WOOD Flash – Air Astana Group: 2Q24 in line, but 1H24 EBIT and FCFE both down yoy, and VietJet entry into Kazakhstan a risk
Air Astana Group has not suffered a similar setback in demand and fares as we have seen recently in Europe. It seems that the demand for flying in Kazakhstan remains strong, and management sounded a confident note on the 3Q24E bookings and fares. That said, due partly to one-off factors (including the 1H23 revenue boost, driven by people migrating from Russia, fleeing the draft, and due to the IPO expenses incurred in 1H24), the CASK growth is set to outpace the RASK this year. Unless the summer turns out particularly strong, there is likely some downside for our 2024E estimates. Management reiterated that its mid-term targets remain on track, but the entry of VietJet could prove a risk (although launching an airline in a new geography is subject to many operational and execution challenges). Below, we also discuss, briefly, VietJet, Sovico, and its plans to enter the Kazakh aviation market via Qazaq Air.
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