Air Astana raising domestic flights prices

Air Astana air company is raising prices of domestic flights tickets, Tengrinews.kz reports, citing the press-office of the carrier. According to the company, domestic flights tickets will go up 16% starting from April 5, 2012. It is said that a new law “On state regulation of production and turnover of certain types of oil products,” was adopted in 2011. This law cancelled state regulation of aviation kerosine prices. This leaded to a spike in jet fuel prices. Kerosene selling price jumped by 200% in 2012 compared to the 2010 prices. This surge made Kazakhstan jet fuel prices one of the most highest in the world. Air Astana believes that its jet fuel expenses will increase 61% compared to 2011 and will make up 30% of the air company’s total expenses. The surge in prices has already resulted in losses in amount of $10.9 million for the company in January-February 2012. “Introduction of a fuel levy on domestic flights is a coercive measure for Air Astana air company. The air company’s tariffs remained unchanged since 2002 and we were doing everything possible to optimize the company’s expenses. (…) This step will allow the air company to partially compensate for the jet fuel prices increase and stay committed to high principles of safety, reliability and regularity of flights,” President of Air Astana Peter Foster said. Generally the following components of the flight make up its’ cost: 30% - kerosene and POL; 16% - personnel services; 5% passengers expenses; 11% air crafts and spare parts leasing; 14% technical maintenance of the aircraft; 1% - taxes and customs payments; 4% - navigation and weather services; 12% - airport and ground services; 6% - sales; 1% - other expenses.