Air Astana to list in London to fund expansion as travel soars

Air Astana, Kazakhstan’s flag carrier, said it will go ahead with a long-delayed initial public offering in London and at home, as the post-pandemic rebound in travel persists.

The carrier, owned by UK defense firm BAE Systems Plc and Kazakhstan’s sovereign wealth fund, will use the funds to expand its fleet and network, Chief Executive Officer Peter Foster said in an interview. Air Astana’s previous attempts to proceed with a listing were stymied by the pandemic and then the turmoil following the Russian invasion of Ukraine.

“We first started these discussions in 2018, and then events got in the way with covid and then the invasion,” Foster said. “But notwithstanding all of these things that have come our way and come the way of the industry, we’ve had a good run. Now is as good a time as any.”

The listing is a sign of the aviation industry’s confidence that demand will continue to be strong, and is also a shot in the arm for London’s stock markets. UK and international firms alike have shied away from listing in the UK, deterred by a small buyer base, a wide valuation gap between issuers and investors, and poor shareholder returns from recently listed firms.

Just about $1 billion was raised in the UK via initial public offerings last year, the lowest annual tally in over three decades, according to data compiled by Bloomberg.

The offering will comprise new shares, or global depositary receipts issued by the company, as well as stake sales by existing holders. Due to the rules around airline ownership, the sale will be structured to ensure that Kazakhstan institutional and retail investors retain a majority stake, Foster said. 

Air Astana expects to raise gross proceeds of about $120 million from the share sale. The new stock will also be listed on Astana International Exchange and the Kazakh stock exchange.

Air Astana currently has a fleet of 49 aircraft, and Foster said it plans to expand with additional Airbus SE A320 aircraft for its low-cost airline FlyArystan, and A321s for its full-service carrier.