Geopolitical changes are increasing the role of aviation finance in the region: expert discussion held at the AIFC
According to research conducted by the AIFC, the aircraft fleet in Central Asia and the Caucasus could double by 2030. At the same time, the global fleet, according to Airbus forecasts, is expected to grow from 24,730 aircraft in 2024 to approximately 49,210 by 2044. The growth in passenger traffic and the expansion of airline fleets are generating significant demand for new aviation financing mechanisms in the region. In addition, amid a shifting global landscape and growing geopolitical uncertainty, the importance of establishing reliable and secure financing mechanisms to support the stable development of the aviation industry is increasing.
These issues became the central theme of a roundtable held on 10 March at the Astana International Financial Centre (AIFC, the Centre). During the discussion, experts explored the development of aviation finance and aircraft leasing globally and in the region, as well as the opportunities for using the AIFC jurisdiction to structure transactions in Kazakhstan. These opportunities are becoming particularly relevant amid geopolitical uncertainty affecting global transport corridors and investment decisions in the aviation industry.
The roundtable brought together representatives from the aviation industry, international organisations, and the expert community. Participants included Saltanat Tompiyeva, Chairperson of Civil Aviation Committee of the Republic of Kazakhstan; Peter Foster, CEO of Air Astana; Aslan Satzhanov, Acting CEO of the Aviation Administration of Kazakhstan; Alma Aliguzhinova, Executive Director of AAAG Ltd.; Erlan Ospanov, Chairman of the Board of Directors of Karaganda Airport; Zhanna Shek, Senior Director of Sustainability at the Aviation Administration of Kazakhstan; Rizwan Siddiqui, Regional Manager of IATA; Jim Bell, Partner at Watson Farley & Williams LLP; Kanat Skakov, Director of VCC LLP; Roman Blachshishin, Head of Airbus in Kazakhstan, and other industry experts.
Zhanbolat Kakishev, Chief Product Officer of the AIFC Authority presented the activities of the Aviation Finance Hub, a dedicated initiative of the AIFC designed to develop the region’s aviation-finance ecosystem: “The AIFC is exploring Kazakhstan’s potential as a regional hub for aviation finance and leasing, drawing on leading global practices and growing demand in Central Asia and the Caucasus. The Hub development initiative aims to facilitate the financing and leasing of commercial and cargo aircraft, support the sustainable development of aviation in the region, attract investment, and foster international cooperation”.
In his welcoming remarks, Peter Foster, CEO of Air Astana, emphasised the timeliness of discussions on the aviation sector amid changing transport flows:“Kazakhstan is Central Asia’s aviation leader in the fastest growing air transport market in the world. However, we are not unchallenged. Other parts of the region are developing fast. To stay ahead, we need a focussed and united aviation development plan, and to invest carefully for maximum impact”.
Experts noted that Central Asia and the Caucasus are among the fastest-growing aviation regions in the world. Kazakhstan benefits from a unique geographical location and a rapidly developing infrastructure. The country’s flight safety standards exceed the average European indicators, and domestic aviation workforce competencies continue to expand. In addition, between 55% and 80% of the commercial aircraft fleet in the region operates under leasing arrangements, compared with a global average of approximately 60%. These factors collectively highlight Kazakhstan’s strong potential to establish itself as a key aviation hub in the region.
Assel Bagissova, Head of AIFC Aviation Finance Hub, emphasised the central role of the leasing model in the modern aviation industry: “Today, only 45% of the global commercial aircraft fleet remains owned by airlines, with leasing serving as the primary mechanism for fleet management. The leasing model provides higher returns relative to risk compared with other financing methods. According to expert assessments, in 2024, leasing companies emerged as industry leaders, significantly outperforming aircraft manufacturers in terms of efficiency”.
Experts also highlighted the attractiveness of the leasing model, which has transformed aviation by making aircraft more accessible and financially efficient, enabling airlines worldwide to expand. During discussions, it was noted that the appeal of a jurisdiction for leasing companies is largely determined by three key factors: the legal framework, the tax regime, and a developed cluster of aviation services. Drawing on international experience from countries such as Ireland and Singapore, the AIFC provides a legal and regulatory environment conducive to attracting investment into the aviation sector. With a well-developed financial infrastructure, the Centre is well-positioned to serve as a key platform for the development of aviation in Kazakhstan.
Jim Bell, Partner at Watson Farley & Williams LLP, noted: “AIFC should carefully consider its positioning as a leasing hub. Leasing companies already cluster in established centres like Ireland and the United States. However, by identifying a clear niche that offers advantages for extending operations in the region, AIFC could position itself as a complementary destination to these established hubs”.
During the roundtable, experts noted that despite the scale of global centres, the AIFC’s attractiveness is defined by its regional specialisation. Kazakhstan’s network of tax treaties with all countries in Central Asia and the Caucasus reinforces the AIFC’s status as a priority jurisdiction for developing the leasing business in these high-potential markets.
The AIFC jurisdiction is based on the principles of English common law, representing a key advantage for the aviation finance industry. In addition, Kazakhstan has concluded over 55 tax treaties with other countries, creating favourable conditions for structuring cross-border transactions and attracting international investors.
Additional legal protection for leasing operations is provided through Kazakhstan’s participation in the Cape Town Convention and the Aircraft Protocol, including the IDERA mechanism, which offers lessors control over the asset in default.
Another key advantage is the high level of flight safety. According to the International Civil Aviation Organization (ICAO), Kazakhstan meets 82% of its standards, significantly exceeding both global and regional averages.
In addition, amid a shifting global agenda and geopolitical turbulence, the importance of establishing reliable and secure financing mechanisms to ensure the stable development of the aviation sector is increasing. In this context, the AIFC serves as a platform for building a modern aviation finance and leasing ecosystem in the region, developing industry expertise, and attracting international market participants.
Reference:
The Astana International Financial Centre (AIFC) is an independent jurisdiction where investors and business meet emerging opportunities of Kazakhstan and Central Asia in a transparent and sustainable environment backed by the principles of English Common Law. aifc.kz
AIFC Press Office
Ainur Issabayeva, Press Secretary
E-mail: [email protected]
