Route Development – How Air Astana developed India market?

There is no denying the fact that I am a big fan of multi-aircraft fleets! Even the strong proponents of single fleet types like IndiGo have eventually graduated to multiple fleet types and sub-fleets. As it stands today, IndiGo has a mix of A320, A321 and ATR but the sub-fleet varies from seating configuration which is 180, 186, 222, 234, 72 and 74. While it would become a bit more standardised over a period of time, indeed the airline moved away from its single-fleet philosophy. Spicejet did that much earlier and Vistara followed suit. While the B737 was an unforeseen addition for Vistara, the all economy A320/A321 and A321neo with lie flat beds show how the market does require multiple fleet types or sub-fleets.

While my previous article about Network Planning was well received, I attempt to explain how route development is done with an example of Air Astana – an airline I have closely tracked over the years and got a chance to fly in 2018. (Read: Flight Review: Air Astana – from the heart of Eurasia)

Background

Air Astana is the national carrier of Kazakhstan. Interesting as it might sound, 49% of the airline is owned by BAE systems! The airline started commercial operations in 2002. Over a period of time, the airline has grown its fleet and has committed itself to fleet renewal as it looks at new destinations for growth and cust costs. 

The airline currently has a fleet of 35 aircraft comprising a mix of B767, B757, the A320 family comprising A320, A320neo, A321neo, A321LR, Embraer E-190 and Embraer E190-E2. 

Kazakhstan is a huge country but sparsely populated but limited trade outside the CIS in the initial years. Air Astana picked up from where Air Kazakhstan left. Air Kazakhstan was established as an independent airline of the newly formed country of Kazakhstan after the fall of USSR. By the time it shut down after being declared bankrupt, it intermittently served many destinations with a schedule which was erratic and subject to aircraft availability. This also included Delhi, being serviced by one of the soviet era aircraft.

Initial Expansion to India – Step 1

Air Astana launched service to New Delhi in 2004. The airline started with a twice a week service operated by the Airbus A320 aircraft from Almaty. It was the smallest aircraft for this mission in the airline’s fleet back then. 

When the airline launched operations, there would have been serious lack of data in terms of demand or traffic flow. With a handful of planes, the airline wasn’t targeting a hub either and Kazakhstan had rules which paralleled any other closed state and required a visitor to get multiple approvals to get a visa so promoting tourism was definitely not the reason to start!

The route was launched to Almaty – the erstwhile capital. While the capital shifted to Astana (now Nur Sultan) in 1998, Almaty (once known as Alma Ata) continues to be the largest city and the commercial hotspot of the country. No wonder then that Air Astana, though named to popularize Astana has a larger presence and effective hub at Almaty! For an airline which started in 2002, having a presence at New Delhi very early in its life indicates the long term plan of the airline.

Any route takes time to mature and while trade increased between India and Kazakhstan on the back of multiple high level visits between the two countries. 

Increase Frequency – Step 2

When a route is launched, it can do well or struggle. The next logical step if it does well is to fortify it from competition but if the route is struggling then the options typically revolve around decreasing frequency, pulling out completely or adding frequency! Surprising as it may seem, but even loss making routes turn around if frequency is increased and it helps cater to demand which was earlier lost to others!

Air Astana added a third frequency in 2008. As the airline continued to increase stations, this helped offer one-stop services via Almaty to Moscow, St. Petersburg, Kiev and other places in the former USSR which lacked direct connectivity to India.

Experiment – Step 3

In 2011, the airline took delivery of the Embraer E-190 regional jet. This helped the airline cater to certain routes where the demand was lower yet (probably) sustainable. The airline also decided to experiment by having flights at different timings to see what suits passengers the most. A popular tactic, I had written about this earlier when IndiGo re-jigged its Kolkata hub.

Frequency over capacity & more passengers – Step 4

Within months of differential timings, the airline increased frequency between Almaty and New Delhi to five times a week! The trade-off? From A320s to a mix of E-190 and A320, the sector moved to E-190 completely. So the per flight capacity was lower than earlier, but it offered an opportunity to have multiple frequencies spread out, offering more choice to potential passengers.

This was also the time when carriers from the region Turkmenistan Airlines and Uzbekistan Airways had started making a beeline to India and competition was increasing. This continued with the airline operating a mix of A320s and E-190s depending on the load profile, timings, etc. It was now time to expand the market but how?

The airline had few options in such times – it was already catering to connections from Kazakhstan to India, funnelling it via Almaty, but what happens to the passengers who go beyond New Delhi? There comes the code-share with Air India. Both airlines entered into a code-share which covered most major cities in India. This was in 2014! 

Trigger to launch new route – Step 5

For a country which shifted its capital city and named its national airline to popularize that city, it was time Air Astana would launch flights from Astana to all major cities in its network! And while the airline indeed had started doing the same, Delhi happened in 2017. It takes months of efforts to launch a new route, unless you are flying on a route like Delhi – London where there already is a sizable traffic and you just need to pounce on it.

In the case of Astana – Delhi, this did not exist so there had to be a trigger and that was EXPO 2017. With 3 million visitors expected, what can be a better time to launch a new route? And thus started thrice a week flight between Astana and New Delhi. But the trick used was similar to Step 3 – Experiment. The flight operated at a certain timing on two days of a week and at a different timing on the third day! 

Aircraft of choice? Again a mix of E-190 and A320! The expanding network out of Almaty and Astana gave a huge fillip to the spoke that was New Delhi and by 2019, the airline expanded to operate double daily flights to New Delhi from Almaty and thrice weekly flights from Astana (now Nur Sultan).

What Next? – Step 6

If you command a market, strengthen it like there is no tomorrow! The airline announced flights to Mumbai! A four times a week service to Almaty and guess what? It had differential timings! While one of the reasons for differential timings can be slot issues and the other being availability of aircraft, prima facie the experimentation angle carries more weightage in the case of Air Astana!

Unfortunately, for Air Astana – the airspace closure by Pakistan last year hit hard leading to decrease of frequency and even pulling out of Astana – Delhi and the COVID-19 impact has been severe like all other airlines. Leaving Air Astana’s case here, an airline can grow from these steps to come to add further frequency subject to aircraft availability, slots at airports and most importantly – bilateral rights (about which I would write an article sometime soon). 

Tail Note

While Route planning is challenging and involves number crunching and is more often than not a closely guarded secret, Route development is a joint responsibility of every individual in an airline. From sales to revenue management, airport experience to in-flight, there are multiple reasons why a route does well or doesn’t! 

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