Table of Contents
Appendix 1 – International comparisons of air travel related to GDP, 20048
Appendix 2- Industry Average International Traffic Vs. THY International Traffic8
Appendix 3- THY Operating Margin Vs. Industry Average Operating Margin9
Appendix 4 – Turkish Airlines Unit Costs Index Vs. Unit Revenues Index9
Appendix 5 – Industry Average Load Factor vs. Turkish Airlines Load Factor10
Appendix 6 – BA, Emirates & THY Load Factors compared to Industry Average10
Appendix 7- THY and European airline peer growth cost per ASK: Nine months ended Sep-2009.11
Appendix 8 – Relationship between World GDP and Air Traffic11
Turkish airlines (THY), Turkey’s national flag carrier, began its services 78 years ago, under the supervision of the Ministry of National Defense, with 5 aircrafts and today has 169 (both passenger and cargo) aircrafts. The enterprise is still under state control, but within the scope of the privatization plan they have offered 25% of the airline to the public in 2005. They are network type of airline serving both domestically and internationally. Turkish Airlines also offers a freight service which was first started in 1936, and was restructured in year 2000 to consolidate the cargo activities of Turkish Airlines into Turkish Cargo. In 2008, THY have launched Anadolujet, which offered a no-frills service, to make the connection between Anatolia and the Nation’s capital easier and economical to access. They also joined the global airline alliance of Star Alliance in 2008.
2. Operational Characteristics
THY currently operates scheduled services to 139 international and 42 domestic cities, serving a total of 181 airports, in Europe, Asia, Africa, Australia and the Americas. They have recently expanded their Asia network by adding Guangzhou, from Southern China, to their routes to increase their market share on the Europe-China routes, as well as African-China traffic flows. According to IATA (2007), the international passenger demand from Asia Pacific was expected to increase significantly (87 million) by 2011, which caused many airlines operating in that network to expand their routes to gain more market share. The research done by Airbus on International comparisons of air travel related to GDP revealed that every Chinese citizen made on average 0.02 trips a year compared to Europe countries average of 1 trip a year(see Appendix 1). According to Hanlon (2007), with China being in the middle of economic transformation, they are expected to become the world’s largest consumer markets over the next 25 years which will create a huge potential for air travel growth. THY have a competitive advantage over some of their rivals with their hubs being located in Istanbul, city which connects Europe to Asia, which will allow them to use hub and spoke scheduling to feed passengers from Europe to Asia.
THY have also added Erbil, Basra, Al Najaf and Suleymaniah routes to its network in Iraq recently, as the passenger demand from this region is set to grow after the War being settled down. Their strategy in expanding this network was to allow their neighbours to get connected to the rest of the world. On the other hand, after Israel’s deadly May 31 raid on the Turkish-flagged Mavi Marmara, the number of tourists travelling between these two states has decreased drastically. As a result, THY have dropped the number of daily flights to and from Israel by almost half (The Marker, 2010).
The traffic (RPK) at Turkish Airlines has seen a steady growth (from 21% in 2007 to 25% in first 3 quarters of 2011) during...