The Eurasian market typically goes unnoticed in comparison to countries from surrounding areas such as Asia, Europe and the Middle East. One particular country that is making a name for itself economically, is Turkey. With its large population, dynamic history, strategic location, and investment in aviation, the Eastern jewel is set to be a dominant player in the coming years. Why is Turkey set for success, and what can other regions and airlines learn from its example?
Turkey, on the whole, is a fascinating dynamic market that is full of aviation opportunities. Whilst this article only scratches the surface on the subject, we'll outline some of the reasons (both physically, culturally, and financially) why Turkey is worth looking at.
To start with, we need to discuss the power of a robust domestic market. Turkey has a population of 82 million (2019), with 15 million living in greater Istanbul alone. The vast population explains why for ten years (baring recent months), the local market has had double-digit aviation growth (on only three occasions has the growth been under double digits). This is because the aviation sector is still trying to catch up to the countries runaway GDP (Turkey is the fourth quickest growing economy in the world according to CAPA), leaving plenty of opportunities for new players to enter the market.
Air transport market in Turkey is forecast under the “current trends” scenario to grow by 109% in the next 20 years. This would result in an additional 91 million passenger journeys by 2037. If met, this increased demand would support approximately US $94 billion of GDP and around 1.5 million jobs
IATA report on Turkish aviation
A major reason why Turkey is set for success in the world of transcontinental travel, is its location. Istanbul, the capital, largest city and gateway to Turkey, is located right in between the West (Europe) and the East (Asia and the Middle East). Like Dubai and Doha, Istanbul also has the advantage of being a transfer/transition hub. Unlike the other two cities, however, the hub is located to the north of the globe allowing quicker trans-artic travel to North America. Travelers heading in either direction are best suited to fly through Turkey as it is almost an equidistant from everywhere.
Additionally, when the market starts to recover and bounce back from the current pandemic crisis, Turkey's strategic location will be of great advantage to travelers.
"Projected growth rates in aviation demand between Europe and the Middle East/Asia are very high (for example Boeing projects demand in 20 years between Europe and the Middle East to be 2.6 times what it is at present in terms of passenger-km, and three times for trips from Europe to China)"
Dr Lynnette Dray, Senior Research Associate, at the University College, London to CNN
But location isn't enough to become one of the best aviation hotspots.
The government of Turkey has significantly invested in its aviation sector, from limited sponsorship of its state carrier Turkish Airlines, to building airports and funding aircraft research.
It is this first area that Turkey has done so well in: Turkish Airlines is one of the biggest and best airlines in the world. With a fleet of 361 aircraft (both long haul and short-haul) and an entire cargo fleet, they are a force to be reckoned with. And these are not old planes either, with the carrier investing in next-generation aircraft like the Boeing 787 and the Airbus A350.
It is also worth mentioning that despite being such a colossal airline with many destinations, the carrier has an excellent balance sheet and is operating for half the cost of similar-sized airlines. This is thanks to the cheaper labor and economics of Turkey, that provide European level training for much lower cost - something that rival carriers have been quick to take advantage of.
Turkish Airline's excellent hospitality reputation has extended to on-board service as well. The airline consistently wins awards (such as Europe's Best Airline for six years straight from 2011 to 2016) and has earned a reputation that places it amongst other titans like Air France, Emirates, Singapore, British Airways, and Qantas.
Another smart move by Turkey has been an investment in budget travelers. Pegasus Airlines, the low-cost budget carrier for Turkish Airways, saw double growth in 2019, lowered its costs by half in 2020, and is well suited to thrive in a post-COVID-19 world.
But there is plenty of room for new entrants, especially in the smaller single-aisle market. The leading flag carrier has hit a bottleneck in short-haul operations (primarily domestic) due to the Boeing 737 MAX grounding and Airbus being unable to supply aircraft quickly enough. Turkish Airlines, for example, expected to have fifteen new Airbus A321neo aircraft delivered in the first half of 2020 but was only able to receive twelve. But other operators who can move into this space with their narrowbody aircraft, could find a wealth of opportunities within this market.
It's also worth nothing that other local carriers have seen substantial growth: budget airline Onur Air has been operating domestic and charter services since 1992 and recently expanded its services with leisure subsidiary Holiday Europe that operates flights to leisure destinations around the globe.
ULS Airlines Cargo has also seen steady growth since its inception in 2004, when it launched with three cargo planes. It has expanded its fleet and now operates seven planes (four A300s and two A310s) across a number of cargo routes.
Turkey hasn't been sitting idle as its flag carrier flies around the world. Back home in Istanbul, the government of Turkey constructed a brand new massive airport (called Istanbul International Airport) that not only has six runways, but is six times bigger than Heathrow and can facilitate up to 200 million passengers a year (double the nearest other airport, Bejing's Capital International Airport). Turkish Airlines moved its entire fleet to the new airport in preparation for further growth,
"Istanbul Airport will be a milestone for Turkey's aviation industry, and an investment that demonstrates the future vision of Turkish Airlines. More than just a transport hub, the airport is designed as a smart complex equipped with cutting-edge technology"
A spokesperson from the airline told Traveler
This installation was not cheap, with reports that the airport cost around $12 billion US but well worth it to cement Turkey's role in the future of the aviation industry. Airlines operating to the country (and any smart future airlines that want to use the new airport as a hub with a capacity of 250 airlines) will find high-tech facilities, award-winning features, and plenty of room for expansion.
Possibly the most prominent growth sector not yet mentioned is the world of private flying in Turkey. The region has a massive market for private aviation clients underserved by the current market offering (According to lexology.com, there are 194 air taxi operators as of 2019). Yet, conditions seem to prove that the market is there.
"Turkey, and Istanbul in particular, is a rapidly growing business aviation market with good infrastructure and potential for growth. But it also continues to be a challenging destination for our customers due to service levels, parking availability, and operating restrictions," said Greg Evans, CEO of Universal Aviation Turkey to Arabian Airspace.
The older Ataturk airport, which was replaced by the above Istanbul International Airport, is now open for private aircraft. Close to the city and with expansive facilities (remember it used to be the main international airport of Istanbul), it makes flying private a dream. Although private aviation companies need to have some caution, with only 180,000 high wealth individuals in Turkey with over one million US, the market may be more competitive than compared to the USA.
An odd upside of the coronavirus is more demand to fly private. Less contact with other people outside of your household dramatically reduces the possibility of contracting the coronavirus; thus, private aviation by its very namesake is the safest way to fly.
Turkey is potentially posed for massive growth, thanks to its geographical location and its growing economy. A robust domestic market supports healthy and stable financial growth and creates business opportunities for investors. With the private aviation market growth during the downturn as the cherry on top, Turkey really is a country to keep your eyes on.
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