Viet Nam's Sovico Group buys into Kazakhstan's Qazaq Air

A consortium of Central Asia Aviation Holdings Limited, a subsidiary of the Vietnamese conglomerate Sovico Group JSC, and Kazasia Holdings Limited finalised a deal with the Kazakh sovereign wealth fund Samruk-Kazyna JSC to acquire a 51% stake in Qazaq Air (IQ, Astana Nursultan Nazarbayev) on December 24, 2024. The agreement went into effect three days later, in line with the updated timeline.

"The primary goal of this transaction is to advance the domestic civil aviation market by increasing competition, expanding international flight routes to and from Kazakhstan, creating new job positions, and many other related goals," Qazaq Air said in a press release.

While the parties did not disclose the value of the transaction, the government earlier expected to net around KZT2 billion tenge (USD4.2 million).

Sovico Group, a multi-industry investment holding, founded VietJetAir (VJ, Hanoi Noi Bai International) and remains a major shareholder in that carrier. In late 2024, it agreed to pay KZT38.4 billion (USD74.2 million) of Qazaq Air debt by the end of 2044 as part of the acquisition deal. The terms of the sale and purchase agreement also include adding approximately twenty B737 MAX or A321 family aircraft over "the next several years," and leveraging VietJet's franchise model and technical capabilities to improve competitiveness and service quality.

Kazasia Holdings is a privately held Kazakh entity used by VietJet to ensure local entities retain effective control over Qazaq Air in compliance with local foreign ownership rules.

According to ch-aviation PRO airlines data, Qazaq Air flies to 16 airports in Kazakhstan and Russia using a fleet of five DHC-8-Q400s. The principle agreement regarding privatisation was reached in May 2024.

"We are proud to establish a strong presence in Kazakhstan and contribute to the country’s aviation development," said Sovico Group Chairman Nguyen Thanh Hung. "Sovico Group, with global vision is dedicated to providing the resources and expertise necessary to strengthen Qazaq Air, enabling it to achieve its strategic objectives."

The shares will transfer and the transaction will close once the parties meet the conditions of the sale and purchase agreement. Samruk-Kazyna did not disclose the timeline for this process.

Following the IPO of Air Astana earlier this year, Samruk-Kazyna no longer holds a majority stake in any carrier.