to:
Manage with due responsibility, accountability and effectiveness
in order to maximise Company and shareholder value
Provide transparency and due disclosure of information
Ensure the effectiveness of risk management and its internal
control system.
BOA RD ROLE S A ND RE SPONSIBILITIE S SUPPORTING ROLE S
Role of the Chairman
Nurlan Zhakupov
The Chairman, who is a Non-Executive Director, is responsible
for both the leadership of and the effectiveness of all the
functions of the Board. In this role, he is supported by the
Independent Directors. The Chairman oversees the work of the
Board of Directors, ensures the Board’s effective performance
across its areas of responsibility and that all Directors make an
active contribution to the Board’s activities, including interaction
with the Air Astana’s CEO.
Role of other Non-Executive Directors
Myles Westcott, Simon Wood, Aidar Ryskulov
Any shareholder of the Company can nominate Non-Executive
Directors to be elected by the General Meeting of shareholders,
subject to compliance with the Company’s Charter. These bring
diverse financial and operational experience and expertise to
the Board and its Committees as well as adding an external
perspective and objectivity to the Board’s decision-making.
In addition to their involvement with development, approval
and review of Company strategy, our Non-Executive Directors
are able to provide constructive appraisals of the performance
of the executive team.
Role of the Corporate Secretary
The Corporate Secretary plays a major role in
enabling open dialogue across the business, while
also ensuring that all the Company’s different
governing bodies uphold both legislative and
Company requirements. The Corporate Secretary’s
role is also to safeguard the rights of all shareholders
and ensure that shareholder communications are
considered by the relevant body and resolve any
disputes involving shareholders’ rights. Board
approval is required for the appointment and
removal of the Corporate Secretary.
Role of the Internal Audit Service
The Internal Audit Service provides risk-based and
objective assurance, advice and insight in order to
protect and enhance the value of the Company.
Role of Compliance and Sustainability
The mission of the Compliance and Sustainability
Department is to assist the Company in achieving its
strategic goals in accordance with the requirements of
legislative, ethical and social norms (compliance) and
without damage to its sustainability from a long-term
perspective, taking into consideration stakeholders’
expectations (sustainability).
Role of Non-Executive Independent Directors
Yeldar Abdrazakov, Keith Gaebel, Janet Heckman,
Garry Kingshott
The Board is balanced by the selection of Independent Directors,
who complement the composition of the Board through their
skills, experience, age and diversity.
Role of the CEO
Peter Foster
The Chief Executive Officer sits on the Board of Directors, has
responsibility for the day-to-day activity of the Company and has a
legal mandate to make decisions on any matters relating to the
activity of the Company that are not, under the JSC Law, other
legislative acts of Kazakhstan or the Charter, within the
competence of other bodies or officers of the Company.
The nine members of the Board of Directors – four Non-Executive Directors, four Independent Directors and one representative
from the Senior Management Team – uphold Air Astana’s corporate governance principles and, in doing so, ensure that the
Company generates long-term shareholder value through its safe, sustainable and successful operations.
Board of
Directors
Corporate
Secretary
Internal
Audit Service
(IAS)
Compliance
and
Sustainability
Board Committees
Strategic
Planning
See p. 97
ESG
See p. 98
Treasury
See p. 99
Audit
See p. 100
Nomination and
Remuneration
See p. 102
Senior Management Team
Chief Executive Officer
95 Air Astana Integrated Report 2023 94 Air Astana Integrated Report 2023
Division of
responsibilities
Air Astana JSC is committed to maintaining high standards of
corporate governance.
The aims of the Company’s corporate governance framework are to:
Manage with due responsibility, accountability and effectiveness
in order to maximise Company and shareholder value
Provide transparency and due disclosure of information
Ensure the effectiveness of risk management and its internal
control system.
BOA RD ROLE S A ND RE SPONSIBILITIE S SUPPORTING ROLE S
Role of the Chairman
Nurlan Zhakupov
The Chairman, who is a Non-Executive Director, is responsible
for both the leadership of and the effectiveness of all the
functions of the Board. In this role, he is supported by the
Independent Directors. The Chairman oversees the work of the
Board of Directors, ensures the Board’s effective performance
across its areas of responsibility and that all Directors make an
active contribution to the Board’s activities, including interaction
with the Air Astana’s CEO.
Role of other Non-Executive Directors
Myles Westcott, Simon Wood, Aidar Ryskulov
Any shareholder of the Company can nominate Non-Executive
Directors to be elected by the General Meeting of shareholders,
subject to compliance with the Company’s Charter. These bring
diverse financial and operational experience and expertise to
the Board and its Committees as well as adding an external
perspective and objectivity to the Board’s decision-making.
In addition to their involvement with development, approval
and review of Company strategy, our Non-Executive Directors
are able to provide constructive appraisals of the performance
of the executive team.
Role of the Corporate Secretary
The Corporate Secretary plays a major role in
enabling open dialogue across the business, while
also ensuring that all the Company’s different
governing bodies uphold both legislative and
Company requirements. The Corporate Secretary’s
role is also to safeguard the rights of all shareholders
and ensure that shareholder communications are
considered by the relevant body and resolve any
disputes involving shareholders’ rights. Board
approval is required for the appointment and
removal of the Corporate Secretary.
Role of the Internal Audit Service
The Internal Audit Service provides risk-based and
objective assurance, advice and insight in order to
protect and enhance the value of the Company.
Role of Compliance and Sustainability
The mission of the Compliance and Sustainability
Department is to assist the Company in achieving its
strategic goals in accordance with the requirements of
legislative, ethical and social norms (compliance) and
without damage to its sustainability from a long-term
perspective, taking into consideration stakeholders’
expectations (sustainability).
Role of Non-Executive Independent Directors
Yeldar Abdrazakov, Keith Gaebel, Janet Heckman,
Garry Kingshott
The Board is balanced by the selection of Independent Directors,
who complement the composition of the Board through their
skills, experience, age and diversity.
Role of the CEO
Peter Foster
The Chief Executive Officer sits on the Board of Directors, has
responsibility for the day-to-day activity of the Company and has a
legal mandate to make decisions on any matters relating to the
activity of the Company that are not, under the JSC Law, other
legislative acts of Kazakhstan or the Charter, within the
competence of other bodies or officers of the Company.
The nine members of the Board of Directors – four Non-Executive Directors, four Independent Directors and one representative
from the Senior Management Team – uphold Air Astana’s corporate governance principles and, in doing so, ensure that the
Company generates long-term shareholder value through its safe, sustainable and successful operations.
Board of
Directors
Corporate
Secretary
Internal
Audit Service
(IAS)
Compliance
and
Sustainability
Board Committees
Strategic
Planning
See p. 97
ESG
See p. 98
Treasury
See p. 99
Audit
See p. 100
Nomination and
Remuneration
See p. 102
Senior Management Team
Chief Executive Officer
95 Air Astana Integrated Report 2023 94 Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
CORPOR ATE GOVERN A NCE REPORT
CONTINUED
Composition, succession
and evaluation
Strategic Planning
Committee
The process for Board nominations is led by the Nomination and Remuneration Committee, which
also ensures that the Company has succession plans in place for both Board and senior management.
Board composition and
independence
The Board is elected by cumulative voting
at the General Meeting of shareholders
unless one candidate is proposed to be
elected to fill one vacancy.
Mr. Nurlan Zhakupov, Chairman of the
Board since December 2023, is nominated
by National Welfare Fund Samruk-Kazyna
JSC. To mitigate any concerns about
independence, we have four Independent
Directors on the Board.
A number of changes were made to
the composition of the Board and its
Committees during the year. In making
these changes, the Nomination and
Remuneration Committee and Board took
into account various considerations including
Board diversity, independence and the
combination of skills, knowledge and
experience of the Directors. More details on
the Board changes can be found on page 84.
We believe that the composition of the Board
has continued to improve and, in line with the
Company’s corporate governance framework,
is well balanced and most advantageous in
terms of the competencies, diversity and
age of Board members, as well as the
representation of shareholders’ interests.
The Board is satisfied that each member
of its Directors is able to allocate sufficient
time and discharge his or her duties
effectively as part of Air Astana’s Board.
Board evaluation
According to the Code, the activities of the
Board of Directors are subject to an external
independent evaluation every three years.
External evaluation of Board performance
was performed in the beginning of 2023
by Nestor Advisors Ltd, a London-based
specialist corporate governance advisory
firm. The evaluation was conducted via a
questionnaire-based survey and interviews
with Board members, the Corporate
Secretary and several senior executives.
In their feedback, the independent
consultants noted the Board’s close
involvement in the oversight of key areas
of the Company’s operations, internal control
and risk management practices and the
audit process, as well as the Board’s
well-established procedures and good
support from the Corporate Secretarial
function. It also reported that the
composition of the Board, through its
highly skilled members, had a healthy
mix of international and local expertise
with the Independent Directors actively
contributing to decision-making.
In subsequent years 2024–2025, the Board
will undertake a self-assessment that
will also assist in monitoring of the
implementation of the recommendations
and any improvements.
Board induction and training
In accordance with the approved Induction
Programme, within the first six months of
their appointment, newly appointed Directors
undergo an onboarding programme. This has
been developed in order to bring them up to
speed quickly about Air Astana JSC and its key
assets, representatives of its management
bodies, existing practices and standards
of corporate governance, specific features
of the Company and the industry, and other
information necessary to perform their duties
as members of the Board of Directors. Aidar
Ryskulov and Saltanat Satzhan underwent
the induction process, which included
familiarisation with corporate policies and
procedures. A dedicated induction session
was arranged at Air Astana’s offices,
where they got a chance to meet with key
management who gave an overview of the
Company’s business and plans.
Information and support
The Chairman of the Board is responsible
for ensuring the timely receipt by the
Directors of accurate, clear and relevant
information needed to enable them to
perform their duties.
Main activities during 2023
During 2023, one of the Committee’s major focuses was on the
process of preparation of the Company to IPO. At each meeting, the
Committee received an update on the status of IPO preparation and
made recommendations to the Board on various related matters.
With the decision to start the process of obtaining AOC for
FlyArystan, the Committee’s responsibility has been extended
to matters related to the Company’s subsidiary, including
recommendations to the Board on issues related to corporate
governance and the business operations of FlyArystan.
The Committee has also been engaged in regular reviews of the
Company’s performance against the budget and cash forecast
reports. It also made recommendations about the procedure for
the distribution of the net income and payment of shareholder
dividends for 2022. Looking to the future, the Committee
recommended preliminary approval of the Annual Budget for 2024
and the Business Plan (Development Plan) for 2024–2028.
The Senior Management Team and IAS are
obliged to provide such information and the
Directors may request further clarifications
and explanations as necessary. The Board
of Directors and its Committees are entitled
to use the services of external experts,
consultants and additional resources to
enable them to carry out their duties in full.
Financial provision for this is made in the
Company’s budget each year.
All Directors have access to the advice and
services of the Corporate Secretary, who
is responsible to the Board on matters of
corporate governance and compliance with
Board procedures. The Corporate Secretary
manages the information flow within the
Board of Directors and its Committees, and
also between the Senior Management Team
and the Board of Directors.
The Corporate Secretary has a key role in
the preparation and oversight of Board of
Directors’ meetings and the General Meeting
of shareholders, ensuring that the disclosure
and dissemination of information comply
with the rights and interests of shareholders.
Re-election
The tеrm of office for each member of
the Воаrd of Dirесtоrs is dеtеrminеd bу the
Gеnеrаl Shагеhоldеrs’ Meeting, but should
not be for less than for 2 уеаrs. Once elected,
there is no limit to the number of times that
members may be re-elected to the Воаrd of
Dirесtогs. The effectiveness and commitment
of each Board member are also reviewed in
order to ensure that the interests of the
shareholders are fairly and objectively
represented. Taking account of the other
offices and interests held by the current
Independent Directors, the Board is satisfied
with the individual skills, relevant experience,
contributions and time commitment of each.
Following the IPO in 2024, Board members
were re-appointed for the term of two years.
Priorities for 2024
The Strategic Planning Committee will continue to fulfil its general
responsibilities with a focus on monitoring new projects and carrying
out its activities in accordance with the approved plan of work,
which includes:
Reviewing the Company’s performance against budget, business
plan and ten-year strategy
Reviewing updates on the Company’s cash position
Reviewing the latest results from FlyArystan
Considering the Annual Budget and Business Plan for the next
5-year cycle.
G A RRY
K INGSHOT T
Chair
ROLE A ND RE SPONSIBILITIE S
The Strategic Planning Committee assists with the
effective performance of the Board of Directors and makes
recommendations to the Board on issues related to
strategic development.
The Strategic Planning Committee is responsible for:
Air Astana’s priority areas of business activity and development
Recommending potential amendments to the Company’s
long-term development strategy
Reviewing the Company’s performance against budget,
business plan and ten-year strategy
Corporate governance issues
Air Astana’s strategy in view of changes in the economic,
political, social and competitive environment
Suggested improvements to the Company’s long-term
performance and competitiveness in the aviation
transportation market.
COMPOSITION A ND AT TENDA NCE
Member Position
Meetings attended
(total 9)
Garry Kingshott Committee Chair
Myles Westcott Non-Executive
Director
Janet Heckman Non-Executive
Independent Director
Saltanat Satzhan 1 Non-Executive
Director
Yernar Zhanadil 2 Non-Executive
Director
1 Member of the Board of Directors from 5 September 2023 to 11 December 2023.
2 Member of the Board of Directors until 5 September 2023.
97 Air Astana Integrated Report 2023 96 Air Astana Integrated Report 2023
Composition, succession
and evaluation
Strategic Planning
Committee
The process for Board nominations is led by the Nomination and Remuneration Committee, which
also ensures that the Company has succession plans in place for both Board and senior management.
Board composition and
independence
The Board is elected by cumulative voting
at the General Meeting of shareholders
unless one candidate is proposed to be
elected to fill one vacancy.
Mr. Nurlan Zhakupov, Chairman of the
Board since December 2023, is nominated
by National Welfare Fund Samruk-Kazyna
JSC. To mitigate any concerns about
independence, we have four Independent
Directors on the Board.
A number of changes were made to
the composition of the Board and its
Committees during the year. In making
these changes, the Nomination and
Remuneration Committee and Board took
into account various considerations including
Board diversity, independence and the
combination of skills, knowledge and
experience of the Directors. More details on
the Board changes can be found on page 84.
We believe that the composition of the Board
has continued to improve and, in line with the
Company’s corporate governance framework,
is well balanced and most advantageous in
terms of the competencies, diversity and
age of Board members, as well as the
representation of shareholders’ interests.
The Board is satisfied that each member
of its Directors is able to allocate sufficient
time and discharge his or her duties
effectively as part of Air Astana’s Board.
Board evaluation
According to the Code, the activities of the
Board of Directors are subject to an external
independent evaluation every three years.
External evaluation of Board performance
was performed in the beginning of 2023
by Nestor Advisors Ltd, a London-based
specialist corporate governance advisory
firm. The evaluation was conducted via a
questionnaire-based survey and interviews
with Board members, the Corporate
Secretary and several senior executives.
In their feedback, the independent
consultants noted the Board’s close
involvement in the oversight of key areas
of the Company’s operations, internal control
and risk management practices and the
audit process, as well as the Board’s
well-established procedures and good
support from the Corporate Secretarial
function. It also reported that the
composition of the Board, through its
highly skilled members, had a healthy
mix of international and local expertise
with the Independent Directors actively
contributing to decision-making.
In subsequent years 2024–2025, the Board
will undertake a self-assessment that
will also assist in monitoring of the
implementation of the recommendations
and any improvements.
Board induction and training
In accordance with the approved Induction
Programme, within the first six months of
their appointment, newly appointed Directors
undergo an onboarding programme. This has
been developed in order to bring them up to
speed quickly about Air Astana JSC and its key
assets, representatives of its management
bodies, existing practices and standards
of corporate governance, specific features
of the Company and the industry, and other
information necessary to perform their duties
as members of the Board of Directors. Aidar
Ryskulov and Saltanat Satzhan underwent
the induction process, which included
familiarisation with corporate policies and
procedures. A dedicated induction session
was arranged at Air Astana’s offices,
where they got a chance to meet with key
management who gave an overview of the
Company’s business and plans.
Information and support
The Chairman of the Board is responsible
for ensuring the timely receipt by the
Directors of accurate, clear and relevant
information needed to enable them to
perform their duties.
Main activities during 2023
During 2023, one of the Committee’s major focuses was on the
process of preparation of the Company to IPO. At each meeting, the
Committee received an update on the status of IPO preparation and
made recommendations to the Board on various related matters.
With the decision to start the process of obtaining AOC for
FlyArystan, the Committee’s responsibility has been extended
to matters related to the Company’s subsidiary, including
recommendations to the Board on issues related to corporate
governance and the business operations of FlyArystan.
The Committee has also been engaged in regular reviews of the
Company’s performance against the budget and cash forecast
reports. It also made recommendations about the procedure for
the distribution of the net income and payment of shareholder
dividends for 2022. Looking to the future, the Committee
recommended preliminary approval of the Annual Budget for 2024
and the Business Plan (Development Plan) for 2024–2028.
The Senior Management Team and IAS are
obliged to provide such information and the
Directors may request further clarifications
and explanations as necessary. The Board
of Directors and its Committees are entitled
to use the services of external experts,
consultants and additional resources to
enable them to carry out their duties in full.
Financial provision for this is made in the
Company’s budget each year.
All Directors have access to the advice and
services of the Corporate Secretary, who
is responsible to the Board on matters of
corporate governance and compliance with
Board procedures. The Corporate Secretary
manages the information flow within the
Board of Directors and its Committees, and
also between the Senior Management Team
and the Board of Directors.
The Corporate Secretary has a key role in
the preparation and oversight of Board of
Directors’ meetings and the General Meeting
of shareholders, ensuring that the disclosure
and dissemination of information comply
with the rights and interests of shareholders.
Re-election
The tеrm of office for each member of
the Воаrd of Dirесtоrs is dеtеrminеd bу the
Gеnеrаl Shагеhоldеrs’ Meeting, but should
not be for less than for 2 уеаrs. Once elected,
there is no limit to the number of times that
members may be re-elected to the Воаrd of
Dirесtогs. The effectiveness and commitment
of each Board member are also reviewed in
order to ensure that the interests of the
shareholders are fairly and objectively
represented. Taking account of the other
offices and interests held by the current
Independent Directors, the Board is satisfied
with the individual skills, relevant experience,
contributions and time commitment of each.
Following the IPO in 2024, Board members
were re-appointed for the term of two years.
Priorities for 2024
The Strategic Planning Committee will continue to fulfil its general
responsibilities with a focus on monitoring new projects and carrying
out its activities in accordance with the approved plan of work,
which includes:
Reviewing the Company’s performance against budget, business
plan and ten-year strategy
Reviewing updates on the Company’s cash position
Reviewing the latest results from FlyArystan
Considering the Annual Budget and Business Plan for the next
5-year cycle.
G A RRY
K INGSHOT T
Chair
ROLE A ND RE SPONSIBILITIE S
The Strategic Planning Committee assists with the
effective performance of the Board of Directors and makes
recommendations to the Board on issues related to
strategic development.
The Strategic Planning Committee is responsible for:
Air Astana’s priority areas of business activity and development
Recommending potential amendments to the Company’s
long-term development strategy
Reviewing the Company’s performance against budget,
business plan and ten-year strategy
Corporate governance issues
Air Astana’s strategy in view of changes in the economic,
political, social and competitive environment
Suggested improvements to the Company’s long-term
performance and competitiveness in the aviation
transportation market.
COMPOSITION A ND AT TENDA NCE
Member Position
Meetings attended
(total 9)
Garry Kingshott Committee Chair
Myles Westcott Non-Executive
Director
Janet Heckman Non-Executive
Independent Director
Saltanat Satzhan 1 Non-Executive
Director
Yernar Zhanadil 2 Non-Executive
Director
1 Member of the Board of Directors from 5 September 2023 to 11 December 2023.
2 Member of the Board of Directors until 5 September 2023.
97 Air Astana Integrated Report 2023 96 Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
CORPOR ATE GOVERN A NCE REPORT
CONTINUED
ESG Committee Treasury Committee
Main activities during 2023
The year started with reviewing and recommending approval of the
ESG Strategy of the Company for 2023–2032 to the Board of Directors.
This had been amended towards the end of the previous year to
reflect changes related to an update of the SWOT analysis of the
Company’s ESG system, expansion of the Company’s activities in
relation to UN SDG 13 Climate Action and to add the roles of the
management and the Board of Directors with regard to ESG. The
Committee also reviewed and recommended to the Board approval
of the initiatives (short-, mid-, long-term) aimed at achieving the
goals and objectives set for the management and Board in the ESG
Strategy in order to provide a systematic approach to managing ESG
activities, which had been updated.
The Committee also considered the information on the status of the
limited assurance of non-financial indicators of the Sustainability
section in the Company’s Integrated Annual Report 2022.
In alignment with the Task Force on Climate-related Financial
Disclosures (TCFD) recommendations, Air Astana has initiated a
comprehensive Climate-Related Risks and Opportunities Project to
identify, assess, disclose and manage the impact of climate change on
Air Astana’s operations and financial performance.
Main activities during 2023
In 2023, the Treasury Committee continued to monitor activities in
regular reports received from the CFO, which set out details of cash
position, deposits, loans and finance leases, and available credit
lines. On a quarterly basis, the Committee received reports on the
Company’s placed deposits and exposure to counterparty banks
to ensure compliance with the internal policies, and continued
monitoring liquidity levels through regular cash forecast updates
throughout the year. During the year, the Committee additionally
recommended Board approval of several items related to the
existing credit lines, amending the Cash Management, Bank Risk &
Treasury Reporting Policy, increase in the number of accredited
banks, as well as approval of the credit limits for the new
accredited banks and opening new bank accounts.
The Committee reviewed the report on the implementation progress
of this project and welcomed all members of the Board of Directors
to join them.
The Committee has also reviewed information about the
ESG Communications Strategy, developed by the Corporate
Communication Department, and the ESG materials published
through various communication channels.
Priorities for 2024
Focus on implementation of ESG initiatives within the framework
of the Company’s ESG Strategy for 2023–2032, Climate-Related Risks
and Opportunities Project and study on potential of production and
consumption of SAF.
During 2024, we also plan to update the Low-Carbon Development
Programme to align with our commitment to achieving net zero
by 2050.
Priorities for 2024
Over the next year, the Committee will continue to fulfil its general
responsibilities with a focus on monitoring compliance with internal
policies and carrying out its activities in accordance with the approved
plan of work, which includes monthly and quarterly treasury reports,
review of counterparty banks, accredited banks credit limits and other
bank and treasury risks.
Y ELDA R
A BDR A Z A KOV
Chair
K EITH G A EBEL
Chair
ROLE A ND RE SPONSIBILITIE S
The ESG Committee develops recommendations to the Board on
building an effective ESG system in the Company.
The ESG Committee is responsible for:
Oversight of the Company’s ESG-related goals, metrics
and initiatives
Monitoring the Company’s progress towards achieving
its ESG objectives
Review and recommendations with respect to approval
of ESG-related policies
Review and approval of ESG-related disclosures in the
Company’s Annual Report.
ROLE A ND RE SPONSIBILITIE S
The Treasury Committee assists the Board of Directors
in monitoring and improving the effectiveness of risk
management of the Company’s treasury functions.
The Treasury Committee is responsible for:
Verifying control mechanisms for the Company’s treasury
activities and ensuring the effectiveness and improvement
of policies and procedures in the treasury function
Monitoring treasury activities and notifying the Board of
Directors of risks and opportunities associated with them.
COMPOSITION A ND AT TENDA NCE
Member Position
Meetings attended
(total 4)
Yeldar Abdrazakov Committee Chair
Aidar Ryskulov 1 Non-Executive
Director
Simon Wood Non-Executive
Director
Janet Heckman Non-Executive
Independent Director
Nurzhan
Baidauletov 2
Non-Executive
Director
1 Member of the Board of Directors since 12 September 2023.
2 Chairman of the Board of Directors until 12 September 2023.
COMPOSITION A ND AT TENDA NCE
Member Position
Meetings attended
(total 4)
Keith Gaebel Committee Chair
Simon Wood Non-Executive
Director
Saltanat Satzhan 1 Non-Executive
Director
Yernar Zhanadil 2 Non-Executive
Director
1 Member of the Board of Directors from 5 September 2023 to 11 December 2023.
2 Member of the Board of Directors until 5 September 2023.
98 99 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
ESG Committee Treasury Committee
Main activities during 2023
The year started with reviewing and recommending approval of the
ESG Strategy of the Company for 2023–2032 to the Board of Directors.
This had been amended towards the end of the previous year to
reflect changes related to an update of the SWOT analysis of the
Company’s ESG system, expansion of the Company’s activities in
relation to UN SDG 13 Climate Action and to add the roles of the
management and the Board of Directors with regard to ESG. The
Committee also reviewed and recommended to the Board approval
of the initiatives (short-, mid-, long-term) aimed at achieving the
goals and objectives set for the management and Board in the ESG
Strategy in order to provide a systematic approach to managing ESG
activities, which had been updated.
The Committee also considered the information on the status of the
limited assurance of non-financial indicators of the Sustainability
section in the Company’s Integrated Annual Report 2022.
In alignment with the Task Force on Climate-related Financial
Disclosures (TCFD) recommendations, Air Astana has initiated a
comprehensive Climate-Related Risks and Opportunities Project to
identify, assess, disclose and manage the impact of climate change on
Air Astana’s operations and financial performance.
Main activities during 2023
In 2023, the Treasury Committee continued to monitor activities in
regular reports received from the CFO, which set out details of cash
position, deposits, loans and finance leases, and available credit
lines. On a quarterly basis, the Committee received reports on the
Company’s placed deposits and exposure to counterparty banks
to ensure compliance with the internal policies, and continued
monitoring liquidity levels through regular cash forecast updates
throughout the year. During the year, the Committee additionally
recommended Board approval of several items related to the
existing credit lines, amending the Cash Management, Bank Risk &
Treasury Reporting Policy, increase in the number of accredited
banks, as well as approval of the credit limits for the new
accredited banks and opening new bank accounts.
The Committee reviewed the report on the implementation progress
of this project and welcomed all members of the Board of Directors
to join them.
The Committee has also reviewed information about the
ESG Communications Strategy, developed by the Corporate
Communication Department, and the ESG materials published
through various communication channels.
Priorities for 2024
Focus on implementation of ESG initiatives within the framework
of the Company’s ESG Strategy for 2023–2032, Climate-Related Risks
and Opportunities Project and study on potential of production and
consumption of SAF.
During 2024, we also plan to update the Low-Carbon Development
Programme to align with our commitment to achieving net zero
by 2050.
Priorities for 2024
Over the next year, the Committee will continue to fulfil its general
responsibilities with a focus on monitoring compliance with internal
policies and carrying out its activities in accordance with the approved
plan of work, which includes monthly and quarterly treasury reports,
review of counterparty banks, accredited banks credit limits and other
bank and treasury risks.
Y ELDA R
A BDR A Z A KOV
Chair
K EITH G A EBEL
Chair
ROLE A ND RE SPONSIBILITIE S
The ESG Committee develops recommendations to the Board on
building an effective ESG system in the Company.
The ESG Committee is responsible for:
Oversight of the Company’s ESG-related goals, metrics
and initiatives
Monitoring the Company’s progress towards achieving
its ESG objectives
Review and recommendations with respect to approval
of ESG-related policies
Review and approval of ESG-related disclosures in the
Company’s Annual Report.
ROLE A ND RE SPONSIBILITIE S
The Treasury Committee assists the Board of Directors
in monitoring and improving the effectiveness of risk
management of the Company’s treasury functions.
The Treasury Committee is responsible for:
Verifying control mechanisms for the Company’s treasury
activities and ensuring the effectiveness and improvement
of policies and procedures in the treasury function
Monitoring treasury activities and notifying the Board of
Directors of risks and opportunities associated with them.
COMPOSITION A ND AT TENDA NCE
Member Position
Meetings attended
(total 4)
Yeldar Abdrazakov Committee Chair
Aidar Ryskulov 1 Non-Executive
Director
Simon Wood Non-Executive
Director
Janet Heckman Non-Executive
Independent Director
Nurzhan
Baidauletov 2
Non-Executive
Director
1 Member of the Board of Directors since 12 September 2023.
2 Chairman of the Board of Directors until 12 September 2023.
COMPOSITION A ND AT TENDA NCE
Member Position
Meetings attended
(total 4)
Keith Gaebel Committee Chair
Simon Wood Non-Executive
Director
Saltanat Satzhan 1 Non-Executive
Director
Yernar Zhanadil 2 Non-Executive
Director
1 Member of the Board of Directors from 5 September 2023 to 11 December 2023.
2 Member of the Board of Directors until 5 September 2023.
98 99 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
CORPOR ATE GOVERN A NCE REPORT
CONTINUED
Audit Committee
Other questions
Update on implementation of APEX (Airline Performance
Excellence)
FlyArystan matters: annual financial statements
Report on litigations and state inspections of the Company
Priorities for 2024
The Audit Committee will continue to focus on maintaining
the integrity and quality of financial statements and ensuring that
the Company prepares its financial and business reports based on
the principles of transparency and accountability, completeness
and reliability. The Audit Committee will continue to promote the
enhancement of the Company's internal control, risk management
and compliance systems.
Risk management and internal control
The Board is responsible for evaluation of the effectiveness
of management's processes, for monitoring and reviewing
risk management and internal control. The Board reviews the
effectiveness of the internal control system during the year under
the auspices of the Audit Committee. The Board of Directors
regularly reviews and evaluates the overall risk management
system in the Company. Further information on the principal risks
and uncertainties, and mitigation measures is available on pages
72–77 of this report. The Audit Committee acts in the interests of
shareholders and provides oversight support to the Board of
Directors concerning the reliability and efficiency of the risk
management and internal control systems.
Internal audit
Leila Nik-Zade
Head of the Internal Audit
Service
Mission and functions
Air Astana’s IAS was created in December 2007 by a decision of the
Board of Directors. The IAS organises and carries out internal audits
and reports directly to the Board of Directors. Supervision of the
IAS is carried out by the Audit Committee in accordance with
internal documents governing its activities.
The appointment and dismissal of the IAS Head and employees is
within the remit of the Board of Directors.
The IAS’s mission is to protect and enhance the value of the
Company by providing risk-based and objective assurance, advice,
and insight. The objective of the IAS is to perform independent and
objective assurance and consulting engagements designed to add
value and improve the Company’s operations.
Audit process
The IAS continues improving the approach and methodology of
performing internal audit engagements. The IAS is agile in planning
and performing internal audit engagements, aiming to carry out
its responsibilities more effectively and efficiently. The IAS uses a
risk-based approach in selecting internal audit engagements for the
Annual Audit Plan and defining audit scope and audit procedures for
internal audit engagements. The Internal Audit Manual describes in
details audit processes.
The IAS fully implemented the Annual Audit Plan for 2023. In total,
throughout 2023, the IAS completed 23 internal audit engagements,
including tasks related to 4 areas of continuous monitoring.
In addition to 13 planned internal audit engagements, six
unplanned audits and consulting engagements were performed
at the request of the management and the Company’s structural
units respectively. The IAS is using the internal audit management
software TeamMate+ for the entire audit process which helps to
increase the IAS' efficiency.
Compliance with the standards
In November 2022, the IAS successfully passed an external
independent assessment with a final result – ‘Fully conforms
with the Code of Ethics and the Definition of Internal Audit of the
Institute of Internal Auditors, as well as the requirements of the
Standards by 100%.’
One of the key factors behind the IAS’s success is the high
professional level of its employees. The IAS employees
continuously enhancing their knowledge and skills.
External audit
The external auditor adheres to the International Standards on
Auditing and the International Financial Reporting Standards for
rendering audit services. The external auditor regularly holds
meetings with the Audit Committee without the presence of
members of the Company management.
The current practice of selecting an external auditor involves a
set of procedures that precede the signing of an agreement for
rendering audit services per Air Astana’s Procurement Regulations
approved by the Board of Directors. This procedure was developed
in accordance with the laws of the Republic of Kazakhstan, as well
as the Company’s Charter, Procurement Regulations and other
internal documents.
The auditor is selected for a period not exceeding three years.
Air Astana’s external auditor for the period of 2020–2022 was
KPMG Audit LLP, an independent audit organisation. The Company
renewed the contract with KPMG Audit LLP for 2023 through the
required procurement procedures.
K EITH G A EBEL
Chair
ROLE A ND RE SPONSIBILITIE S
The Audit Committee supports the Board of Directors in
overseeing the Company’s financial and economic activities, the
reliability and efficiency of internal control and risk management
systems, the application of the corporate governance standards,
the independence of processes related to the external and
internal audit, and compliance with the laws and regulations
of the Republic of Kazakhstan.
Meetings of the Audit Committee are conducted at least once a
quarter. The Audit Committee is responsible for:
Oversight of the framework and effectiveness of the
Company’s systems of risk management and internal control,
compliance and internal audit through regular reports from the
Internal Audit Service, Risk Management Division and
Compliance and Sustainability Officer Department
Assessing all aspects of the independence of the external
auditor and the Internal Audit Service
Developing recommendations to the Company’s Board of
Directors on the appointment and change of the external
auditor, on determining the amount to be paid to the external
auditor, on evaluating the quality of services rendered by the
external auditor, on receiving the related services from the
external auditor
Developing recommendations for the Board of Directors on the
appointment (or termination) of employees to the Internal
Audit Service
Reviewing reports from the Company's management and
external auditor on material accounting matters and decisions.
COMPOSITION A ND AT TENDA NCE
Member Position
Meetings attended
(total 6)
Keith Gaebel Committee Chair
Janet Heckman Non-Executive
Independent Director
Yeldar Abdrazakov Non-Executive
Independent Director
Main activities during 2023
Key matters considered by the Audit Committee:
External auditor and financial statements
Reports of the external auditor on the results of the audit
of the consolidated financial statements for the year ended
31 December 2022, for the 6 months ended 30 June 2023, for the
9 months ended 30 September 2023
Determination of the auditing organisation performing the
audit (review) of the financial statements for the year ending
31 December 2024 and for the additional scope of work related
to the issuance of a Comfort Letter for the purposes of the IPO
Review of the procedures used by Air Astana JSC for the
selection of the external audit organisation in view of local
legislation changes
Internal Audit Service (IAS)
Regular reports on the activities of the IAS
Report on the status of implementation of the Strategic Plan of
the Internal Audit Service
Changes to the 2023 Annual Audit Plan
Changes in the Regulation of the IAS
Amendments to the Regulations of the Audit Committee
Compliance and ethical conduct
Report on internal analysis of corruption risks
Reports on conflict of interests. Review of the status of
automation of the processes related to familiarisation with the
policy for the prevention and resolution of conflicts of interest
and filling out the declaration on the presence/absence of a
conflict of interest
Regular reports on compliance matters that cover revision of
compliance (corruption) risks at the corporate level, identification
of corruption risks at the business process level, whistleblowing
hotline, internal investigations, conflicts of interest, sanctions
compliance, review and assessment of single source purchases,
third-party due diligence procedure, review and assessment of
candidates for the positions of CEO and CEO-1 levels
Regular reports on messages received to the Company’s
whistleblowing hotline
Amendments to the Code of Conduct, Data Privacy Policy and
Sanctions Policy
Risk management and internal control
Quarterly update of risk register and risk map
Quarterly reports on realised risks
Company’s risk appetite
100 101 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
Audit Committee
Other questions
Update on implementation of APEX (Airline Performance
Excellence)
FlyArystan matters: annual financial statements
Report on litigations and state inspections of the Company
Priorities for 2024
The Audit Committee will continue to focus on maintaining
the integrity and quality of financial statements and ensuring that
the Company prepares its financial and business reports based on
the principles of transparency and accountability, completeness
and reliability. The Audit Committee will continue to promote the
enhancement of the Company's internal control, risk management
and compliance systems.
Risk management and internal control
The Board is responsible for evaluation of the effectiveness
of management's processes, for monitoring and reviewing
risk management and internal control. The Board reviews the
effectiveness of the internal control system during the year under
the auspices of the Audit Committee. The Board of Directors
regularly reviews and evaluates the overall risk management
system in the Company. Further information on the principal risks
and uncertainties, and mitigation measures is available on pages
72–77 of this report. The Audit Committee acts in the interests of
shareholders and provides oversight support to the Board of
Directors concerning the reliability and efficiency of the risk
management and internal control systems.
Internal audit
Leila Nik-Zade
Head of the Internal Audit
Service
Mission and functions
Air Astana’s IAS was created in December 2007 by a decision of the
Board of Directors. The IAS organises and carries out internal audits
and reports directly to the Board of Directors. Supervision of the
IAS is carried out by the Audit Committee in accordance with
internal documents governing its activities.
The appointment and dismissal of the IAS Head and employees is
within the remit of the Board of Directors.
The IAS’s mission is to protect and enhance the value of the
Company by providing risk-based and objective assurance, advice,
and insight. The objective of the IAS is to perform independent and
objective assurance and consulting engagements designed to add
value and improve the Company’s operations.
Audit process
The IAS continues improving the approach and methodology of
performing internal audit engagements. The IAS is agile in planning
and performing internal audit engagements, aiming to carry out
its responsibilities more effectively and efficiently. The IAS uses a
risk-based approach in selecting internal audit engagements for the
Annual Audit Plan and defining audit scope and audit procedures for
internal audit engagements. The Internal Audit Manual describes in
details audit processes.
The IAS fully implemented the Annual Audit Plan for 2023. In total,
throughout 2023, the IAS completed 23 internal audit engagements,
including tasks related to 4 areas of continuous monitoring.
In addition to 13 planned internal audit engagements, six
unplanned audits and consulting engagements were performed
at the request of the management and the Company’s structural
units respectively. The IAS is using the internal audit management
software TeamMate+ for the entire audit process which helps to
increase the IAS' efficiency.
Compliance with the standards
In November 2022, the IAS successfully passed an external
independent assessment with a final result – ‘Fully conforms
with the Code of Ethics and the Definition of Internal Audit of the
Institute of Internal Auditors, as well as the requirements of the
Standards by 100%.’
One of the key factors behind the IAS’s success is the high
professional level of its employees. The IAS employees
continuously enhancing their knowledge and skills.
External audit
The external auditor adheres to the International Standards on
Auditing and the International Financial Reporting Standards for
rendering audit services. The external auditor regularly holds
meetings with the Audit Committee without the presence of
members of the Company management.
The current practice of selecting an external auditor involves a
set of procedures that precede the signing of an agreement for
rendering audit services per Air Astana’s Procurement Regulations
approved by the Board of Directors. This procedure was developed
in accordance with the laws of the Republic of Kazakhstan, as well
as the Company’s Charter, Procurement Regulations and other
internal documents.
The auditor is selected for a period not exceeding three years.
Air Astana’s external auditor for the period of 2020–2022 was
KPMG Audit LLP, an independent audit organisation. The Company
renewed the contract with KPMG Audit LLP for 2023 through the
required procurement procedures.
K EITH G A EBEL
Chair
ROLE A ND RE SPONSIBILITIE S
The Audit Committee supports the Board of Directors in
overseeing the Company’s financial and economic activities, the
reliability and efficiency of internal control and risk management
systems, the application of the corporate governance standards,
the independence of processes related to the external and
internal audit, and compliance with the laws and regulations
of the Republic of Kazakhstan.
Meetings of the Audit Committee are conducted at least once a
quarter. The Audit Committee is responsible for:
Oversight of the framework and effectiveness of the
Company’s systems of risk management and internal control,
compliance and internal audit through regular reports from the
Internal Audit Service, Risk Management Division and
Compliance and Sustainability Officer Department
Assessing all aspects of the independence of the external
auditor and the Internal Audit Service
Developing recommendations to the Company’s Board of
Directors on the appointment and change of the external
auditor, on determining the amount to be paid to the external
auditor, on evaluating the quality of services rendered by the
external auditor, on receiving the related services from the
external auditor
Developing recommendations for the Board of Directors on the
appointment (or termination) of employees to the Internal
Audit Service
Reviewing reports from the Company's management and
external auditor on material accounting matters and decisions.
COMPOSITION A ND AT TENDA NCE
Member Position
Meetings attended
(total 6)
Keith Gaebel Committee Chair
Janet Heckman Non-Executive
Independent Director
Yeldar Abdrazakov Non-Executive
Independent Director
Main activities during 2023
Key matters considered by the Audit Committee:
External auditor and financial statements
Reports of the external auditor on the results of the audit
of the consolidated financial statements for the year ended
31 December 2022, for the 6 months ended 30 June 2023, for the
9 months ended 30 September 2023
Determination of the auditing organisation performing the
audit (review) of the financial statements for the year ending
31 December 2024 and for the additional scope of work related
to the issuance of a Comfort Letter for the purposes of the IPO
Review of the procedures used by Air Astana JSC for the
selection of the external audit organisation in view of local
legislation changes
Internal Audit Service (IAS)
Regular reports on the activities of the IAS
Report on the status of implementation of the Strategic Plan of
the Internal Audit Service
Changes to the 2023 Annual Audit Plan
Changes in the Regulation of the IAS
Amendments to the Regulations of the Audit Committee
Compliance and ethical conduct
Report on internal analysis of corruption risks
Reports on conflict of interests. Review of the status of
automation of the processes related to familiarisation with the
policy for the prevention and resolution of conflicts of interest
and filling out the declaration on the presence/absence of a
conflict of interest
Regular reports on compliance matters that cover revision of
compliance (corruption) risks at the corporate level, identification
of corruption risks at the business process level, whistleblowing
hotline, internal investigations, conflicts of interest, sanctions
compliance, review and assessment of single source purchases,
third-party due diligence procedure, review and assessment of
candidates for the positions of CEO and CEO-1 levels
Regular reports on messages received to the Company’s
whistleblowing hotline
Amendments to the Code of Conduct, Data Privacy Policy and
Sanctions Policy
Risk management and internal control
Quarterly update of risk register and risk map
Quarterly reports on realised risks
Company’s risk appetite
100 101 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Nomination and
Remuneration Committee
Main activities during 2023
Board and Committees
The Nomination and Remuneration Committee makes
recommendations regarding the composition of the Board and
its Committees, as well as the remuneration and compensation
of the Chairman and Independent Non-Executive Directors.
The Committee reviewed the report on the external Board
assessment and the updated Board skills matrix and discussed
the succession of the Board of Directors based on the skills matrix,
as well as further actions.
Terminations and appointments
The Committee issued recommendations in relation to determination
of the term of office and election of the new Vice President Flight
Operations due to the retirement of the previous incumbent.
Remuneration, compensation and incentive plans
The Committee recommended to the Board approval of the
Regulations of Incentive Plans, as well as annual approvals
of internal regulations within the remit of the Board. For those
employees of the Company whose remuneration shall be
determined by the Board/shareholders, the Committee made
recommendations about changes in salaries and terms, and
the amount of bonus payments. The Committee also made
recommendations about the terms of the airline performance
bonus for 2023 based on performance measures and weightings.
Priorities for 2024
The Nomination and Remuneration Committee will continue
to fulfil its general responsibilities and carry out its activities
according to the approved plan of work for 2024, with special
focus on matters related to the succession planning for the Board
of Directors.
JA NE T HECK M A N
Chair
ROLE A ND RE SPONSIBILITIE S
The Nomination and Remuneration Committee develops
recommendations for the Board of Directors regarding the
recruitment and selection of members of the Board of Directors,
the executive body, the head of the IAS, the Corporate Secretary
and other employees whose appointment requires the approval
of the Board of Directors or shareholders according to Company’s
Charter and the legislation of the Republic of Kazakhstan.
The Nomination and Remuneration Committee meets regularly
and is responsible for:
Development of requirements for candidate qualifications
and recommendations on election or nomination for the
roles of, amongst others, the Independent Non-Executive
Directors and the CEO of the Company
Development of a Succession Planning Policy
Recommendations on the policy and structure of
remuneration, including conducting comparative analyses
of remuneration levels.
COMPOSITION A ND AT TENDA NCE
Member Position
Meetings attended
(total 7)
Janet Heckman Committee Chair
Garry Kingshott Non-Executive
Independent Director
Yeldar Abdrazakov Non-executive
Independent Director
Myles Westcott Non-Executive Director
Aidar Ryskulov 1 Non-Executive Director
Nurzhan
Baidauletov 2 Non-Executive Director
1 Member of the Board of Directors since 12 September 2023.
2 Chairman of the Board of Directors until 12 September 2023.
Remuneration policy
Procedures relating to remuneration and compensation payments
to the members of the Board of Directors are determined by the
Policy of Remuneration of the Board of Directors, developed in
accordance with the current laws of the Republic of Kazakhstan
and our Charter and Corporate Governance Code.
Remuneration is not paid to the members of the Board
of Directors nominated on behalf of shareholders. Independent
Directors are remunerated, and the amount of remuneration is
determined at the General Meeting of shareholders, based on the
recommendations of the Board of Directors and the Nomination
and Remuneration Committee.
By decision of the General Meeting of Shareholders of Air Astana,
taking into consideration the recommendations of the Nomination
and Remuneration Committee, an annual fixed remuneration may
be established for the Chairman of the Board of Directors of the
Company similar to compensation to the Independent Director of
the Company.
The amount to be paid to the executive body is also determined at
the General Meeting of shareholders, based on the recommendations
of the Nomination and Remuneration Committee.
Independent Directors are paid as follows:
An annual fixed remuneration, for participation in sessions
of the Board of Directors and its Committees
Compensation of expenses associated with the performance
of duties
Travel benefits.
The amounts of annual fixed remuneration and compensation
are determined in accordance with the contract agreed with each
Independent Director on the basis of a decision of the General
Meeting of shareholders.
Remuneration in 2023
In 2023, the total remuneration paid to Independent Directors and
the executive body was USD 1,150,052.
CORPOR ATE GOVERN A NCE REPORT CONTINUED
DIVIDEND
We have developed Air Astana JSC Dividend Policy in
accordance with the legislation of the Republic of Kazakhstan,
the Company’s Charter and other internal documents. The
Policy specifies a transparent process for determining both the
size of dividends and the conditions under which dividends are
paid, while aiming to achieve an appropriate balance between
returning value to shareholders and financing the Company’s
continued growth.
Pursuant to the dividend policy adopted by the Company,
the Board of Directors is entitled to propose to the General
Shareholders Meeting a distribution of the part of net profit for
the relevant reporting year as determined in accordance with
the Company’s financial statements. Any decision on the
payment of dividends on the Company’s Shares based on
full-year, half-year or quarterly results shall be adopted by
the General Shareholders Meeting.
As per the guidance provided in Company’s Prospectus in the
near-term the Company does not expect to pay dividends. This
will be reassessed in the future with a view in the mid-term to
paying up to 20% of IFRS net profit of the Air Astana Group
subject to growth requirements and its ability to meet
leverage and liquidity ratios.
For the last three years the Group paid dividends of USD
16 million in 2023 for 2022 reporting year. The Air Astana
Group is targeting a near-term dividend payment of
approximately 20% of net profit.
102 103 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
Remuneration Committee
Main activities during 2023
Board and Committees
The Nomination and Remuneration Committee makes
recommendations regarding the composition of the Board and
its Committees, as well as the remuneration and compensation
of the Chairman and Independent Non-Executive Directors.
The Committee reviewed the report on the external Board
assessment and the updated Board skills matrix and discussed
the succession of the Board of Directors based on the skills matrix,
as well as further actions.
Terminations and appointments
The Committee issued recommendations in relation to determination
of the term of office and election of the new Vice President Flight
Operations due to the retirement of the previous incumbent.
Remuneration, compensation and incentive plans
The Committee recommended to the Board approval of the
Regulations of Incentive Plans, as well as annual approvals
of internal regulations within the remit of the Board. For those
employees of the Company whose remuneration shall be
determined by the Board/shareholders, the Committee made
recommendations about changes in salaries and terms, and
the amount of bonus payments. The Committee also made
recommendations about the terms of the airline performance
bonus for 2023 based on performance measures and weightings.
Priorities for 2024
The Nomination and Remuneration Committee will continue
to fulfil its general responsibilities and carry out its activities
according to the approved plan of work for 2024, with special
focus on matters related to the succession planning for the Board
of Directors.
JA NE T HECK M A N
Chair
ROLE A ND RE SPONSIBILITIE S
The Nomination and Remuneration Committee develops
recommendations for the Board of Directors regarding the
recruitment and selection of members of the Board of Directors,
the executive body, the head of the IAS, the Corporate Secretary
and other employees whose appointment requires the approval
of the Board of Directors or shareholders according to Company’s
Charter and the legislation of the Republic of Kazakhstan.
The Nomination and Remuneration Committee meets regularly
and is responsible for:
Development of requirements for candidate qualifications
and recommendations on election or nomination for the
roles of, amongst others, the Independent Non-Executive
Directors and the CEO of the Company
Development of a Succession Planning Policy
Recommendations on the policy and structure of
remuneration, including conducting comparative analyses
of remuneration levels.
COMPOSITION A ND AT TENDA NCE
Member Position
Meetings attended
(total 7)
Janet Heckman Committee Chair
Garry Kingshott Non-Executive
Independent Director
Yeldar Abdrazakov Non-executive
Independent Director
Myles Westcott Non-Executive Director
Aidar Ryskulov 1 Non-Executive Director
Nurzhan
Baidauletov 2 Non-Executive Director
1 Member of the Board of Directors since 12 September 2023.
2 Chairman of the Board of Directors until 12 September 2023.
Remuneration policy
Procedures relating to remuneration and compensation payments
to the members of the Board of Directors are determined by the
Policy of Remuneration of the Board of Directors, developed in
accordance with the current laws of the Republic of Kazakhstan
and our Charter and Corporate Governance Code.
Remuneration is not paid to the members of the Board
of Directors nominated on behalf of shareholders. Independent
Directors are remunerated, and the amount of remuneration is
determined at the General Meeting of shareholders, based on the
recommendations of the Board of Directors and the Nomination
and Remuneration Committee.
By decision of the General Meeting of Shareholders of Air Astana,
taking into consideration the recommendations of the Nomination
and Remuneration Committee, an annual fixed remuneration may
be established for the Chairman of the Board of Directors of the
Company similar to compensation to the Independent Director of
the Company.
The amount to be paid to the executive body is also determined at
the General Meeting of shareholders, based on the recommendations
of the Nomination and Remuneration Committee.
Independent Directors are paid as follows:
An annual fixed remuneration, for participation in sessions
of the Board of Directors and its Committees
Compensation of expenses associated with the performance
of duties
Travel benefits.
The amounts of annual fixed remuneration and compensation
are determined in accordance with the contract agreed with each
Independent Director on the basis of a decision of the General
Meeting of shareholders.
Remuneration in 2023
In 2023, the total remuneration paid to Independent Directors and
the executive body was USD 1,150,052.
CORPOR ATE GOVERN A NCE REPORT CONTINUED
DIVIDEND
We have developed Air Astana JSC Dividend Policy in
accordance with the legislation of the Republic of Kazakhstan,
the Company’s Charter and other internal documents. The
Policy specifies a transparent process for determining both the
size of dividends and the conditions under which dividends are
paid, while aiming to achieve an appropriate balance between
returning value to shareholders and financing the Company’s
continued growth.
Pursuant to the dividend policy adopted by the Company,
the Board of Directors is entitled to propose to the General
Shareholders Meeting a distribution of the part of net profit for
the relevant reporting year as determined in accordance with
the Company’s financial statements. Any decision on the
payment of dividends on the Company’s Shares based on
full-year, half-year or quarterly results shall be adopted by
the General Shareholders Meeting.
As per the guidance provided in Company’s Prospectus in the
near-term the Company does not expect to pay dividends. This
will be reassessed in the future with a view in the mid-term to
paying up to 20% of IFRS net profit of the Air Astana Group
subject to growth requirements and its ability to meet
leverage and liquidity ratios.
For the last three years the Group paid dividends of USD
16 million in 2023 for 2022 reporting year. The Air Astana
Group is targeting a near-term dividend payment of
approximately 20% of net profit.
102 103 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Statement of management’s responsibilities for the preparation
and approval of the consolidated financial statements
FOR THE YEAR ENDED 31 DECEMBER 2023
Independent Auditors’ Report
TO THE SHAREHOLDERS OF JOINT STOCK COMPANY AIR ASTANA
FIN A NCIA L STATEMENTS
The management is responsible for the preparation of the consolidated financial statements that present fairly the consolidated financial
position of Joint Stock Company Air Astana and its subsidiary (the ʻGroupʼ) as at 31 December 2023, and the results of its consolidated
operations, cash flows and changes in equity for the year then ended in compliance with IFRS Accounting Standards as issued by the
International Accounting Standards Board (‘IFRS Accounting Standards’).
In preparing the consolidated financial statements, the management is responsible for:
properly selecting and applying accounting policies;
presenting information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable
information;
providing additional disclosures when compliance with the specific requirements in IFRS Accounting Standards are insufficient to
enable users to understand the impact of particular transactions, other events and conditions on the Group’s financial position and
financial performance; and
making an assessment of the Group’s ability to continue as a going concern.
The management is also responsible for:
designing, implementing and maintaining an effective and sound system of internal controls throughout the Group;
maintaining adequate accounting records that are sufficient to show and explain the Group’s transactions and disclose with reasonable
accuracy at any time the consolidated financial position of the Group, and which enable them to ensure that the consolidated financial
statements of the Group comply with IFRS Accounting standards;
maintaining statutory accounting records in compliance with the legislation of Kazakhstan and IFRS Accounting Standards;
taking such steps as are reasonably available to them to safeguard the assets of the Group; and
preventing and detecting fraud and other irregularities.
The consolidated financial statements for the year ended 31 December 2023 were authorised for issue on 14 March 2024 by the
management of the Group.
On behalf of the management of the Group:
PE TER FOSTER
Chief Executive Officer
IBR A HIM C A NLIEL
Chief Financial Officer
SAULE K H A SSENOVA
Chief Accountant
Almaty, Republic of Kazakhstan
14 March 2024
Opinion
We have audited the consolidated financial statements of Joint Stock Company Air Astana (the “Company”) and its subsidiary
(the “Group”), which comprise the consolidated statement of financial position as at 31 December 2023, the consolidated statements of
profit or loss, other comprehensive income, changes in equity and cash flows for the year then ended, and notes comprising material
accounting policies and other explanatory information.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position
of the Group as at 31 December 2023 and its consolidated financial performance and its consolidated cash flows for the year then ended in
accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (IFRS Accounting Standards).
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are
further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are
independent of the Group in accordance with the International Ethics Standards Board for Accountants International Code of Ethics for
Professional Accountants (including International Independence Standards) (IESBA Code) together with the ethical requirements that are
relevant to our audit of the consolidated financial statements in the Republic of Kazakhstan, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated
financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
104 105 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
and approval of the consolidated financial statements
FOR THE YEAR ENDED 31 DECEMBER 2023
Independent Auditors’ Report
TO THE SHAREHOLDERS OF JOINT STOCK COMPANY AIR ASTANA
FIN A NCIA L STATEMENTS
The management is responsible for the preparation of the consolidated financial statements that present fairly the consolidated financial
position of Joint Stock Company Air Astana and its subsidiary (the ʻGroupʼ) as at 31 December 2023, and the results of its consolidated
operations, cash flows and changes in equity for the year then ended in compliance with IFRS Accounting Standards as issued by the
International Accounting Standards Board (‘IFRS Accounting Standards’).
In preparing the consolidated financial statements, the management is responsible for:
properly selecting and applying accounting policies;
presenting information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable
information;
providing additional disclosures when compliance with the specific requirements in IFRS Accounting Standards are insufficient to
enable users to understand the impact of particular transactions, other events and conditions on the Group’s financial position and
financial performance; and
making an assessment of the Group’s ability to continue as a going concern.
The management is also responsible for:
designing, implementing and maintaining an effective and sound system of internal controls throughout the Group;
maintaining adequate accounting records that are sufficient to show and explain the Group’s transactions and disclose with reasonable
accuracy at any time the consolidated financial position of the Group, and which enable them to ensure that the consolidated financial
statements of the Group comply with IFRS Accounting standards;
maintaining statutory accounting records in compliance with the legislation of Kazakhstan and IFRS Accounting Standards;
taking such steps as are reasonably available to them to safeguard the assets of the Group; and
preventing and detecting fraud and other irregularities.
The consolidated financial statements for the year ended 31 December 2023 were authorised for issue on 14 March 2024 by the
management of the Group.
On behalf of the management of the Group:
PE TER FOSTER
Chief Executive Officer
IBR A HIM C A NLIEL
Chief Financial Officer
SAULE K H A SSENOVA
Chief Accountant
Almaty, Republic of Kazakhstan
14 March 2024
Opinion
We have audited the consolidated financial statements of Joint Stock Company Air Astana (the “Company”) and its subsidiary
(the “Group”), which comprise the consolidated statement of financial position as at 31 December 2023, the consolidated statements of
profit or loss, other comprehensive income, changes in equity and cash flows for the year then ended, and notes comprising material
accounting policies and other explanatory information.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position
of the Group as at 31 December 2023 and its consolidated financial performance and its consolidated cash flows for the year then ended in
accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (IFRS Accounting Standards).
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are
further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are
independent of the Group in accordance with the International Ethics Standards Board for Accountants International Code of Ethics for
Professional Accountants (including International Independence Standards) (IESBA Code) together with the ethical requirements that are
relevant to our audit of the consolidated financial statements in the Republic of Kazakhstan, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated
financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
104 105 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Independent Auditors’ Report continued
TO THE SHAREHOLDERS OF JOINT STOCK COMPANY AIR ASTANA
FIN A NCIA L STATEMENTS CONTINUED
The recognition of the passenger revenue, including accounting for customer loyalty program provision
Please refer to Note 3, paragraph ‘Revenue’, Note 5, paragraph ‘Customer loyalty program’ in the consolidated financial statements and Notes 7, 21.
The key audit matter How the matter was addressed in our audit
The revenue of the Group is mainly represented by passenger revenue which
is recognised when the transportation services are provided to customers.
In addition, the Group recognises contract liabilities for customer loyalty
programs in its consolidated financial statements that relate to points granted
to participants of the Nomad club program.
Revenue is recognised when the points are redeemed by a customer and the
underlying performance obligation relating to the redeemed points is fulfilled.
The transaction price is allocated between the transportation service and the
award provided based on their stand-alone selling prices.
The accounting for these loyalty programs involves significant judgment and
estimates, particularly for estimation of the deferred revenue associated with
the points awarded and the timing and amount of revenue recognition for
redeemed points. Total passenger revenue for 2023 amounted to USD
1,143,596 thousand and customer loyalty program provision as at 31
December 2023 amounted to USD 11,928 thousand.
The recognition of the passenger revenue, including the recognition of
contract liabilities for customer loyalty programs, involves a significant risk of
material misstatement and is, therefore, considered as a key audit matter in
our audit, since the estimates and assumptions of the management have a
significant effect on the recognition and estimation of these items, which are
significant in terms of the amount.
We considered fraudulent revenue recognition to be a key audit matter as
passenger revenue is one of the Group’s key performance indicators and
management is in a unique position to perpetrate fraud because of its ability
to manipulate accounting records.
Our approach to address the matter included, among other, the following
procedures:
• Testing and evaluating design, implementation and operating
effectiveness of internal controls related to revenue recognition,
specifically:
– Testing controls related to transfer of data between relevant IT
systems that management uses to recognise revenue;
– For the IT systems or processes that are outsourced to third party
service providers, assessing Type 2 SOC 1 reports attesting the
appropriateness and effectiveness of the internal control systems
established by the service providers.
• Testing and evaluating design, implementation and operating
effectiveness of internal controls over the tracking and accounting of
points awarded and redeemed within IT systems that management uses
to initially accrue and subsequently redeem points, including controls
over the estimation processes for deferred revenue.
• Assessment of the methodologies used by management to estimate the
fair value of the points awarded and the expected redemption rate.
• Testing consistency and mathematical accuracy of the method and
assumptions used in calculation of frequent flyer program liabilities.
• Reconciliation of points awarded and redeemed during the year to the
underlying IT systems. Assessment of the expected usage rate and stand
alone selling price of points against historical experience, and recent
trends, analysing historical redemption patterns and comparison with
industry benchmarks.
• Assessment of the appropriateness of high risk manual journal entries
and evaluation of business rationale of the transactions, including
inspection of supporting documents.
• Testing, on a sample basis, passenger revenue transactions by inspecting
the supporting documents.
• Assessment of the Group’s disclosures for the consistency with the
requirements of IFRS Accounting Standards, including critical accounting
judgments and key sources of estimation uncertainty.
The recognition of provision for aircraft under lease agreements without transfer of title
Please refer to Note 3, paragraph ‘Provisions’ and Note 22 in the consolidated financial statements.
The key audit matter How the matter was addressed in our audit
For aircraft under lease agreements without transfer of title, the Group is
contractually committed to either return the aircraft in a specified condition
or to compensate the lessor based on the actual condition of the aircraft
and its major components upon return.
Provision is made for the expected cost associated with these contractual
return conditions.
In addition, the Group is obligated to perform regular scheduled
maintenance of aircraft under the terms of its lease agreements without
transfer of title and regulatory requirements relating to air safety.
At each reporting date, the estimation of the maintenance provision includes
a number of variable factors and assumptions, including anticipated utilization
of each aircraft; the expected cost of maintenance activities and the time it is
expected to occur; the condition of the aircraft; and the lifespan of life-limited
parts. Management has engaged an expert to assist in estimating the timing
and cost of expected engine maintenance activities.
We have identified this as a key audit matter because of the inherent level
of management judgement required in estimating the amount of provision
and complex and subjective elements around these estimations.
In addition, the provision for aircraft under lease agreements without
transfer of title in the amount of USD 253,788 thousand is material to the
consolidated financial statements.
The following procedures were performed:
• Assessment of the key assumptions adopted by management in
estimating the provisions, as follows:
– Assessing if the expected utilisation of aircraft is reasonable and
achievable in view of the entity’s circumstances and evaluation of the
consistency of the management’s forecast with other evidence
obtained by us;
– Assessment of the expected cost of maintenance activities against
historical actual costs incurred and existing maintenance agreements;
– Agreeing expected cost of maintenance activities and the time it is
expected to occur to supporting documentation.
• Assessment of the accuracy of management’s previous estimates and
the consistency of the provisions based on analysis of historical flight
hours, estimate of the cost of maintenance work to historic invoices
(retrospective review).
• Inspection of the reports provided by the management’s expert and
evaluation of the relevance and reasonableness of the expert’s findings
and conclusions.
• Assessment of the knowledge, skill, and ability of the management’s
expert and the expert’s relationship to the entity.
• Assessment of the disclosures in the consolidated financial statements
for the consistency with the requirements of IFRS Accounting Standards.
Other Information
Management is responsible for the other information. The other information comprises the information included in the Annual Report,
but does not include the consolidated financial statements and our auditors’ report thereon. The Annual report is expected to be made
available to us after the date of this auditors’ report.
Our opinion on the consolidated financial statements does not cover the other information and we will not express any form of assurance
conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above
when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the consolidated
financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS
Accounting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management
either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group’s financial reporting process.
106 107 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
TO THE SHAREHOLDERS OF JOINT STOCK COMPANY AIR ASTANA
FIN A NCIA L STATEMENTS CONTINUED
The recognition of the passenger revenue, including accounting for customer loyalty program provision
Please refer to Note 3, paragraph ‘Revenue’, Note 5, paragraph ‘Customer loyalty program’ in the consolidated financial statements and Notes 7, 21.
The key audit matter How the matter was addressed in our audit
The revenue of the Group is mainly represented by passenger revenue which
is recognised when the transportation services are provided to customers.
In addition, the Group recognises contract liabilities for customer loyalty
programs in its consolidated financial statements that relate to points granted
to participants of the Nomad club program.
Revenue is recognised when the points are redeemed by a customer and the
underlying performance obligation relating to the redeemed points is fulfilled.
The transaction price is allocated between the transportation service and the
award provided based on their stand-alone selling prices.
The accounting for these loyalty programs involves significant judgment and
estimates, particularly for estimation of the deferred revenue associated with
the points awarded and the timing and amount of revenue recognition for
redeemed points. Total passenger revenue for 2023 amounted to USD
1,143,596 thousand and customer loyalty program provision as at 31
December 2023 amounted to USD 11,928 thousand.
The recognition of the passenger revenue, including the recognition of
contract liabilities for customer loyalty programs, involves a significant risk of
material misstatement and is, therefore, considered as a key audit matter in
our audit, since the estimates and assumptions of the management have a
significant effect on the recognition and estimation of these items, which are
significant in terms of the amount.
We considered fraudulent revenue recognition to be a key audit matter as
passenger revenue is one of the Group’s key performance indicators and
management is in a unique position to perpetrate fraud because of its ability
to manipulate accounting records.
Our approach to address the matter included, among other, the following
procedures:
• Testing and evaluating design, implementation and operating
effectiveness of internal controls related to revenue recognition,
specifically:
– Testing controls related to transfer of data between relevant IT
systems that management uses to recognise revenue;
– For the IT systems or processes that are outsourced to third party
service providers, assessing Type 2 SOC 1 reports attesting the
appropriateness and effectiveness of the internal control systems
established by the service providers.
• Testing and evaluating design, implementation and operating
effectiveness of internal controls over the tracking and accounting of
points awarded and redeemed within IT systems that management uses
to initially accrue and subsequently redeem points, including controls
over the estimation processes for deferred revenue.
• Assessment of the methodologies used by management to estimate the
fair value of the points awarded and the expected redemption rate.
• Testing consistency and mathematical accuracy of the method and
assumptions used in calculation of frequent flyer program liabilities.
• Reconciliation of points awarded and redeemed during the year to the
underlying IT systems. Assessment of the expected usage rate and stand
alone selling price of points against historical experience, and recent
trends, analysing historical redemption patterns and comparison with
industry benchmarks.
• Assessment of the appropriateness of high risk manual journal entries
and evaluation of business rationale of the transactions, including
inspection of supporting documents.
• Testing, on a sample basis, passenger revenue transactions by inspecting
the supporting documents.
• Assessment of the Group’s disclosures for the consistency with the
requirements of IFRS Accounting Standards, including critical accounting
judgments and key sources of estimation uncertainty.
The recognition of provision for aircraft under lease agreements without transfer of title
Please refer to Note 3, paragraph ‘Provisions’ and Note 22 in the consolidated financial statements.
The key audit matter How the matter was addressed in our audit
For aircraft under lease agreements without transfer of title, the Group is
contractually committed to either return the aircraft in a specified condition
or to compensate the lessor based on the actual condition of the aircraft
and its major components upon return.
Provision is made for the expected cost associated with these contractual
return conditions.
In addition, the Group is obligated to perform regular scheduled
maintenance of aircraft under the terms of its lease agreements without
transfer of title and regulatory requirements relating to air safety.
At each reporting date, the estimation of the maintenance provision includes
a number of variable factors and assumptions, including anticipated utilization
of each aircraft; the expected cost of maintenance activities and the time it is
expected to occur; the condition of the aircraft; and the lifespan of life-limited
parts. Management has engaged an expert to assist in estimating the timing
and cost of expected engine maintenance activities.
We have identified this as a key audit matter because of the inherent level
of management judgement required in estimating the amount of provision
and complex and subjective elements around these estimations.
In addition, the provision for aircraft under lease agreements without
transfer of title in the amount of USD 253,788 thousand is material to the
consolidated financial statements.
The following procedures were performed:
• Assessment of the key assumptions adopted by management in
estimating the provisions, as follows:
– Assessing if the expected utilisation of aircraft is reasonable and
achievable in view of the entity’s circumstances and evaluation of the
consistency of the management’s forecast with other evidence
obtained by us;
– Assessment of the expected cost of maintenance activities against
historical actual costs incurred and existing maintenance agreements;
– Agreeing expected cost of maintenance activities and the time it is
expected to occur to supporting documentation.
• Assessment of the accuracy of management’s previous estimates and
the consistency of the provisions based on analysis of historical flight
hours, estimate of the cost of maintenance work to historic invoices
(retrospective review).
• Inspection of the reports provided by the management’s expert and
evaluation of the relevance and reasonableness of the expert’s findings
and conclusions.
• Assessment of the knowledge, skill, and ability of the management’s
expert and the expert’s relationship to the entity.
• Assessment of the disclosures in the consolidated financial statements
for the consistency with the requirements of IFRS Accounting Standards.
Other Information
Management is responsible for the other information. The other information comprises the information included in the Annual Report,
but does not include the consolidated financial statements and our auditors’ report thereon. The Annual report is expected to be made
available to us after the date of this auditors’ report.
Our opinion on the consolidated financial statements does not cover the other information and we will not express any form of assurance
conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above
when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the consolidated
financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS
Accounting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management
either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group’s financial reporting process.
106 107 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Independent Auditors’ Report continued
TO THE SHAREHOLDERS OF JOINT STOCK COMPANY AIR ASTANA
Consolidated statement of profit or loss
FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level
of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit.
We also:
Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by
management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability
to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’
report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions
may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether
the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to
express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the
group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding
independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the
audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in
our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
The engagement partner on the audit resulting in this independent auditors’ report is:
MUK HIT KOSSAY E V
Certified Auditor
of the Republic of Kazakhstan
Auditor’s Qualification Certificate
No. 558 of 24 December 2003
K PMG AUDIT LLC
State License to conduct audit #0000021
dated 6 December 2006 issued by the
Ministry of Finance of the Republic
of Kazakhstan
SERGE Y DEMENT Y E V
General Director of KPMG Audit LLC
acting on the basis of the Charter
14 March 2024
The consolidated statement of profit or loss is to be read in conjunction with the notes to, and forming part of, the consolidated financial
statements set out on pages 115 to 166.
1 Loss on fuel options of USD 2,510 thousand was added to fuel costs for the year ended 31 December 2023. Fuel costs for the years ended 31 December 2022 and 31 December 2021
include gain of USD 12,145 thousand and USD 8,013 thousand, respectively.
2 Basic and diluted earnings per share have been retrospectively recalculated to reflect the updated number of shares issued.
On behalf of the Group’s management:
PE TER FOSTER
Chief Executive Officer
IBR A HIM C A NLIEL
Chief Financial Officer
SAULE K H A SSENOVA
Chief Accountant
Almaty, Republic of Kazakhstan
14 March 2024
108 109 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
TO THE SHAREHOLDERS OF JOINT STOCK COMPANY AIR ASTANA
Consolidated statement of profit or loss
FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level
of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit.
We also:
Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by
management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability
to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’
report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions
may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether
the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to
express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the
group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding
independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the
audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in
our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
The engagement partner on the audit resulting in this independent auditors’ report is:
MUK HIT KOSSAY E V
Certified Auditor
of the Republic of Kazakhstan
Auditor’s Qualification Certificate
No. 558 of 24 December 2003
K PMG AUDIT LLC
State License to conduct audit #0000021
dated 6 December 2006 issued by the
Ministry of Finance of the Republic
of Kazakhstan
SERGE Y DEMENT Y E V
General Director of KPMG Audit LLC
acting on the basis of the Charter
14 March 2024
| ’000 USD | Notes | 2023 | 2022 | 2021 |
| Revenue and other income | ||||
| Passenger revenue | 7 |
|
|
|
| Cargo and mail revenue | 7 |
|
|
|
| Other income | 7 |
|
|
|
| Gain from sale and leaseback transaction | 7 |
|
|
|
| Total revenue and other income |
|
|
|
|
| Operating expenses | ||||
| Fuel and oil costs 1 |
( |
( |
( |
|
| Employee and crew costs | 8 |
( |
( |
( |
| Depreciation and amortisation | 12 |
( |
( |
( |
| Engineering and maintenance | 8 |
( |
( |
( |
| Handling, landing fees and route charges | 8 |
( |
( |
( |
| Passenger service | 8 |
( |
( |
( |
| Selling costs | 8 |
( |
( |
( |
| Insurance |
( |
( |
( |
|
| IT and communication costs |
( |
( |
( |
|
| Consultancy, legal and professional services |
( |
( |
( |
|
| Taxes |
( |
( |
( |
|
| Property and office costs |
( |
( |
( |
|
| Aircraft lease costs | 8 |
( |
( |
( |
| Impairment loss on trade receivables |
( |
( |
( |
|
| Other operating costs |
( |
( |
( |
|
| Total operating expenses |
( |
( |
( |
|
| Operating profit |
|
|
|
|
| Finance income | 9 |
|
|
|
| Finance costs | 9 |
( |
( |
( |
| Foreign exchange loss, net |
( |
( |
( |
|
| Profit before tax |
|
|
|
|
| Income tax expense | 10 |
( |
( |
( |
| Profit for the year |
|
|
|
|
| Basic and diluted earnings per share (in USD) 2 | 20 |
|
|
|
The consolidated statement of profit or loss is to be read in conjunction with the notes to, and forming part of, the consolidated financial
statements set out on pages 115 to 166.
1 Loss on fuel options of USD 2,510 thousand was added to fuel costs for the year ended 31 December 2023. Fuel costs for the years ended 31 December 2022 and 31 December 2021
include gain of USD 12,145 thousand and USD 8,013 thousand, respectively.
2 Basic and diluted earnings per share have been retrospectively recalculated to reflect the updated number of shares issued.
On behalf of the Group’s management:
PE TER FOSTER
Chief Executive Officer
IBR A HIM C A NLIEL
Chief Financial Officer
SAULE K H A SSENOVA
Chief Accountant
Almaty, Republic of Kazakhstan
14 March 2024
108 109 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Consolidated statement of other comprehensive income
FOR THE YEAR ENDED 31 DECEMBER 2023
Consolidated statement of financial position
AS AT 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
The consolidated statement of profit or loss is to be read in conjunction with the notes to, and forming part of, the consolidated financial
statements set out on pages 115 to 166.
The consolidated statement of profit or loss is to be read in conjunction with the notes to, and forming part of, the consolidated financial
statements set out on pages 115 to 166.
110 111 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
FOR THE YEAR ENDED 31 DECEMBER 2023
Consolidated statement of financial position
AS AT 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
| ’000 USD | Notes | 2023 | 2022 | 2021 |
| Profit for the year |
|
|
|
|
| Other comprehensive income to be reclassified into profit or lossin subsequent periods: | ||||
| Cash flow hedges – effective portion of changes in fair value | 19 |
( |
|
|
| Corporate income tax related to cash flow hedges – effective portionof changes in fair value |
|
( |
|
|
| Realised net loss from cash flow hedging instruments | 25 |
|
|
|
| Corporate income tax related to loss from hedging instruments | 25 |
( |
( |
( |
| Other comprehensive income for the year, net of income tax |
|
|
|
|
| Total comprehensive income for the year |
|
|
|
The consolidated statement of profit or loss is to be read in conjunction with the notes to, and forming part of, the consolidated financial
statements set out on pages 115 to 166.
| ’000 USD | Notes | 31 December 2023 | 31 December 2022 | 31 December 2021 |
| ASSETS | ||||
| Non-current assets | ||||
| Property, plant and equipment | 11 |
|
|
|
| Intangible assets |
|
|
|
|
| Prepayments | 15 |
|
|
|
| Guarantee deposits | 13 |
|
|
|
| Deferred tax assets | 10 |
|
|
|
| Trade and other receivables | 16 |
|
|
|
|
|
|
|
||
| Current assets | ||||
| Inventories | 14 |
|
|
|
| Prepayments | 15 |
|
|
|
| Income tax prepaid |
|
|
|
|
| Trade and other receivables | 16 |
|
|
|
| Other taxes prepaid | 17 |
|
|
|
| Guarantee deposits | 13 |
|
|
|
| Cash and bank balances | 18 |
|
|
|
| Other financial assets | 19 |
|
|
|
|
|
|
|
||
| Total assets |
|
|
|
|
| EQUITY AND LIABILITIESEquity | ||||
| Share capital | 20 |
|
|
|
| Functional currency transition reserve |
( |
( |
( |
|
| Reserve on hedging instruments, net of tax |
( |
( |
( |
|
| Retained earnings |
|
|
|
|
| Total equity |
|
|
|
|
| Non-current liabilities | ||||
| Loans | 24 |
|
|
|
| Lease liabilities | 25 |
|
|
|
| Provision for aircraft maintenance | 22 |
|
|
|
| Employee benefits |
|
|
|
|
|
|
|
|
||
| Current liabilities | ||||
| Loans | 24 |
|
|
|
| Lease liabilities | 25 |
|
|
|
| Deferred revenue | 21 |
|
|
|
| Provision for aircraft maintenance | 22 |
|
|
|
| Trade and other payables | 23 |
|
|
|
| Other financial liabilities |
|
|
|
|
|
|
|
|
||
| Total liabilities |
|
|
|
|
| Total equity and liabilities |
|
|
|
The consolidated statement of profit or loss is to be read in conjunction with the notes to, and forming part of, the consolidated financial
statements set out on pages 115 to 166.
110 111 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Consolidated statement of changes in equity
FOR THE YEAR ENDED 31 DECEMBER 2023
Consolidated statement of cash flows
FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
The consolidated statement of profit or loss is to be read in conjunction with the notes to, and forming part of, the consolidated financial
statements set out on pages 115 to 166.
The consolidated statement of profit or loss is to be read in conjunction with the notes to, and forming part of, the consolidated financial
statements set out on pages 115 to 166.
112 113 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
FOR THE YEAR ENDED 31 DECEMBER 2023
Consolidated statement of cash flows
FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
| ’000 USD | Share capital | Functional currencytranslation reserve | Reserve on hedginginstruments | Retained earnings | Total equity |
| At 1 January 2021 |
|
( |
( |
|
|
| Profit for the year |
|
|
|
|
|
| Other comprehensive income: Realised loss oncash flow hedging instruments, net of tax |
|
|
|
|
|
| Total comprehensive income for the year |
|
|
|
|
|
| At 31 December 2021 |
|
( |
( |
|
|
| At 1 January 2022 |
|
( |
( |
|
|
| Profit for the year |
|
|
|
|
|
| Other comprehensive income: Realised loss oncash flow hedging instruments and effectiveportion of changes in fair value of fuel call options,net of tax |
|
|
|
|
|
| Total comprehensive income for the year |
|
|
|
|
|
| At 31 December 2022 |
|
( |
( |
|
|
| At 1 January 2023 |
|
( |
( |
|
|
| Profit for the year |
|
|
|
|
|
| Other comprehensive income: Realised loss oncash flow hedging instruments and effectiveportion of changes in fair value of fuel call options,net of tax |
|
|
|
|
|
| Total comprehensive income for the year |
|
|
|
|
|
| Dividends declared |
|
|
|
( |
( |
| Other |
|
|
|
|
|
| At 31 December 2023 |
|
( |
( |
|
|
The consolidated statement of profit or loss is to be read in conjunction with the notes to, and forming part of, the consolidated financial
statements set out on pages 115 to 166.
| ’000 USD | Notes | 2023 | 2022 | 2021 |
| OPERATING ACTIVITIES: | ||||
| Profit before tax |
|
|
|
|
| Adjustments for: | ||||
| Depreciation and amortisation of property, plant and equipment andintangible assets | 12 |
|
|
|
| Gain on disposal of property, equipment and other assets | 7 |
( |
( |
( |
| Change in impairment allowance for trade receivables, prepayments,guarantee deposits and cash and bank balances | 13,15, 16,18 |
( |
( |
( |
| Write-down of obsolete and slow-moving inventories | 14 |
( |
|
( |
| Change in vacation accrual | 23 |
( |
( |
|
| Accrual of provision for aircraft maintenance | 8 |
|
|
|
| Change in customer loyalty program provision | 21 |
|
|
( |
| Foreign exchange loss, net |
|
|
|
|
| Finance income, excluding impairment | 9 |
( |
( |
( |
| Finance costs, excluding impairment | 9 |
|
|
|
| Effect of COVID-19 related rent concessions | 8, 25 |
|
|
|
| Gain from early return of engine | 25 |
|
|
( |
| Operating cash flow before movements in working capital |
|
|
|
|
| Change in trade and other receivables |
( |
( |
( |
|
| Change in prepaid expenses and prepayments |
( |
|
( |
|
| Change in inventories |
( |
( |
( |
|
| Change in trade and other payables and provision for aircraftmaintenance |
( |
( |
|
|
| Change in deferred revenue |
|
|
|
|
| Change in other financial instruments |
( |
|
( |
|
| Cash generated from operations |
|
|
|
|
| Income tax paid |
( |
( |
( |
|
| Interest received |
|
|
|
|
| Net cash generated from operating activities |
|
|
|
|
| INVESTING ACTIVITIES: | ||||
| Purchase of property, plant and equipment |
( |
( |
( |
|
| Proceed from sale and leaseback transaction |
|
|
|
|
| Proceeds from disposal of property, plant and equipment |
|
|
|
|
| Purchase of intangible assets |
( |
( |
( |
|
| Bank and Guarantee deposits placed |
( |
( |
( |
|
| Bank and Guarantee deposits withdrawn |
|
|
|
|
| Net cash used in investing activities |
( |
( |
( |
The consolidated statement of profit or loss is to be read in conjunction with the notes to, and forming part of, the consolidated financial
statements set out on pages 115 to 166.
112 113 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Consolidated statement of cash flows continued
FOR THE YEAR ENDED 31 DECEMBER 2023
Notes to the consolidated financial statements
FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
The consolidated statement of profit or loss is to be read in conjunction with the notes to, and forming part of, the consolidated financial
statements set out on pages 115 to 166.
1. Nature of activities
Joint Stock Company Air Astana is a joint stock company (the “Company”) as defined in the Civil Code of the Republic of Kazakhstan.
The Company was established as a closed joint stock company on 14 September 2001 by Resolution of the Government of the Republic
of Kazakhstan #1118 dated 29 August 2001. Due to a change in legislation introduced in 2003, the Parent Company was re-registered as
a joint stock company on 27 May 2005.
The Company has a subsidiary JSC “FlyArystan” (formerly JSC “Aviation Company “Air Kazakhstan”) (hereinafter – the “Subsidiary”) which
was acquired in November 2019 by purchasing one hundred percent of the shares and voting interests. Together the Company and the
Subsidiary are referred to as the “Group”.
The operations of Subsidiary commenced in October 2023. In December 2023, JSC “FlyArystan” issued additional 240,000 shares in favour
of the Company. The total additional investment amounted to KZT 960,000 thousand.
The Group’s principal activity is the provision of scheduled domestic and international air services for passengers. Other business activities
include freight and mail transportation.
The Group operated its maiden flight on 15 May 2002, a Boeing-737 service from Almaty to Kazakhstan’s national capital, Astana. As at
31 December 2023, the Group operated 49 aircraft that are acquired under lease.
The Parent Company re-registered its office in 2010 from Astana, Kazakhstan to Zakarpatskaya Street 4A, Almaty, Kazakhstan as the
Parent Company’s main airport of operations is Almaty International Airport.
As at 31 December 2023, the shareholders of the Group were JSC “National Welfare Fund “Samruk-Kazyna” (which held the investment on
behalf of the Government of the Republic of Kazakhstan ) and BAE Systems Kazakhstan Limited, which owned 51% and 49% of the shares of
the Company, respectively. On 15 February 2024, the Company completed its initial public offering (“IPO”), raising KZT 54,256,673 thousand
(USD 121,111 thousand). The Company listed simultaneously on three exchanges: Kazakhstan Stock Exchange, Astana International Exchange,
and London Stock Exchange. In addition to the primary offering, existing shareholders JSC “National Welfare Fund “Samruk-Kazyna”, and BAE
Systems Kazakhstan Limited both sold their shares (or GDRs representing shares), reducing their shareholdings to 41% and 16.95%,
respectively. Other shareholders had less than 10% of shares post-IPO.
2. Basis of accounting
Statement of compliance
These consolidated financial statements have been prepared in accordance with IFRS Accounting Standards as issued by the International
Accounting Standards Board (“IFRS Accounting Standards”).
Functional and presentation currency
The national currency of Kazakhstan is the Kazakhstani tenge (“tenge”), which until 31 December 2017 was the Company’s functional
currency, because it reflected the economic substance of the underlying events and circumstances of the Company.
During 2017, the management reassessed the indicators of the Company’s functional currency, with particular focus on the Company’s
increasing international flight operations, and noted that an increasing part of the Company’s operations are influenced by currencies other
than tenge; predominantly the US Dollar. As a result, the management concluded that with effect from 31 December 2017 (the transition
date, for the purpose of the financial reporting under IFRS Accounting Standards), that the Company’s functional currency is the US Dollar.
As requested by shareholders, in addition to the consolidated financial statements presented in the Company’s functional currency, US Dollar
(“USD”), the Group also issues the consolidated financial statements in Kazakhstani tenge, which is a non-functional currency for the Company as
shareholders believe that both currencies are useful for the users of the Group’s consolidated financial statements. These consolidated financial
statements have been presented in USD for the year ended 31 December 2023. All financial information presented in USD has been rounded to
the nearest thousand, so minor discrepancies may arise from addition of these amounts.
114 115 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
FOR THE YEAR ENDED 31 DECEMBER 2023
Notes to the consolidated financial statements
FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
| ’000 USD | Notes | 2023 | 2022 | 2021 |
| FINANCING ACTIVITIES: | ||||
| Repayment of lease liabilities | 25 |
( |
( |
( |
| Interest paid | 25 |
( |
( |
( |
| Repayment of borrowings and additional financing from saleand leaseback | 25 |
( |
( |
( |
| Proceeds from borrowings and additional financing from saleand leaseback | 25 |
|
|
|
| Dividends paid | 20 |
( |
|
|
| Net cash used in financing activities |
( |
( |
( |
|
| NET INCREASE IN CASH AND BANK BALANCES |
|
|
|
|
| Effect of exchange rate changes on cash and bank balances held inforeign currencies |
( |
( |
( |
|
| Effects of movements in ECL on cash and bank balances |
( |
( |
( |
|
| CASH AND BANK BALANCES, at the beginning of the year |
|
|
|
|
| CASH AND BANK BALANCES, at the end of the year | 18 |
|
|
|
The consolidated statement of profit or loss is to be read in conjunction with the notes to, and forming part of, the consolidated financial
statements set out on pages 115 to 166.
Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Notes to the consolidated financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
2. Basis of accounting
continued
Impact of COVID-19
Since the first quarter 2020, the COVID-19 pandemic had a significant impact on the aviation industry. As of 31 December 2023, travel
restrictions related to COVID-19 were abolished in Kazakhstan and most countries around the world. The Group is monitoring the situation
on an ongoing basis.
Going concern
The Group’s cash position remains strong. As of 31 December 2023 the Group’s cash and bank balances increased by USD 21,118 thousand
compared to 31 December 2022, whereas the Group had repaid its bank loans in the amount of USD 46,250 thousand. As at 31 December
2023, the Group’s net current liabilities were USD 39,796 thousand (2022: USD 33,095 thousand; 2021: USD 26,970 thousand).
With regard to a possible new COVID-19 wave, management believes that its impact would not be as significant as the impact of the first
wave in March-April 2020. Whereas increase in price of jet fuel has negative effect on the Group’s profitability, the Group’s strong fuel
hedge positions lessens the adverse effect.
Management has concluded that there is no material uncertainty regarding the Group’s ability to continue as a going concern and
management considered it appropriate for the going concern assumption to be adopted in preparing the consolidated financial statements.
Regional geopolitical conflicts
Following the conflict between Russia and Ukraine at the end of February 2022, the Group (under both Air Astana and FlyArystan brands)
suspended flights to and over Russia and Ukraine.
In 2021, the revenue shares of the Group on routes to Russia and Ukraine were at 8% and 2% respectively. The management believes that
the impact of the conflict is limited, as the Group has reallocated vacant capacity from suspended routes to other destinations.
3. Material accounting policies
Basis of preparation
The consolidated financial statements have been prepared on the historical cost basis except for certain financial instruments that
are measured at fair value, as explained in the accounting policies below. Historical cost is generally based on the fair value of the
consideration given in exchange for assets on the date of acquisition. The Group discloses other comprehensive income separately from
its consolidated statement of profit or loss. The principal accounting policies set out below have been applied consistently to all periods
presented in these consolidated financial statements.
Basis of consolidation
(i) Business combinations
Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control
is transferred to the Group.
(ii) Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from
its involvement with the entity and has the ability to affect those returns through its power over the entity.
The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until
the date that control ceases. The accounting policies of subsidiaries have been changed when necessary to align them with the policies
adopted by the Group.
Segment information
There are two main operating segments of the Group, full service brand Air Astana and low cost brand FlyArystan; these include
information for the determination of performance evaluation and allocation of resources by the management. The Group management
uses the operating profit calculated according to IFRS Accounting Standards while evaluating the performance of the segments adjusted
for the impact of inter-segments leases.
Revenue
Passenger revenue
The Group satisfies the performance obligations related to tickets sold and reports the sales as revenue when the transportation service
performance obligation has been satisfied. The value of tickets sold and still valid but not used by the reporting date is reported as
deferred (unearned) transportation revenue. This item is reduced either when the Group satisfies the performance obligation by
completing the transportation service or when the passenger requests a refund. Based on historical data of previous years, the Group
recognises passenger revenue in proportion to the pattern of rights exercised by the customer in respect of a percentage of tickets sold
that are expected not to be used or refunded.
The Group conducts sales through agents that act as intermediaries distributing tickets among customers. On average, accounts
receivable are collected within a month from origination. The Group’s sales do not contain significant finance components due to the
short-term nature of airline tickets.
Passenger revenue includes revenue from code-share agreements with other airlines. Under these agreements, the Group sells seats on
these airlines’ flights and those other airlines sell seats on the Group’s flights. Revenue from the sale of code-share seats on other airlines
are recorded net in the Group’s passenger revenue in profit or loss, since the Group acts as an agent in these agreements. The revenue
from other airlines’ sale of code-share seats on the Group’s flights is recorded in passenger revenue in profit or loss.
Revenue related to airport charges, such as fees and taxes, are presented gross of the related costs. This is due to the fact that the Group
is exposed to changes in the actual costs, and these costs are assessed by the Group based on the volume of its operations, such that the
Group acts as a principal in the transactions, not as an agent.
Cargo revenue
Cargo transport services are recognised as revenue when the Group satisfies the performance obligation by providing the air transportation.
Cargo sales for which performance obligation to provide transportation service has not yet been discharged are shown as deferred
(unearned) transportation revenue.
Customer loyalty program
Sales of tickets that result in award credits for customers, under the Group’s Nomad Club Loyalty Programme, are accounted for as two
separate performance obligations embedded into one contract, the ticket. The transaction price is allocated between the transportation
service and the award provided based on their stand-alone selling prices. The transaction price of credit award is not recognised as
revenue at the time of the initial sale transaction but is deferred and recognised as revenue when the award credits are redeemed
and the Group’s performance obligations have been fulfilled.
Travel agents’ commissions
Travel agents’ commissions are recognised as an expense when the transportation service is provided.
Reservation costs
Reservation costs are recognised as an expense when incurred since the amortisation period of the asset that the Group otherwise would
have recognised is less than a year.
Leasing
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract
conveys the right to control the use of an identified asset for a period of time in exchange for a consideration. To assess whether a contract
conveys the right to control the use of an identified asset, the Group uses the definition of a lease in IFRS 16.
116 117 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
116 117 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Notes to the consolidated financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
3. Material accounting policies
continued
(i) As a lessee
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially
measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the
commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to
restore the underlying asset or the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease
term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or the cost of the right-of-
use asset reflects that the Group will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life
of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is
periodically reduced by impairment losses, if any, and adjusted for certain re-measurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date,
discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, and the Group’s incremental borrowing
rate. Generally, the Group uses its incremental borrowing rate as the discount rate.
The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes
certain adjustments to reflect the terms of the lease and type of the asset leased.
Lease payments included in the measurement of the lease liability comprise the following:
fixed payments, including in-substance fixed payments;
variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
amounts expected to be payable under a residual value guarantee; and
the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal
period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the
Group is reasonably certain not to terminate early.
The lease liability is measured at amortised cost using the effective interest method. It is re-measured when there is a change in future
lease payments arising from a change in an index or rate, if there is a change in the Group’s estimate of the amount expected to be
payable under a residual value guarantee, if the Group changes its assessment of whether it will exercise a purchase, extension or
termination option or if there is a revised in-substance fixed lease payment.
When the lease liability is re-measured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset,
or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The Group presents right-of-use assets in ‘property, plant and equipment’ and lease liabilities separately in the consolidated statement
of financial position.
The Group has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and short-term leases.
The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
(ii) Sale and leaseback transactions
If the Group transfers an asset to another entity and leases that asset back from this same entity, the Group accounts for the transfer
contract and the lease according to IFRS 16 Leases.
The Group applies the requirements for determining when a performance obligation is satisfied in IFRS 15 Revenue from contracts with
customers to determine whether the transfer of an asset is accounted for as a sale of that asset.
If the transfer of an asset by the Group satisfies the requirements of IFRS 15 to be accounted for as a sale of the asset the Group measures
the right-of-use asset arising from the leaseback at the proportion of the previous carrying amount of the asset that relates to the right of
use retained by the Group. Accordingly, the Group recognises only the amount of any gain or loss that relates to the rights transferred to
the buyer-lessor. If the fair value of the consideration for the sale of an asset does not equal the fair value of the asset, or if the payments
for the lease are not at market rates, the Group makes the following adjustments to measure the sale proceeds at fair value:
(a) any below-market terms shall be accounted for as a prepayment of lease payments; and
(b) any above-market terms shall be accounted for as additional financing provided by the buyer- lessor to the seller-lessee.
Guarantee deposits
Guarantee deposits represent amounts paid to the lessors of aircraft, which are held as security deposits by the lessors in accordance with
the provisions of lease agreements without transfer of title. These deposits are returned to the Group at the end of the lease period. Lease
deposits relating to the lease agreements without transfer of title are presented as assets in the consolidated statement of financial position.
These deposits are interest-free and are recorded at amortised cost using an average market yield of 2.97% per annum (2022: 2.66%, 2021:
2.25%). At initial recognition the Group recognises a discount and a deferred asset (additional lease payment) simultaneously. The discount
is amortised over the lease term using the effective interest method, and the deferred asset is amortised by equal amounts over the
lease term.
Foreign currencies
In preparing the consolidated financial statements, transactions in currencies other than the functional currency of the Group entities
(foreign currencies) are recorded at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period,
monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items that are
measured at historical cost in a foreign currency are not retranslated.
The following table summarises US Dollar exchange rates at 31 December 2023, 31 December 2022 and 31 December 2021 and for the
The following table summarises KZT exchange rates at 31 December 2023, 31 December 2022 and 31 December 2021 and for the years
then ended:
118 119 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
| years then ended: | Average rate | Reporting date spot-rate | |||||
| USD | 2023 | 2022 | 2021 | 31 December 2023 | 31 December 2022 | 31 December 2021 | |
| 1,000 Tenge (KZT) | 2.19 | 2.17 | 2.35 | 2.20 | 2.16 | 2.32 | |
| Euro (EUR) | 1.08 | 1.05 | 1.18 | 1.10 | 1.07 | 1.13 | |
| British Pound (GBP) | 1.24 | 1.23 | 1.38 | 1.27 | 1.20 | 1.35 | |
| Average rate | Reporting date spot-rate | |||||
| KZT | 2023 | 2022 | 2021 | 31 December 2023 | 31 December 2022 | 31 December 2021 |
| US Dollar (USD) | 456.31 | 460.48 | 426.03 | 454.56 | 462.65 | 431.8 |
| Euro (EUR) | 493.33 | 484.22 | 503.88 | 502.24 | 492.86 | 489.1 |
| British Pound (GBP) | 567.3 | 568.22 | 586.25 | 577.47 | 556.57 | 583.32 |
118 119 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Notes to the consolidated financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
3. Material accounting policies
continued
Finance income and costs
Finance income comprises interest income on bank deposits and gain on financial instruments through profit and loss. Interest income
from a financial asset is recognised when it is probable that the economic benefits will flow to the Group and the amount of income can
be measured reliably. Interest income is accrued on a time basis, by reference to the carrying value and at the effective interest rate
applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to
that asset’s net carrying amount on initial recognition.
Finance costs comprise interest expense, bank commissions, losses on financial instruments through profit and loss and other costs.
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily
take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until those assets are
substantially ready for their intended use or sale. All other borrowing costs are recognised in profit or loss in the period in which they
are incurred.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is
deducted from the borrowing costs eligible for capitalisation.
Employee benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.
A provision is recognised for the amount expected to be paid under cash bonus or profit-sharing plans if the Group has a present
legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be
estimated reliably.
Taxation
Income tax expense represents the sum of the tax currently payable, tax paid for the current period and deferred tax. The tax currently
payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the profit or loss because it excludes items
of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting date.
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial
statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for
all taxable temporary differences, and deferred tax assets are generally recognised for all deductible temporary differences to the extent
that it is probable that taxable profits will be available against which those deductible temporary differences can be realised. Such assets
and liabilities are not recognised if the temporary difference arises in a transaction that affects neither the taxable profit nor the
accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that
sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is
settled or the asset recognised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the reporting
date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which
the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax
assets and liabilities on a net basis.
Current and deferred taxes are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive
income or directly in equity, in which case, the current and deferred taxes are also recognised in other comprehensive income or directly
in equity, respectively.
Property, plant and equipment
Property, plant and equipment held for use in the supply of services, or for administrative purposes, are stated in the consolidated
statement of financial position at cost less accumulated depreciation and impairment losses.
The financial interest attributed to pre-delivery payments made on account of aircraft and other significant assets under construction is
capitalised and added to the cost of the asset concerned.
Maintenance costs are recorded as expenses during the period when incurred, with the exception of programs that extend the useful life
of the asset or increase its value, which are then capitalised (e.g. maintenance on airframes and engines).
Aircraft
The purchase price of aircraft is denominated in US dollar.
Aircraft are depreciated using a straight-line method over their average estimated useful life of 25 years or over the lease terms, if the
lease term is shorter than the 25-year period, assuming no residual value. During the operating cycle, the Group reviews whether the
depreciable base or the useful life should be adjusted and, if necessary, determines whether a residual value should be recognised.
Repairs for major airframes and engines of all aircraft are treated as a separate asset component with the cost capitalised and depreciated
over the period between the date of acquisition and the next major overhaul.
Major overhaul expenditure, including replacement spares and labour costs, are capitalised and amortised over the average expected life
between major overhauls based on flight hours and cycles.
All other replacement spares and other costs relating to maintenance of an aircraft are charged to profit or loss upon consumption or as
incurred, respectively.
Rotable spare parts
Rotable spare parts are carried in property, plant and equipment.
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable
that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The costs of the
day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.
Other property, plant and equipment
Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the
cost of materials and direct labour, any other costs directly attributable to bringing the asset to a working condition for its intended use,
and the costs of dismantling and removing the items and restoring the site on which they are located. Purchased software that is integral
to the functionality of the related equipment is capitalised as part of that equipment.
Depreciation
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property, plant
and equipment.
The estimated useful lives for the current and comparative periods are as follows:
120 121 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
| Aircraft (excluding separate asset components) | 25 years |
| Buildings and premises | 14–50 years |
| Rotable spare parts | 3–10 years |
| Office and training equipment | 4–20 years |
| Vehicles | 7–9 years |
| Other | 5–10 years |
120 121 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Notes to the consolidated financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
3. Material accounting policies
continued
Depreciation is recognised so as to write off the cost of assets (other than freehold land, properties under construction and separate asset
component of the aircraft) less their residual values over their useful lives, using the straight-line method. Separate asset component of
an aircraft is amortised over the average expected life between major overhauls which is based on flight hours or cycles.
The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of
any changes in estimate accounted for on a prospective basis.
An item of property, plant and equipment is de-recognised upon disposal or when no future economic benefits are expected to arise from
the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is
determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.
Intangible assets
Intangible assets acquired separately are reported at cost less accumulated amortisation and impairment losses. Amortisation is charged
on a straight-line basis over the estimated useful lives of the assets. The estimated useful lives are reviewed at the end of each annual
reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. The estimated useful economic
life of software for the current and comparative periods is from 7 to 10 years.
Impairment of tangible and intangible assets
At each reporting date, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any
indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated
in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual
asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Where a reasonable and
consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they
are allocated to the smallest group of cash- generating units for which a reasonable and consistent allocation basis can be identified.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash
flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of
money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. The Group identifies the
recoverable amount as value in use of a CGU.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of
the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss,
unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised
estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been
determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is
recognised immediately in profit or loss.
Contingent liabilities and contingent assets
Contingent liabilities are not recognised in the consolidated financial statements. They are disclosed in the notes to the consolidated
financial statements, unless the possibility of an outflow of resources embodying economic benefits is remote.
Contingent assets are not recognised in the consolidated financial statements. Where an inflow of economic benefits is probable, they are
disclosed in the notes to the consolidated financial statements.
Inventories
Inventories are stated at the lower of cost and net realisable value. Costs of inventories are determined on a first-in-first-out basis, except
for fuel and de-icing liquid, which are determined on the weighted average cost basis. Fuel and de-icing liquid are written off upon actual
consumption. Net realizable value represents the estimated selling price for inventories less all estimated costs of completion and costs
necessary to make the sale.
Expenditures incurred in acquiring the inventories such as customs duties, freight and broker’s services are accumulated into a separate
inventory account and allocated depending on use of relevant inventory.
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that
the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting
date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows
estimated to settle the present obligation, its carrying amount is the present value of those cash flows.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is
recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
Provision for aircraft maintenance under lease agreement without transfer of title
The Group is obligated to perform regular scheduled maintenance of aircraft under the terms of its lease agreements without transfer
of title and regulatory requirements relating to air safety. The lease agreements also require the Group to return aircraft to lessors in a
satisfactory condition at the end of the lease term, which may require the performance of final return conditions. The Group’s scheduled
aircraft maintenance programs carried out through the lease periods are designed to reduce the incidence of final return costs. Major
aircraft maintenance relates to airframes (referred to as the C- check, D-check and redelivery preparation program) and engines.
The C-check is heavy maintenance with approved performance intervals. It takes place the earliest of every 6,000–12,000 flight hours,
3,000–8,000 flight cycles and 18–36 months according to aircraft type.
The D-check (4С, 6YR, 12YR) is heavy maintenance connected with deep aircraft disassembly, structure inspection and anticorrosion
prevention program. It takes place with an interval of not more than 72 months. Engine overhaul occurs after specified flight hours or
cycles occur. Some of the lease agreements without transfer of title include a component of variable lease payments which is generally
reimbursable to the Group by lessors as a contribution to engine maintenance costs after they are incurred.
The variable lease payments are recognised as an expense in profit or loss as incurred. In the case of other lease agreements without
transfer of title variable lease payments are replaced (subject to certain conditions) by Letters of Credit as security for Lessors to cover any
unfulfilled maintenance liabilities on the return of the aircraft, and amounts corresponding to the applicable variable lease amounts are
included in provisions. For C-check maintenance, a provision is recorded on a progressive basis based upon the Group’s estimate of future
maintenance costs. For engine maintenance, a provision is recorded on a progressive basis based upon the Group’s estimate of the excess
of maintenance costs over the amount reimbursable by the lessors. The Group’s aircraft maintenance liabilities are due in US Dollars.
Overhaul and restoration works (not depending on aircraft utilisation)
Costs resulting from restoration work required to be performed just before returning aircraft to the lessors, such as painting of the shell
or aircraft overhaul are recognised as provisions as of the inception of the contract. The counterpart of these provisions is booked as a
complement through the initial book value of the aircraft right-of-use assets. This complement to the right-of-use asset is depreciated
over the lease term.
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FIN A NCIA L STATEMENTS CONTINUED
3. Material accounting policies
continued
Financial instruments
Recognition and initial measurement
Trade receivables are initially recognised when they are originated. All other financial assets and financial liabilities are initially recognised
when the Group becomes a party to the contractual provisions of the instrument.
A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair
value plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or
issue. A trade receivable without a significant financing component is initially measured at the transaction price.
Classification and subsequent measurement
Financial assets
On initial recognition, a financial asset is classified as measured at: amortised cost; fair value through other comprehensive income
(FVOCI) – debt investment; FVOCI – equity investment; or FVTPL.
Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing
financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the
change in the business model.
A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:
it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal
amount outstanding.
A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:
it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal
amount outstanding.
On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present subsequent changes
in the investment’s fair value in OCI. This election is made on an investment-by-investment basis.
All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. This includes
all derivative financial assets. On initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the
requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting
mismatch that would otherwise arise.
Financial assets – Business model assessment
The Group makes an assessment of the objective of the business model in which a financial asset is held at a portfolio level, because this
best reflects the way the business is managed and information is provided to the management. The information considered includes:
the stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether the
management’s strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the
duration of the financial assets to the duration of any related liabilities or expected cash outflows or realising cash flows through the
sale of the assets;
how the performance of the portfolio is evaluated and reported to the Group’s management;
the risks that affect the performance of the business model (and the financial assets held within that business model) and how those
risks are managed;
how managers of the business are compensated – e.g. whether compensation is based on the fair value of the assets managed or the
contractual cash flows collected; and
the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future
sales activity.
Transfers of financial assets to third parties in transactions that do not qualify for de-recognition are not considered sales for this purpose,
consistent with the Group’s continuing recognition of the assets.
Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are measured at FVTPL.
Financial assets – Assessment whether contractual cash flows are solely payments of principal and interest
For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial asset on initial recognition. ‘Interest’ is defined
as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular
period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as a profit margin.
In assessing whether the contractual cash flows are solely payments of principal and interest, the Group considers the contractual terms
of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount
of contractual cash flows such that it would not meet this condition. In making this assessment, the Group considers:
contingent events that would change the amount or timing of cash flows;
terms that may adjust the contractual coupon rate, including variable-rate features;
prepayment and extension features; and
terms that limit the Group’s claim to cash flows from specified assets (e.g. non-recourse features).
A prepayment feature is consistent with the solely payments of principal and interest criterion if the prepayment amount substantially
represents unpaid amounts of principal and interest on the principal amount outstanding, which may include reasonable additional
compensation for early termination of the contract. Additionally, for a financial asset acquired at a discount or premium to its contractual
par amount, a feature that permits or requires prepayment at an amount that substantially represents the contractual par amount plus
accrued (but unpaid) contractual interest (which may also include reasonable additional compensation for early termination) is treated as
consistent with this criterion if the fair value of the prepayment feature is insignificant at initial recognition.
Financial assets – Subsequent measurement and gains and losses
Financial assets at FVTPL These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend
income, are recognised in profit or loss. However, see Note 19 for derivatives designated as hedging instruments.
Financial assets at amortised cost These assets are subsequently measured at amortised cost using the effective interest method. The amortised cost
is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are
recognised in profit or loss. Any gain or loss on de-recognition is recognised in profit or loss.
Debt investments at FVOCI These assets are subsequently measured at fair value. Interest income calculated using the effective interest method,
foreign exchange gains and losses and impairment are recognised in profit or loss. Other net gains and losses are
recognised in OCI. On de-recognition, gains and losses accumulated in OCI are reclassified to profit or loss.
Equity investments at FVOCI These assets are subsequently measured at fair value. Dividends are recognised as income in profit or loss unless
the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are
recognised in OCI and are never reclassified to profit or loss.
Classification, subsequent measurement and gains and losses
Financial liabilities
Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as
held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value
and net gains and losses, including any interest expense, are recognised in profit or loss. Other financial liabilities are subsequently
measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised
in profit or loss. Any gain or loss on de-recognition is also recognised in profit or loss.
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FIN A NCIA L STATEMENTS CONTINUED
3. Material accounting policies
continued
Modification of financial assets and financial liabilities
Financial assets
If the terms of a financial asset are modified, the Group evaluates whether the cash flows of the modified asset are substantially
different. If the cash flows are substantially different (referred to as ‘substantial modification’), then the contractual rights to cash flows
from the original financial asset are deemed to have expired. In this case, the original financial asset is de-recognised and a new financial
asset is recognised at fair value.
The Group performs a quantitative and qualitative evaluation of whether the modification is substantial, i.e. whether the cash flows
of the original financial asset and the modified or replaced financial asset are substantially different. The Group assesses whether the
modification is substantial based on quantitative and qualitative factors in the following order: qualitative factors, quantitative factors,
combined effect of qualitative and quantitative factors. If the cash flows are substantially different, then the contractual rights to cash
flows from the original financial asset is deemed to have expired. In making this evaluation the Group analogizes to the guidance on the
de-recognition of financial liabilities.
The Group concludes that the modification is substantial as a result of the following qualitative factors:
change the currency of the financial asset;
change in collateral or other credit enhancement.
If the cash flows of the modified asset carried at amortised cost are not substantially different, then the modification does not result in
de-recognition of the financial asset. In this case, the Group recalculates the gross carrying amount of the financial asset and recognises
the amount arising from adjusting the gross carrying amount as a modification gain or loss in profit or loss. The gross carrying amount of
the financial asset is recalculated as the present value of the renegotiated or modified contractual cash flows that are discounted at the
financial asset’s original effective interest rate. Any costs or fees incurred adjust the carrying amount of the modified financial asset and
are amortised over the remaining term of the modified financial asset.
Financial liabilities
The Group de-recognises a financial liability when its terms are modified and the cash flows of the modified liability are substantially
different. In this case, a new financial liability based on the modified terms is recognised at fair value. The difference between the
carrying amount of the financial liability extinguished and the new financial liability with modified terms is recognised in profit or loss.
If a modification (or exchange) does not result in the de-recognition of the financial liability the Group applies an accounting policy
consistent with the requirements for adjusting the gross carrying amount of a financial asset when a modification does not result in the
de-recognition of the financial asset, i.e. the Group recognises any adjustment to the amortised cost of the financial liability arising from
such a modification (or exchange) in profit or loss at the date of the modification (or exchange).
Changes in cash flows on existing financial liabilities are not considered as modification, if they result from existing contractual terms, e.g.
changes in fixed interest rates initiated by banks due to changes in the SOFR, NBRK and other key rates. The Group treats the modification
of an interest rate to a current market rate using the guidance on variable-rate financial instruments. This means that the effective
interest rate is adjusted prospectively.
The Group performs a quantitative and qualitative evaluation of whether the modification is substantial considering qualitative factors,
quantitative factors and combined effect of qualitative and quantitative factors. The Group concludes that the modification is substantial
as a result of the following qualitative factors:
change in the currency of the financial liability;
change in collateral or other credit enhancement;
inclusion of conversion option;
change in the subordination of the financial liability.
For the quantitative assessment the terms are substantially different if the discounted present value of the cash flows under the new terms,
including any fees paid net of any fees received and discounted using the original effective interest rate, is at least 10 per cent different from
the discounted present value of the remaining cash flows of the original financial liability. If an exchange of debt instruments or modification
of terms is accounted for as an extinguishment, any costs or fees incurred are recognised as part of the gain or loss on the extinguishment. If
the exchange or modification is not accounted for as an extinguishment, any costs or fees incurred adjust the carrying amount of the liability
and are amortised over the remaining term of the modified liability.
De-recognition
Financial assets
The Group de-recognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the
rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial
asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does
not retain control of the financial asset.
The Group enters into transactions whereby it transfers assets recognised in its consolidated statement of financial position, but retains either
all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not de-recognised.
Financial liabilities
The Group de-recognises a financial liability when its contractual obligations are discharged or cancelled, or expire. The Group also
de-recognises a financial liability when its terms are modified and the cash flows of the modified liability are substantially different,
in which case a new financial liability based on the modified terms is recognised at fair value.
On de-recognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including
any non-cash assets transferred or liabilities assumed) is recognised in profit or loss.
Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the consolidated statement of financial position when,
and only when, the Group currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net
basis or to realise the asset and settle the liability simultaneously.
Derivatives and hedging activities
Initial recognition and subsequent measurement
The Group uses derivative financial instruments such as commodity derivatives to hedge its risks associated with jet-fuel price
fluctuations. Such derivative financial instruments are initially recognised at fair value on the date on which the derivative contracts are
entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and
as financial liabilities when the fair value is negative.
The fair value of commodity derivatives are determined by reference to available market information and swap/forward valuation
methodology. Any gains or losses arising from changes in fair value of derivatives are taken directly to consolidated statement of profit
or loss, except for the effective portion and cost of hedging for cash flow hedges, which are recognised in OCI.
For the purpose of hedge accounting, hedges are classified as:
Fair value hedges when hedging the exposure to changes in the fair value of a recognised asset or liability or an unrecognised
firm commitment;
Cash flow hedges when hedging the exposure to variability in cash flows that is either attributable to a particular risk associated with a
recognised asset or liability or a highly probable forecast transaction or the foreign currency risk in an unrecognised firm commitment;
Hedges of a net investment in a foreign operation.
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FIN A NCIA L STATEMENTS CONTINUED
3. Material accounting policies
continued
The Group considers transactions with the probability of occurrence more than ninety percent highly probable transactions.
At the inception of the hedge, the Group formally designates and documents the hedging relationship to which the Group wishes to apply
hedge accounting, and the risk management objective and strategy for undertaking the hedge. That documentation includes identification
of the hedging instrument, the hedged item, the nature of the risk being hedged and how the entity will assess whether the hedging
relationship meets the hedge effectiveness requirements (including its analysis of the sources of hedge ineffectiveness and how it
determines the hedge ratio).
Such hedges are expected to be highly effective in achieving offsetting changes in fair value or cash flows and are assessed on an
ongoing basis at each reporting date or upon a significant change in the circumstances affecting the hedge effectiveness requirements,
whichever comes first. The assessment relates to expectations about hedge effectiveness and is therefore only forward-looking.
Hedges that meet the strict criteria for hedge accounting are accounted for as described below:
Cash flow hedges
The effective portion of the gains or losses on the hedging instrument is recognised directly in OCI in the cash flow hedge reserve, while
any ineffective portion is recognised immediately in the consolidated statement of profit or loss.
The Group uses fuel options contracts as hedges of its exposure to jet fuel price fluctuations in forecast transactions and firm
commitments. The ineffective portion relating to the ineffective portion relating to commodity contracts is recognised in the consolidated
statement of profit or loss.
Amounts recognised as OCI are transferred to the consolidated statement of profit or loss when the hedged transaction affects the
consolidated statement of profit or loss, such as when the hedged financial expense is recognised or when a forecast transaction occurs.
When the hedged item is the cost of a non-financial asset or non-financial liability, the amounts recognised as OCI are transferred to the
initial carrying amount of the non-financial asset or liability.
If the forecast transaction or firm commitment is no longer expected to occur, the cumulative gain or loss previously recognised in equity
is transferred to the consolidated statement of profit or loss. If the hedging instrument expires or is sold, terminated or exercised without
replacement or rollover, or if its designation as a hedge is revoked, any cumulative gain or loss previously recognised in OCI remains in
OCI until the forecast transaction or firm commitment affects consolidated statement of profit or loss.
If the hedge ratio for risk management purposes is no longer optimal but the risk management objective remains unchanged and the
hedge continues to qualify for hedge accounting, the hedge relationship will be rebalanced by adjusting either the volume of the hedging
instrument or the volume of the hedged item so that the hedge ratio aligns with the ratio used for risk management purposes. Any
hedge ineffectiveness is calculated and accounted for in profit or loss at the time of the hedge relationship rebalancing.
Cost of hedging
If the time value of a purchased option is separated and excluded from the designated hedging instrument, then the excluded portion is
separately accounted for as a cost of hedging. As such, the change in fair value of the excluded portion is recognised in OCI and accumulated
in a separate component of equity to the extent that it relates to the hedged item.
As a result of the above accounting, fluctuations in the fair value of the time value element will be accounted in OCI, both positive
and negative. At the maturity date, the time value of option becomes zero, the fair value is equal to the intrinsic value.
Crude oil commodity options
The Group has also entered into certain crude oil commodity options to mitigate the risk of variability of future cash flows on jet fuel
consumptions. These are just purely economic hedges and changes to its value are directly charged to the consolidated statement of
profit or loss within ‘Fuel and oil costs’.
Share Capital
Ordinary shares are classified as equity. Incremental costs directly attributable to issue of ordinary shares and share options are
recognised as a deduction from equity, net of any tax effects.
Dividends
Dividends are recognised as a liability in the period in which they are declared.
I mpairment of financial assets
The Group recognises loss allowances for expected credit losses (ECLs) on:
financial assets measured at amortised cost;
debt investments measured at FVOCI.
The Group measures loss allowances at an amount equal to lifetime ECLs, except for the following, which are measured at 12-month ECLs:
guarantee deposits and bank balances that are determined to have low credit risk at the reporting date; and
other guarantee deposits and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial
instrument) has not increased significantly since initial recognition.
Loss allowances for trade receivables and contract assets are always measured at an amount equal to lifetime ECLs.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating
ECLs, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort.
This includes both quantitative and qualitative information and analysis, based on the Group’s historical experience and informed credit
assessment and including forward-looking information.
The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due or if the external
credit rating assigned to a financial asset by an international rating agency falls by six notches according to Standard and Poor’s Global
Ratings (S&P Global Ratings), Moody’s or Fitch credit rating a gencies.
The Group considers a financial asset to be in default when:
the borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to actions such as realising
security (if any is held); or
the financial asset is more than 90 days past due.
The Group considers a debt security to have low credit risk when its credit risk rating is equivalent to the globally understood definition
of ‘investment grade’. The Group considers this to be Baa3 or higher per Moody’s or BBB- or higher per S&P Global Ratings.
Lifetime ECLs are the ECLs that result from all possible default events over the contractual life of a financial instrument.
12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date
(or a shorter period if the expected life of the instrument is less than 12 months).
The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk.
Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the
difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Group expects to receive).
ECLs are discounted at the effective interest rate of the financial asset.
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FIN A NCIA L STATEMENTS CONTINUED
3. Material accounting policies
continued
Credit-impaired financial assets
At each reporting date, the Group assesses whether financial assets carried at amortised cost and debt securities at FVOCI are credit-
impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash
flows of the financial asset have occurred.
Evidence that a financial asset is credit-impaired includes the following observable data:
significant financial difficulty of the borrower or issuer;
a breach of contract such as a default or being more than 90 days past due;
the restructuring of a loan or advance by the Group on terms that the Group would not consider otherwise;
it is probable that the borrower will enter bankruptcy or other financial reorganisation;
or the disappearance of an active market for a security because of financial difficulties.
Presentation of allowance for ECL in the consolidated statement of financial position
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.
For debt securities at FVOCI, the loss allowance is charged to profit or loss and is recognised in OCI.
Write-off
The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recovering a financial
asset in its entirety or a portion thereof. The Group makes an assessment with respect to the timing and amount of write-off based on
whether there is a reasonable expectation of recovery. The Group expects no significant recovery from the amount written off.
4. Application of new and revised international financial reporting standards
New standards and interpretations not yet adopted
A number of new standards are effective for annual periods beginning after 1 January 2023 and earlier application is permitted; however,
the Group has not early adopted the new or amended standards in preparing these consolidated financial statements.
The following amended standards and interpretations are not expected to have a significant impact on the Group’s consolidated
financial statements:
Classification of Liabilities as Current or Non-current with Covenants (Amendments to IAS 1);
Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7);
Lease Liability in a Sale and Leaseback (Amendments to IFRS 16);
Lack of Exchangeability (Amendments to IAS 21).
5. Critical accounting judgments and key sources of estimation uncertainty
The preparation of consolidated financial statements in conformity with IFRS Accounting Standards requires the management to make
judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities,
income and expenses. Actual results may differ from those estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the
period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the
revision affects both current and future periods.
The following are the critical judgments and estimates that the management have made in the process of applying the Group’s
accounting policies and that have the most significant effect on the amounts recognised in the consolidated financial statements.
Provisions
Provisions mainly consist of provision for aircraft maintenance (Note 22).
Determination of the functional currency
The functional currency of the Company is USD which, in the management’s view, reflects the economic substance of the underlying
events and circumstances of the Group at the reporting date. At each reporting date the management of the Group reassesses factors that
may affect the determination of the functional currency based on circumstances at the reporting date. Significant judgment is required
from the management when analysing indicators of the primary economic environment including the pricing policy, structure of revenues
from international and domestic routes, costs structure as well as continued development in the strategy of the Group for further
development of international routes. Future circumstances, therefore, may be different and may result in a different conclusion.
Useful lives of property, plant and equipment
In reporting intangible assets and tangible assets, an assessment is made of the useful economic life and an assessment is made at least
once a year to determine whether impairment exists.
Allowances
The Group accrues allowances for impairment of accounts receivable. The Group calculated the probability of default of accounts
receivable based on the lifetime approach. Changes in the economy and specific customer conditions may require adjustments of the
probability of default and loss given default coefficient derived based on the historical information and thus adjustment of the allowances
for doubtful accounts recorded in the consolidated financial statements. As at 31 December 2023, 2022 and 2021, allowances for doubtful
accounts were equal to USD 964 thousand, USD 997 thousand and USD 1,935 thousand, respectively (Note 16).
Other financial assets are mainly credit rated by one or more international credit rating agencies: Moody’s, Fitch, and S&P Global Rati ngs.
The estimated credit loss is calculated for the entire useful life for those assets whose credit risk has increased significantly comparing to
its level at the initial recognition date. Once the instrument is impaired the Group calculates allowances for doubtful accounts based on
the expected future cash flows discounted at the original effective interest rate.
Losses are recognised in profit or loss and reflected in an allowance account. When the Group believes that there are no realistic prospects of
recovery of the asset, the relevant amounts are written off. Interest on the impaired asset continues to be recognised through the unwinding
of the discount. When credit risk significantly decreases for those assets which previously have been classified in Stage 2, the Group performs
an analysis to determine whether the current financial position of the borrower is stable enough to reclassify such assets back to Stage 1.
As at 31 December 2023 impairment allowances were equal to USD 45,258 thousand as disclosed in Note 16 (31 December 2022: USD 45,524
thousand, 31 December 2021: USD 46,604 thousand).
The Group annually estimates the necessity of write-down for obsolete and slow-moving inventories based on annual stock count data
conducted at the reporting date. As at 31 December 2023, the Group recognised a write-down for obsolete and slow-moving inventories
in the amount of USD 5,237 thousand (2022: USD 5,858 thousand, 2021: USD 1,568 thousand) (Note 14).
130 131 Air Astana Integrated Report 2023
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FIN A NCIA L STATEMENTS CONTINUED
130 131 Air Astana Integrated Report 2023
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STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Notes to the consolidated financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
5. Critical accounting judgments and key sources of estimation uncertainty continued
Customer loyalty program
The Group’s Nomad Club Loyalty program is an incentive program under which passengers are granted points for each flight. Once a
passenger accumulates a certain number of points he or she can convert the points into a ticket. While calculating the customer loyalty
program provision the Group uses critical judgements and estimates in regard to the value per point by Nomad club members.
The Group uses estimated ticket values to calculate the program’s point value. Outstanding unutilised points as of each reporting dates are
treated as deferred revenue. Points are valued based on the weighted average standalone prices of tickets redeemed by route and class.
Based on the historical statistics the Group determines the amount of breakage with regards to those points whose usage is not probable.
Lease term
Some property leases contain extension options exercisable by the Group up to one year before the end of the non-cancellable contract
period. Where practicable, the Group seeks to include extension options in new leases to provide operational flexibility. The extension
options held are exercisable only by the Group and not by the lessors. The Group assesses at lease commencement date whether it is
reasonably certain to exercise the extension options. The Group reassesses whether it is reasonably certain to exercise the options if there
is a significant event or significant changes in circumstances within its control.
The Group has applied judgment to determine the lease term for some lease contracts in which it is a lessee, based on the period for
which the contract is enforceable. The Group considers that enforceability of the lease is established by a written contract (including broader
interpretation of a penalty) in combination with applicable legislation governing the lease contract related to renewal or termination rights
(specifically the lessee’s preferential rights to renew or not to cancel the lease). The Group determined that its preferential right to renew or
not to cancel would on its own be treated as substantive, when the Group has a preferential right to renew or not to cancel the lease through
a negotiation mechanism under the Civil Code of Kazakhstan. Thus, considering the broader economics of the contract, and not only the
contractual termination payments, the lease term may go beyond the contract term.
Deferred tax asset recoverability and compliance with tax legislation
Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the
likely timing and the level of future taxable profits, together with future tax planning strategies. The tax code permits an entity to carry
forward the accumulated tax losses for the next ten years. As at 31 December 2023 the Group concluded that it is probable that future
taxable profits will be available against which the deferred tax asset will be utilised.
Tax legislation of Kazakhstan are subject to frequent changes and varying interpretations. The management’s interpretation of such
legislation in applying it to business transactions of the Group may be challenged by the relevant regional authorities enabled by law
to impose fines and penalties. It is possible that the tax treatment of transactions that have not been challenged in the past may be
challenged. Fiscal periods remain open to review by the tax authorities in respect of taxes for the five calendar years preceding the year
of tax review.
Under certain circumstances reviews may cover longer periods. While the Group believes it has provided adequately for all tax liabilities
based on its understanding of the tax legislation, the above facts may create additional financial risks for the Group.
6. Segment reporting
The Group’s management makes decisions regarding resource allocation to segments based upon the results and the activities of its full
service brand Air Astana and Low Cost brand FlyArystan segments for the purpose of segments’ performance evaluation. The Group’s
main activities can be summarized as follows:
Air Astana
The Group’s aviation activities consist of mainly domestic and international passenger and cargo air transportation as full service airline.
FlyArystan
The Group’s aviation activities consist of mainly domestic and international passenger and cargo air transportation as low cost service airline.
In 2023, the Group amended the treatment of intercompany leases costs between Air Astana and FlyArystan in its segment reporting to
consistently apply IFRS 16 Leases in both operating segments.
As a result of this change, the Group has recognised the depreciation of right-of-use assets arising from these intercompany lease
transactions with FlyArystan. These transactions are treated as inter segment transactions and are reflected in elimination section of the
segment report. The amendments have been applied for the years ended 31 December 2023, 2022 and 2021. The Group does not conduct
separate analyses of the financial position for each segment.
Operating results for the years ended 31 December 2023, 2022 and 2021:
132 133 Air Astana Integrated Report 2023
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FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
| ’000 USD Consolidated Profit or Loss statement | 2023 Air Astana | 2023 FlyArystan | Inter-group elimination | Total |
| Revenue and other income | ||||
| Passenger revenue | 869,171 | 274,425 | – | 1,143,596 |
| Cargo and mail revenue | 20,773 | 1,746 | – | 22,519 |
| Other income | 7,449 | 981 | (31) | 8,399 |
| Lease | 87,277 | 673 | (87,950) | – |
| Total revenue and other income | 984,670 | 277,825 | (87,981) | 1,174,514 |
| Operating expenses | ||||
| Fuel and oil costs | (209,195) | (69,977) | – | (279,172) |
| Employee and crew costs | (148,667) | (44,416) | 16 | (193,067) |
| Depreciation and amortisation | (159,148) | (43,648) | 40,785 | (162,011) |
| Engineering and maintenance | (99,663) | (43,522) | 35,005 | (108,180) |
| Handling, landing fees and route charges | (82,480) | (23,247) | – | (105,727) |
| Passenger service | (86,901) | (14,235) | – | (101,136) |
| Selling costs | (36,740) | (3,691) | – | (40,431) |
| Insurance | (7,723) | (3,258) | – | (10,981) |
| IT and communication costs | (4,925) | (1,613) | – | (6,538) |
| Consultancy, legal and professional services | (5,608) | (132) | 11 | (5,729) |
| Taxes | (3,920) | – | – | (3,920) |
| Property and office costs | (3,498) | (367) | – | (3,865) |
| Aircraft lease costs | (1,995) | (1,844) | 1,622 | (2,217) |
| Other operating costs | (14,334) | (1,228) | 3 | (15,559) |
| Total operating expenses | (864,797) | (251,178) | 77,442 | (1,038,533) |
| Operating profit | 119,873 | 26,647 | (10,539) | 135,981 |
132 133 Air Astana Integrated Report 2023
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CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Notes to the consolidated financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
6. Segment reporting
continued
134 135 Air Astana Integrated Report 2023
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FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
| ’000 USD Consolidated Profit or Loss statement | 2022 Air Astana | 2022 FlyArystan | Inter-group elimination | Total |
| Revenue and other income | ||||
| Passenger revenue | 782,911 | 215,209 | – | 998,120 |
| Cargo and mail revenue | 20,673 | 1,451 | – | 22,124 |
| Other income | 10,853 | 1,285 | – | 12,138 |
| Lease | 62,972 | – | (62,972) | – |
| Total revenue and other income | 877,409 | 217,945 | (62,972) | 1,032,382 |
| Operating expenses | ||||
| Fuel and oil costs | (175,701) | (56,183) | – | (231,884) |
| Employee and crew costs | (116,876) | (32,031) | – | (148,907) |
| Depreciation and amortisation | (132,959) | (30,710) | 28,491 | (135,178) |
| Engineering and maintenance | (118,252) | (33,582) | 25,943 | (125,891) |
| Handling, landing fees and route charges | (65,835) | (19,098) | – | (84,933) |
| Passenger service | (68,639) | (11,682) | – | (80,321) |
| Selling costs | (31,057) | (2,197) | – | (33,254) |
| Insurance | (6,148) | (2,169) | – | (8,317) |
| IT and communication costs | (4,252) | (1,491) | – | (5,743) |
| Consultancy, legal and professional services | (4,181) | (77) | – | (4,258) |
| Aircraft lease costs | (3,737) | (2,636) | 2,480 | (3,893) |
| Property and office costs | (2,344) | (139) | – | (2,483) |
| Taxes | (1,427) | – | – | (1,427) |
| Other operating costs | (16,487) | (691) | – | (17,178) |
| Total operating expenses | (747,895) | (192,686) | 56,914 | (883,667) |
| Operating profit | 129,514 | 25,259 | (6,058) | 148,715 |
| ’000 USD Consolidated Profit or Loss statement | 2021 Air Astana | 2021 FlyArystan | Inter-group elimination | Total |
| Revenue and other income | ||||
| Passenger revenue | 562,393 | 153,401 | – | 715,794 |
| Cargo and mail revenue | 31,930 | 1,640 | – | 33,570 |
| Other income | 6,414 | 1,432 | – | 7,846 |
| Lease | 54,661 | – | (54,661) | – |
| Gain from sale and leaseback transaction | 4,628 | – | 4,628 | |
| Total revenue and other income | 660,026 | 156,473 | (54,661) | 761,838 |
| Operating expenses | ||||
| Fuel and oil costs | (97,895) | (38,663) | – | (136,558) |
| Depreciation and amortisation | (119,505) | (25,779) | 24,452 | (120,832) |
| Employee and crew costs | (92,006) | (24,259) | – | (116,265) |
| Engineering and maintenance | (87,950) | (28,965) | 22,333 | (94,582) |
| Handling, landing fees and route charges | (54,341) | (15,756) | – | (70,097) |
| Passenger service | (52,649) | (8,245) | – | (60,894) |
| Selling costs | (23,130) | (1,945) | – | (25,075) |
| Insurance | (6,395) | (1,655) | – | (8,050) |
| IT and communication costs | (3,832) | (743) | – | (4,575) |
| Aircraft lease costs | (3,432) | (3,754) | 3,524 | (3,662) |
| Consultancy, legal and professional services | (3,334) | (58) | – | (3,392) |
| Property and office costs | (2,543) | (98) | – | (2,641) |
| Taxes | (2,501) | – | – | (2,501) |
| Other operating costs | (9,690) | (851) | – | (10,541) |
| Total operating expenses | (559,203) | (150,771) | 50,309 | (659,665) |
| Operating profit | 100,823 | 5,702 | (4,352) | 102,173 |
134 135 Air Astana Integrated Report 2023
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STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Notes to the consolidated financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
7. Revenue and other income
Passenger revenue increased by USD 145,476 thousand during 2023 as compared to 2022 primarily due to the optimization in operations.
Passenger revenue increased by USD 282,326 thousand during 2022 as compared to 2021 primarily due to the restoration in demand.
8,399
12,138
7,846
In December 2022 the Group recognised income from insurance claim in other income in the amount of USD 4,581 thousand.
The insurance claim was based on an incident with aircraft which happened in July 2022.
Based on negotiations with the manufacturer in 2015, the Group purchased a spare engine in November 2021 which was immediately
sold as part of a sale and leaseback transaction for the purpose of obtaining additional financing. The Group measured the right-of-use
asset arising from the leaseback at the proportion of the previous carrying amount of the asset that relates to the right-of-use retained by
the Group. Accordingly, the Group recognised a net gain of USD 4,628 thousand which represents the excess of the sale proceeds over
lease liabilities and the changes in engine’s related assets. The Group has sold a spare engine for the total amount of USD 18,321 thousand
and recognised a right-of-use asset of USD 4,579 thousand and lease liabilities of USD 8,670 thousand. Under the lease agreement the
Group has leased back the spare engine for eight years with monthly payments The Group has recognised USD 8,719 thousand as the
proceeds from the sale and leaseback transaction in investing activities in the consolidated statement of cash flows.
During 2023, 2022 and 2021 passenger, cargo and mail revenue, representing total revenue from contracts with customers, were generated
from the following destinations in each operating segment:
136 137 Air Astana Integrated Report 2023
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FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
| ’000 USD | 2023 | 2022 | 2021 |
| Passenger revenue | |||
| Scheduled passenger flights including: | 1,092,287 | 931,393 | 663,379 |
| Fuel surcharge | 109,786 | 91,836 | 60,764 |
| Airport services | 57,185 | 45,773 | 32,459 |
| Excess baggage | 6,638 | 6,920 | 5,718 |
| Charter flights | 51,309 | 66,727 | 52,415 |
| 1,143,596 | 998,120 | 715,794 |
| ’000 USD | 2023 | 2022 | 2021 |
| Cargo and mail revenue | |||
| Cargo – Regular | 20,469 | 19,121 | 13,975 |
| 2,050 | 1,796 | 1,685 | |
| Cargo – Charter | – | 1,207 | 17,910 |
| 22,519 | 22,124 | 33,570 | |
| ’000 USD | 2023 | 2022 | 2021 |
| Other income | |||
| Gain on disposal of property, plant and equipment and other assets | 3,499 | 2,239 | 2,489 |
| Other income | 1,546 | 7,421 | 3,183 |
| Income from ground services | 1,522 | 1,204 | 1,281 |
| Other | 1,832 | 1,274 | 893 |
| Operating segments | |||
| 2023 | 2023 | ||
| ’000 USD | Air Astana | FlyArystan | Total |
| Domestic | 241,306 | 205,753 | 447,059 |
| Asia and Middle East | 302,053 | 17,784 | 319,837 |
| Europe | 264,741 | 22,697 | 287,438 |
| CIS | 81,844 | 29,937 | 111,781 |
| Total revenue from passenger, cargo and mail | 889,944 | 276,171 | 1,166,115 |
| Operating segments | |||
| 2022 | 2022 | ||
| ’000 USD | Air Astana | FlyArystan | Total |
| Domestic | 205,782 | 158,422 | 364,204 |
| Asia and Middle East | 246,219 | 10,510 | 256,729 |
| Europe | 265,702 | 20,628 | 286,330 |
| CIS | 85,881 | 27,100 | 112,981 |
| Total revenue from passenger, cargo and mail | 803,584 | 216,660 | 1,020,244 |
| Operating segments | |||
| 2021 | 2021 | ||
| ’000 USD | Air Astana | FlyArystan | Total |
| Domestic | 175,991 | 133,180 | 309,171 |
| Asia and Middle East | 152,496 | 3,401 | 155,897 |
| Europe | 131,539 | 4,541 | 136,080 |
| CIS | 134,297 | 13,919 | 148,216 |
| Total revenue from passenger, cargo and mail | 594,323 | 155,041 | 749,364 |
136 137 Air Astana Integrated Report 2023
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CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Notes to the consolidated financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
8. Operating expenses
The average number of employees during 2023 was 5,467 (2022: 5,001; 2021: 4,559).
1 During 2023 the Group received compensation amounts of USD 15,905 thousand from suppliers.
In 2023, due to increase in the operating activity, the Group’s operating expenses increased in comparison with 2022 and 2021.
9. Finance income and costs
138 139 Air Astana Integrated Report 2023
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FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
| ’000 USD | 2023 | 2022 | 2021 |
| Employee and crew costs | |||
| Wages and salaries of operational personnel | 113,450 | 87,182 | 69,930 |
| Wages and salaries of administrative personnel | 25,246 | 19,701 | 16,941 |
| Accommodation and allowance | 17,256 | 12,875 | 8,427 |
| Social tax | 13,528 | 10,668 | 8,159 |
| Wages and salaries of sales personnel | 8,038 | 6,641 | 5,178 |
| Training | 6,662 | 5,894 | 4,002 |
| Contract crew | – | 27 | 19 |
| Other | 8,887 | 5,919 | 3,609 |
| 193,067 | 148,907 | 116,265 |
| ’000 USD | 2023 | 2022 | 2021 |
| Engineering and maintenance | |||
| Maintenance – provisions (Note 22) | 85,830 | 80,514 | 60,818 |
| Spare parts | 13,142 | 12,150 | 10,709 |
| Maintenance – variable lease payments | 12,734 | 11,314 | 12,914 |
| Technical inspection | 2,665 | 2,598 | 2,724 |
| Maintenance – components 1 | (6,191) | 19,315 | 7,417 |
| 108,180 | 125,891 | 94,582 |
| ’000 USD | 2023 | 2022 | 2021 |
| Handling, landing fees and route charges | |||
| Handling charge | 45,211 | 35,989 | 28,832 |
| Aero navigation | 37,593 | 29,497 | 23,247 |
| Landing fees | 20,941 | 17,826 | 16,612 |
| Meteorological services | 229 | 142 | 164 |
| Other | 1,753 | 1,479 | 1,242 |
| 105,727 | 84,933 | 70,097 | |
| ’000 USD | 2023 | 2022 | 2021 |
| Passenger service | |||
| Airport charges | 48,378 | 39,148 | 29,596 |
| Catering | 31,027 | 22,301 | 16,249 |
| Security | 5,913 | 4,130 | 2,842 |
| In-flight entertainment | 5,090 | 5,317 | 4,664 |
| Other | 10,728 | 9,425 | 7,543 |
| 101,136 | 80,321 | 60,894 |
| ’000 USD | 2023 | 2022 | 2021 |
| Selling costs | |||
| Reservation costs | 22,140 | 19,719 | 15,965 |
| Commissions | 9,152 | 7,129 | 4,157 |
| Advertising | 8,341 | 5,669 | 4,431 |
| Interline commissions | 352 | 370 | 234 |
| Other | 446 | 367 | 288 |
| 40,431 | 33,254 | 25,075 | |
| ’000 USD | 2023 | 2022 | 2021 |
| Aircraft lease costs | |||
| Variable lease charges | 907 | 393 | 332 |
| Lease return costs | 635 | 242 | 380 |
| Leased engine on wing costs | 395 | 2,390 | 656 |
| Lease of engines and rotable spare parts | 280 | 868 | 1,413 |
| Effect of COVID-19 related rent concessions (Note 25) | – | – | 881 |
| 2,217 | 3,893 | 3,662 |
| ’000 USD | 2023 | 2022 | 2021 |
| Finance income | |||
| Interest income on bank deposits | 14,071 | 6,274 | 1,621 |
| Reversal of impairment allowance on financial assets | 485 | 721 | 616 |
| Other | 250 | – | 168 |
| 14,806 | 6,995 | 2,405 | |
| ’000 USD | 2023 | 2022 | 2021 |
| Finance costs | |||
| Interest expense on lease liabilities (Note 25) | 44,578 | 35,239 | 35,448 |
| Unwinding of the discount of provision for aircraft maintenance (Note 22) | 3,362 | – | – |
| Interest expense on bank loans (Note 25) | 1,415 | 3,256 | 11,296 |
| Impairment allowance on financial assets | 430 | 114 | 253 |
| Financial assets and liabilities held at FVTPL | – | 239 | – |
| Other | 107 | 406 | 69 |
| 49,892 | 39,254 | 47,066 |
138 139 Air Astana Integrated Report 2023
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STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Notes to the consolidated financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
10. Income tax expense
The Group’s income tax expense for the years ended 31 December was as follows:
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes. In addition, as the Company has a functional currency that is
different from the currency of the country in which it is domiciled, it recognises temporary differences on changes in exchange rates
which lead to changes in the tax basis rather than the book basis.
The tax effect on the major temporary differences that give rise to the deferred income tax assets and liabilities as at 31 December 2023,
2022 and 2021 is presented in the table below:
As at 31 December 2023 the Group concluded that it is probable that future taxable profits will be available against which the deferred tax
asset will be utilised.
During 2022, the total amount of tax loss carried forward was utilised fully (tax loss carried forward as of 31 December 2021:
USD 6,905 thousand).
Movements in deferred tax assets and liabilities presented above were recorded in profit or loss accounts, except for USD 2,277 thousand
related to carried forward corporate income tax movements, which were recognised in equity relating to the realised portion of deferred
tax on cash flows hedge and effective portion of changes in fair value. (2022: USD 2,470 thousand;
2021: USD 2,352 thousand).
In accordance with the local tax legislation both hedged and unhedged foreign currency losses are treated as deductible expenses for the
purpose of corporate income tax calculations. If such deductible expenses cannot be fully utilised in the year of origination the tax code
permits an entity to carry forward the accumulated tax losses for the next ten years.
In accordance with the local tax legislation, if deductible expenses from derivative instruments cannot be fully utilised in the year
of origination, the tax code permits an entity to carry forward the accumulated tax losses for the next ten years. In previous years, the
probability of gain from derivative instruments was low and no deferred tax asset was recognised for tax losses from derivative instruments.
During 2022 and 2021 the Group earned a gain from derivative instruments and utilised tax losses accumulated in prior years and recognised
a deferred tax asset to the extent of expected payments on exercised contracts.
The income tax rate in the Republic of Kazakhstan, where the Group is located, in 2023, 2022 and 2021 was 20%. The taxation charge for the
year is different from that which would be obtained by applying the statutory income tax rate to profit or loss before income tax.
Below is a reconciliation of theoretical income tax at 20% (2022 and 2021: 20%) to the actual income tax expense recorded in the Group’s
consolidated statement of profit or loss:
140 141 Air Astana Integrated Report 2023
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FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
| ’000 USD | 2023 | 2022 | 2021 |
| Current income tax | |||
| Current income tax | (41,137) | (42,599) | (4,707) |
| Adjustment recognised in the current year in relation to the current tax of prior years | 1,920 | 1,376 | (416) |
| (39,217) | (41,223) | (5,123) | |
| Deferred tax expense | |||
| Deferred income tax benefit/(expense) | 20,830 | 18,246 | (3,708) |
| 20,830 | 18,246 | (3,708) | |
| (18,387) | (22,977) | (8,831) |
| ’000 USD | 2023 | 2022 | 2021 |
| Deferred tax assets | |||
| Lease liabilities | 132,305 | 123,633 | 106,091 |
| Provision for aircraft maintenance | 50,758 | 37,929 | 25,433 |
| Trade and other payables | 5,219 | 3,843 | 5,482 |
| Trade receivables | 3,674 | 3,805 | 2,285 |
| Tax loss carried forward | 41 | – | 1,381 |
| Other | 1,047 | 1,172 | 355 |
| Total deferred tax assets | 193,044 | 170,382 | 141,027 |
| Deferred tax liabilities | |||
| Right of use assets | (120,772) | (113,204) | (97,434) |
| Difference in depreciable value of property, plant and equipment and intangible assets | (31,309) | (34,074) | (36,043) |
| Inventories | (2,621) | (2,809) | (2,182) |
| Prepaid expenses | (477) | (768) | (1,091) |
| Other | (825) | (1,040) | (1,566) |
| Total deferred tax liabilities | (156,004) | (151,895) | (138,316) |
| Net deferred tax assets | 37,040 | 18,487 | 2,711 |
| ’000 USD | 2023 | 2022 | 2021 |
| Profit before tax | 87,092 | 101,391 | 44,990 |
| Corporate income tax, % | 20% | 20% | 20% |
| Income tax at statutory rate | (17,418) | (20,278) | (8,998) |
| Recognition of previously unrecognised tax losses | – | – | 1,381 |
| USD forex effect | 1,997 | 350 | 617 |
| Tax effect of non-deductible expenses | (2,966) | (3,049) | (1,831) |
| Income tax expense | (18,387) | (22,977) | (8,831) |
140 141 Air Astana Integrated Report 2023
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CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Notes to the consolidated financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
11. Property, plant and equipment
Accumulated depreciation
In determining the Group’s geographical information, assets, which consist principally of aircraft and ground equipment, are mainly
registered in the Republic of Kazakhstan. Accordingly, there is no reasonable basis for allocating the assets to geographical segments.
Rotable spare parts include aircraft modification costs.
The Group’s obligations under leases have a carrying amount of USD 734,632 thousand (2022: USD 714,186 thousand; 2021: USD 648,097
thousand) (Note 25). The total amount of Aircraft Under Lease as at 31 December 2023 includes eighteen Airbus aircraft related to the
FlyArystan division with a net book value of USD 271,447 thousand (2022: fourteen Airbus aircraft with a net book value of USD 181,708
thousand; 2021: ten Airbus aircraft with a net book value of USD 118,216 thousand).
As per the loan agreement with JSC Halyk Bank of Kazakhstan the Technical Center (Hangar) in Astana with a carrying amount of
USD 18,413 thousand was pledged in favor of JSC Halyk Bank of Kazakhstan on 5 May 2021 (Note 24). In 2022, the land plot, where the
above-mentioned Aviation Technical Center is located, was divided into two separate parts. The main land plot where Aviation Technical
Center is located remains pledged in JSC Halyk Bank of Kazakhstan till the end of availability of credit line in 2025. The second part of the
land was released from pledge.
The cost of fully depreciated items as at 31 December 2023 is USD 22,250 thousand (2022: USD 19,627 thousand; 2021: USD 14,711 thousand).
Impairment
As at 31 December 2023, 31 December 2022 and 31 December 2021 there were no indicators of impairment.
12. Depreciation and amortisation
13. Guarantee deposits
Guarantee deposits for leased aircraft comprise security deposits required by the lease agreements as security for future lease payments
to be made by the Group. Guarantee deposits are denominated primarily in US Dollars. The Group assesses credit risk for such deposits as
low mainly because almost all lessors are rated from AA to BBB in accordance with S&P Global Ratings credit quality gra des.
For those lessors who are not credit rated by international rating agencies, the management calculates the expected credit loss based
on the assumption that such lessors are rated at CCC by S&P Global Ratings. The amount of deposits with such lessors as of 31
2023 is USD 3,732 thousand (2022: USD 1,721 thousand, 2021: USD 2,850 thousand).
In 2023 the Group re-issued two standby letters of credit with JSC Halyk bank of Kazakhstan (initially issued in Citibank Europe PLC and secured
by cash) as a result, the cash collateral in the amount of USD 1,258 thousand was returned by Citibank Europe PLC to the Group’s account.
As at 31 December 2023, the Group had guarantees and stand-by letters of credit in JSC Halyk Bank of Kazakhstan in the amount of
USD 10,168 thousand, USD 13,396 thousand in JSC Altyn Bank and USD 41,979 thousand in JSC Citibank Kazakhstan.
142 143 Air Astana Integrated Report 2023
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FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
| ’000 USD | Rotable spare parts | Office and training equipment | Building,premises and land | Vehicles | Aircraft under lease | Equipment in transit and construction in progress | Total |
| Cost | |||||||
| At 1 January 2021 | 77,536 | 9,011 | 33,800 | 2,940 | 976,141 | 382 | 1,099,810 |
| Additions | 13,709 | 502 | 4,476 | 64 | 120,638 | 429 | 139,818 |
| Disposals | (10,267) | (406) | (600) | (223) | (15,543) | – | (27,039) |
| Transfers to inventories | (216) | – | – | – | – | – | (216) |
| Transfers from inventories | 309 | – | 373 | – | – | – | 682 |
| Other transfers | (1,557) | – | – | – | 2,184 | (627) | – |
| At 31 December 2021 | 79,514 | 9,107 | 38,049 | 2,781 | 1,083,420 | 184 | 1,213,055 |
| Additions | 30,274 | 3,069 | 275 | 116 | 187,365 | 9,995 | 231,094 |
| Disposals | (6,894) | (189) | – | (215) | (4,818) | – | (12,116) |
| Transfers to inventories | (2) | – | – | – | – | – | (2) |
| At 31 December 2022 | 102,892 | 11,987 | 38,324 | 2,682 | 1,265,967 | 10,179 | 1,432,031 |
| Additions | 18,565 | 3,774 | 10,821 | 251 | 163,833 | 2,736 | 199,980 |
| Disposals | (5,279) | (638) | (3,167) | (65) | (14,455) | – | (23,604) |
| Other transfers | – | 8,312 | 2,106 | – | – | (10,418) | – |
| At 31 December 2023 | 116,178 | 23,435 | 48,084 | 2,868 | 1,415,345 | 2,497 | 1,608,407 |
| ’000 USD | Rotable spare parts | Office and training equipment | Building,premises and land | Vehicles | Aircraft under lease | Equipment in transit and construction in progress | Total |
| At 1 January 2021 | 36,312 | 6,346 | 7,501 | 1,513 | 343,026 | – | 394,698 |
| Charge for the year | 8,896 | 831 | 3,164 | 195 | 107,087 | – | 120,173 |
| Disposals | (8,486) | (316) | (221) | (203) | (14,790) | – | (24,016) |
| At 31 December 2021 | 36,722 | 6,861 | 10,444 | 1,505 | 435,323 | – | 490,855 |
| Charge for the year | 8,579 | 907 | 3,607 | 186 | 121,265 | – | 134,544 |
| Disposals | (5,816) | (173) | – | (157) | (4,807) | – | (10,953) |
| At 31 December 2022 | 39,485 | 7,595 | 14,051 | 1,534 | 551,781 | – | 614,446 |
| Charge for the year | 12,093 | 1,755 | 4,017 | 186 | 143,151 | – | 161,202 |
| Disposals | (3,034) | (624) | (2,635) | (49) | (14,219) | – | (20,561) |
| At 31 December 2023 | 48,544 | 8,726 | 15,433 | 1,671 | 680,713 | – | 755,087 |
| Net book value | |||||||
| At 31 December 2021 | 42,792 | 2,246 | 27,605 | 1,276 | 648,097 | 184 | 722,200 |
| At 31 December 2022 | 63,407 | 4,392 | 24,273 | 1,148 | 714,186 | 10,179 | 817,585 |
| At 31 December 2023 | 67,634 | 14,709 | 32,651 | 1,197 | 734,632 | 2,497 | 853,320 |
| ’000 USD | 2023 | 2022 | 2021 |
| Depreciation of property, plant and equipment (Note 11) | 161,202 | 134,544 | 120,173 |
| Amortisation of intangible assets | 809 | 634 | 659 |
| Total | 162,011 | 135,178 | 120,832 |
| ’000 USD | 31 December 2023 | 31 December 2022 | 31 December 2021 |
| Non-current | |||
| Guarantee deposits for leased aircraft | 32,233 | 29,311 | 17,549 |
| Other guarantee deposits | 1,599 | 481 | 828 |
| Impairment allowances | (530) | (272) | (403) |
| 33,302 | 29,520 | 17,974 | |
| Current | |||
| Other guarantee deposits | 1,580 | 1,723 | 1,450 |
| Guarantee deposits for leased aircraft | 400 | 538 | 124 |
| Guarantee deposits to secure Letters of Credit for maintenance liabilities | – | 1,258 | – |
| Impairment allowances | (1) | (3) | (6) |
| 1,979 | 3,516 | 1,568 | |
| 35,281 | 33,036 | 19,542 |
142 143 Air Astana Integrated Report 2023
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STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Notes to the consolidated financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
13. Guarantee deposits continued
Guarantee deposits for leased aircraft and maintenance liabilities are receivable as follows:
The main driver for increases in guarantee deposits for leased aircraft in 2022 was the additional 16 aircraft committed for delivery in
2023–2026.
The movements in the cumulative write-down for obsolete and slow-moving inventories were as follows for the years ended 31 December:
15. Prepayments
As at 31 December 2023, prepayments for long-term assets include prepayments to Boeing as pre delivery payment for three
aircraft (Note 28).
The movements in the impairment allowance for the years ended 31 December 2023, 31 December 2022 and 31 December 2021 were:
The impairment allowance includes advance payments made by the Group to suppliers which are currently subject to legal claims for
recovery due to the suppliers’ inability to complete the transactions.
144 145 Air Astana Integrated Report 2023
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FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
| ‘000 USD | 31 December 2023 | 31 December 2022 | 31 December 2021 |
| Within one year | 400 | 1,796 | 124 |
| After one year but not more than five years | 11,456 | 10,517 | 6,305 |
| More than five years | 20,804 | 18,842 | 11,288 |
| 32,660 | 31,155 | 17,717 | |
| Fair value adjustment | (27) | (48) | (44) |
| 32,633 | 31,107 | 17,673 |
| 14. Inventories ’000 USD | 31 December 2023 | 31 December 2022 | 31 December 2021 |
| Spare parts | 41,548 | 36,980 | 34,258 |
| Fuel | 14,733 | 6,581 | 7,112 |
| Crockery | 4,136 | 2,879 | 3,902 |
| Goods in transit | 4,238 | 2,277 | 2,530 |
| De-icing liquid | 447 | 1,791 | 827 |
| Uniforms | 1,825 | 1,288 | 1,049 |
| Promotional materials | 2,586 | 670 | 1,470 |
| Blank forms | 263 | 269 | 282 |
| Other | 3,009 | 2,298 | 1,693 |
| 72,785 | 55,033 | 53,123 | |
| Less: cumulative write-down for obsolete and slow-moving inventories | (5,237) | (5,858) | (1,568) |
| 67,548 | 49,175 | 51,555 |
| ’000 USD | 2023 | 2022 | 2021 |
| Cumulative write-down for obsolete and slow-moving inventories at the beginning of the year | (5,858) | (1,568) | (1,707) |
| Write-down for the year | (206) | (8,029) | (34) |
| Reversal of previous write-down for the year | 827 | 3,739 | 173 |
| Cumulative write-down for obsolete and slow-moving inventories at the end of the year | (5,237) | (5,858) | (1,568) |
| ’000 USD | 31 December 2023 | 31 December 2022 | 31 December 2021 |
| Non-current | |||
| Advances for services | 9,146 | 9,165 | 7,306 |
| Prepayments for long-term assets | 9,305 | 6,352 | 8,993 |
| 18,451 | 15,517 | 16,299 | |
| Current | |||
| Advances for goods | 10,934 | 11,088 | 13,288 |
| Advances for services | 11,506 | 8,138 | 12,594 |
| Prepayments of leases without transfer of legal title | 2,569 | 2,003 | 1,147 |
| 25,009 | 21,229 | 27,029 | |
| Less: impairment allowance for prepayments | (184) | (218) | (495) |
| 24,825 | 21,011 | 26,534 |
| ’000 USD | 2023 | 2022 | 2021 |
| At the beginning of the year | (218) | (495) | (498) |
| Accrued during the year | (74) | (451) | (8) |
| Written-off against previously created allowance | 98 | – | – |
| Reversed during the year | 10 | 728 | 11 |
| Allowance for doubtful debt at the end of the year | (184) | (218) | (495) |
| 16. Trade and other receivables ’000 USD | 31 December 2023 | 31 December 2022 | 31 December 2021 |
| Non-current | |||
| Other financial assets | 45,258 | 45,524 | 47,092 |
| Due from employees and Ab-initio pilot trainees | 1,343 | 1,300 | 3,123 |
| 46,601 | 46,824 | 50,215 | |
| Less: impairment allowance | (45,258) | (45,524) | (46,604) |
| 1,343 | 1,300 | 3,611 | |
| Current | |||
| Trade receivables | 23,135 | 20,119 | 14,906 |
| Due from employees and Ab-initio pilot trainees | 1,354 | 1,337 | 993 |
| Receivable from lessors – variable lease reimbursement | – | 848 | 170 |
| 24,489 | 22,304 | 16,069 | |
| Less: impairment allowance | (964) | (997) | (1,935) |
| 23,525 | 21,307 | 14,134 |
144 145 Air Astana Integrated Report 2023
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STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Notes to the consolidated financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
16. Trade and other receivables
continued
In 2016, due to the significant credit quality deterioration, KazInvestBank JSC announced that its banking license was recalled, and Delta Bank
JSC experienced temporary suspension of its license for accepting new deposits and opening new accounts on 22 May 2017. Consequently,
the management reclassified all funds held with these banks from the bank deposit line item to non-current trade and other receivables
and recognised an impairment allowance of approximately 90% of the funds as at 31 December 2016.
As at 31 December 2023 the allowance for those banks comprises 100% of the gross balances.
Receivable from lessors represents the amount of variable lease reimbursement claimed by the Group as a result of maintenance
performed that occurred prior to the reporting date.
Amounts due from trainees of the Ab-initio pilot program in respect of 75% (2022: 50%; 2021: 50%) of their initial training costs are
classified as interest free loans. The remaining costs are classified by the Group as a prepayment of its expenses and are amortised over
a period of seven years, during which period the Group has a right to oblige these expenses also to become payable by the pilot trainees
should such pilot trainee terminate his/her employment. The alumni of the Ab-initio pilot program can either repay the remaining training
cost by cash or defer for the future so that this amount becomes payable only if they leave the Company. Amounts due from those cadets
who selected the option were reclassified to deferred expenses and are amortised using the straight-line method over the remaining
amortisation term.
The Group’s net trade and other receivables are denominated in the following currencies as at 31 December:
The movements in impairment allowance for the years ended 31 December 2023, 31 December 2022 and 31 December 2021 were:
17. Other taxes prepaid
Value-added tax recoverable is recognised within current assets as the Group annually applies for reimbursement of these amounts,
which is usually successful.
18. Cash and bank balances
Cash and bank balances are denominated in the following currencies as at 31 December:
19. Other financial assets
The Group signed agreements and entered into transactions with various financial institutions to manage the risk of significant changes in
aviation fuel prices. In accordance with the terms, financial institutions agreed to compensate the Group the excess between the actual
price of crude oil and the ceiling price specified in the agreements. The fair value has been determined using а valuation model with
market observable parameters.
Loss on fuel options of USD 2,510 thousand was added to fuel costs for the year ended 31 December 2023. Fuel costs for the years ended
31 December 2022 and 31 December 2021 include gain of USD 12,145 thousand and USD 8,013 thousand, respectively.
146 147 Air Astana Integrated Report 2023
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FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
| ’000 USD | 2023 | 2022 | 2021 |
| Tenge | 16,008 | 8,161 | 12,334 |
| US Dollar | 2,070 | 8,353 | 2,453 |
| Euro | 1,757 | 1,232 | 756 |
| Other | 5,033 | 4,861 | 2,202 |
| 24,868 | 22,607 | 17,745 |
| ’000 USD | 2023 | 2022 | 2021 |
| At the beginning of the year | (46,521) | (48,539) | (49,634) |
| Accrued during the year | (840) | (220) | (1,562) |
| Reversed during the year | 1,116 | 1,588 | 2,175 |
| Written-off against previously created allowance | 97 | – | – |
| Foreign currency difference | (74) | 650 | 482 |
| At the end of the year | (46,222) | (46,521) | (48,539) |
| ’000 USD | 31 December 2023 | 31 December 2022 | 31 December 2021 |
| Value-added tax recoverable | 9,722 | 7,826 | 7,590 |
| Other taxes prepaid | 525 | 552 | 119 |
| 10,247 | 8,378 | 7,709 |
| ’000 USD | 31 December 2023 | 31 December 2022 | 31 December 2021 |
| Term deposits with an initial maturity of less than 3 months | 178,313 | 155,476 | 81,595 |
| Current accounts with foreign banks | 85,661 | 82,254 | 102,172 |
| Current accounts with local banks | 9,578 | 14,712 | 42,488 |
| Cash in hand | 111 | 183 | 107 |
| Accrued interest | 353 | 272 | 3 |
| 274,016 | 252,897 | 226,365 | |
| Impairment allowances | (10) | (9) | (8) |
| 274,006 | 252,888 | 226,357 |
| ’000 USD | 2023 | 2022 | 2021 |
| US Dollar | 262,832 | 229,006 | 217,119 |
| Tenge | 3,869 | 12,766 | 2,285 |
| Euro | 1,686 | 4,634 | 1,652 |
| Indian Rupee | 2,164 | 2,705 | 425 |
| British Pound | 1,504 | 1,520 | 2,712 |
| Chinese Yuan | 249 | 558 | 203 |
| Uzbek Som | 284 | 336 | 266 |
| Russian Rouble | 239 | 188 | 285 |
| Other | 1,179 | 1,175 | 1,410 |
| 274,006 | 252,888 | 226,357 |
| ’000 USD | Call option (purchase) |
| At 1 January 2021 | – |
| Acquisition | 4,460 |
| Gain included in “fuel and oil costs” | 8,013 |
| Payments on exercised contracts | (5,090) |
| At 31 December 2021 | 7,383 |
| At 1 January 2022 | 7,383 |
| Acquisition | 1,388 |
| Gain included in “fuel and oil costs” | 12,145 |
| Payments on exercised contracts | (19,121) |
| Reclassification to accounts receivable on exercised instruments | (407) |
| Gain included in OCI - Net change in fair value | 272 |
| At 31 December 2022 | 1,660 |
| At 1 January 2023 | 1,660 |
| Acquisition | 3,225 |
| Loss included in “fuel and oil costs” | (2,510) |
| Payments on exercised contracts | (587) |
| Loss included in OCI - Net change in fair value | (1,025) |
| At 31 December 2023 | 763 |
146 147 Air Astana Integrated Report 2023
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STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Notes to the consolidated financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
20. Equity
As at 31 December 2023, 2022 and 2021, share capital was comprised of 17,000 authorised, issued and fully paid ordinary shares with
a par value of 147,150 tenge per share (equivalent to USD 1,000 per share at the time of purchase).
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share
at meetings of the Group.
In accordance with Kazakhstan legislation the Company’s distributable reserves are limited to the balance of retained earnings as recorded
in the Company’s statutory financial statements prepared in accordance with IFRS Accounting Standards. A distribution cannot be made
when equity is negative or if distribution would result in negative equity or the Company’s insolvency.
As at 31 December 2023 the Company had retained earnings, including the profit for the current year, of USD 221,975 thousand
(2022: USD 169,990 thousand; 2021: USD 91,576 thousand).
On 31 March 2023, a general annual meeting of the Company’s shareholders was held. The general meeting decided to distribute 20%
of the Company’s net profit for 2022 in the amount of KZT 7,516,580 thousand (equivalent of USD 16,776 thousand) between the Company’s
shareholders in proportion to their interests. The dividends were fully paid on 26 May 2023 (No dividends were declared during 2022 and 2021).
In 2023 dividends in the amount of KZT 442 thousand (equivalent of USD 0.99 thousand) per share were declared (2022: nil, 2021: nil)
on the 17,000 authorised ordinary shares as at declaration date.
On 8 July 2022 the Company changed the number of authorised ordinary shares from 17,000 to 1,700,000. On 10 January 2024 existing
shares were split to 306,000,000 shares and additional 60,000,000 shares were authorised for issue. On 15 February 2024 the Group
successfully completed its IPO. The number of authorised but not issued shares is 9,473,685 as at the date of approval of the consolidated
financial statements.
The calculation of basic earnings per share is based on profit or loss for the year and the updated number of ordinary shares outstanding
after the share split of 306,000,000. Basic and diluted earnings per share have been retrospectively recalculated to reflect the updated
number of shares issued. The Company has no instruments with potential dilutive effect.
Unearned transportation revenue represents the value of sold but unused passenger tickets the validity period of which has not expired,
excluding recognised passenger revenue in respect of the percentage of tickets sold that are expected not to be used or refunded.
Deferred revenue attributable to the customer loyalty program refers to the Group’s Nomad Club program.
Due to the short-term nature of the Group’s performance obligations, the opening balance of unearned transportation revenue less the
refunded amounts was recognised as revenue in 2023.
22. Provision for aircraft maintenance
The movements in the provision for aircraft maintenance were as follows for the years ended 31 December:
Under the terms of its lease agreements without transfer of title for aircraft, the Group is obliged to carry out and pay for maintenance
based on use of the aircraft and to return aircraft to the lessors in a satisfactory condition at the end of the lease term. The maintenance
cost estimates used for calculating the provisions are stated in US Dollars.
The significant increase in the provision balance as at 31 December 2023 and 2022 was due to the increased utilization of aircraft as a
result of restoration of the operations. In addition, the number of aircraft leased under agreements with favourable contractual conditions,
where variable maintenance reserves are paid to lessors decreased due to return of such aircraft.
Significant judgment is involved in determining the provision for aircraft maintenance. The management has engaged an independent
specialist to assist in estimating the timing and cost of expected engine maintenance activities. The estimate by the independent specialist
is prepared based on the current condition of aircraft, historical flight hours and cycles, expected future utilisation of the aircraft over the
remaining life of the leases without transfer of title as well as requirements for returnable condition when the lease term is concluded.
The estimates are based on the following key assumptions:
expected utilisation rate for flight hours and cycles is based on historical data and actual usage;
market prices are used for services and parts;
aircraft will be operated within standard norms and conditions; and
no provisions have been made for unscheduled maintenance.
148 149 Air Astana Integrated Report 2023
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FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
| ‘000 USD | 2023 | 2022 | 2021 |
| Profit for the year | 68,705 | 78,414 | 36,159 |
| Number of ordinary shares | 306,000,000 | 306,000,000 | 306,000,000 |
| Earnings per share – basic and diluted (USD) | 0.225 | 0.256 | 0.118 |
| 21. Deferred revenue ’000 USD | 31 December 2023 | 31 December 2022 | 31 December 2021 |
| Unearned transportation revenue | 72,440 | 70,998 | 49,068 |
| Customer loyalty program provision | 11,928 | 9,154 | 8,192 |
| 84,368 | 80,152 | 57,260 |
| ’000 USD | 31 December 2023 | 31 December 2022 | 31 December 2021 |
| Engines | 210,975 | 155,955 | 98,667 |
| D-Check | 22,486 | 13,464 | 12,430 |
| Landing gear | 6,141 | 4,880 | 4,543 |
| Provision for redelivery of aircraft | 5,864 | 4,963 | 3,936 |
| Auxiliary Power unit | 5,328 | 4,698 | 4,002 |
| C-Check | 2,994 | 5,683 | 3,588 |
| 253,788 | 189,643 | 127,166 |
| ’000 USD | 2023 | 2022 | 2021 |
| At 1 January | 189,643 | 127,166 | 83,070 |
| Accrued during the year (Note 8) | 88,793 | 82,503 | 61,348 |
| Used during the year | (25,047) | (18,037) | (16,722) |
| Reversed during the year (Note 8) | (2,963) | (1,989) | (530) |
| Unwinding of the discount (Note 9) | 3,362 | – | – |
| At 31 December | 253,788 | 189,643 | 127,166 |
| The planned utilisation of these provisions is as follows: ’000 USD | 31 December 2023 | 31 December 2022 | 31 December 2021 |
| Within one year | 105,170 | 71,685 | 40,710 |
| During the second year | 62,411 | 38,651 | 37,809 |
| During the third year | 59,412 | 46,648 | 30,159 |
| After the third year | 26,795 | 32,659 | 18,488 |
| Total provision for aircraft maintenance | 253,788 | 189,643 | 127,166 |
| Less: current portion | 105,170 | 71,685 | 40,710 |
| Non-current portion | 148,618 | 117,958 | 86,456 |
148 149 Air Astana Integrated Report 2023
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STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Notes to the consolidated financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
23. Trade and other payables
24. Loans
On 12 August 2019, the Group opened a Credit Line in JSC Halyk Bank of Kazakhstan for USD 40,000 thousand for 3 years, for the purpose
of working capital financing. Later, during 2020, the credit line was increased up to USD 160,000 thousand and tenor extended until
10 September 2025. The credit line in JSC Halyk Bank of Kazakhstan allows taking borrowings both in KZT and USD.
As per the loan agreement with JSC Halyk Bank of Kazakhstan the Technical Center (Hangar) in Astana with a carrying amount of
USD 18,413 thousand was pledged in favor of JSC Halyk Bank of Kazakhstan on 5 May 2021 (Note 11). During 2021 the Group received
borrowings from JSC Halyk Bank of Kazakhstan within the existing Credit Line in the amount of USD 10,000 thousand and KZT 1,000,000
thousand (equivalent USD 2,305 thousand). At the same year the Group has repaid USD 25,000 thousand and KZT 35,013,000 thousand
(equivalent USD 81,444 thousand), out of which significant part was ahead of schedule.
In the first quarter of 2022 the Group has received available facilities from JSC Halyk Bank of Kazakhstan in the amount of USD 10,000
thousand and KZT 13,500,000 thousand (equivalent USD 27,705 thousand). During 2022 the Group has fully repaid all the borrowed
facilities from JSC Halyk Bank of Kazakhstan. In 2022, the land plot, where the above-mentioned Aviation Technical Center is located, was
divided into two separate parts. The main land plot where Aviation Technical Center is located will remain pledged in JSC Halyk Bank of
Kazakhstan till the end of availability of credit line in 2025. The second part of the land was released from pledge.
On 31 August 2021 the Group entered into a multi-currency Loan Agreement with EBRD for the total amount of USD 50,000 thousand.
Uncommitted Tranche 2 in the amount of USD 15,000 thousand was for the purpose of financing capital expenditures (flight simulation
facility, which planned to be pledged to the EBRD) and Committed Tranche 1 in the amount of USD 35,000 thousand is for working capital
needs (COVID-19 package). In February and March 2022 the Group withdrew USD 5,000 thousand and USD 10,000 thousand, respectively for
working capital needs. In April 2022 EBRD upgraded status of Tranche 2 to a “committed”. In March 2023 the Group received USD 20,000
thousand for working capital needs and USD 15,000 thousand for the reimbursement of capital expenditures related to purchase of the Flight
Simulation Equipment. The Group fully repaid the loan in July 2023.
As of 31 December 2023 the Group had available credit lines totalling USD 142,832 thousand with the option to be utilised until September
2025 at JSC Halyk Bank of Kazakhstan. Additionally, there are revolving credit line of USD 20,000 thousand at Citibank Kazakhstan JSC.
25. Lease liabilities
During the years from 2012 to 2014 the Group acquired ten aircraft under fixed interest lease agreements with transfer of title. The lease
term for each aircraft is twelve years. The Group has an option to purchase each aircraft for a nominal amount at the end of the lease.
For other aircraft lease contracts are concluded for eight years without repurchase options at the end of the lease terms.
As at 31 December 2023 the Group has five Airbus and three Boeing 767 aircraft under fixed interest lease agreements with transfer of
title (2022: five Airbus and three Boeing 767 aircraft; 2021: five Airbus and three Boeing 767 aircraft).
Loans provided by financial institutions to the lessors in respect of five new Airbus aircraft which were delivered during 2012 and 2013
were guaranteed by European Export Credit Agencies while three Boeing 767 aircraft which were delivered in 2013 and 2014 were
guaranteed by the US Export Import Bank.
The Group’s leases with transfer of title are subject to certain covenants. These covenants impose restrictions in respect of certain
transactions, including, but not limited to restrictions in respect of indebtedness. Certain lease agreements with transfer of title include
covenants as regards to change of ownership of the Group. These requirements have been met as at 31 December 2023, 2022 and 2021.
All other aircraft leases other than described above are contracted without the right for purchase at the end of the lease term.
The Group’s obligations under leases are secured by the lessors’ title to the leased assets. These assets have a carrying value of
USD 734,632 thousand (2022: USD 714,186 thousand; 2021: USD 648,097 thousand) (Note 11).
150 151 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
| ’000 USD | 31 December 2023 | 31 December 2022 | 31 December 2021 |
| Trade payables | 62,929 | 47,425 | 35,375 |
| Advances received | 8,570 | 12,232 | 5,424 |
| Deposits received from agents | 7,250 | 6,844 | 3,441 |
| Due to employees | 6,860 | 5,071 | 4,490 |
| Accrued bonuses | 1,637 | 6,559 | 11,425 |
| Taxes payable | 1,637 | 1,065 | 740 |
| Pension contribution | 1,014 | 773 | 580 |
| Vacation pay accrual | 1,005 | 1,321 | 1,397 |
| Deferred revenue refund | – | 6 | – |
| Other | 99 | 109 | 117 |
| 91,001 | 81,405 | 62,989 | |
| The Group’s trade and other payables are denominated in the following currencies: ’000 USD | 31 December 2023 | 31 December 2022 | 31 December 2021 |
| US Dollar | 37,505 | 33,230 | 16,361 |
| Tenge | 43,945 | 33,088 | 39,424 |
| Euro | 4,395 | 3,900 | 2,846 |
| British Pound | 958 | 671 | 519 |
| Other | 4,198 | 10,516 | 3,839 |
| 91,001 | 81,405 | 62,989 |
| ’000 USD | 31 December 2023 | 31 December 2022 | 31 December 2021 |
| Non-current | |||
| Loan | – | 4,162 | 4,759 |
| – | 4,162 | 4,759 | |
| Current | |||
| Current portion of loan | 412 | 7,889 | 57,320 |
| Interest payable | – | 45 | 207 |
| 412 | 7,934 | 57,527 |
| The Group’s loans are denominated in the following currencies: ’000 USD | 31 December 2023 | 31 December 2022 | 31 December 2021 |
| US Dollar | 412 | 12,096 | 31,196 |
| Tenge | – | – | 31,090 |
| 412 | 12,096 | 62,286 |
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ADDITIONAL INFORMATION
Notes to the consolidated financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
25. Lease liabilities
continued
Minimum lease payments
Present value of minimum lease payments
The Group’s lease obligations are mainly denominated in US Dollars.
Reconciliation of movements of loans and lease liabilities to cash flows arising from financing activities
On 1 July 2015 the Group designated a portion of its US Dollar lease obligations with transfer of title as hedges of highly probable future US
Dollar revenue streams. The Group applied the cash flow hedge accounting model to this hedging transaction in accordance with IAS 39.
In connection with the transition of the functional currency to US Dollar, this hedge ceased to be economically effective from 31 December
2017. At 31 December 2023 a foreign currency loss of USD 19,613 thousand (2022: USD 32,020 thousand; 2021: USD 44,098 thousand), before
deferred income tax of USD 3,923 thousand (2022: USD 6,404 thousand; 2021: USD 8,820 thousand) on the lease liabilities with transfer of
title, representing an effective portion of the hedge, is deferred in the hedging reserve within equity. As a result of the change, the hedge
relationship has been discontinued so that starting from 1 January 2018 no further foreign currency translation gains or losses are transferred
from profit or loss to the hedge reserve, and the hedge reserve recognised in equity as at 31 December 2017 shall remain in equity until the
forecasted revenue cash flows are received.
During 2023 the amount reclassified from the hedging reserve to foreign exchange loss in the consolidated statement of comprehensive
income was USD 12,408 thousand (before deferred income tax of USD 2,482 thousand) (2022: USD 12,078 thousand before deferred
income tax of USD 2,416 thousand; 2021: USD 11,760 thousand, before deferred income tax of USD 2,352 thousand).
The Group conducted a sale and leaseback transaction in November 2021 by buying and selling at the same day one engine and leasing it
back under the agreement without transfer of title. From this transaction the Group has received cash of USD 18,321 thousand, recognised
assets of USD 4,579 and recognised a gain of USD 4,628 thousand.
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FIN A NCIA L STATEMENTS CONTINUED
| Minimum lease payments | Present value of minimum lease payments | |||||
| ’000 USD | 31 December 2023 | 31 December 2022 | 31 December 2021 | 31 December 2023 | 31 December 2022 | 31 December 2021 |
| Not later than one year | 214,585 | 196,804 | 177,178 | 174,997 | 158,593 | 146,354 |
| Later than one year and not later than five years | 512,484 | 537,167 | 545,269 | 431,400 | 463,293 | 484,301 |
| Later than five years | 121,453 | 119,600 | 101,281 | 112,496 | 110,918 | 96,238 |
| 848,522 | 853,571 | 823,728 | 718,893 | 732,804 | 726,893 | |
| Less: future finance charges | (129,629) | (120,767) | (96,835) | – | – | – |
| Present value of minimum lease payments | 718,893 | 732,804 | 726,893 | 718,893 | 732,804 | 726,893 |
| ’000 USD | 31 December 2023 | 31 December 2022 | 31 December 2021 | 31 December 2023 | 31 December 2022 | 31 December 2021 |
| Included in the consolidated financial statements as: – current portion of lease obligations | – | – | – | 174,997 | 158,593 | 146,354 |
| – non-current portion of lease obligations | – | – | – | 543,896 | 574,211 | 580,539 |
| – | – | – | 718,893 | 732,804 | 726,893 |
| ’000 USD | Loans (Note 24) | Lease liabilities | Total |
| Balance as at 1 January 2023 | 12,096 | 732,804 | 744,900 |
| Repayment of borrowings | (46,250) | – | (46,250) |
| Proceed from borrowings | 35,000 | – | 35,000 |
| Repayment of lease liabilities | – | (173,302) | (173,302) |
| Repayment of additional financing | (390) | – | (390) |
| Interest paid | (1,459) | (41,258) | (42,717) |
| Total changes from financing cash flows | (13,099) | (214,560) | (227,659) |
| Effect of changes in foreign exchange rates | – | 81 | 81 |
| Other changes | – | – | – |
| Additional adjustment - new leases and modifications | – | 160,574 | 160,574 |
| Non-cash settlement due to netting with guarantee deposits | – | (4,584) | (4,584) |
| Interest expense (Note 9) | 1,415 | 44,578 | 45,993 |
| Total other changes | 1,415 | 200,568 | 201,983 |
| Balance as at 31 December 2023 | 412 | 718,893 | 719,305 |
| ’000 USD | Loans (Note 24) | Lease liabilities | Total |
| Balance as at 1 January 2022 | 62,286 | 726,893 | 789,179 |
| Repayment of borrowings | (104,027) | – | (104,027) |
| Proceed from borrowings | 52,706 | – | 52,706 |
| Repayment of lease liabilities | – | (173,501) | (173,501) |
| Repayment of additional financing | (368) | – | (368) |
| Interest paid | (3,367) | (34,987) | (38,354) |
| Total changes from financing cash flows | (55,056) | (208,488) | (263,544) |
| Effect of changes in foreign exchange rates | 1,610 | (298) | 1,312 |
| Other changes | |||
| Additional adjustment - new leases | – | 179,458 | 179,458 |
| Interest expense (Note 9) | 3,256 | 35,239 | 38,495 |
| Total other changes | 3,256 | 214,697 | 217,953 |
| Balance as at 31 December 2022 | 12,096 | 732,804 | 744,900 |
| ’000 USD | Loans (Note 24) | Lease l iabilities | Total |
| Balance as at 1 January 2021 | 164,013 | 704,662 | 868,675 |
| Repayment of borrowings | (106,444) | – | (106,444) |
| Proceed from borrowings | 12,305 | – | 12,305 |
| Repayment of lease liabilities | – | (93,553) | (93,553) |
| Repayment of additional financing | (350) | – | (350) |
| Interest paid | (16,047) | (33,041) | (49,088) |
| Total changes from financing cash flows | (110,536) | (126,594) | (237,130) |
| Effect of changes in foreign exchange rates | (2,487) | (84) | (2,571) |
| Other changes | |||
| Additional adjustment – new leases | – | 113,070 | 113,070 |
| Interest expense (Note 9) | 11,296 | 35,448 | 46,744 |
| Effect of COVID-19 related rent concessions (Note 8) | – | 881 | 881 |
| Gain from early return of engine | – | (490) | (490) |
| Total other changes | 11,296 | 148,909 | 160,205 |
| Balance as at 31 December 2021 | 62,286 | 726,893 | 789,179 |
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ADDITIONAL INFORMATION
Notes to the consolidated financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
26. Financial instruments
Exposure to credit, interest rate, currency and commodity price risk arises in the normal course of the Group’s business. The Group does
not hedge its exposure to such risks, other than commodity price risk and interest rate risks arising from lease contractual obligations as
discussed below.
Capital management
The Group manages its capital to ensure the Group will be able to continue as a going concern while maximising the return to the
shareholders through the optimisation of the debt and equity balance. The Group’s current 10 year development Strategy was approved in
2017 and covers the years 2017–2026.
The capital structure of the Group consists of net debt (comprising loans and lease obligations in Notes 24 and 25) and equity of the Group
(comprising issued capital, functional currency translation reserve, reserve on hedging instruments and retained earnings as detailed in
Note 20).
The Group is not subject to any externally imposed capital requirements.
The Group does not have a target gearing ratio.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group
has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of
mitigating the risk of financial loss from defaults. Credit exposure is controlled by counterparty limits that are reviewed and approved by
the risk management committee annually.
The maximum exposure to credit risk related to financial instruments, such as cash, guarantee deposits and accounts receivable, is calculated
based on their book value.
Trade receivables consist of a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation
is performed on the financial condition of accounts receivable and, where appropriate, credit guarantee insurance cover is purchased.
As at 31 December 2023, 31 December 2022 and 31 December 2021 there was no significant concentration of credit risk in respect of trade
accounts receivable (Note 16).
The Group uses reputable banks and has established a cash investment policy which would limit the credit risk related to bank accounts
and deposits.
As a result of the increased credit risks on some of the banks, the management reconsidered its cash management policy in 2017
and reviewed the credit ratings of the major banks in Kazakhstan and placed its main amounts due from banks in banks with ratings of
“BBB- or higher. The carrying amounts of financial assets represent the maximum credit exposure. Impairment losses on financial assets
recognised in profit or loss were as follows:
Trade and other receivables
Trade receivables
The sale of tickets is the main revenue source of the Group. The Group uses agents who sell tickets on behalf of the Group to corporations
and the general public for a certain commission that varies depending on the geographical location and market conditions. As a result
agents amass significant amounts of funds for tickets sold which are recorded as trade receivables by airlines. The International Air
Transport Association (hereinafter referred to as “IATA”) conducts monitoring of agents by establishing IATA accreditation procedures
designed to ensure the credit quality of agents. IATA also set Local Financial Criteria for each market in accordance to which agents have
to obtain a credit enhancement such as bank guarantee or insurance from a financial institution of certain credit rating before they can be
accredited by IATA.
On a regular basis, the IATA notifies the airlines about the amount of debt from each agent in excess of its guarantee or insurance
protected amount. In addition, the IATA also informs about sharp and unusual increases in sales which might signal an increase in risk.
The Group then decides whether to stop dealing with such agents until the negative factors are resolved.
The Group works only with IATA accredited agents.
The Group does not have trade receivables and contract assets for which no loss allowance is recognised because of collateral.
At 31 December 2023, 9 debtors including IATA Billing Settlement Plans (BSPs) as collecting agencies from the worldwide travel agencies
comprised 69% of the Group’s trade and other receivables excluding banks in default (at 31 December 2022: fifteen debtors comprised
52%; at 31 December 2021: eight debtors comprised 46%).
The following tables provide information about the exposure to credit risk for trade receivables as at 31 December 2023, 31 December
2022 and 31 December 2021.
Receivable from lessors
Receivable from lessors represents the amount of variable lease reimbursement claimed by the Group as a result of maintenance
performed that occurred prior to the reporting date. Most of the lessors are rated by the international credit rating agencies. Since all
lessors have excellent credit history and the Group has been conducting operations with many of them for many years, the management
considers their credit risk to be insignificant even for those lessors that do not hold any credit rating.
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FIN A NCIA L STATEMENTS CONTINUED
| ’000 USD | Note | 2023 | 2022 | 2021 |
| Reversal of impairment loss on trade and other receivables and prepayments | 15, 16 | 212 | 1,645 | 616 |
| (Accrual)/reversal of impairment loss on guarantee deposits | 13 | (256) | 134 | (252) |
| Accrual of impairment loss on cash and bank balances | 18 | (1) | (1) | (1) |
| (45) | 1,778 | 363 |
| ’000 USD | 31 December 2023 | 31 December 2022 | 31 December 2021 |
| Default banks | 45,258 | 45,524 | 47,092 |
| Trade receivables | 23,135 | 20,119 | 14,906 |
| Amounts due from employees | 2,697 | 2,637 | 4,116 |
| Receivable from lessors | – | 848 | 170 |
| Total gross carrying amount | 71,090 | 69,128 | 66,284 |
| Impairment allowance | (46,222) | (46,521) | (48,539) |
| Total net carrying amount | 24,868 | 22,607 | 17,745 |
| 31 December 2023 | 31 December 2022 | 31 December 2021 | |||||||
| ’000 USD | Gross carrying amount | Loss allowance | Carrying amount | Gross carrying amount | Loss allowance | Carrying amount | Gross carrying amount | Loss allowance | Carrying amount |
| Current (not past due) | 22,344 | (8) | 22,336 | 18,941 | (15) | 18,926 | 12,920 | (23) | 12,897 |
| 1–30 days past due | 390 | – | 390 | 503 | – | 503 | 372 | – | 372 |
| 31–90 days past due | 62 | – | 62 | 229 | – | 229 | 169 | – | 169 |
| More than 90 days past due | 339 | (339) | – | 446 | (446) | – | 1,445 | (1,445) | – |
| 23,135 | (347) | 22,788 | 20,119 | (461) | 19,658 | 14,906 | (1,468) | 13,438 | |
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Notes to the consolidated financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
26. Financial instruments continued
The table below presents the credit quality of receivables from lessors and others:
Amounts due from employees
In general, certain part of the Ab-initio pilot training costs is borne by the pilot trainees but are funded by the Group through the provision of
interest free loans to participants of the program. The Group withholds the amounts due from pilots’ salary on a monthly basis. Those pilots
or cadets who leave the Group are fully provided with respect of the credit losses.
Guarantee Deposits
The main counterparties of the Group have a credit rating of at least from BBB- S&P Global Rati ngs.
To determine whether published ratings remain up-to-date and to assess whether there has been a significant increase in credit risk at the
reporting date that has not been reflected in published ratings the Group monitors changes in credit risk by tracking their financial stability.
12-month and lifetime probabilities of default are based on historical data supplied by S&P Global Ratings for each credit rating. Lo
default (LGD) parameters generally reflect an assumed recovery rate of 30% except when a security is credit-impaired, in which case the
estimate of loss is based on the instrument’s current market price and original effective interest rate.
The following table presents credit ratings of guarantee deposits each of which were classified in stage 1:
The Group did not have any guarantee deposits that were either past due or impaired.
Cash and bank balances
The Group held cash and bank balances of USD 274,006 thousand at 31 December 2023 (2022: USD 252,888 thousand; 2021: USD 226,357
thousand). The cash and bank balances are held with bank and financial institution counterparties, which are rated BBB- to A+, based on
S&P Global
Impairment on cash and bank balances has been measured on a 12-month expected loss basis and reflects the short maturities of the
exposures. The Group believes that its cash and bank balances have low credit risk based on the external credit ratings of the
counterparties.
The Group uses a similar approach for assessment of ECLs for cash and bank balances to those used for bank and guarantee deposits.
The following table presents an analysis of the credit quality of cash and bank balances measured at amortised cost:
Interest rate risk
The Group is not exposed to significant interest rate risk because the Group mainly borrows funds at fixed interest rates.
Foreign currency risk
The Group is exposed to foreign currency risk on sales and purchases that are denominated in currencies other than the US Dollar.
The currencies giving rise to this risk are primarily Tenge and Euro. For amounts of assets and liabilities denominated in foreign currency
refer to Notes 16, 18, 23 and 24. The management believes that it has taken appropriate measures to support the sustainability of the
Group’s business under the current circumstances.
Foreign currency sensitivity analysis
The Group is mainly exposed to the risk of change of exchange rates of the US Dollar against Tenge and Euro.
The carrying value of the Group’s monetary assets and liabilities in foreign currency as at the reporting date has been provided below.
This disclosure excludes assets and liabilities denominated in other currencies as they do not have significant effect on the consolidated
financial statements of the Group.
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| Credit rating | |
| ’000 USD | 31 December 2022 |
| BBB- to AAA | 848 |
| Without ratings | – |
| Gross carrying amounts | 848 |
| Impairment allowance | – |
| Balance at 31 December | 848 |
| Movements in the allowance for impairment in respect of trade and other receivables | |||
| ’000 USD | 2023 | 2022 | 2021 |
| Balance at 1 January | 46,521 | 48,539 | 49,634 |
| Accrual of impairment allowance | 840 | 220 | 1,562 |
| Write-off of impairment allowance | (97) | – | – |
| Foreign currency difference | 74 | (650) | (482) |
| Reversal of impairment allowance | (1,116) | (1,588) | (2,175) |
| Balance at 31 December | 46,222 | 46,521 | 48,539 |
| ’000 USD | 31 December 2023 | 31 December 2022 | 31 December 2021 |
| Credit rating | |||
| BBB- to AAA | 28,901 | 27,990 | 15,289 |
| C to CCC+ | 3,732 | 1,721 | 2,850 |
| Without ratings | 3,179 | 3,600 | 1,812 |
| Gross carrying amounts (amortised cost before impairment) | 35,812 | 33,311 | 19,951 |
| Impairment allowance | (531) | (275) | (409) |
| Total net carrying amount | 35,281 | 33,036 | 19,542 |
| ’000 USD | 2023 | 2022 | 2021 |
| Balance at 1 January | (275) | (409) | (157) |
| Net re-measurement of loss allowance | (256) | 134 | (252) |
| Balance at 31 December | (531) | (275) | (409) |
| 31 December 2023 | 31 December 2022 | 31 December 2021 | |||||||
| ’000 USD Credit rating | Gross carrying amount | 12 month ECL | Carrying amount | Gross carrying amount | 12 month ECL | Carrying amount | Gross carrying amount | 12 month ECL | Carrying amount |
| BBB- to A+ | 257,562 | (9) | 257,553 | 232,795 | (8) | 232,787 | 189,811 | (5) | 189,806 |
| B+ to BB+ | 16,343 | (1) | 16,342 | 19,919 | (1) | 19,918 | 36,447 | (3) | 36,444 |
| Without ratings | 111 | – | 111 | 183 | – | 183 | 107 | – | 107 |
| 274,016 | (10) | 274,006 | 252,897 | (9) | 252,888 | 226,365 | (8) | 226,357 | |
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ADDITIONAL INFORMATION
Notes to the consolidated financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
26. Financial instruments continued
In 2023 the following table details the Group’s sensitivity of weakening of the US Dollar against the Tenge by 10% (2022 and 2021: 21%
and 10%) and Euro by 10% (2022 and 2021: 10.6% and 9%) and strengthening of the US Dollar against the Tenge by 10% (2022 and 2021:
21% and 13%) and Euro by 10% (2022 and 2021: 10.6% and 9%).
The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the
period end for above-mentioned sensitivity ratios.
The sensitivity analysis includes trade and other receivables, cash and bank balances, bank deposits, guarantee deposits, trade and other
payables, loans and lease liabilities.
A negative number below indicates a decrease in Profit or Loss and positive number would be an opposite impact on the Profit or Loss:
The Group limits the currency risk by monitoring changes in exchange rates of foreign currencies in which trade and other receivables,
cash and bank balances, bank deposits, guarantee deposits, trade and other payables and loans and lease liabilities are denominated.
Liquidity risk management
Liquidity risk is the risk that a Group will encounter difficulty in meeting the obligations associated with its liabilities that are settled by
delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always
have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses
or risking damage to the Group’s reputation.
Ultimate responsibility for liquidity risk management rests with the Group’s Management. The Group manages liquidity risk by maintaining
adequate reserves, continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.
Liquidity and interest risk tables
The following tables detail the Group’s remaining contractual maturity for its non-derivative financial liabilities and assets. The tables have been
drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay.
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FIN A NCIA L STATEMENTS CONTINUED
| 31 December 2023 | 31 December 2022 | 31 December 2021 | |||||
| ’000 USD | Notes | Tenge | Euro | Tenge | Euro | Tenge | Euro |
| Assets | |||||||
| Other taxes prepaid | 17 | 10,247 | – | 8,378 | – | 7,709 | – |
| Trade and other receivables | 16 | 16,008 | 1,757 | 8,161 | 1,232 | 12,334 | 756 |
| Income tax prepaid | 13,259 | – | 8,978 | – | 2,630 | – | |
| Cash and bank balances | 18 | 3,869 | 1,686 | 12,766 | 4,634 | 2,285 | 1,652 |
| Guarantee deposits | 341 | 313 | 177 | 306 | 145 | 443 | |
| Total | 43,724 | 3,756 | 38,460 | 6,172 | 25,103 | 2,851 | |
| Liabilities | |||||||
| Trade and other payables | 23 | 43,945 | 4,395 | 33,088 | 3,900 | 39,424 | 2,846 |
| Loans | 24 | – | – | – | – | 31,090 | – |
| Lease liabilities | 4,832 | – | 3,260 | – | 4,427 | – | |
| Total | 48,777 | 4,395 | 36,348 | 3,900 | 74,941 | 2,846 | |
| Net position | (5,053) | (639) | 2,112 | 2,272 | (49,838) | 5 | |
| Weakening of US Dollar | Strengthening of US Dollar | |||
| ’000 USD | Tenge | Euro | Tenge | Euro |
| 31 December 2023 | 10% | 10% | (10%) | (10%) |
| (Loss)/profit | (404) | (51) | 404 | 51 |
| Weakening of US Dollar | Strengthening of US Dollar | |||
| ’000 USD | Tenge | Euro | Tenge | Euro |
| 31 December 2022 | 21% | 10.6% | (21%) | (10.6%) |
| Profit/(loss) | 355 | 193 | (355) | (193) |
| Weakening of US Dollar | Strengthening of US Dollar | |||
| ’000 USD | Tenge | Euro | Tenge | Euro |
| 31 December 2021 | 10% | 9% | (13%) | (9%) |
| (Loss)/profit | (3,987) | – | 5,183 | – |
| ’000 USD | Up to 3 months | 3 months to 1 year | 1–5 years | Over 5 years | Total |
| 31 December 2023 | |||||
| Financial assets | |||||
| Trade and other receivables | 22,778 | 747 | 1,343 | – | 24,868 |
| Guarantee deposits | 384 | 1,595 | 12,230 | 21,099 | 35,308 |
| Cash and bank balances | 274,006 | – | – | – | 274,006 |
| Financial liabilities | |||||
| Non-interest bearing | |||||
| Trade and other payables | 73,544 | 7,250 | – | – | 80,794 |
| Fixed rate | |||||
| Loans | 106 | 317 | – | – | 423 |
| Lease liabilities | 53,282 | 161,303 | 512,484 | 121,453 | 848,522 |
| ’000 USD | Up to 3 months | 3 months to 1 year | 1–5 years | Over 5 years | Total |
| 31 December 2022 | |||||
| Financial assets | |||||
| Trade and other receivables | 20,117 | 1,190 | 1,300 | – | 22,607 |
| Guarantee deposits | 1,096 | 2,420 | 11,459 | 18,109 | 33,084 |
| Cash and bank balances | 252,888 | – | – | – | 252,888 |
| Financial liabilities | |||||
| Non-interest bearing | |||||
| Trade and other payables | 61,264 | 6,844 | – | – | 68,108 |
| Variable rate | |||||
| Loans | 2,082 | 6,057 | 3,890 | – | 12,029 |
| Fixed rate | |||||
| Loans | 96 | 294 | 412 | – | 802 |
| Lease liabilities | 49,099 | 147,705 | 537,167 | 119,600 | 853,571 |
| ’000 USD | Up to 3 months | 3 months to 1 year | 1–5 years | Over 5 years | Total |
| 31 December 2021 | |||||
| Financial assets | |||||
| Trade and other receivables | 13,609 | 525 | 3,081 | 530 | 17,745 |
| Guarantee deposits | 582 | 986 | 6,802 | 11,216 | 19,586 |
| Cash and bank balances | 226,357 | – | – | – | 226,357 |
| Financial liabilities | |||||
| Non-interest bearing | |||||
| Trade and other payables | 53,384 | 3,441 | – | – | 56,825 |
| Fixed rate | |||||
| Loans | 1,190 | 60,946 | 5,560 | – | 67,696 |
| Lease liabilities | 41,620 | 135,558 | 545,269 | 101,281 | 823,728 |
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FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Notes to the consolidated financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
26. Financial instruments continued
Fair values
Cash and bank balances
The carrying value of cash and bank balances approximates their fair value as they either have short- term maturity or are interest-
bearing and hence are not discounted.
Fuel call options
The Group uses options to hedge the risk of jet fuel price movement. The Group uses standard market instruments for fuel hedging
purposes, such as “call option” (where the premium is paid in advance bу the Group to cover the risk of increases of commodity price
above the predetermined level). Since there is no possibility to hedge the risk of changes in jet fuel prices purchased from call option
suppliers, the Group hedges only the amount of fuel purchased outside the Republic of Kazakhstan signing a general agreement with
several international banks on the conclusion of derivative transactions. The management of the Group determines the volume of jet fuel
that will bе hedged before executing the deal. Hedging is carried out according to the Fuel hedging policy approved bу the directors and
shareholders of the Group. The Group determines the economic relationship between the hedge instrument and the hedge item by
analyzing the historic price movement of aviation fuel and Brent by performing a regression analysis. The resulting Beta coefficient is
assessed for statistical significance and used as a hedge ratio.
The hedge ineffectiveness comes from the probability that due to constantly changing economic conditions the highly probable
transaction, purchase of aviation fuel, might not occur.
The fair values (FV) of financial assets and financial liabilities of the Group are determined in accordance with generally accepted pricing
models based on discounted cash flow analysis using prices from observable current market transactions and dealer quotes for similar
instruments.
The Group applied discounted expected future cash flows method under income approach to reach fair value of the instruments.
The cash-flows represent payouts from the counterparties to the Group in case of a floating price exceeding a strike price.
To estimate payouts the Group applied Monte Carlo method based on Geometric Brownian Motion model. The following key inputs
parameters were used by the Group in their model:
Spot: Brent Crude Oil futures last price as at 31 December 2023 and 31 December 2022;
Growth rate: futures curve for Crude Oil, Brent (ICE) according to Bloomberg;
Volatility: Implied volatility for Brent Crude oil according to Bloomberg; and
Discount rate: 5.3% (as at 31 December 2022: 3%) according to the Group estimations.
These hedge items are highly probable future transactions planned for the first half of 2024. The hedge instrument is the crude oil call
option with the strike prices of USD 85 and USD 80 per barrel. Based on the hedge ratio of 1.157, the Group hedged 353,884 barrels of fuel as
of 31 December 2023. Due to the short-term maturity the Group does not expect significant changes in the fair value of the instruments.
Level 2 fair values for financial assets and liabilities at fair value through profit or loss have been generally derived using the fair value
valuation reports provided bу the banks which participate in hedging transactions. The most significant input into this valuation approach
are time left to maturity of the deal, forward and spot prices of crude oil.
Interest rate option
In November 2022, the Group has entered into Zero-Cost Collar option (hereinafter referred as “Collar”) agreement in order to hedge against
the interest rate fluctuations related to operating lease contracts of one future aircraft delivery. An interest risk arises from the time difference
between the contract signature and actual delivery of an aircraft. The delivery date and contract maturity was in February 2023.
To estimate the payouts and fair value of the Collar, Binomial Tree method was applied. The following key inputs were included in the
evaluation model:
SOFR spot rate 3.60%;
The Collar Strike Rate-Cap 3.59%;
Risk-free rate based on the U.S. Treasury notes;
Risk-free rate based on the Kazakhstan Eurobonds.
Level 2 fair values for financial assets and liabilities at fair value through profit or loss have been generally derived using the inputs which
are observable. The most significant input into this valuation approach is time left to maturity of the deal.
The Group has no other financial and non-financial instruments that are measured subsequent to initial recognition at fair value, grouped
into Levels 1 to 3 of fair value hierarchy.
Guarantee Deposits
Guarantee Deposits are recognised at amortised cost. The management believes that their carrying amounts approximate their fair value.
Trade and other receivables and payables
For receivables and payables with a maturity of less than six months fair value is not materially different from the carrying amount
because the effect of the time value of money is not material.
Ab- initio receivables are recorded at fair value at initial recognition and subsequently measured at amortised cost. The management
believes that their carrying amounts approximate their fair value.
Loans
Loans are recognised at amortised cost. The management believes that their carrying amounts approximate their fair values.
Lease liabilities
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date,
discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing
rate. Generally, the Group uses its incremental borrowing rate as the discount rate.
27. Measurement of fair values
A number of the Group’s accounting policies and disclosures require the measurement of fair values for financial assets and liabilities.
The Group has an established control framework with respect to the measurement of fair values. This includes a finance department that
has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values.
The finance department regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as
broker quotes or pricing services, is used to measure fair values, then the valuation team assesses the evidence obtained from the third
parties to support the conclusion that such valuations meet the requirements of IFRS Accounting Standards, including the level in the fair
value hierarchy in which such valuations should be classified.
If the inputs used to measure the fair value of an asset or a liability might be categorised in different levels of the fair value hierarchy,
then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is
significant to the entire measurement.
160 161 Air Astana Integrated Report 2023
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FIN A NCIA L STATEMENTS CONTINUED
160 161 Air Astana Integrated Report 2023
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STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Notes to the consolidated financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
27. Measurement of fair values
continued
The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change
has occurred.
As at 31 December 2023, 2022 and 2021 all of the Group’s assets were measured at amortised cost except for fuel call options.
When measuring the fair value of an asset or a liability, the Group uses market observable data as far as possible. Fair values are
categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices)
or indirectly (i.e. derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
If the inputs used to measure the fair value of an asset or a liability might be categorised in different levels of the fair value hierarchy,
then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is
significant to the entire measurement.
Further information about the assumptions made in measuring fair values is included in Note 26.
28. Commitments and contingencies
Capital commitments
In 2011 the Group finalised an agreement with Boeing to purchase three Boeing-787 aircraft. The Group is committed to pre-delivery
payments in accordance with the agreed payment schedule.
The terms of the Group’s contract with the above supplier precludes it from disclosing information on the purchase cost of the aircraft.
Lease commitments
Aircraft
Aircraft leases are for terms of between 5 to 12 years. All lease contracts contain market review clauses in the event that the parties
agree to renew the leases. The Group may not have an option to purchase the leased aircraft at the expiry of the lease period.
The fixed and fixed part of variable lease payments are denominated and settled in US Dollars. This currency is routinely used in
international commerce for aircraft leases.
Non-cancellable commitments for leases of aircraft to be delivered from 2024 to 2026:
In 2021 the Group signed operating lease agreements for four A320neo aircraft and one A320ceo aircraft with expected delivery dates in
2022–2023.
In 2022 the Group signed operating lease agreements for twelve A320neo aircraft and for three A321neo aircraft with expected delivery
dates in 2023–2025 both for expansion and replacement of retiring aircraft. Also, the Airline signed the operating lease for three B787-9
aircraft with deliveries in 2025–2026.
During 2022 three A320neo aircraft, three A321neo aircraft and one A320ceo aircraft were delivered.
During 2023 four A320neo, two A320ceo and one A321neo aircraft were delivered.
In 2023 the Group signed operating lease agreements for two A320neo, two A321neo and four A321neo LR aircraft with expected delivery
dates in 2024–2026 both for expansion and replacing of retiring aircraft.
In 2021 the Group signed agreements for Full-flight simulator delivery and Simulator center construction in Astana. The simulator has been
delivered to the airline. Full-flight simulator installation and commissioning was finished in 2023.
In 2023 the Group signed various contracts aimed at implementing projects for the modernization and enhancement of its operational activities.
Insurance
Aviation insurance
Air Astana puts substantial attention in contracting insurance coverage for its aircraft operations and hence hedges aviation risks with
major international insurance markets (e.g. Lloyd’s) with a high rating of financial stability through the services of an international
reputable broker. Types of insurance coverage are stated below:
Aviation Hull, Total Loss Only and Spares All risks and Airline Liability including Passenger Liability;
Aircraft Hull and Spare Engine Deductible;
Aviation Hull and Spares “War and Allied Perils”;
Aviation War, Hi-Jacking and Other Perils Excess Liability.
Non – Aviation Insurance
Apart from aviation insurance coverage the Group constantly purchases non-aviation insurance policies to reduce the financial risk
of damage to property and general liability, as well as covering employees from accidents and medical expenses, as follows:
Medical insurance of employees;
Directors, Officers and Corporate liability insurance;
Property insurance;
Comprehensive vehicle insurance;
Compulsory insurance of employee from accidents during execution of labour (service) duties;
Pilot’s loss of license insurance;
Insurance of goods at warehouse;
Cyber insurance.
162 163 Air Astana Integrated Report 2023
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FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
| ’000 USD | 31 December 2023 | 31 December 2022 | 31 December 2021 |
| Within one year | 22,166 | 14,070 | 9,372 |
| After one year but not more than five years | 511,496 | 406,869 | 64,494 |
| More than five years | 852,470 | 747,355 | 55,489 |
| 1,386,132 | 1,168,294 | 129,355 |
| Non-cancellable commitments related to the Simulator project and other projects: ’000 USD | 31 December 2023 | 31 December 2022 | 31 December 2021 |
| Within one year | 1,054 | 993 | 6,385 |
| 1,054 | 993 | 6,385 |
162 163 Air Astana Integrated Report 2023
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STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Notes to the consolidated financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
28. Commitments and contingencies
continued
Taxation contingencies
The taxation system in Kazakhstan is relatively new and is characterised by frequent changes in legislation, official pronouncements and
court decisions, which are often unclear, contradictory and subject to varying interpretation by different tax authorities, including opinions
with respect to IFRS Accounting Standards treatment of revenues, expenses and other items in the consolidated financial statements.
Taxes are subject to review and investigation by various levels of authorities, which have the authority to impose severe fines and
interest charges. A tax year generally remains open for review by the tax authorities for five subsequent calendar years; however,
under certain circumstances a tax year may remain open longer.
The management believes that it has provided adequately for tax liabilities based on its interpretations of applicable tax legislation,
official pronouncements and court decisions. However, the interpretations of the relevant authorities could differ and the effect on
these consolidated financial statements, if the authorities were successful in enforcing their interpretations, could be significant.
The functional currency of the Company is US Dollar, as it best reflects the economic substance of the underlying events and circumstances
of the Company. The Tax Code of the Republic of Kazakhstan does not contain provisions which would regulate questions arising from the
application of functional currency in accounting books different from tenge. However, the Tax Code requires all taxpayers in Kazakhstan to
maintain their tax records and to settle tax liabilities in tenge. Therefore, the Group also maintains records and conducts calculations in tenge
for the purpose of taxation and settlement of tax liabilities and makes certain estimates in this respect. The management believes that such
approach is the most appropriate under the current legislation.
Operating Environment
Emerging markets such as Kazakhstan are subject to different risks than more developed markets, including economic, political and
social, and legal and legislative risks. Laws and regulations affecting businesses in Kazakhstan continue to change rapidly, tax and regulatory
frameworks are subject to varying interpretations. The Group initially incurred a fine imposed by the court following an investigation by the
Antimonopoly agency of the Republic of Kazakhstan regarding an alleged non-compliance in the collection of fuel surcharge from passengers
for services rendered during the period January 2021 – May 2022. Initially, the court determined a penalty amounting to KZT 6,806,138
thousand (USD 15,041 thousand); however, after the Group appealed the court decision, the fine was decreased significantly to the amount
of KZT 876,863 thousand (USD 1,848 thousand). The Group fully repaid the fine in January 2024. Following the initial court decision, the Group
faces the possibility of legal proceedings with the Antimonopoly agency of the Republic of Kazakhstan concerning an alleged non-compliance
in the collection of fuel surcharge from passengers for services rendered starting from June 2022. If such legal proceedings were to occur,
the Group might be subject to a fine which cannot be estimated reliably because the principle underlying the assessment of the fine by the
latest court was unclear. The future economic direction of Kazakhstan is heavily influenced by the fiscal and monetary policies adopted by
the government, together with developments in the legal, regulatory, and political environment. As Kazakhstan produces and exports large
volumes of oil and gas, its economy is particularly sensitive to the price of oil and gas on the world market.
Depreciation of the Kazakhstan Tenge, volatility in the global price of oil and geopolitical conflicts have also increased the level of
uncertainty in the business environment. The consolidated financial statements reflect the management’s assessment of the impact of
the Kazakhstan business environment on the operations and the financial position of the Group. The future business environment may
differ from the management’s assessment.
29. Related party transactions
Control relationships
As at 31 December 2023, 31 December 2022 and 31 December 2021 the shareholders of the Group were JSC “National Welfare Fund
“Samruk-Kazyna” (which held the investment on behalf of the Government of the Republic of Kazakhstan) and BAE Systems Kazakhstan
Limited, which owned 51% and 49% of the shares of the Group, respectively.
Management remuneration
Key management that have authority and responsibility regarding management, control and planning of the Group’s activity received the
following remuneration during the year, which is included in employee costs (Note 8):
Transactions with related parties
Related parties comprise the shareholders of the Group and all other companies in which those shareholders, either individually
or together, have a controlling interest or significant influence.
The Group provides air transportation services to Government departments, Government agencies and State-controlled enterprises.
The Group has established its buying and approval process for purchases and sales of products and services. Both sales and purchase
transactions are conducted in the ordinary course of the Group’s business on terms comparable to those with other entities that are not
state-controlled.
The following table represents the related party transactions:
1
Transaction values with related parties for 2023 was presented without value-added tax amounts. Comparative figures for 2022 and 2021 were adjusted accordingly.
Services from related parties are represented by airport, navigation, meteorological forecasting services and fuel.
1
Transaction values with related parties for 2023 was presented without value-added tax amounts. Comparative figures for 2022 and 2021 were adjusted accordingly.
All outstanding balances with related parties are to be settled in cash within six months of the reporting date. None of the balances
are secured.
164 165 Air Astana Integrated Report 2023
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FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
| ’000 USD | 2023 | 2022 | 2021 |
| Salaries and bonuses | 7,323 | 6,582 | 6,010 |
| Social tax | 671 | 625 | 556 |
| 7,994 | 7,207 | 6,566 |
| 2023 | 2022 | 2021 | ||||
| ’000 USD Services received | Transaction value1 | Outstanding balance | Transaction value1 | Outstanding balance | Transaction value1 | Outstanding balance |
| State-owned companies | 149,402 | 1,332 | 104,777 | 2,095 | 42,570 | (1,850) |
| Shareholders and their subsidiaries | 67,765 | (1,598) | 28,139 | (32) | 10,115 | (2,203) |
| 217,167 | (266) | 132,916 | 2,063 | 52,685 | (4,053) | |
| 2023 | 2022 | 2021 | ||||
| ’000 USD Services provided by the Group | Transaction value1 | Outstanding balance | Transaction value1 | Outstanding balance | Transaction value1 | Outstanding balance |
| Shareholders and their subsidiaries | 1,229 | 1,018 | 1,204 | 3,469 | 1,141 | 430 |
| State-owned companies | – | – | – | – | – | 3 |
| 1,229 | 1,018 | 1,204 | 3,469 | 1,141 | 433 | |
164 165 Air Astana Integrated Report 2023
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STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Notes to the consolidated financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
29. Related party transactions
continued
Transactions with government-related entities
The Group transacts with a number of entities that are controlled by the Government of Kazakhstan. The Group applies the exemption
in IAS 24 Related Party Disclosures that allows to present reduced related party disclosures regarding transactions with government-
related entities.
The Group transacts with a number of entities that are related to the Government of Kazakhstan. These transactions are conducted in the
ordinary course of the Group’s business on terms comparable to those with other entities that are not government-related.
30. Fees for the services received from the independent auditors
The fees for the services received from the independent auditors including the statutory audit and other non-audit fees as per the
agreements for the year ended 31 December 2023:
31. Subsequent events
During January and February 2024, the Group obtained new short-term loans for working capital needs from JSC Halyk Bank of Kazakhstan
and JSC Citibank Kazakhstan in amount of KZT 9,000,000 thousand (USD 19,733 thousand) and KZT 8,000,000 thousand (USD 17,792 thousand).
The loans were fully repaid in February 2024.
On 15 February 2024, the Company completed its initial public offering (“IPO”), raising KZT 54,256,673 thousand (USD 121,111 thousand).
The Company listed simultaneously on three exchanges: Kazakhstan Stock Exchange, Astana International Exchange, and London Stock
Exchange. In addition to the primary offering, existing shareholders JSC “National Welfare Fund “Samruk-Kazyna”, and BAE Systems
Kazakhstan Limited both sold their shares (or GDRs representing shares), reducing their shareholdings to 41% and 16.95%, respectively.
Other shareholders had less than 10% of shares post-IPO.
In February 2024, JSC “FlyArystan” issued additional 100,000 shares in favour of the Company. The total additional investment amounted
to KZT 400,000 thousand.
32. Approval of the consolidated financial statements
The consolidated financial statements were approved by the management of the Group and authorised for issue on 14 March 2024.
16 October 2023
Air Astana JSC announces on the decision of the General Meeting of Stockholders of the Company dated 13 October 2023
on entering into a major transaction with International Aero Engines LLC for off-wing engine maintenance services to cover
up to 125 (one hundred and twenty five) PW1127G/PW1133G type engines for Airbus А320 NEO family aircraft including
23 aircraft and 9 spare engines for the period of 8 years from the entry into service of each aircraft and 35 aircraft for the
period of 12 years from the entry into service of each aircraft with the latest delivery scheduled for May 2028).
Major transactions
ADDITION A L INFOR M ATION
Through its core activities and socio-economic investments, the Group contributes to the local and national economies wherever it
operates. Recognising its duties as a corporate citizen, it operates its business in a responsible, efficient and profitable manner and is
committed to supporting sustainable development through:
Direct business activity and focusing on improved efficiency and productivity
Paying taxes
Creating both direct and indirect employment opportunities
Developing supply chains and procurement from local suppliers.
Detailed information about Air Astana Group’s economic performance can be found in the audited financial statements of this Integrated
Report on pages 109 to 114.
Economic performance
167 Air Astana Integrated Report 2023 166 Air Astana Integrated Report 2023
FOR THE YEAR ENDED 31 DECEMBER 2023
FIN A NCIA L STATEMENTS CONTINUED
| ’000 USD | 2023 |
| Audit fee | 515 |
| Non-audit fees related to IPO | 444 |
| Other non-audit fees | 90 1,049 |
16 October 2023
Air Astana JSC announces on the decision of the General Meeting of Stockholders of the Company dated 13 October 2023
on entering into a major transaction with International Aero Engines LLC for off-wing engine maintenance services to cover
up to 125 (one hundred and twenty five) PW1127G/PW1133G type engines for Airbus А320 NEO family aircraft including
23 aircraft and 9 spare engines for the period of 8 years from the entry into service of each aircraft and 35 aircraft for the
period of 12 years from the entry into service of each aircraft with the latest delivery scheduled for May 2028).
Major transactions
ADDITION A L INFOR M ATION
Through its core activities and socio-economic investments, the Group contributes to the local and national economies wherever it
operates. Recognising its duties as a corporate citizen, it operates its business in a responsible, efficient and profitable manner and is
committed to supporting sustainable development through:
Direct business activity and focusing on improved efficiency and productivity
Paying taxes
Creating both direct and indirect employment opportunities
Developing supply chains and procurement from local suppliers.
Detailed information about Air Astana Group’s economic performance can be found in the audited financial statements of this Integrated
Report on pages 109 to 114.
| USD ‘000 | 2023 | 2022 | 2021 |
| Direct economic value generated | 1,189,320 | 1,039,377 | 764,243 |
| Revenue | 1,174,514 | 1,039,377 | 764,243 |
| Economic value distributed | |||
| Operating cash costs | 841,531 | 733,249 | 540,752 |
| Employee wages and benefits | 193,067 | 148,907 | 116,265 |
| Payments to providers of capital | 62,769 | 38,495 | 46,744 |
| Taxes paid | 3,920 | 1,427 | 2,501 |
| Community investments | 15 | 84 | 147 |
| Economic value retained | 88,018 | 117,215 | 57,834 |
Economic performance
167 Air Astana Integrated Report 2023 166 Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
GRI content index
ADDITION A L INFOR M ATION CONTINUED
The Air Astana Group has reported in accordance with the GRI Standards for the period from 1 January 2023 to 31 December 2023.
GRI Standard/Disclosure Location of disclosures/Reasons for omission
GRI 2: General Disclosures 2021
2-1 Organisational details
• Name of the organisation Cover of the Annual Report 2023
• Ownership and legal form Notes to the consolidated financial statements, page 115
• Location of headquarters Almaty, Kazakhstan
• Location of operations At a glance, pages 6–7
2-2 Entities included in the organisation’s
sustainability reporting
Air Astana Group
2-3 Reporting period, frequency and contact point
• Reporting period for financials 1 January 2023 – 31 December 2023
• Reporting period for sustainability data 1 January 2023 – 31 December 2023
• Publication date April 2024 (Annual)
• Contact point for questions regarding the report Corporate.governance@airastana.com
Sustainability.issues@airastana.com
2-4 Restatements of information The Company has not performed restatement of the information
2-5 External assurance Independent practitioner’s assurance report, page 171
2-6 Activities, value chain and other business relationships At a glance, pages 6–7; Business model, pages 14–15; Stakeholder engagement and
priorities, pages 16–20; Sustainability, page 65
2-7 Employees Sustainability, pages 60–65
2-9 Governance structure and composition Sustainability, page 44; Corporate Governance report, pages 94–95
2-10 Nomination and selection of the highest
governance body
Corporate Governance report, pages 96, 102–103
2-11 Chair of the highest governance body Corporate Governance report, pages 82, 91, 94
2-12 Role of the highest governance body in overseeing
the management of impacts
Corporate Governance report, pages 90, 94
2-13 Delegation of responsibility for managing impacts Sustainability, page 44; Corporate Governance report, pages 94–95
2-14 Role of the highest governance body in
sustainability reporting
Sustainability, page 44
2-15 Conflicts of interest Corporate Governance report, page 91
Policy for prevention of conflicts of interest
2-16 Communication of critical concerns Sustainability, pages 45–46
2-17 Collective knowledge of the highest governance body Sustainability, page 44
2-18 Evaluation of the performance of the highest
governance body
Corporate Governance report, page 96
2-19 Remuneration policies Corporate Governance report, page 103
2-20 Process to determine remuneration Corporate Governance report, page 103
GRI Standard/Disclosure Location of disclosures/Reasons for omission
2-22 Statement on sustainable development strategy Sustainability, pages 42–43, 47–49
2-23 Policy commitments Sustainability, pages 45–46
2-24 Embedding policy commitments Sustainability, pages 45–46
2-25 Processes to remediate negative impacts Sustainability, pages 45–46, 63
2-26 Mechanisms for seeking advice and raising concerns Sustainability, pages 45–46, 63
2-27 Compliance with laws and regulations Sustainability, page 53
2-28 Membership associations International Air Transport Association (IATA), Association of Asia Pacific Airlines (AAPA),
IATA Clearing House, Flight Safety Foundation, Airline Passenger Experience Association
(APEX), International Society of Air Safety Investigators (ISASI)
2-29 Approach to stakeholder engagement Stakeholder engagement and priorities, pages 16–20
GRI 3: Material Topics 2021
3-1 Process to determine material topics Sustainability section, page 46
3-2 List of material topics Sustainability section, page 46
3-3 Management of material topics Throughout the annual report – see individual indicators for further information
Strategy Strategy, pages 26–29
Ethics and compliance Sustainability, pages 45–46
Corporate Governance Covered in GRI 2-9 – 2-21
Stakeholder engagement Covered in GRI 2-29
Economic performance (GRI 201: Economic performance 2016)
201-1 Direct economic value generated and distributed Additional information, page 167
201-2 Financial implications and other risks and
opportunities due to climate change
Sustainability, pages 53–55; Risk Management, page 78
201-4 Financial assistance received from government No financial assistance has been received from government since the launch
of Air Astana
Procurement practices (GRI 204: Procurement practices 2016)
204-1 Proportion of spending on local suppliers Sustainability, page 65
Anti-corruption (GRI 205: Anti-corruption 2016)
205-1 Operations assessed for risks related to corruption Sustainability, pages 45–46
205-2 Communication and training about anti-corruption
policies and procedures
Sustainability, pages 45–46
205-3 Confirmed incidents of corruption and actions taken Sustainability, pages 45–46
Aviation safety management systems Sustainability, pages 58–59
Energy (GRI 302: Energy 2016)
302-1 Energy consumption within the organisation Sustainability, pages 50–51
302-4 Reduction of energy consumption Sustainability, pages 50–51
168 169 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
ADDITION A L INFOR M ATION CONTINUED
The Air Astana Group has reported in accordance with the GRI Standards for the period from 1 January 2023 to 31 December 2023.
GRI Standard/Disclosure Location of disclosures/Reasons for omission
GRI 2: General Disclosures 2021
2-1 Organisational details
• Name of the organisation Cover of the Annual Report 2023
• Ownership and legal form Notes to the consolidated financial statements, page 115
• Location of headquarters Almaty, Kazakhstan
• Location of operations At a glance, pages 6–7
2-2 Entities included in the organisation’s
sustainability reporting
Air Astana Group
2-3 Reporting period, frequency and contact point
• Reporting period for financials 1 January 2023 – 31 December 2023
• Reporting period for sustainability data 1 January 2023 – 31 December 2023
• Publication date April 2024 (Annual)
• Contact point for questions regarding the report Corporate.governance@airastana.com
Sustainability.issues@airastana.com
2-4 Restatements of information The Company has not performed restatement of the information
2-5 External assurance Independent practitioner’s assurance report, page 171
2-6 Activities, value chain and other business relationships At a glance, pages 6–7; Business model, pages 14–15; Stakeholder engagement and
priorities, pages 16–20; Sustainability, page 65
2-7 Employees Sustainability, pages 60–65
2-9 Governance structure and composition Sustainability, page 44; Corporate Governance report, pages 94–95
2-10 Nomination and selection of the highest
governance body
Corporate Governance report, pages 96, 102–103
2-11 Chair of the highest governance body Corporate Governance report, pages 82, 91, 94
2-12 Role of the highest governance body in overseeing
the management of impacts
Corporate Governance report, pages 90, 94
2-13 Delegation of responsibility for managing impacts Sustainability, page 44; Corporate Governance report, pages 94–95
2-14 Role of the highest governance body in
sustainability reporting
Sustainability, page 44
2-15 Conflicts of interest Corporate Governance report, page 91
Policy for prevention of conflicts of interest
2-16 Communication of critical concerns Sustainability, pages 45–46
2-17 Collective knowledge of the highest governance body Sustainability, page 44
2-18 Evaluation of the performance of the highest
governance body
Corporate Governance report, page 96
2-19 Remuneration policies Corporate Governance report, page 103
2-20 Process to determine remuneration Corporate Governance report, page 103
GRI Standard/Disclosure Location of disclosures/Reasons for omission
2-22 Statement on sustainable development strategy Sustainability, pages 42–43, 47–49
2-23 Policy commitments Sustainability, pages 45–46
2-24 Embedding policy commitments Sustainability, pages 45–46
2-25 Processes to remediate negative impacts Sustainability, pages 45–46, 63
2-26 Mechanisms for seeking advice and raising concerns Sustainability, pages 45–46, 63
2-27 Compliance with laws and regulations Sustainability, page 53
2-28 Membership associations International Air Transport Association (IATA), Association of Asia Pacific Airlines (AAPA),
IATA Clearing House, Flight Safety Foundation, Airline Passenger Experience Association
(APEX), International Society of Air Safety Investigators (ISASI)
2-29 Approach to stakeholder engagement Stakeholder engagement and priorities, pages 16–20
GRI 3: Material Topics 2021
3-1 Process to determine material topics Sustainability section, page 46
3-2 List of material topics Sustainability section, page 46
3-3 Management of material topics Throughout the annual report – see individual indicators for further information
Strategy Strategy, pages 26–29
Ethics and compliance Sustainability, pages 45–46
Corporate Governance Covered in GRI 2-9 – 2-21
Stakeholder engagement Covered in GRI 2-29
Economic performance (GRI 201: Economic performance 2016)
201-1 Direct economic value generated and distributed Additional information, page 167
201-2 Financial implications and other risks and
opportunities due to climate change
Sustainability, pages 53–55; Risk Management, page 78
201-4 Financial assistance received from government No financial assistance has been received from government since the launch
of Air Astana
Procurement practices (GRI 204: Procurement practices 2016)
204-1 Proportion of spending on local suppliers Sustainability, page 65
Anti-corruption (GRI 205: Anti-corruption 2016)
205-1 Operations assessed for risks related to corruption Sustainability, pages 45–46
205-2 Communication and training about anti-corruption
policies and procedures
Sustainability, pages 45–46
205-3 Confirmed incidents of corruption and actions taken Sustainability, pages 45–46
Aviation safety management systems Sustainability, pages 58–59
Energy (GRI 302: Energy 2016)
302-1 Energy consumption within the organisation Sustainability, pages 50–51
302-4 Reduction of energy consumption Sustainability, pages 50–51
168 169 Air Astana Integrated Report 2023
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STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
GRI content index continued
ADDITION A L INFOR M ATION CONTINUED
GRI Standard/Disclosure Location of disclosures/Reasons for omission
GRI 3: Material Topics 2021 continued
Emissions (GRI 305: Emissions 2016)
305-1 Direct (Scope 1) GHG emissions Sustainability, pages 51–52
305-4 GHG emissions intensity Sustainability, page 52
305-5 Reduction of GHG emissions Sustainability, page 51
305-7 Nitrogen oxides (NOx), sulfur oxides (SOx), and other
significant air emissions
Sustainability, page 52
Waste management (GRI 306: Waste 2020)
306-2 Management of significant waste-related impacts Sustainability, page 52
306-5 General waste by type and disposal methods Sustainability, page 52
Environmental compliance Sustainability, page 53
Employment (GRI 401: Employment 2016)
401-1 New employee hires and employee turnover Sustainability, page 61
401-2 Benefits provided to full-time employees that are
not provided to temporary or part-time employees
Sustainability, page 62
401-3 Parental leave Sustainability, page 61
Occupational health and safety (GRI 403: Occupational health and safety 2018)
403-1 Occupational health and safety management system Sustainability, pages 56–58
403-2 Hazard identification, risk assessment, and
incident investigation
Sustainability, pages 56–58
403-3 Occupational health services Sustainability, pages 56–58
403-4 Worker participation, consultation, and
communication on occupational health and safety
Sustainability, pages 56–58
403-5 Worker training on occupational health and safety Sustainability, pages 56–59
403-6 Promotion of worker health Sustainability, pages 56–58
403-9 Work-related injuries Sustainability, pages 57–58
Training and development (GRI 404: Training and education 2016)
404-1 Average hours of training per year per employee Sustainability, pages 63–65
404-2 Programs for upgrading employee skills and
transition assistance programs
Sustainability, pages 63–65
404-3 Percentage of employees receiving regular
performance and career development reviews
All employees receive annual appraisal as well as career development review
406-1 Incidents of discrimination and corrective
actions taken
Sustainability, page 61
Customer privacy (GRI 418: Customer privacy 2016)
418-1 Substantiated complaints concerning breaches
of customer privacy and losses of customer data
Sustainability, pages 45–46
Innovation and digitalisation Operating review, page 41
Service quality Operating review, pages 38–41
Passenger turnover Operating review, pages 32–34
On-time flight performance Operating review, page 39
Fleet technological improvements Operating review, pages 36–37
Independent practitioner’s assurance report
To the Shareholders and Management of Air Astana Group
Scope
We have been engaged by Air Astana Group (the ‘Group’) refers to Air Astana JSC (the ‘Company’) and its 100% subsidiary organization
FlyArystan JSC to perform a ‘limited assurance engagement,’ as defined by International Standards on Assurance Engagements, (hereinafter
‘Engagement’), to report on the selected indicators (hereinafter ‘Subject Matter’ or ‘Indicators’) in the field of sustainability contained in the
Group’s Integrated Annual Report (hereinafter referred to as the ‘Report’) for the period from January 1 to December 31, 2023 (hereinafter ‘the
Reporting Period’).
Subject Matter includes following disclosures with relevant GRI-indexes:
201-1 Direct economic value generated and distributed;
204-1 Proportion of spending on local suppliers;
205-1 Operations assessed for risks related to corruption;
205-2 Communication and training about anti-corruption policies and procedures;
205-3 Confirmed incidents of corruption and actions taken;
302-1 Energy consumption within the organization;
305-1 Direct (Scope 1) GHG emissions;
305-4 GHG emissions intensity;
305-7 Nitrogen oxides (NOx), sulfur oxides (SOx), and other significant air emissions;
306-5 General waste by type and disposal methods;
401-1 New employee hires and employee turnover;
401-3 Parental leave;
403-9 Work-related injuries;
404-1 Average hours of training per year per employee;
406-1 Incidents of discrimination and corrective actions taken;
418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data.
The Subject Matter is disclosed in the following sections of the Report:
Sustainability section of the Integrated Annual Report, pages 42–66. Part ‘Economic performance’, page 167
Subject Matter related figures in the Integrated Annual Report pages 2–3, 31, 92
GRI Index and relevant sections of the Report which the GRI Index refers to, pages 168–170.
Other than as described in the preceding paragraph, which sets out the scope of our engagement, we did not perform assurance
procedures on the remaining information included in the Report, and accordingly, we do not express a conclusion on this information.
Criteria applied by the Group
In preparing the Subject Matter the Group applied the:
Global Reporting Initiative Sustainability Reporting Standards 2021 (hereinafter ‘the GRI Standards’), as set forth in section ‘About the
Report’ on the page 1 of the Report (hereinafter ‘the Criteria’).
Group’s responsibilities
The Group’s management is responsible for selecting the Criteria, and for presenting the Subject Matter in accordance with that Criteria, in
all material respects. This responsibility includes establishing and maintaining internal controls, maintaining adequate records and making
estimates that are relevant to the preparation of the subject matter, such that it is free from material misstatement, whether due to fraud
or error.
170 171 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
ADDITION A L INFOR M ATION CONTINUED
GRI Standard/Disclosure Location of disclosures/Reasons for omission
GRI 3: Material Topics 2021 continued
Emissions (GRI 305: Emissions 2016)
305-1 Direct (Scope 1) GHG emissions Sustainability, pages 51–52
305-4 GHG emissions intensity Sustainability, page 52
305-5 Reduction of GHG emissions Sustainability, page 51
305-7 Nitrogen oxides (NOx), sulfur oxides (SOx), and other
significant air emissions
Sustainability, page 52
Waste management (GRI 306: Waste 2020)
306-2 Management of significant waste-related impacts Sustainability, page 52
306-5 General waste by type and disposal methods Sustainability, page 52
Environmental compliance Sustainability, page 53
Employment (GRI 401: Employment 2016)
401-1 New employee hires and employee turnover Sustainability, page 61
401-2 Benefits provided to full-time employees that are
not provided to temporary or part-time employees
Sustainability, page 62
401-3 Parental leave Sustainability, page 61
Occupational health and safety (GRI 403: Occupational health and safety 2018)
403-1 Occupational health and safety management system Sustainability, pages 56–58
403-2 Hazard identification, risk assessment, and
incident investigation
Sustainability, pages 56–58
403-3 Occupational health services Sustainability, pages 56–58
403-4 Worker participation, consultation, and
communication on occupational health and safety
Sustainability, pages 56–58
403-5 Worker training on occupational health and safety Sustainability, pages 56–59
403-6 Promotion of worker health Sustainability, pages 56–58
403-9 Work-related injuries Sustainability, pages 57–58
Training and development (GRI 404: Training and education 2016)
404-1 Average hours of training per year per employee Sustainability, pages 63–65
404-2 Programs for upgrading employee skills and
transition assistance programs
Sustainability, pages 63–65
404-3 Percentage of employees receiving regular
performance and career development reviews
All employees receive annual appraisal as well as career development review
406-1 Incidents of discrimination and corrective
actions taken
Sustainability, page 61
Customer privacy (GRI 418: Customer privacy 2016)
418-1 Substantiated complaints concerning breaches
of customer privacy and losses of customer data
Sustainability, pages 45–46
Innovation and digitalisation Operating review, page 41
Service quality Operating review, pages 38–41
Passenger turnover Operating review, pages 32–34
On-time flight performance Operating review, page 39
Fleet technological improvements Operating review, pages 36–37
Independent practitioner’s assurance report
To the Shareholders and Management of Air Astana Group
Scope
We have been engaged by Air Astana Group (the ‘Group’) refers to Air Astana JSC (the ‘Company’) and its 100% subsidiary organization
FlyArystan JSC to perform a ‘limited assurance engagement,’ as defined by International Standards on Assurance Engagements, (hereinafter
‘Engagement’), to report on the selected indicators (hereinafter ‘Subject Matter’ or ‘Indicators’) in the field of sustainability contained in the
Group’s Integrated Annual Report (hereinafter referred to as the ‘Report’) for the period from January 1 to December 31, 2023 (hereinafter ‘the
Reporting Period’).
Subject Matter includes following disclosures with relevant GRI-indexes:
201-1 Direct economic value generated and distributed;
204-1 Proportion of spending on local suppliers;
205-1 Operations assessed for risks related to corruption;
205-2 Communication and training about anti-corruption policies and procedures;
205-3 Confirmed incidents of corruption and actions taken;
302-1 Energy consumption within the organization;
305-1 Direct (Scope 1) GHG emissions;
305-4 GHG emissions intensity;
305-7 Nitrogen oxides (NOx), sulfur oxides (SOx), and other significant air emissions;
306-5 General waste by type and disposal methods;
401-1 New employee hires and employee turnover;
401-3 Parental leave;
403-9 Work-related injuries;
404-1 Average hours of training per year per employee;
406-1 Incidents of discrimination and corrective actions taken;
418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data.
The Subject Matter is disclosed in the following sections of the Report:
Sustainability section of the Integrated Annual Report, pages 42–66. Part ‘Economic performance’, page 167
Subject Matter related figures in the Integrated Annual Report pages 2–3, 31, 92
GRI Index and relevant sections of the Report which the GRI Index refers to, pages 168–170.
Other than as described in the preceding paragraph, which sets out the scope of our engagement, we did not perform assurance
procedures on the remaining information included in the Report, and accordingly, we do not express a conclusion on this information.
Criteria applied by the Group
In preparing the Subject Matter the Group applied the:
Global Reporting Initiative Sustainability Reporting Standards 2021 (hereinafter ‘the GRI Standards’), as set forth in section ‘About the
Report’ on the page 1 of the Report (hereinafter ‘the Criteria’).
Group’s responsibilities
The Group’s management is responsible for selecting the Criteria, and for presenting the Subject Matter in accordance with that Criteria, in
all material respects. This responsibility includes establishing and maintaining internal controls, maintaining adequate records and making
estimates that are relevant to the preparation of the subject matter, such that it is free from material misstatement, whether due to fraud
or error.
170 171 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Glossary
AAK Aviation Administration of Kazakhstan
ACTK Available cargo tonne-kilometres
Air Astana Group Air Astana and FlyArystan brands
APEX Airline Passenger Experience Association
ASK Available-seat kilometres
CAC Civil aviation Committee
CASK Cost of Available Seat Kilometre
CEET Cabin Emergency Evacuation Trainers
CRMS Corporate Risk Management System
CSAT Customer Satisfaction Ratings
CTK Cargo tonne-kilometres
E&M Engineering and Maintenance
EASA European Aviation Safety Agency
EBITDAR Earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs
EBRD European Bank for Reconstruction and Development
EC European Commission
ECLs Expected credit losses
EME Extraordinary market event
ESG Environmental, Social and Governance
FH Fuel hedging
FRMS Fatigue Risk Management System
FVOCI Fair value through other comprehensive income
FVTPL Fair value through profit or loss
GHG Greenhouse Gas
GRF Global Reporting Format
GRI Global Reporting Initiative
HEART Hospitable, Efficient, Active, Reliable, Trustworthy
HSE Health, Safety and Environment
IAA Irish Aviation Authority
IAS Internal Audit Service
IATA The International Air Transport Association
ICAO International Civil Aviation Organisation
IFRS International Financial Reporting Standards
IOSA IATA Operational Safety Audit
ISO International Organization for Standardization
KPI Key Performance Indicator
LCC Low-cost carrier
LCDP Low-Carbon Development Programme
NPS Net Promoter Score
Independent practitioner’s assurance report continued
EY’s responsibilities
Our responsibility is to express a conclusion on the presentation of the Subject Matter based on the evidence we have obtained.
We conducted our limited assurance engagement in accordance with the International Standard for Assurance Engagements Other Than
Audits or Reviews of Historical Financial Information (‘ISAE 3000 (Revised)’), and the terms of reference for this engagement as agreed
with the Group. ISAE 3000 requires that we plan and perform our engagement to obtain limited assurance about whether we are aware
of any material modifications that need to be made to the Subject Matter in order for it to be in accordance with the Criteria, and to issue
a report. The nature, timing, and extent of the procedures selected depend on our judgment, including an assessment of the risk of
material misstatement, whether due to fraud or error.
We believe that the evidence obtained is sufficient and appropriate to provide a basis for our limited assurance conclusions.
Our independence and quality management
We have maintained our independence and confirm that we have met the requirements of the Code of Ethics for Professional Accountants
issued by the International Ethics Standards Board for Accountants, and have the required competencies and experience to conduct this
assurance engagement.
EY also applies International Standard on Quality Management 1, Quality Management for Firms that Perform Audits or Reviews of
Financial Statements, or Other Assurance or Related Services engagements, which requires that we design, implement and operate a
system of quality management including policies or procedures regarding compliance with ethical requirements, professional standards
and applicable legal and regulatory requirements.
Description of procedures performed
Procedures performed in a limited assurance engagement vary in nature and timing from, and are less in extent than for a reasonable
assurance engagement. Consequently, the level of assurance obtained in a limited assurance engagement is substantially lower than the
assurance that would have been obtained had a reasonable assurance engagement been performed. Our procedures were designed to
obtain a limited level of assurance on which to base our conclusion and do not provide all the evidence that would be required to provide
a reasonable level of assurance.
Although we considered the effectiveness of management’s internal controls when determining the nature and extent of our procedures,
our assurance engagement was not designed to provide assurance on internal controls. Our procedures did not include testing controls or
performing procedures relating to checking aggregation or calculation of data within IT systems.
A limited assurance engagement consists of making enquiries, primarily of persons responsible for preparing the Subject Matter and
related information, and applying analytical and other appropriate procedures.
Our procedures included the following:
We interviewed representatives of the Group’s divisions involved in the preparation of the Subject Matter;
We conducted analytical procedures of the quantitative information related to Subject Matter;
We examined sustainability-related internal corporate documents of the Group;
On a sample basis, we compared the Subject Matter with source information;
We evaluated the presentation of the Subject Matter in the layout of the Report.
We also performed such other procedures as we considered necessary in the circumstances.
Conclusion
Based on our procedures and the evidence obtained, we are not aware of any material modifications that should be made to the Subject
Matter for the period from January 1 to December 31, 2023, in order for it to be in accordance with the Criteria.
April 26, 2024
Almaty, Kazakhstan
172 173 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023
AAK Aviation Administration of Kazakhstan
ACTK Available cargo tonne-kilometres
Air Astana Group Air Astana and FlyArystan brands
APEX Airline Passenger Experience Association
ASK Available-seat kilometres
CAC Civil aviation Committee
CASK Cost of Available Seat Kilometre
CEET Cabin Emergency Evacuation Trainers
CRMS Corporate Risk Management System
CSAT Customer Satisfaction Ratings
CTK Cargo tonne-kilometres
E&M Engineering and Maintenance
EASA European Aviation Safety Agency
EBITDAR Earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs
EBRD European Bank for Reconstruction and Development
EC European Commission
ECLs Expected credit losses
EME Extraordinary market event
ESG Environmental, Social and Governance
FH Fuel hedging
FRMS Fatigue Risk Management System
FVOCI Fair value through other comprehensive income
FVTPL Fair value through profit or loss
GHG Greenhouse Gas
GRF Global Reporting Format
GRI Global Reporting Initiative
HEART Hospitable, Efficient, Active, Reliable, Trustworthy
HSE Health, Safety and Environment
IAA Irish Aviation Authority
IAS Internal Audit Service
IATA The International Air Transport Association
ICAO International Civil Aviation Organisation
IFRS International Financial Reporting Standards
IOSA IATA Operational Safety Audit
ISO International Organization for Standardization
KPI Key Performance Indicator
LCC Low-cost carrier
LCDP Low-Carbon Development Programme
NPS Net Promoter Score
Independent practitioner’s assurance report continued
EY’s responsibilities
Our responsibility is to express a conclusion on the presentation of the Subject Matter based on the evidence we have obtained.
We conducted our limited assurance engagement in accordance with the International Standard for Assurance Engagements Other Than
Audits or Reviews of Historical Financial Information (‘ISAE 3000 (Revised)’), and the terms of reference for this engagement as agreed
with the Group. ISAE 3000 requires that we plan and perform our engagement to obtain limited assurance about whether we are aware
of any material modifications that need to be made to the Subject Matter in order for it to be in accordance with the Criteria, and to issue
a report. The nature, timing, and extent of the procedures selected depend on our judgment, including an assessment of the risk of
material misstatement, whether due to fraud or error.
We believe that the evidence obtained is sufficient and appropriate to provide a basis for our limited assurance conclusions.
Our independence and quality management
We have maintained our independence and confirm that we have met the requirements of the Code of Ethics for Professional Accountants
issued by the International Ethics Standards Board for Accountants, and have the required competencies and experience to conduct this
assurance engagement.
EY also applies International Standard on Quality Management 1, Quality Management for Firms that Perform Audits or Reviews of
Financial Statements, or Other Assurance or Related Services engagements, which requires that we design, implement and operate a
system of quality management including policies or procedures regarding compliance with ethical requirements, professional standards
and applicable legal and regulatory requirements.
Description of procedures performed
Procedures performed in a limited assurance engagement vary in nature and timing from, and are less in extent than for a reasonable
assurance engagement. Consequently, the level of assurance obtained in a limited assurance engagement is substantially lower than the
assurance that would have been obtained had a reasonable assurance engagement been performed. Our procedures were designed to
obtain a limited level of assurance on which to base our conclusion and do not provide all the evidence that would be required to provide
a reasonable level of assurance.
Although we considered the effectiveness of management’s internal controls when determining the nature and extent of our procedures,
our assurance engagement was not designed to provide assurance on internal controls. Our procedures did not include testing controls or
performing procedures relating to checking aggregation or calculation of data within IT systems.
A limited assurance engagement consists of making enquiries, primarily of persons responsible for preparing the Subject Matter and
related information, and applying analytical and other appropriate procedures.
Our procedures included the following:
We interviewed representatives of the Group’s divisions involved in the preparation of the Subject Matter;
We conducted analytical procedures of the quantitative information related to Subject Matter;
We examined sustainability-related internal corporate documents of the Group;
On a sample basis, we compared the Subject Matter with source information;
We evaluated the presentation of the Subject Matter in the layout of the Report.
We also performed such other procedures as we considered necessary in the circumstances.
Conclusion
Based on our procedures and the evidence obtained, we are not aware of any material modifications that should be made to the Subject
Matter for the period from January 1 to December 31, 2023, in order for it to be in accordance with the Criteria.
April 26, 2024
Almaty, Kazakhstan
172 173 Air Astana Integrated Report 2023
Air Astana Integrated Report 2023