2000-01-24 Kazak Corporate News

Kazakhstan Weekly

Company News

Monday January 24, 2000

Air Transportation

The Air Kazakhstan Group (AKG) and the international Russian airline Aeroflot are close to signing an agreement on global partnership.

The President of AKG, Alexander Krinichansky, told a group of government officials that the agreement on global partnership will provide AKG with access to Aeroflot’s sales system, along with the opportunity to fly through Moscow to international destinations, including North America, for the first time. He added that he is optimistic that, if the agreement is signed, AKG will carry at least 50,000 of the 253,000 passengers who travel to Kazakhstan each year.

The airline’s chief stressed that a strategic alliance with Aeroflot will allow AKG to better compete with the three primary foreign air carriers now operating in Kazakhstan—KLM, British Airways and Lufthansa.

Krinichansky also revealed that a possible, similar alliance with Swiss Air is currently under negotiation.

Air Kazakhstan Group

The Air Kazakhstan Group (AKG) owes nearly USD 110m to creditors and has USD 10m in accounts receivable, President Alexander Krinichansky stated at a government session. The group was created late last year as a holding company for the national air carrier (Air Kazakhstan), a regional airline and several transport-related facilities.

Krinichansky described the financial health of AKG as “extremely complicated.” He said the company is currently experiencing monthly losses of USD 1.5m, the lion’s share of which (USD 1.2m) stems from the maintenance of Air Kazakhstan’s two leased Airbus A-310’s. On January 20, AKG’s managers were planning to ask the US aerospace firm Boeing for a leasing holiday of 6-8 months, since the company is incapable of meeting the payment terms for the Airbuses.

At the same session, Prime Minister Kasymzhomart Tokaev stressed his fear of damaging Kazakhstan’s image, stating that the government cannot afford for the national air carrier to go bankrupt like its predecessor, Kazakhstan Aue Zholy (KazAir). Tokaev recommended that the management of KAG change its tariff policy and return to stricter financial accounting. (Golden Eagle Partners)

Telecommunications

This year, the mobile telecommunications company Altel plans to implement an aggressive campaign to increase its client base, Commercial Vice President Mikhail Grishkov said at last Wednesday’s press conference. Beginning January 3, the company cut monthly fees by 50% and usage fees by 25%. According to Grishkov, Altel’s new tariff policy is made possible because of the company’s stability and its current client base of 35,000 users.

Founded in March 1994, Altel was the first cellular communications operator in Kazakhstan. Altel has faced stiff competition over the past year from the GSM mobile phone operators K-Cell and K-Mobile.

The national communications firm, Kazakhtelecom, owns 50% of Altel. The other half is held by US-based Metromedia International Corporation, which merged with Altel’s co-founder PLD Telecom last year.

At present the Altel network covers Astana and 11 of Kazakhstan’s 14 regional centres. Altel users can roam using the Altel networks in Uzbekistan, Tajikistan, the Kyrgyz Republic, Russia and Ukraine. (Golden Eagle Partners)