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Sat 24 Jan 2009 04:00 AM

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Steady growth

Temel Kotil, CEO of Turkish Airlines discusses the carrier's expansion during the recession.

Temel Kotil, CEO of Turkish Airlines discusses the carrier's expansion during the recession.

Can you give some background about the company?

Turkish airlines was established in 1933 and from that point it grew up as a state owned carrier but later, in 2006, it became a private carrier and launched 24 new international routes. In the last five years we've doubled our passenger loads.

The Middle East is one of the fastest growing markets, around 50% growth, and it represents about 10% of our total market.

There have been three major developments in the company; one was in the late fifties when Turkish airlines purchased 30 DC3, American aircraft. With that fleet they started the international flights.

The second major development was in the mid 1980s when we started buying long-haul aircraft and began to do more overseas flights. The third major development was the expansion plan that was put together in 2003.

From then on we've had more passengers and revenue and we've experienced rapid development. In the past, concerns about safety with Turkish Airlines have been raised. What are your views on this?

We are a member of Star Alliance and its safety record is very high. In the last five years they've put together an extensive safety programme which we adhere to. We have an excellent safety record, particularly throughout the developments we've had over the last five years.

Will you be making cost cuts during the global economic recession?

We have kept our costs constant throughout the last five years. Our cost structure has not increased because we have brought in efficiency measures. The number of passengers used to be 800 per employee but in the last five years it has risen to 1700, more than double.

We hire only licensed people to enhance service quality. Although we've cut our costs in terms of employees we think service is actually better for the passengers now.

This year, from January, the number of business class tickets has increased 26% and average increase in passengers overall is 17%.

So despite global recession we have still managed to grow and our load factor is continually increasing which is bringing extra revenue.

So although there is decrease in premium passengers worldwide we are still managing to increase our figures. I think because of the crunch, passengers are looking for affordable alternatives and see Turkish airlines as a good choice.

What is your current fleet size?

At the end of last year it grew to 124 airliners, including four cargo aircraft. We've more than doubled our fleet in the last five years. Now we're also in the process of ordering 105 aircraft- 35 long-haul, and the rest narrow-bodied, which means we are really investing for the future.

We have both Boeing 737s and several of the Airbus A320 family, all of which have an average age of 6.2 years, making it one of the youngest fleets in Europe. We are constantly returning older aircraft and receiving new planes to keep the entire fleet up-to-date.

How will you be developing your route networks?

We have 109 international destinations and 33 domestic routes. Our network and frequencies have almost doubled in the last five years as well. Our network is constantly getting larger, including recent addition, Nigeria.

The Middle East is one of the fastest growing markets- around 50% growth, and represents about 10% of our total market. We also fly to Saudi Arabia and carried around 100,000 passengers there during the Hajj season at the end of last year.

We are turning Istanbul, our home base, into a very efficient hub to enable us to fly to all these new destinations.

What kind of onboard entertainment services do you offer?

We believe in quality and we'd like to become a five star carrier. Some of the long-haul aircraft have the video on demand system, which passengers enjoy. But we also provide movies even for just a two hour flight which is a nice feature of the entertainment system.

What are your future expansion and growth plans?

By 2013 we'll have ordered our 105 aircraft. We're targeting 40 million passengers and US$10 billion revenue which is roughly double what we have today. In addition we hope to open more and more routes and expand our long-haul business.

We are hoping to expand further into North Africa and the Far East, so really our growth plans are very ambitious. We are hoping to turn this credit crunch around to our benefit so we can continue to grow and develop, rather than lose revenue.

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