From steppe to skyway: Kazakhstan’s bold vision for a regional air hub
In late January, Kazakhstan’s President Kassym-Jomart Tokayev called for the urgent creation of an international air hub, stating that the most decisive measures must be taken. Kursiv.media spoke with industry experts and airport stakeholders in Kazakhstan to understand how this vision might be implemented in practice.
Industry reactions to Tokayev’s directive.
What is an air hub and how can it be built?
How do air hubs operate in other countries?
Infrastructure limitations and lack of investment.
The cargo opportunity: untapped potential.
Reform is essential for a functional hub.
Ministry plans multiple hubs based on six key airports.
Industry reactions to Tokayev’s directive
A current Airbus A320 captain, speaking on condition of anonymity, described the president’s directive as a «difficult task.» He noted that Tashkent Airport, located not far from Almaty, is also vying for regional hub status, a competition that Kazakhstan must be prepared to face.
«If Kazakhstan’s authorities manage to implement this project, it will provide a massive stimulus for the growth of local airlines and the broader aviation services sector,» the captain said.
Peter Foster, CEO of Air Astana, Kazakhstan’s flag carrier, said the airline supports the concept of transforming the country into a regional aviation hub. However, he admitted the details remain unclear.
Foster added that Air Astana would support placing the hub in the Almaty region, where most business travel is concentrated. He also speculated that a completely new site could be developed north of the city or even closer to Astana.
What is an air hub and how can it be built?
During an extended cabinet meeting on Jan. 28, 2025, President Tokayev described an air hub as an integrated ecosystem that includes passenger and cargo terminals, logistics centers and modern services.
However, aviation industry expert Abul Kekilbayev noted that the concept of an «air hub» is not clearly defined in current legislation, leading to varied interpretations. For some, it means a large airport handling over 10 million passengers annually. For others, it represents a fully developed transport and logistics center, including warehouses, rail connections, hotels, residential housing, schools, medical centers and facilities for cargo airlines.
Erlan Ospanov, co-owner of Sary-Arka International Airport in Karaganda, emphasized that an air hub is not just about physical infrastructure.
«An air hub requires close cooperation between an airline and an airport. The airline creates the passenger and cargo flows; the airport supports that flow with the necessary infrastructure,» he explained.
Kazakhstan’s law on airspace use and aviation activity defines an air hub as a key airport equipped with infrastructure for organizing connecting flights. It serves as an intermediate stop for airlines to transfer passengers, baggage, mail and cargo en route to final destinations.
How do air hubs operate in other countries?
Ospanov cited several classic examples of successful air hubs: Dubai International Airport with Emirates Airlines, Frankfurt Airport with Lufthansa and Istanbul Airport with Turkish Airlines.
The Airbus A320 captain also pointed to Istanbul as a standout model. He noted that Turkish Airlines now flies to 120 countries and operates a fleet of 347 aircraft.
«This creates enormous demand for their services and drives consistent growth,» he said. «Istanbul is one of the largest airports I’ve ever flown into; it operates thousands of flights each day to every corner of the world. Turkey has shown how to successfully manage transportation and logistics flows, create thousands of jobs and grow its national airline.»
Kekilbayev highlighted Frankfurt’s airport ecosystem as another strong example. Within its vicinity are three major airports: Mannheim, Frankfurt-Hahn and Frankfurt am Main, the latter of which is Europe’s top cargo hub. The entire region’s infrastructure is built around these air transport nodes.
He also pointed to Moscow, which operates four major airports: Sheremetyevo (a hub for Aeroflot), Domodedovo (S7 Airlines), Vnukovo (Utair) and Zhukovsky (Red Wings, technically located in the Moscow region). Each serves as a strategic base for a particular airline, optimizing efficiency and logistics in Russia’s capital.
Foster of Air Astana identified limited access to jet fuel as the biggest challenge facing Kazakhstan’s aviation industry. Currently, the country produces only TS-1, a Soviet-era grade of aviation kerosene, and lacks the more widely used global standard Jet-A1. Transitioning, at least partially, to Jet-A1 has been necessary for years. But it still hasn’t happened.
President Tokayev has ordered that affordable jet fuel be made available by mid-2025. He acknowledged that kerosene prices at Kazakhstan’s airports are too expensive.
Although the production of Jet-A1 has been under discussion for years, a timeline remains unclear. Experts note that introducing the fuel will require new infrastructure, including dedicated storage tanks, because TS-1 and Jet-A1 cannot be mixed. Smooth logistics and fuel delivery will also depend on upgrades to airport infrastructure.
According to Kekilbayev, jet fuel in Kazakhstan costs about $1,000 per ton, compared to $700 to $800 in Europe. He says this pricing gap is a major deterrent to foreign investment.
«If it costs $1,000 a ton here, how are we supposed to attract anyone?» he said. «Investors won’t commit to the market until conditions are in place that allow them to recoup their investments.»
Complicating the issue, Kazakhstan heavily relies on imported jet fuel, primarily from Russia, increasing its exposure to price volatility and supply chain risks. Infrastructure is not yet in place to support imports from alternative suppliers, such as China or Turkmenistan.
However, Ospanov pushed back on the notion that Kazakhstan’s fuel is too expensive. He explained that only imported fuel comes with a high price tag, while domestic fuel — making up 60% to 70% of the total market — is significantly cheaper.
«Air Astana and SCAT purchase domestic fuel for 300,000 to 350,000 tenge (about $580 to $670),» he said. «You won’t find prices like that at any airport in the world. Plus, they pay almost nothing for storage.»
Ospanov argued that the high price of imported fuel is driven by value-added tax (VAT) and a monopolized supply chain dominated by Russian producers. He added that while imported fuel is technically sold to foreign companies at a zero VAT rate, the refund process can take up to two years.
«Accordingly, traders who import this fuel don’t expect to recover the VAT,» he said. «They write it off immediately and factor it into the fuel cost. On top of that, they add a risk margin, usually around 10% to 20%. As a result, imported fuel ends up being 40% to 50% more expensive than fuel refined in Russia.»
Ospanov explained that Russian suppliers can maintain this pricing power due to their monopoly in the Kazakhstani market. Fuel is not imported from other countries because a 5% import duty, while modest in theory, effectively acts as a trade barrier rather than a fiscal tool.
He emphasized that reducing airfares — a key factor in boosting passenger volumes — will require solving the fuel affordability problem. There are two potential solutions: ensure domestic availability of jet fuel or introduce a 6% preferential VAT rate.
«This isn’t about helping airlines; it’s about helping passengers,» he added. «Airlines will benefit anyway through increased traffic. But competition also needs to grow, and we’re hopeful the acquisition of Qazaq Air by Vietnam’s Sovico Group will help drive that.»
Infrastructure limitations and lack of investment
Experts also cite underdeveloped infrastructure, limited investment and a shortage of qualified personnel as major barriers to hub development.
Kekilbayev noted that Kazakhstan’s two largest airports, Almaty and Astana, are now hemmed in by private developments, leaving little room for expansion. The new terminal in Almaty is already overloaded and struggling to manage growing passenger demand.
Ospanov agreed, stating that airport infrastructure suffers from chronic underinvestment due to poor profitability. He pointed to a significant imbalance between the financial performance of airlines and that of airports.
«All the income and profit go to the airlines. Air Astana, for example, reported an EBITDA of $300 million in 2023. In contrast, the combined EBITDA of all 25 airports in Kazakhstan is less than $100 million,» he said.
Kekilbayev added that the low tariffs for aircraft maintenance further discourage private investment. There is also no clear mechanism to recoup infrastructure investments through tariffs or state-backed compensation programs. Additionally, the sector is experiencing a talent drain, particularly in aviation management, as professionals seek opportunities abroad.
«Unfortunately, we have very few experienced practitioners in aviation leadership,» Kekilbayev said. «The people in charge are smart managers, but many lack specialized training or practical industry experience.»
The cargo opportunity: untapped potential
President Tokayev noted that the global air cargo market is valued at around $140 billion, yet no Kazakhstani airline significantly participates in it.
Kekilbayev argued that Kazakhstan urgently needs a national cargo carrier. Unlike Azerbaijan, where Silk Way Airlines plays a leading regional role, Kazakhstan is still in the planning stages.
Ospanov highlighted the critical difference between passenger and cargo operations: cargo cannot wait.
«Companies like DHL, FedEx and UPS operate with flight schedules precise to within two minutes,» he said. «Kazakhstan’s current infrastructure simply can’t meet those standards.»
He also noted that Karaganda holds strong potential as a future cargo hub due to its central location and available space. However, he cautioned that it must operate without delays to be viable.
«Look at Liege in Belgium or Cologne in Germany. Those are examples of how to do it right,» he said.
Reform is essential for a functional hub
Kekilbayev stressed that Kazakhstan must urgently develop a comprehensive aviation strategy and modernize its airports if it hopes to create a functioning air hub.
«Despite the president’s initiative, there is still no state program specifically focused on air hub development,» he said. «The Ministry of Transport is more concerned with automobile roads and railways.»
He highlighted that Kazakhstan lacks a dedicated civil aviation policy.
«We’re still operating under a general transport strategy that doesn’t address the unique needs of the aviation sector,» Kekilbayev said.
Ospanov echoed the need for structural reform, calling it a prerequisite for real progress.
«Only through reform can we give this industry room to breathe,» he said. «Without that, there’s little chance of building an international hub. Our airports were never designed to be large transit centers. The master plans and development projects must be overhauled from the ground up.»
Ospanov said that a strategic misstep was made in the early stages of Kazakhstan’s aviation sector development. According to the classic model, airports should generate revenue through both aviation services — such as takeoff, landing and aircraft handling — and commercial, non-aviation services, including fuel sales, terminal leasing and catering.
«Due to regulated airport tariffs and unregulated airfare prices, we’ve seen a dramatic income imbalance,» he said. «All the revenue and profits go to the airlines. They’re thriving while airports are struggling to stay afloat. That imbalance has to be fixed. Someone deliberately drove a wedge between airlines and airports, and they began developing separately. That was a strategic mistake.»
Ospanov argued that Kazakhstan should focus on developing just one international air hub, warning that the market cannot sustain more than one. To support hub development, he recommended cutting VAT on aviation and fuel imports, encouraging a competitive fuel market, deregulating airport operations and overhauling the industry’s master plan and development strategy.
«We’re going to have one air hub. You can’t have two at an international level, not in this market,» Ospanov said. «We need to make a firm decision on where it will be based.»
Kekilbayev added that, realistically, Kazakhstan will not see a true international air hub for another five to ten years.
«First, there needs to be a shift in mindset,» he said. «Until that happens, it’s very difficult to even talk about building something of that scale.»
Ministry plans multiple hubs based on six key airports
Despite industry skepticism, Kazakhstan’s Ministry of Transport is moving forward with plans to develop multiple air hubs. The strategy centers around six airports: Astana, Almaty, Aktau, Aktobe, Karaganda and Shymkent.
The cabinet has outlined five primary focus areas for air hub development:
Infrastructure modernization: Runways, logistics terminals and warehouses will be upgraded in partnership with investors. Foreign capital will fund improvements in Astana, Almaty and Aktau, while domestic investors will handle Karaganda and Shymkent. Aktobe is still seeking an investor.
Jet fuel availability: The government is amending fuel supply regulations to expand the list of acceptable fuel types, oils and lubricants. This includes allowing purchases outside the Eurasian Economic Union (EEU) and enabling alternative production standards. In mid-2024, KazMunayGas, the national oil and gas company, announced it was ready to begin producing Jet A-1 fuel. The ASTM D1655 standard, the international benchmark for jet fuels, has already been registered and is being incorporated into legislation. The company also plans to produce sustainable aviation fuel (SAF) in partnership with Japan and the U.S.
Creating special economic zones (SEZs): Designed to attract investors, increase traffic and support manufacturing, SEZs are already in place. One has been active at Aktobe Airport since Jan. 8, 2025, while the others are still in development.
Streamlined customs and tax benefits: The government is considering tax incentives and simplifying customs procedures to support air hub growth.
Automation of cargo processing: All airports will be linked to the E-freight digital information system, which reduces bureaucracy and corruption risks, shortens cargo processing time and increases efficiency. The system will be integrated with Kazakhstan’s customs and agriculture management platforms for seamless logistics coordination.
The government is also exploring partnerships with global cargo giants such as Cargolux, Turkish Cargo and China Airlines Cargo. Currently, cargo transit through Kazakhstan accounts for just 2% of volume, but 22% of the total cargo value, a figure the authorities hope to grow.
«These measures will increase cargo volumes at domestic airports and lay the groundwork for developing regional air hubs that offer a full range of services,» the Ministry of Transport stated.
In his September 2024 state-of-the-nation address, President Tokayev reaffirmed the importance of aviation reform, calling the development of air hubs a critical national task. He stressed the need to leave future generations a legacy of efficient highways, railways, seaports, train stations and fully operational air hubs.
