Turkish Airlines

Pegasus Airlines bets on liberalisation in Turkey’s international market with 100-aircraft order

Turkish low-cost carrier Pegasus Airlines is placing a big bet that Turkey’s market will liberalise over the next decade, enabling the carrier to expand its fleet to between 100 and 140 aircraft. Pegasus currently operates 43 narrowbody aircraft and has been negotiating since last year with Airbus and Boeing an order for 100 A320neos or Boeing 737-800 MAX. Pegasus CEO Sertac Haybat said on the sidelines of last week’s CAPA Airlines in Transition CEO Summit in Istanbul that he expects the 100-aircraft order will be placed within one month and deliveries will be spread out over six to seven years.

My Haybat expects the new aircraft will primarily be used to accelerate expansion of Pegasus’ international network, including to new destinations in the Indian subcontinent that are not within range of its fleet of current generation 737-800s. But he acknowledges international expansion will only be possible if bilaterals are liberalised.

Air services expansion to Iraq accelerating this summer

Another round of new routes to Iraq is occurring over the next few months, continuing the wave of expansion by international carriers as the country's economy develops and trade links grow. After almost two decades of limited activity, commercial aviation is playing an important role in the redevelopment of Iraq.

Between the early 1990s and 2000, Iraq was faced with heavy international sanctions, effectively preventing commercial travel. Royal Jordanian was the first international carrier to resume operations to the country, initially operating irregular cargo and charter services and then an on-again, off-again scheduled passenger service. It was only after the fall of the Hussein regime in 2003 that commercial airlines began to return to the country in any numbers.

What began as a trickle of airlines and a handful of routes become a torrent at the end of 2008. More than 20 airlines have added services to Iraq over the past three years. In the past six months alone, flydubai, Etihad Airways, Emirates, EgyptAir, Pegasus Airlines, Turkish Airlines and (the now defunct) Viking Hellas have all added new services or extra capacity into the country. Qatar Airways and Jazeera Airways are set to enter the Iraqi market in the next few months.

Natural resources and economic growth draw Turkish Airlines to Africa

Turkish Airlines’ bullish African expansion plans will see the carrier launch service to several destinations in 2012 and upgrade many existing routes to twice daily. The carrier’s focus for 2012 is on expanding in emerging markets, primarily Africa, as further network expansion in the US is on hold and plans for launching service to Australia will likely not materialise until at least 2013.

Turkish currently operates 18 destinations in Africa, including Misrata in Libya which was launched in Dec-2011. Turkish CEO Temel Kotil told CAPA in Dec-2011 that the carrier plans to launch in 2012 Abuja and Kano in Nigeria; Kigali in Rwanda; Abidjan in Cote d’Ivoire; and Mogadishu in Somalia.

The carrier has since also announced plans to launch in 2012 Kinshasa in The Democratic Republic of the Congo, which could give Turkish an African network of 24 destinations by the end of this year.

Poland’s LOT and Turkish Airlines highlight Eastern European flag carriers investor/seller shortfall

Several Eastern European flag carriers are clearly struggling as competition in their markets, particularly from low-cost carriers, continues to increase, threatening their survival as independent entities. Many of these carriers are reliant on regular capital injections from their respective governments simply to maintain operations. In an effort to ensure their long-term survival and a more sustainable future, several are seeking to secure strategic partners in 2012.

Being acquired by, or partnering with, larger airlines from Turkey and the Middle East is proving to be the most likely of scenarios for these Eastern European operators as Western European airline groups are attempting to reduce expenditure significantly in 2012. While Turkish Airlines and the three major Gulf carriers have the cash and interest to pursue investments in Eastern European carriers in 2012, such investments do not appear to be on the radar at all for Western airlines.

Small capacity with regular frequency key for Turkish Airlines strategy to Africa, and perhaps India

In an interview with CAPA, Turkish Airlines CEO Temel Kotil expanded on the airline’s strategic decision to deploy a specially configured sub-fleet of B737-900ERs on many African routes, primarily in the central and western region of the continent. The strategy could be expanded to Central Asia and India, Mr Kotil says.

He said that while Africa is a very good market for carriers – including Turkish – the seat demand is small and carriers have responded by offering limited frequencies on large aircraft able to span the distances involved. While non-stop long-haul passenger comfort is maintained, sporadic flights have meant that travellers have had to tailor trips to the airline's schedules rather than to their actual needs.

Europe-Africa routes heavily concentrated across a few points

Africa, once carved up by European powers, retains air links reminiscent of those historic ties. Even so, in too much of the continent, service remains spotty. The CAPA routes tool breaks African searches into four categories: North, South, East and West/Central. But in terms of seat offers available, the real division is between North Africa, those countries bordering the Mediterranean – and everything else. This examination will utilise this format, beginning with everything else.