Rassul Kospanov
Senior Researcher at the Center for Regional Analysis
Astana, Kazakhstan – January 10, 2025

Aviation plays a crucial role in the development of a country's transport infrastructure and economic potential, especially in a geographically vast country like Kazakhstan. Kazakhstan possesses the key attributes to become an aviation hub in Eurasia, including a strategic geographical location, developing infrastructure, and a growing economy with untapped potential. As the aviation sector grows, Kazakhstan aims to improve its domestic and international connectivity. However, in practice, the situation is quite different—the development of the aviation industry faces several obstacles, such as ineffective sector policies and market monopolization. This article examines the main challenges hindering the growth of Kazakhstan's aviation industry and explores possible solutions. To gain insights, anonymous interviews were conducted with experts in the transport and logistics sectors.

Open Skies: Myth or Reality?

One of the key international agreements regulating civil aviation is the Open Skies Treaty. This treaty, signed in Helsinki in 1992, aims to increase trust and transparency among participating countries by allowing reciprocal aerial surveillance flights. The treaty establishes different levels of freedom, depending on various factors such as flight routes, altitude, and technologies used. These levels are regulated to ensure equal opportunities for all signatories. However, some countries impose specific restrictions on flights, particularly over strategic or military areas.

What about Kazakhstan? In December 2023, the Ministry of Transport introduced an order to “enhance” the country’s Open Skies regime to increase the attractiveness of Kazakhstan’s aviation market. The order lifted previous restrictions that allowed foreign airlines to exercise fifth freedom rights only on routes where Kazakh carriers were not operating. Despite government promises, experts argue that access to Kazakhstan’s market remains largely restricted for foreign airlines. The Ministry of Transport has been accused of misleading the public, as the so-called “Open Skies” policy does not fully align with its international definition. One aviation expert stated:

"Saying 'We are open everywhere except where our airlines operate, and they must not face competition' is misleading. It would have been better if they had remained silent rather than falsely advertising an Open Skies policy."

Experts emphasize that Open Skies should be introduced without exceptions or limitations. This would allow Kazakhstan to attract international airlines, facilitate new routes, and encourage infrastructure investment. What is particularly frustrating is that the current global geopolitical tensions have created unique opportunities for Kazakhstan’s aviation sector. However, aviation authorities have failed to capitalize on these prospects for the past two years. One expert remarked:

"Due to the war, all European, Japanese, and Korean airlines are avoiding Russian airspace. Ukrainian airspace is also inaccessible. This has given Kazakhstan a significant advantage in aviation. And yet, we are sitting idle and doing nothing. We have lost two years. This opportunity may never come again."

Monopoly and Lack of Competition

One of the main factors stifling the growth of Kazakhstan’s aviation industry is market monopolization by two dominant players: Air Astana and SCAT. Despite their achievements, experts argue that the lack of genuine competition is stalling industry development. Fly Arystan, although positioned as a low-cost carrier, is often perceived as merely a subsidiary shielding Air Astana’s market dominance. A major issue is standardized airport tariffs, which remain the same regardless of an airport’s size, passenger flow, or cargo volume. Experts believe this benefits monopolistic carriers. For example, the airport tariffs in Almaty (over 9 million passengers annually) and Taldykorgan (around 67,000 passengers annually) are identical, which distorts the market. To improve the situation, unrestricted access to the market must be granted to new competitors, allowing tariffs to decrease and service quality to improve. Kazakhstan should deregulate domestic flight tariffs and open its doors to international carriers to foster healthy competition and benefit passengers.

Infrastructure: Missed Opportunities

Mismanagement of infrastructure is another major issue. Kazakhstan’s strategic location could make it a primary transit hub for air transportation between Europe and Asia. However, infrastructure development is hindered by illegal land allocation near major airports, which has already led to tragedies. A notable example is the Bek Air crash in December 2019, when a plane lost altitude on takeoff, crashed through a concrete barrier, and collided with an illegally constructed building near Almaty Airport. In accordance with global aviation standards, airport-adjacent land should be designated for customs warehouses and logistics centers. Experts stress that Kazakhstan’s underdeveloped logistics infrastructure is the main barrier preventing the country from becoming an aviation hub. Without efficient and convenient cargo handling, Kazakhstan’s transit potential will remain unrealized.

Subsidies and Inefficient Management

Another critical issue affecting the aviation sector is the subsidy system and airport management. According to industry experts, the government frequently misallocates funds by supporting financially unsustainable routes instead of investing in regional airports and improving intercity transport connections. To attract investors and develop regional airports, Kazakhstan must revise its subsidy policies. Instead of favoring dominant carriers like Air Astana, the government should create favorable conditions for new market players. This would encourage small aviation growth and improve flight accessibility for citizens. Some Kazakh airports are already managed by foreign investors. The airports in Almaty and Aktau are under Turkish management, while Nur-Sultan Airport is controlled by UAE investors, and Atyrau Airport was recently acquired by Qatari company QazAir Investments LLC. However, Kazakhstanis have not seen significant improvements. Aviation experts question why world-class companies that successfully manage Istanbul and Dubai airports fail to improve Kazakhstan’s airports. Reports indicate that the new Almaty Airport terminal cost $780 million, yet the final result is underwhelming. One expert compared this to global benchmarks:

"They killed the airport with their tariffs, and now they’re inviting investors from Turkey, Qatar, and the UAE, handing over control until they recover their investments. Meanwhile, the actual cost of the Almaty terminal is estimated at $1.5 billion. For that amount, they built the Burj Khalifa—the greatest architectural feat of modern times!"

Two Key Reforms for Sustainable Growth

Industry experts argue that Kazakhstan’s aviation industry requires two key reforms:

1. Fully opening the skies to international carriers.
2. Deregulating airport tariffs to enhance competition.

Without these reforms, it will be impossible to attract investment or foster a competitive environment. Only these measures will enable Kazakhstan to leverage its unique geographical location and become a true aviation hub of Eurasia. The government must move away from protecting monopolies and instead encourage free-market competition. Kazakhstan’s aviation industry desperately needs comprehensive reforms. Despite its vast potential and strategic location, barriers such as monopolization, mismanagement, and limited market access continue to hinder progress. Opening the skies, supporting private aviation, and modernizing infrastructure are crucial for Kazakhstan to establish itself on the global aviation map.

Failing to implement these changes could result in Kazakhstan losing its chance to become a regional leader, missing out on economic growth, enhanced global connectivity, and improved competitiveness in the aviation sector. It may also lead to Kazakhstan being overshadowed by more progressive neighbors... Furthermore, the aviation sector could serve as a powerful driver of economic growth and social progress, improving citizens' quality of life and enhancing the country’s global competitiveness.

Rassul Kospanov

Senior Researcher at the Center for Regional Analysis
Astana, Kazakhstan – January 6, 2025

Recently, my Uzbek colleagues shared with me an interview with renowned political scientist Farhod Tolipov, director of the research institute Bilim Karvoni, published on Kun.uz. The interview provides valuable insights into Uzbekistan’s strategic approach to foreign policy in the face of complex regional and global challenges. For Kazakhstan, analyzing Uzbekistan’s foreign policy offers a deeper understanding of regional dynamics and the strategic priorities of its southern neighbor. Throughout this analysis, I will reference Tolipov’s key observations to examine how Uzbekistan strengthens cooperation with its neighbors, balances interests with global powers, and enhances its international resilience. Due to its unique geographical position and active diplomacy, Uzbekistan plays a central role in shaping regional affairs. Sharing borders with all Central Asian states, the country leverages its location to foster stability and cooperation. However, maintaining this strategic approach requires a delicate balance between domestic priorities and external pressures.

Central Asia as a Strategic Priority

Central Asia remains at the core of Uzbekistan’s foreign policy, as regional stability directly affects the country’s economy, security, and international standing. Its central location makes strong neighborly relations essential for access to trade routes, markets, and water resources. Uzbekistan also sees the region as a foundation for economic growth, actively developing cross-border infrastructure and energy projects to bolster its position as a regional leader. Security is a key factor. Stability in Central Asia is critical to protecting national interests, particularly amid growing geopolitical competition between major powers such as Russia and China. By actively engaging in regional processes, Uzbekistan not only addresses its internal needs but also positions itself as a key player in shaping the regional agenda and balancing external influences. According to the Agency of Statistics under the President of Uzbekistan, Central Asian countries accounted for 10.3% of Uzbekistan’s foreign trade, amounting to $5.6 billion between January and October 2024.

In recent years, Uzbekistan has been revisiting its historical and cultural identity, emphasizing the shared heritage of Central Asian nations. This is reflected in renewed references to the Turkestan Autonomy (which existed from November 1917 to February 1918) and Jadidism, an early 20th-century intellectual movement advocating for regional modernization. One notable example was the 2022 Independence Day celebrations in Tashkent, where a theatrical performance depicted prominent Uzbek intellectuals of the early 20th century, many of whom were later repressed in the 1930s. The actors performed Beautiful Turkestan, a poem by Uzbek literary figure Abdulkhamid Cholpon, which expresses nostalgia for the region’s lost unity. The Turkestan Autonomy is also historically significant for Kazakhstan. Its first leader was Mukhamedzhan Tynyshpayev, who was soon succeeded by Mustafa Shokai, another prominent Kazakh intellectual. The autonomy once encompassed territories of present-day southern Kazakhstan, Uzbekistan, Kyrgyzstan, and northern Tajikistan.

On August 5, 2024, during the opening ceremony of the Zakovat International Intellectual Games in Astana, Saida Mirziyoyeva—advisor to the President of Uzbekistan and his daughter—highlighted the shared aspirations of the Jadids and Alash movements in the early 20th century. She stated: "Both the Jadids and the representatives of the Alash movement sought to liberate our nations and build prosperous, progressive societies. Our intellectuals understood why the region was falling behind the rest of the world, but they were denied the chance to realize their vision. Generations have passed, but today, thanks to our country’s leadership, we have raised the fallen banner of the Jadids, who, like your Alash representatives, remain an inspiration for progressive youth". Clearly, under President Mirziyoyev, the concept of "Turkestan—Our Common Home"—first articulated by Islam Karimov—continues to shape Uzbekistan’s regional strategy.

A stable and prosperous Central Asia is essential for Uzbekistan’s economic and political progress. Major transport projects such as the Trans-Afghan Railway and the Trans-Caspian Corridor not only facilitate Uzbek exports but also integrate Central Asia into global trade networks. The construction of the Termez–Mazar-i-Sharif–Kabul–Peshawar railway is particularly significant, as it will reduce transportation costs and finally provide Uzbekistan with direct access to Pakistan and India’s major markets. Like other Central Asian nations, Uzbekistan skillfully navigates the competing interests of global powers. Its participation in the C5+1 format with the United States, China, Russia, and the European Union demonstrates diplomatic flexibility. However, Uzbekistan remains cautious to avoid over-reliance on any single partner, ensuring its sovereign decision-making. A prime example of this pragmatic diplomacy is Uzbekistan’s stance on Afghanistan. While Tashkent does not officially recognize the Taliban government, it has repeatedly expressed readiness to implement the Termez–Mazar-i-Sharif–Kabul–Peshawar railway project. In February 2024, the Uzbek state railway company Uzbekistan Temir Yollari dispatched 120 workers to Afghanistan for the reconstruction and maintenance of the Hairatan–Mazar-i-Sharif railway.

Uzbekistan’s Green Agenda in Foreign Policy

Uzbekistan actively integrates environmental concerns into its foreign policy, emphasizing sustainable development and climate resilience. Speaking at the COP29 summit in Baku, President Shavkat Mirziyoyev highlighted the Aral Sea crisis, which has become a global symbol of ecological disaster. Uzbekistan is advocating for a UN-backed Declaration on the Protection of River Ecosystems and plans to establish a Regional Bank of Genetic Resources to enhance agricultural resilience against climate change. The country is also set to launch a UN Innovation Agri-Industrial Hub to support landlocked states. One of its key proposals is the creation of the Alliance of Climate Capitals, a platform for knowledge-sharing and sustainable urban development. The first forum of this alliance is scheduled to take place in Tashkent, underscoring Uzbekistan’s growing leadership in regional climate initiatives. Uzbekistan has set the most ambitious renewable energy targets in Central Asia. By 2030, the country aims to generate 40% of its electricity from renewables, with plans to install 25 GW of solar and wind power capacity.

A significant step in environmental education has been the establishment of the Central Asian University for Environmental Studies and Climate Change—Green University. This is the first university of its kind in the region, specializing in environmental and climate research.

Additionally, Uzbekistan has implemented three notable environmental projects in the Aral Sea region in recent years:

1. The creation of the International Innovation Center for Climate Technologies in the Aral region.
2. The launch of the "Aral Valley" Climate Technology Expo Hub, aimed at supporting environmental entrepreneurship and innovation.
3. The "Climate Expo" exhibition and the establishment of the "Aral Nature Laboratory" in the Muynak district of the Republic of Karakalpakstan.

A positive example of Uzbekistan’s environmental efforts is the renewable energy transition program, supported by the United Nations (UN) and the World Bank. This initiative aims to position Uzbekistan as a regional leader in environmental reforms, already attracting millions of dollars in investments for solar power projects. These efforts reflect Uzbekistan’s commitment to developing green technologies and supporting sustainable development initiatives.

Kazakhstan’s Perspective

For Kazakhstan, Uzbekistan’s integration efforts bring significant economic benefits. Together, Kazakhstan and Uzbekistan account for 57% of all intra-Central Asian trade. In the January-October 2024 period, bilateral trade between the two countries reached $3.3 billion, with a target of $10 billion set by the two presidents. Even today, economic cooperation continues to foster mutual growth in both economies. Today, cooperation between the two countries is already contributing to the mutual development of their economies. In the industrial sector, several significant projects have been implemented, including small-scale assembly production of Chevrolet Onix cars in Kostanay, the establishment of a household appliance manufacturing plant in Karaganda region, the launch of sewing and textile factories in Shymkent and Turkistan region, and the production of autoclaved aerated concrete in Tashkent region. Additionally, Kazakhstan is actively participating in the construction of the Kambarata Hydroelectric Power Station-1 (HPP-1). One of the most anticipated projects is the construction of the International Industrial Cooperation Center "Central Asia," covering 100 hectares in the Turkistan region of Kazakhstan and the Syrdarya region of Uzbekistan. This initiative aims to create favorable conditions for joint industrial production and enhance economic collaboration between the two countries.

Kazakhstan also plans to actively participate in Turkmenistan’s new railway project connecting Turgundi, Herat, Kandahar, and Spin Boldak, linking Turkmenistan, Afghanistan, and Pakistan. At the same time, Kazakhstan supports Uzbekistan’s initiative to develop the Termez–Peshawar transport corridor through Afghanistan. Both routes offer logistical cost reductions and faster delivery of goods to promising South Asian markets. This is particularly crucial for Kazakhstan’s agricultural exports, as the country seeks to expand its presence in South Asian markets. The development of these corridors further strengthens Kazakhstan’s role as a key regional logistics hub and enhances economic ties between Central and South Asia. Furthermore, Uzbekistan imports Russian gas through Kazakhstan, a mutually beneficial trade arrangement.

Kazakhstan places great emphasis on joint environmental projects with Uzbekistan. On November 13, in Baku, the presidents of Kazakhstan, Uzbekistan, and Azerbaijan signed a strategic partnership agreement on the production and transmission of green energy. The agreement aims to integrate the energy systems of Central Asia and the South Caucasus, creating a "Green Energy Bridge" to facilitate the transfer of clean energy and strengthen energy security.

"We are actively working to reduce our dependence on fossil fuels, develop technological innovations, and create infrastructure capable of supporting our ecological sustainability. Kazakhstan has reached agreements with foreign partners to implement 'green' energy projects with a total capacity of 43 GW," stated Kazakhstan’s President Kassym-Jomart Tokayev.

Conclusion

Uzbekistan is striving to become a center of regional integration in Central Asia, leveraging its strategic location and historical ties with neighboring countries. A key priority is strengthening friendly relations within the region, advancing economic projects, and actively engaging in environmental initiatives. The Termez–Peshawar railway project will provide access to South Asian markets, creating new opportunities for the export of agricultural and industrial products. Tashkent’s foreign policy is characterized by its ability to maintain a balanced approach in relations with major global powers such as Russia, China, and the United States. The country actively participates in China’s "Belt and Road Initiative" (BRI), engages in diplomatic dialogue through the C5+1 format, and strengthens transport links with Russia. This multi-vector strategy helps Uzbekistan remain independent and adaptable to global geopolitical changes.

Environmental issues hold a central place in Uzbekistan’s political agenda. The country is actively working on restoring the Aral Sea and expanding renewable energy, attracting major international investments. These initiatives not only address domestic challenges but also enhance Uzbekistan’s international standing as a responsible participant in global environmental efforts.

Additionally, Tashkent is deepening cooperation with its neighbors. Joint projects with Kazakhstan, including the International Industrial Cooperation Center, are creating a new economic platform for long-term regional partnerships. This highlights the pragmatic and results-oriented nature of Uzbekistan’s foreign policy. By positioning itself at the heart of the continent, Uzbekistan is evolving into more than just a transit hub—it is emerging as a regional convener and facilitator of dialogue. The country’s role in hosting international conferences and security forums in Tashkent reflects its ambition to become a key geopolitical player not only in Central Asia but also beyond.

Thus, Uzbekistan’s foreign policy strategy combines pragmatism, foresight, and ambition, strengthening its position as a regional leader capable of addressing domestic challenges while effectively engaging with global partners.