x Abu Dhabi, UAEThursday 18 January 2018

Turkish Airlines hopes new destinations lure travellers

Carrier's big plans include new destinations in bid to increase passenger numbers and boost revenues 70 per cent.

Passengers are reflected in the departure terminal of Nicosia's airport as they board a Turkish Airlines flight.
Passengers are reflected in the departure terminal of Nicosia's airport as they board a Turkish Airlines flight.

Turkish Airlines plans to increase the number of passengers it carries by as much as 20 per cent by the end of the year.

Temel Kotil, the chief executive, said yesterday the airline aimed to add 11 destinations this year, increasing passenger figures to 35 million and targeting revenues of 11 billion Turkish lire (Dh26.1bn).

This is an increase of 70 per cent compared with a reported revenue figure of 7.03bn lire for 2009.

Mr Kotil's announcement of the aggressive expansion targets came the day after the Indian airline IndiGo boldly stated its case for a seat at the international carrier table.

The budget operator placed a record US$15bn (Dh55.09bn) order with the French manufacturer Airbus, the biggest single-firm deal in aviation history, further underlining the commercial rise of airlines in the East.

Andrew Fitchie, the head of research at Investec Securities in London, said: "The IndiGo deal is not a big surprise. Most of the recent big orders have been coming from Asia and the Middle East carriers.

"I imagine that the deal will now drive up manufacturers' prices because they'll have so much in production," he said.

That could have negative consequences for some western carriers, particularly in the US.

While Asian and Middle Eastern airlines have been placing orders with the major manufacturers, there has been a hiatus in spending from US carriers as they wait for new technology to make their fleets more efficient.

"It doesn't look like this [technology] is coming through any time soon," Mr Fitchie said. "So the US guys are going to have to buy at some point - and at what price?"

As well as bagging more aircraft, Asian and Middle Eastern airlines have also learnt from mistakes made by their western counterparts, said Saj Ahmad, an independent airlines analyst and the creator of the FleetBuzzEditorial trade website.

"The business models of these newer airlines such as IndiGo and Turkish Airlines adapt quicker to economic and passenger trends than other legacy airlines like British Airways," Mr Ahmad said.

A Star Alliance member, Turkish Airlines currently flies to 171 destinations on 130 international and 41 domestic routes.

The carrier's new flight programme, which has been confirmed by Turkey's ministry of transport, will enable the company to operate three weekly flights to Guangzhou in China, four weekly flights to Los Angeles and a weekly flight to Shiraz in Iran.

IndiGo, meanwhile, plans to launch international routes to South East Asia and the Middle East this year. But Mr Ahmad said that would not affect the strong position of UAE carriers, at least not in the short term.

"The deliveries for the $15bn deal are still a half decade or more away, assuming Airbus meets its deadlines," Mr Ahmad said, "This will not be a headache for Emirates [Airline] and Etihad [Airways]."

While IndiGo is receiving its aircraft, Emirates and Etihad will have receive more Boeing 777 and Airbus A380 planes, with which they will capture yet more traffic. "IndiGo won't have the critical mass or product to compete, so the big Arab carriers have little to worry about in reality," Mr Ahmad said.