Kazakhstan’s Air Astana halves 2008 profit forecast

business and economy

Kazakhstan’s Air Astana halves 2008 profit forecast

By SRI ⋅ July 30, 2008 ⋅

(SRI) - Kazakhstan’s national airline Air Astana halved its 2008 net profit forecast on Tuesday from $45-47 million due to high fuel prices and limited demand, according to an airline executive.

“Out total revenues will increase, but the net profit will be half of what we had initially planned due to oil prices and shrinking global demand,” Air Astana Vice-President Askhat Beisembayev told reporters.

He said revenues would reach $700-750 million this year, up from $530 million in 2007. Air Astana has not disclosed its 2007 net profit.

“The key reason behind revising our profit projections is the rise in fuel prices,” Beisenbaev said. “We are currently filling in aircrafts at the fuel price of $1,300 per ton, while we budgeted $850 per ton.”

The government of Kazakhstan has a controlling stake in Air Astana, the largest domestic airline, while Britain’s BAE Systems owns 49 percent.

Kazakhstan’s economy has suffered from the global liquidity crunch that hit its highly leveraged banks and construction firms. The government expects gross domestic product growth to slow to 5.3 percent this year from 8.7 percent in 2007.