Kazakhstan – the story behind Central Asia’s largest aviation market

Aviation is one of the most important drivers and beneficiaries of global economic development, connecting people and economies both within national markets and across borders. As the largest country in Central Asia, the growth in Kazakhstan’s air transport network is supported by the positive macroeconomic outlook, the strength of the domestic market and a liberalisation of aviation policy.

Historically, Kazakhstan’s passenger growth has been strongly correlated with the growth of GDP, except between 2004 and 2008 when, despite growing GDP, passenger numbers remained largely stable. However, from 2009 onwards, air travel grew at a faster pace than GDP, mostly driven by the expansion of local airlines.

Unlike other countries, Kazakhstan fully recovered to pre-Covid traffic levels as early as 2021 and has not been impacted by other factors such as increased oil prices.  Its domestic market has shown high resilience with domestic carriers driving market growth and now accounting for circa 88-90% of traffic market share after COVID. There is a strong future market potential – Kazakhstan boasts a very young and growing population with increasing purchasing power, and as air connectivity in the country improves demand for air travel is expected to grow. This coupled with reduced travel restrictions and regulations, the outlook is positive for air traffic in the country.

According to the latest IATA forecast, total traffic is expected to almost double from 13M to 24.3M passengers (13% CAGR) for the period between 2023 and 2027. The rise is predominantly driven by a post COVID market adjustment, an increase in capacity from all Kazakh operators, and a dynamic historical market trend (9% CAGR between 2017 and 2019), further stimulated by the growth of low-cost carriers (LCC). At the same time, the international market is expected to grow at a faster pace than the domestic market, resulting in a 50/50% split by 2027.

Airport capacity is not expected to be a bottleneck in meeting this increased demand. The two main airports, Nursultan Nazarbayev International Airport in Astana and Almaty International Airport, have ongoing or planned infrastructure development plans that should provide enough capacity in the near future.

Post-COVID, global airliners have grappled to restore consumer confidence in air travel. The story of Kazakhstan’s aviation market is altogether different – it demonstrates the power of long-term growth, a receptive market and successfully ramping up capacity to meet demand.

Instinctif Partners specialises in supporting our clients to navigate changing markets and capitalise on opportunities. As more and more travellers take to the skies, the runway is clear for growth in the Kazakh aviation market.

See IATA’s latest report on Kazakhstan Passenger Traffic Forecast 2023 – 2027