Galim Khussainov
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Economy and public policy · 1 min read

Why Ticket Prices Are Rising

Translated from Russian with the help of AI. Original: Russian version

High airfares and the need for high-speed rail to bring competition to domestic transport.

Demand creates supply, and when demand is high and supply is limited, prices rise.

I bought a ticket on a so-called low-cost carrier, Fly Arystan. The fare, with no baggage and no meal, came to KZT 64 thousand one way. I also bought food on board (a sandwich, tea and water) for KZT 5.2 thousand. In total, the trip cost almost KZT 70 thousand.

Business class on Air Astana costs, on average, between KZT 78 thousand and KZT 96 thousand. That is almost the same price as business class on the premium carrier Air Astana and a ticket on the low-cost Fly Arystan.

Competition in the domestic market can be developed only through alternative modes of transport. Opening new air routes is an extremely difficult way to foster competition and lower fares, because air transport is highly capital-intensive and very sensitive to a range of factors.

In developed countries, the main competitors to airlines are trains. For distances of up to a thousand kilometers, travelling by train is much more comfortable and faster, provided that high-speed trains and suitable railways exist. Unfortunately, we have still not built high-speed lines that would make it possible to get from Almaty to Astana in even 4-5 hours.

A high-speed rail project is not the cheapest undertaking, but it would certainly have a greater effect than the inefficient subsidizing of various sectors of the economy.

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