Turkey

Turkey Airports Build: Tackling Demand

Turkish Airport BuildThis is part 2 in a 2-part series on Turkey airports build. In part 1, we looked at the current state of airports in Turkey. Istanbul's new airport is without any doubt more than a plan to solve Ataturk’s current saturation. The mega project ”won't only meet Turkey's needs, but also be a hub for all the traffic from west to east, east to west, from Africa to Europe”, Turkey’s transport minister said. Validated in 2013, the construction of the first phase should start this year and be achieved in 2016, to be able to handle 100 million passengers per year at that time.

Betting on Constant Growth

Is this figure huge? Maybe not. Ataturk is currently processing around 45 million passengers per year, and shows a growth that increased from 4% in 2007 - 2008 to 20% in 2011 - 2012. Doubling in size from 2012 to 2017 implies an annual growth of around 15% during the next five years. This doesn't seem unrealistic.

But still, can Turkey’s capital really manage to become the host of the busiest airport in the world, even before US aviation’s cornerstone Atlanta (90 million passengers in 2012), or the capital of the biggest country in the world (Beijing, 82 million passengers in 2012)? Why not, if large domestic demand is added to a Dubai-like model.

Turkey Competitors

Becoming a global hub are also Dubai and Doha’s ambitions. And even though Istanbul claims it has an advantage over those two, is such a fast growth rate possible to maintain for each competitor? Time will tell how the Istanbul-Doha-Dubai war - which actually looks like a Turkish Airlines - Qatar Airways - Emirates fight will turn. Those three profitable and very-well managed airlines are undoubtdly provided by their respective countries with very efficient infrastructures.

The competition could also come from the West, with major European airlines currently cutting costs. Turkish Airlines’ CEO is optimistic and stated that “these cities are not competitors and can work together to benefit the entire region”. His company had the fastest growth on international markets last year, before Emirates.

Four Phases Planned

Istanbul’s new airport is due to be fully completed in 2019, after four successive phases. At that time, it will be a 6-runway airport capable of handling 150 million passengers per year. Officials make a  strong bet on continuous growth: hosting 150 million passengers in 7 years means a year-to-year growth of around 19%!

Turkey Airports BuildRest of Turkey Gets Attention Also

Several airports are being built or extended in Turkey. OrduHakkari Yüksekova and Cukurova Regional Airport are three that are currently being built or extended. The former should serve 15 million passengers per year when it opens. But this capacity will quickly double, officials said. A couple of other projects are still to launch in other cities. Existing airports received improvements recently, 6 of them being provided with new terminals in 2013.

It is still important to see that Turkey already has a lot of -active- airports. Turkish airlines serves 41 distinct domestic airports. For comparison sake, Lufthansa serves 25 destinations in Germany, and Turkey’s main airlines serve around 55 different Turkish airports. Suprisingly, most routes are served with single-aisle jets, Boeings 737 or Airbuses A-320. Indeed, most carriers operate this type of jets, and only Borajet has regional jets in its fleet.

Air Traffic Management Not a Problem

Here is one more point where Turkey makes the exception. Despite a huge growth, in terms of passengers carried, but also in terms of number of flights, delays due to air traffic management are cut off. At Istanbul Ataturk, delays has been reduced by 80% between 2012 and 2013, and they are almost non existent today. Turkey is a member of Eurocontrol, and is actively cooperating with its European neighbors.

Turkey AirportsOpen Skies

Turkey has not yet reached an agreement with the European Commission about an open sky deal with the European Union. And even if it has, other open skies deals (with the US, etc), there are no forei gn airlines operating domestic flights in Turkey. Still, Turley could be part of the European open skies soon - probably in 2015. Many consequences are naturally expected - and figures could keep surging: competition and number of air transporters in the country will increase, and Turkish airlines will have opportunities abroad. Turkey is currently the highest generator of flights in the European airspace.

A Final Thought

Turkey is an emerging country, and consequently shares one common point with its fellows: it enjoys a growth of its air transport. But contrarily to many of those countries, where aviation is a mess, it seems that it is perfectly managed. From airlines, which are making profit and expanding quickly, to airports that are able to handle the growth pretty well, the performance is undeniably outstanding.

With such assets, Istanbul is on track to become a global hub and Turkish Airlines a global player, and this very soon.

References Air traffic rises in September Traffic continues to surge in Turkey CAPA analysis - Turkish Airlines: narrowing the Strategic Gulf CAPA analysis - Inside the world's biggest airport construction projects in 2013/14

Photos: Izmir, Istanbul and Ankara, courtesy of TAV Airports

Turkey Airports Build: Demand Surge

Turkey Airports Build

This is part 1 of 2 articles exploring the growth of airports in Turkey.  

We hear a lot less about the aviation in Turkey  than in many other countries and even though Turkish Airlines ordered several hundred Boeing and Airbus jets last year, the huge orders of the gulf carriers quickly took the headlines, again. And when it comes to growth figures, we hear a lot more about Asian countries.

Istanbul is planning to build the biggest airport in the world, but most keep in mind Dubai or Beijing airport development plans. Now, what if the aviation market in Turkey was even more impressive than that?

Turkish Airport Growth

There are 3 reasons for the growth:

  1. Turkey is located between the European and Asian continents with a population of 74 millions inhabitants.
  2.  It is the 18th power in the world in terms of GDP, currently enjoying a  very strong economic growth (9% in 2010), possibly making Turkey Europe’s 2nd to 5th economic power by 2050.
  3. Turkey is also a popular tourist destination, with 30 million  yearly visitors making it the 4th most popular destination in Europe and 6th in the World. Istanbul is also the 3rd most-visited city in Europe, and increasingly attracts more and more tourists.

Those 3 key points: a large population, a strong economy, and a strong tourism explain how fast air transport expands in this country. The income elasticity of  aviation being close to 2, air transport is naturally growing at a huge rate, and figures are impressive.

Some numbers released last August showed a 17%-increase in the number of passengers carried on domestic flights compared to last year’s August, 9% on international flights, and an amazing 19% growth of the domestic cargo volume.

Turkey airports build Izmir

Healthy Airlines

This growth is actively supported by Turkey’s main airlines. Turkey has many airlines, and the competition is intense especially from Istanbul. Istanbul’s main airport, Ataturk, is the hub of Turkish Airlines, as well as Atlasjet (15 jets and 11 domestic destinations) and Onurair (23 jets and 17 domestic destinations).

But Istanbul’s Sabiha airport, which also grew 10% last year, is the hub of two other airlines, including Turkey’s main low cost carrier Pegasus, the second largest airline in the country, and famous for its order of 100 Airbus A320neo in 2012. Turkish Airlines, the biggest in Turkey by far, has also flights out of Istanbul Sabiha, Izmir, and Ankara. The group also owns two airlines in Turkey: Anadolujet, a 27-jet subsidiary operating in Ankara, and SunExpress, a joint venture between Turkish Airlines and Germany’s Lufthansa exploiting 64 jets in Antalya.

Airlines Enhance Growth

Turkish Airlines and Pegasus are showing an impressive growth – which will of course be gained on the domestic as well as on the international market, especially for Turkish Airlines. It opened 32 new destinations in 2012, and is planning to double both its fleet and its number of flights in the coming years. A plan that seems realistic considering its huge order log.

And it already reached huge milestones, becoming the 5th European carrier by seat capacity, and being awarded Europe’s best airline by Skytrax in 2013.

According to its CEO, by 2021, Turkish Airlines will have increased its revenue to $18bn (from $8bn in 2012) and carry 90 million passengers in 2020 (versus 46 in 2013), as well as operate twice more flights (to 2000 daily).

Its ambitious plans to become a global player make it look very similar to the 3 Gulf carriers (Emirates, Qatar Airways and Etihad) – and the company has sometimes more advantages than them: - Istanbul is even better located between Europe and Asia with 40% of the worldwide traffic, and most of Turkish Airlines’ destination can be reached using narrow body jets. - Turkish Airlines claims that its localisation allows it to have 30% lower costs than its European counterparts. - Istanbul and Turkey in general are a much stronger market - The company is privately-owned, and actively seeks new investors - It is extremely efficiently managed, having costs per average seat kilometers (ASK) that are comparable to European low cost carriers!

The plans are with any doubt expected to do more than satisfy the needs of the domestic traffic’s growth.

Turkey airports build Istanbul Airport

Double Digit Growth for Istanbul Airports

The growth impacts Istanbul Ataturk airport, Turkish Airlines’ main hub, the second busiest airport in the Middle East after Dubai, and 5th busiest airport in Europe. Istanbul is already regarded as a global hub, which handled around 60 million passengers in 2012, scoring a 20% year-to-year growth. Despite being heavily congested, passengers and airlines will have to wait at least two or three years before its successor is ready. Turkish Airlines stated that it is expecting the new airport to be ready on time (2016) but has plans in case the project is delayed.

Currently having 16 million inhabitants - one of the biggest urban areas in Europe, Istanbul is among the world’s 20 most populated cities, and should rank 15th in 2015. It has around 16000 long haul passengers per day, and this figure will double to 33 in 2022, and 45 in 2032 - triple in twenty years.

Ataturk airport handled 45 million passengers in 2012, while East-sided Sabiha Airport handled 15 million. The Istanbul Area Control Center hosted 7% more flights in 2013 than it did in 2012, and Ataturk handled 12.5% more flights, according to Eurocontrol.

Airports Growth in Main Cities

And with the exception of Antalya’s airport, the five busiest airports in Turkey reached a growth close or higher than 10%, each one of them handling between 9 and 45 million passengers in 2012.

And the previous year’s growth figures are even more impressive, being closer to 14%, while Istanbul’s second airport Sabiha grew by 70% between 2009 and 2010! Sabiha Airport is expecting to handle 25 million passengers in 2025, versus 15 million in 2012, and is the 14th busiest airport in Europe. Meanwhile, it is a huge business jet platform.

Among all the Turkish airports, only a few show decreasing figures, and most enjoy a comfortable growth. Countrywide, the average growth in passengers handled was 10.5% between 2011 and 2012 (with opening airports having doubling or quadrupling scores though).

Top Management Skills

Four of the five busiest airports in Turkey (Istanbul Sabiha being owned by a consortium of a Malaysian, an Indian, and a Turkish firms) are managed by TAV. TAV’s 12 airports enjoyed a 36%-traffic growth in 2012. And even though TAV will not be involved in Istanbul's new aiport construction - and that Ataturk will be shut down when it opens - the firm is on a very dynamic growth slope, and several contracts have been won: in Saudi Arabia, Macedonia, Georgia, for Doha’s Hamad airport and Abu Dhabi’s new terminal (in consortium).

The company is the second largest airport-building firm in the world. That’s not everything. Turkish’s construction company Limak, a key member of the project of Istanbul’s third airport, also worked abroad in the construction of a terminal in Pristina, Kosovo, while Polimeks builds an airport in Turkmenistan, and that Turkish officials reported that Turkey will build an airport in Ghana, and manage airports in Somalia. Turkey definitely demonstrates a pretty solid expertise in this field.

In part 2, we will explore how Turkey copes with the growing traffic through continued investment, as well as its ambitious plans to continually improve infrastructure to become an aviation superpower. Why not leave any comments you have below?

Photo credit: Izmir Airport (1 and 2) and Istanbul Airport (3), all courtesy of TAV Airports.