Kazakhstan airline Air Astana has cancelled its first 787 Dreamliner delivery for the third time.
Blaming the financial markets and the decline in value of Kazakhstan’s currency, the country’s national airline has once again cancelled the delivery of three Boeing 787 Dreamliners.
According to the website Russian Aviation Insider, Air Astana’s 2018 year-end report now has the Seattle made aircraft scheduled to arrive in 2023. The original decision to buy the American airlines was taken back in 2012 and included not only the 787 Dreamliners but also four Boeing 767-300ERs.
The total order was valued at $1.3 billion, the largest civilian aviation order to ever come out of the former Soviet Union republic.
Originally the Dreamliners were supposed to enter service with the Central Asian airline sometime between 2017 and 2019. That was then put back to optimistically projecting 2021 delivery of the planes.
Why has Air Astana had to delay its Dreamliners?
On February 11, 2014, the Kazakh National Bank decided to devalue the Kazakhstani tenge 19% against the U.S. dollar, in line with a depreciating Russian ruble. Now effectively a free-floating currency, the tenge is at the mercy of the markets.
Since floating the currency and putting at the mercy of the markets, the tenge has lost 40% of its value against the American dollar. In August of last year, the tenge took another major plunge due to uncertainty as to whether the U.S. central reserve would raise interest rates during their September meeting.
The Kazakhstan central bank had to intervene, buying up $1.6 billion of the currency to put stability back into the marketplace.
Boeing, of course, sells all its aircraft in U.S. dollars, so even the dumbest of economics majors can see why Air Astana is having difficulty paying for the planes. They are clearly hoping that by delaying the order, the exchange rate between the tenge and the dollar will improve.
Who is Air Astana?
Created in October of 2001, Air Astana is a joint venture between Kazakhstan’s sovereign wealth fund and BAE Systems PLC.
Based in the Kazakhstan city of Almaty, Air Astana operates 64 international and domestic routes with a fleet of mixed Boeing, Airbus and Embraer aircraft.
According to Russian Aviation Insider, the fleet consists of 16 Airbus A320 family aircraft, which includes three A320neos and one A321neo. Boeing’s contribution to the fleet is made up of three Boeing 767-300ERs and five Boeing 757-200 aircraft. The remainder of the planes includes 11 Embraer E190s, two of which are the E190-E2 variant.
Where is Kazakhstan?
Surprisingly, Kazakhstan is the world’s largest landlocked country and the ninth largest country in the world encompassing 2,724,900 square kilometres (1,052,100 sq m).
Kazakhstan is bordered by Russia, China, Uzbekistan, Turkmenistan and Kyrgyzstan. Despite its recent currency troubles, Kazakhstan dominates central Asia when it comes to GDP and has vast oil, gas and mineral reserves.
Perhaps the situation will improve and we’ll see some Dreamliners joining Air Astana’s fleet in the future. However, at least for now, it seems they’re sticking with their current lineup.