November 2010 | Turkish Airlines (THY), Europe’s fourth biggest airline and one of the fastest growing airlines in the world, has seen passengers soar as a result of an aggressive strategy to turn Istanbul’s Atatürk Airport into a hub for passengers between Europe, Asia and Africa. One third of THY’s passengers currently transits and the airline plans to double this in the near future. The airline operates direct flights to 128 international and 39 domestic destinations.
During 2010, THY has grown its fleet from 133 to 153 aircraft, added 15 new destinations and increased passenger numbers to 31 million (up from 25 million in 2009). In the first 9 months of 2010, THY’s revenues grew by 39 percent, passengers carried increased by 18 percent, and its load factor rose 3.4 points to 74.2 percent, despite the substantial capacity increase. THY says it aims to grow 15 to 20 percent annually in the coming years, just as it has for the past seven, and is on track to become Europe’s third-biggest full-service airline by passenger numbers soon, overtaking British Airways.
Doubling number of flights within 5 years
Turkish Airlines will increase its fleet to 196 aircraft within the next five years, as part of an order of 105 aircraft. With the new aircraft, the airline targets to double the number of flights it operates by 2015 and to become one of the 10 biggest carriers worldwide. Says THY’s CEO Temel Kotil. “The company grew twofold in recent years. Now we aim at competing with companies such as Luftansa and Air France. My personal aim is to raise the number of flights to 10,000 and make THY a world leader.” CEO Kotil also stated the Star Alliance carrier would focus on organic growth to boost market share, however THY is also looking to invest in other carriers, such as Serbia’s JAT Airways or LOT Polish Airlines. It already owns a 49% stake in B&H Airlines.
The fourth Gulf Gulliver?
It has often been suggested that THY could become the next Emirates, Qatar Airways or Etihad (a.k.a the Gulf Gullivers) – giant hub airlines that connect all corners of the globe. According to analysts, THY even has an advantage over the Gulf airlines, as it has substantial origin-destination and domestic markets. Furthermore, THY can reach both European cities and the Gulf or North Africa from Istanbul in two to five-hour flights for which its B737s and A320s are ideally suited. Says THY’s CEO, “Smaller aircraft are better to serve secondary cities in Europe and offer a cost advantage that even Gulf carriers cannot match.”
Another advantage are Turkey’s lower labor costs, which enable THY to offer full-service flights while competing on price with low-cost airlines. According to CEO Temil Kotil, “Our unit cost in 2009 was EUR5.1 cents per seat kilometre, which is comparable with the European low-cost companies, whereas legacy carriers in Europe have about twice this rate.” According to Morgan Stanley THY’s earnings before interest, tax, depreciation and amortisation margin will be “second only to Ryanair” in 2010, as cost cuts “have brought operating costs per available seat kilometre within a whisker of Ryanair.”
New cabin interior, connectivity, onboard chef
In October 2010, THY received the first of 9 new A330-300s and the first of 10 new 777-300ERs it has on order. By August 2011, the airline will have received all B777s and 6 A330s, almost doubling its widebody fleet. Priestmangoode (who also designed Lufthansa’s new First Class) has redesigned interiors across THY’s entire fleet, as well as its lounge and check-in areas on the ground.
Details about THY’s new business class seats are still scarse, except that they are 198cm (78 inch) flat beds in a 2-2-2 configuration on the carriers A330s and a 2-3-2 setting on the 777s. Turkish Airlines’ new premium economy product, Comfort Class, which will also act as business class seat in THY’s new narrowbody aircraft, offers seats with a 45-inch pitch. THY will first introduce the Comfort Class on routes to Beijing, Sao Paulo and Toronto by the end of 2010. Economy seating features nine different colours “reflecting the colours and visual richness found in Istanbul.” A back-illuminated 3D version of the carrier’s new logo greets passengers in the galleys and on the back wall of each cabin.
THY also will introduce inflight broadband by Aeromobile/Panasonic on its new widebodies, and has expanded its onboard chef service to flights to Hong Kong, following a successful launch of the service on New York flights earlier this year.