Capacity Stretch: The Strength of Turkish Airlines’ Hub

Unlike many legacy carriers riding the recession by trimming capacity, Turkey's national carrier is stacking up its fleet with wide and narrowbody, aircraft - as it continues to grow medium and long-haul routes out of its main base at Atatürk International Airport (IST) in Turkey. The carrier also operates secondary bases at Esenboğa International Airport (ESB), Sabiha Gokcen International Airport (SAW), and Adnan Menderes International Airport (ADB).

Turkish has just announced orders for multiple narrow-body jets (ten 737-900ERs and ten 737-800ERs). Delivery of the single-aisle jets - which are well-suited to the medium-haul market - are due for delivery between 2011 and 2014, plus the carrier has requested the option of another fifteen aircraft until 2015. Turkish currently has an extensive fleet which comprises of the following mix:

• 1x A310-200
• 2x A310-300
• 3x A300-300F
• 2x A319-100
• 18x A320-200
• 17x A321-200
• 5x A330-200
• 7x A340-300
• 5x B727-400
• 45 x B737-800

Growth at Atatürk

A Routes News analysis of Turkish Airlines' schedule shows how the carrier has grown in the last five years.

In 2005, Turkish (TK) served 89 destinations and a respectable 861 weekly flights and today, this has almost doubled to 149 destinations and 1671 weekly departures. (Schedule Data: Feb 1-7, 2010).

This significant growth has been based upon capturing the Europe to Asia market (demographically both huge continents), Europe to Middle East market and a large home market in Istanbul. Istanbul is ideally suited to be the natural hub for European/Asia market. Turkey is a full member of the EU but close enough to compete with the Middle East carriers for this traffic. Additionally, GDP growth has been strong in Turkey and Istanbul has seen more point-to-point demand in its traffic, less dependant on transfer traffic than Emirates, where the population of Dubai is small and dwindling. Turkey also has a significant diaspora making it an easy source market for Europe and the US.

Broken down by region, Turkish Airlines operates over half of its frequencies to the Middle East, as the following table shows:

Source: Flightbase

In terms of weekly frequencies, Turkish Airlines has now become a larger operator than the major Middle East based carriers, but faces some stiff competition in the market from Emirates, operating 1104 weekly services from Dubai. Etihad is also a valid competitor, with 477 weekly flights from Abu Dhabi, as well as Qatar, offering 745 weekly frequencies from Doha.

The following table summarises this frequency split by region from each carrier:

Atatürk: A Leading European Hub?

Routes News suspects that Turkish Airlines' new fleet of narrow-bodies could be used to serve new markets from Atatürk that Emirates and Etihad struggle to operate. In Europe, Turkish operates thinner European markets such as Warsaw and Budapest, not operated by the Middle East carriers.

The narrow-bodies could also be used to tackle routes in the Middle East that its biggest competitor (Emirates) does not have the right (narrow body) equipment to serve. While Emirates' lack of narrow-body equipment may reduce its ability to reach markets that Turkish has traditionally served, could its low-cost subsidiary, flydubai - which is seen as a separate entity - provide the answer by feeding new destinations from Dubai using its narrow-body B737-800 aircraft?

Across the global network, Turkish Airlines does benefit from extensive connectivity through codeshare arrangements with an exhaustive list of Star Alliance airline partners, including: Air China, EgyptAir, Lufthansa, Asiana, Singapore Airlines, TAP Portugal and United Airlines.

This serves to strengthen Turkish Airlines' strategic position in Atatürk - which is well-connected as a transfer point for flights linking Europe and Asia, as well as a for North American traffic connecting to Asia and the Far East.

Fleet Strategy: Where to Next?

A Routes News analysis shows the markets operated by its competitors that it could serve with its narrow-body and wide-body aircraft. Turkish Airlines has publically stated its interest in operating to Australia and Hanoi, and the airline has reportedly completed its near term European and Middle East network expansion and is focusing on longer sectors. The Star Alliance member has also shifted some of its lower yielding European services into Sabiha Gockhen to free valuable slots in its constrained IST hub.

The table below lists some potential destinations that TK could consider operating with medium or long haul aircraft, and the frequency with which they are served by the three largest Middle East carriers.

As the Turkish Airlines fleet grows, the 737-900ER and 737-800ER will be a welcome addition, enabling the carrier to serve new medium haul thinner markets.