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Thu 7 Dec 2017 03:55 PM

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Turkish Airlines CEO looks to reclaim Istanbul's historic transport hub

Turkish Airlines CEO Bilal Eksi on how the airline hopes to use its network to help Istanbul revive its millennia-old role as the world's original travel hub

Turkish Airlines CEO looks to reclaim Istanbul's historic transport hub
“If you look at tourism, Istanbul is the original city. It isn’t a ‘manufactured’ place. It’s beautiful, and that gives it all the more opportunity to become a real hub”

For Turkish Airlines CEO Bilal Eksi, the completion of Istanbul’s enormous new airport goes way beyond the business of his airline’s operations or tourism figures.

In his eyes, it means the city reclaiming its historic role as the world’s original travel hub, the transcontinental gateway between East and West.

Speaking to Arabian Business in a quiet backroom of the Turkish Airlines office in Dubai, the soft-spoken Eksi notes that Istanbul’s role as a key stop-over for travellers predates air travel by millennia.

“Istanbul has been the historical hub for many civilisations," says Eksi.

"If you look at Istanbul’s history, this was true in Roman times, during the Byzantine era, during the years of the Ottoman empire, and now in Turkey.

“We have a very deep, and very proud history to back us up,” he adds. “Istanbul is connected to two continents. If you look at it in terms of geographic location, Istanbul has a lot of advantages.”

At the moment, Istanbul’s aspirations to take back the title of “global hub” from the likes of Dubai are held back by its two overburdened airports, Atatürk Airport on the European side of the city, and Sabiha Gökçen International on the Asian side.

Turkish Airlines announced a record net profit of $939m in the third quarter of this year

In the case of Atatürk, the airport – which is surrounded by urban residential and industrial areas within the confines of the city – there is no room to build additional runways. That makes the addition of new routes problematic.

A lack of slots and parking spaces means that Turkish Airlines operates some aircraft from Sabiha Gökçen, which is already at maximum capacity.

In Eksi’s opinion, the opening of Istanbul’s third airport in late 2018 will bring about a monumental change, both for his airline and for Istanbul itself.

“If you look at tourism, Istanbul is the original city. It isn’t a ‘manufactured’ place. It’s beautiful, and that gives it all the more opportunity to become a real hub,” he says.

Once finished, Turkey’s new airport will be the largest in the world, with the capacity to process 150 million passengers each year, extendable to 200 million in the long-term (though Dubai's Al Maktoum airport is slated to have an eventual capacity of 220 million passngers).

It will include 6 runways, 16 taxiways, 165 passenger bridges and four terminals connected by rail.

“Once this vision is made into reality, the game will be changed,” Eksi predicts.

Eksi notes that the new airport will open the doors to a number of possibilities, including the potential purchase of Airbus A380s – which he says the airline currently sees “no need” for – or increased flight frequency on already popular routes, such as between Istanbul and Dubai or Abu Dhabi.

Istanbul Atatürk is the biggest airport in Turkey by total number of passengers and aircraft movements

2016: a difficult year

The bright future that Eksi describes stands in stark contrast to 2016, when he first became CEO.

That year left Turkey reeling from a string of deadly terror attacks – most notably a June attack on Atatürk Airport that killed 41 people – followed by a failed coup attempt against the government of president Recep Tayyip Erdogan.

As a result, tourist numbers plummeted and tourism revenues shrank from $31.46bn in 2015 to $22.11bn in 2016.

The events of 2016 were particularly hard on Turkish Airlines, which posted net losses of $77m for the year, compared to $1.07bn in net profit the year before. Looking back on this period, Eksi says that it forced staff members to make difficult decisions which, he says, showed their commitment to the airline.

“The financial situation was not so good. As we prepared for 2017, we asked our employees about our situation, what the challenges were, and how to overcome them,” he recalls.

“Our union came back and said they were [willing to] accept short-term reductions to their salaries. It wasn’t big money, but it was a symbol of understanding from our employees. We worked together and everyone put their hands on the table. I was proud of them.”

While Eksi says that the tumultuous year wasn’t easy, he’s confident that Turkey has weathered the storm and is now on the rebound.

“Tourism dropped very sharply. So did business travel. But Turkey has a very good ability [to withstand such crises] because we have a very good domestic market, very good touristic opportunities, and a very big economy.”

“All the data shows that we’ve been recovering very fast. Tourism businesses have started again, and it’s been a very fast recovery. We’ve had amazing results,” he adds.

Eksi’s optimism is backed up by statistics. Third quarter data, for example, shows a 40 percent year-on-year rebound in tourist numbers. Turkish tourism minister Numan Kurtulmus recently told Reuters that Turkey expects $26bn in tourist revenues in 2017, a figure he thinks will rise back up to $30bn in 2018.

Expected to open in 2018, Istanbul New Airport could handle 150 million passengers annually

Despite the fact that some governments – notably those of the United States and the UK – continue to express concern about the possibility of further terrorist incidents in Turkey, Eksi is quick to dismiss any lingering fears.

“There are no security concerns. If you look at the last 11 months, there has been no terrorist activity in the big cities. [This is why] tourism has recovered, and why air traffic is showing very good results,” he says. “And yet, our expectation is that 2018 will be brighter than 2017.”

The African connection

Capitalising on the improved security situation and the possibilities created by the opening of Istanbul’s third airport, Eksi says the airline will continue to look for new destinations to add to its network, which is already the largest of any airline in the world, with 300 destinations.

“It’s not easy to find new destinations for us, but nonetheless we will [continue] to offer new routes."

Up next in the coming months: Samarkand in Uzbekistan, an additional Russian route and, notably, Freetown, the capital of Sierra Leone.

The addition of a new African route, Eksi noted, is particularly significant, as it adds to the airline’s already booming business on the African continent.

While several years ago the airline flew to 14 African destinations, it now flies to over 50. Statistics show that around 10 percent of the airline’s passenger and cargo numbers during the first half of 2017 came from Africa.

But Eksi says the African strategy goes beyond the airline itself and seeks to help Istanbul grow as a travel hub.

Expected to open in 2018, Istanbul New Airport could handle 150 million passengers annually

“Turkish Airlines in Africa doesn’t only mean the airline. Turkish Airlines can connect the African people to the world. We are carrying people [from Africa] to Istanbul, and from there they can transfer to our network,” he says.

“That brings much value to Africa, and many African governments have made requests to [the Turkish] government and to Turkish Airlines that we establish flights to their countries.”

While Eksi says that the aviation industry is a way to help the Turkish government build strong economic and diplomatic relations in Africa, he readily admits that such a strategy is loaded with potentially lucrative business opportunities for Turkish Airlines.

“We see this as in investment. Cooperation between Turkey and Africa has grown, and we’ve benefitted. It creates more business travel and more tourism,” he says.

Looking to the future

Following what Eksi describes as a “very good” third quarter in which the airline posted a record $939m net profit – a 23 percent increase from the same period last year – and a nine-month operating net profit of $956m, Eksi believes the airline will finish out the year having transported approximately six million more passengers than it did in 2016.

“Our expectation is that passenger volume will grow by around 10 percent. We carried 63 million passengers in 2016, and this year we hope that we will carry around 69 million passengers, which would be very good numbers,” he says.

Sabiha Gökçen International Airport is the second busiest single-runway airport in the world

Passenger numbers and revenue, however, are not the only way to measure success as far as Eksi is concerned. Just as important, he says, is brand recognition and for the name of Turkish Airlines to be synonymous with Turkey.

“Turkish Airlines has become a global airline, one that Turkey has produced. Every Turkish citizen can be proud,” he beams.

“But it’s not just about Turkish citizens. In Africa, for example, we are loved very much, and we get great social support. We’ve seen their eyes grow bright [at the mention of Turkish Airlines] and we are proud of that.”

From airline to airports

In November, Turkish Airlines launched a new real estate investment firm that primarily seek to make investments in airports, according to Eksi.

According to a statement released on the website of Turkey’s Public Disclosure Platform, the company – THY Airport Real Estate Investment and Operation A.S – was founded with a 50,000 Turkish Lira ($13,000) equity.

“It may be that we can take some share from the airports. That’s our first aim,” Eksi says.

“We can do the [airport] operations and so on.”

“Mainly we will work in Turkey, but that depends,” he adds. “We’ve been getting such proposals from different locat ions. Since we don’t have such a business within Turkish Airlines, our board established the company to find such opportunities in this area.”

Leveraging star power

Around the world, Turkish Airlines is well known for its innovative commercials.

Among the best examples is a 2013 YouTube ad featuring Barcelona and Argentine football star Lionel Messi and 18-time NBA all-star player Kobe Bryant of the Los Angeles Lakers in which the two athletes take selfies at various Turkish Airlines destinations around the world.

Within a week, the video accumulated 77 million views, tripled the amount of brand searches for Turkish Airlines on YouTube and increased Google searches for the airline by 16 percent, and achieved a nine percent increase in brand recall, according to research conducted by Google.

The video was followed two years later by a YouTube ad featuring an “epic food battle” between Messi and former Chelsea footballer Didier Drogba, in which the pair travelled the Turkish Airlines network sampling their favourite dishes.

Other Turkish Airlines YouTube videos have featured actor Morgan Freeman (pictured), Turkish-American TV personality Dr Oz and American filmmaker and ‘magician’ Zach King.

Social media to the rescue

Following a social media campaign in March led by popular former vine star and social media influencer Jerome Jarre and some of his peers – and backed by the likes of Hollywood actor Ben Stiller and American NFL player Colin Kaepernick – Turkish Airlines agreed to send aircraft carrying tonnes of humanitarian aid to drought-stricken Somalia.

Following a series of tweets which used the hashtag #TurkishAirlinesHelpSomalia, Turkish Airlines challenged the ‘Love Army for Somalia’ to raise $1m in 10 days, which they accomplished in the span of 21 hours. Eventually, over 75,000 people around the world contributed to raising over $2m.

Not long after, the first Turkish Airlines plane – emblazoned with the campaign’s hashtag – landed in the Somali capital of Mogadishu (pictured) carrying over 60 tonnes of food aid and medical supplies.

At the time, the airline pledged that 200 more tonnes of aid would be flown to Somalia over the course of six months.

Since 2012, Turkish Airlines is the only international carrier to fly to Mogadishu, which has been plagued by years of insecurity and civil strife.