Kazakhstan’s national airline company Air Astana will not pay dividends for 2019. It was announced by Ernar Zhanadil, co-managing director for finance at the National Welfare Fund Samruk-Kazyna.
According to Zhanadil, the payment of dividends at the end of 2019 was not planned, despite the fact that Air Astana received a net profit of 5.7 billion tenge.
“This is primarily due to the fact that the company originally planned to use these funds for its IPO events,” Zhanadil noted at a briefing on Thursday, July 30.
Subsequently, those plans were adjusted to reflect the negative impact of the coronavirus pandemic. Due to volatility in international capital markets, falling fossil fuel prices and a slowdown in global economic growth, in June the Samruk-Kazyna Fund decided to postpone Air Astana’s initial public offering to 2022.
Notably, 51% of shares of Air Astana are owned by Samruk-Kazyna JSC, and the remaining 49% are owned by the British BAE Systems. Given the current situation in the air carriage market and the limited operations of the company, Air Astana’s shareholders decided to leave the net profit at the carrier’s disposal.
It bears reminding that the air carriage sector has been hit hard due to the spread of COVID-19. First of all, regular flights from Kazakhstan to China were suspended on February 3. Then flights to other countries stopped. After discovering the first cases of COVID-19 in Kazakhstan on March 13, the introduction of a state of emergency on March 16 and lockdown measures on March 19, domestic flights were also canceled. Domestic flights were eventually reopened starting from May 1.
Currently the republic is planning to gradually resume flights to Turkey, China, South Korea, Thailand, Japan and Georgia, and later to other countries. At the same time, neither the Civil Aviation Committee of the Ministry of Industry and Infrastructure Development nor international experts expect a complete recovery of the market before 2022.
According to the consolidated financial statements of Air Astana, at the end of 2019, the airline received 11.5 billion tenge of net profit, which is six times higher than in 2018. Revenue increased by 18.7% to 344 billion tenge. Due to the launch of the FlyArystan low-cost airline in May 2019, passenger traffic increased by 17% and exceeded 5 million people per year.