Interview: Kadri Samsunlu, CEO, Istanbul Airport
Kadri Samsunlu, CEO of Istanbul Airport, tells Routes editor-in-chief Wes Charnock why he expects 2021 to be “a year of partial normalization” for air transport and outlines the key markets IST is focusing on during the recovery.
Here is a rush transcript of the video.
Wes Charnock: Hi everyone and welcome to CEO Video Interview for Air Transport Community Week. My name is Wesley Charnock, an editor-in-chief for Routes. Today I'm delighted to be joined by Kadri Samsunlu, the CEO of Istanbul Airport. Kadri thanks very much for being with us today. We've not spoken since last year when things looked a little different in the start of last summer. We all thought that the MOC will be open again by the end of last summer. How are things with you at the moment. How is it at the airport, how is Turkey in general?
Kadri Samsunlu: Overall of course, I have to admit it's very sad that the airports in Europe went all the way back to the traffic levels in 1995. This is astonishing. We lost almost 25 years like we put ourselves in a time machine and went back to 1995. As you go up, it was our second year of operation with over 23 million passengers. We proved to be one of the most resilient airports in the continent and the busiest as well in terms of passenger numbers.
Kadri Samsunlu: There are reasons for this resilience. We have a very strong and big domestic market and our government put relatively limited travel restrictions and border closures which enables us to surpass the other big hubs in Europe.
Kadri Samsunlu: Of course, it's a pandemic and as a global hub airport we should work very closely with the government officials, health professionals and airlines to safely handle the pandemic and to keep the air connectivity to Istanbul or to Turkey and via Turkey. Transport business is also relatively very important for the sector and for my airport. What we are trying to do is we need to reduce the economic impact of the pandemic over us and also in the sector. That's why working with the stakeholders and decision makers as well as airlines and other stakeholders of the ecosystem is very key to set the measures, to reduce the health risks for the passengers, for our employees, which are also very key for us and also general public.
Kadri Samsunlu: I think what I can say is in the first one year of the pandemic we successfully implemented in Turkey to those measures as a result of which currently we have a consistent and predictable travel experience that we can propose to the passengers and tourists who are willing to come to Istanbul this year.
Kadri Samsunlu: I will call 2021 as a year of partial normalization. It's unfortunate comment but the best we can get is a partial normalization. I'll be very glad if we get the air traffic to around 50% contraction compared to 2019 and from our operational perspective, the year started very much in line with our expectations.
Wes Charnock: Thank you. Obviously, you mentioned that you have a lot of different types of traffic there from you looking into the Turkish market. Think of that leisure market as really important and a lot of European countries are closed right now. The UK is closed right now, but is that really key to you getting up to those levels you're hoping for a return to leisure in the back end of the summer?
Kadri Samsunlu: Yes. Turkey is the sixth biggest touristic country in the world. Tourism is one of our main foreign currency inflows as well as the service economy. Therefore, the recovery is very important for the Turkish aviation industry, as well as the tourism industry. Therefore in our country and I think all around the world, we should avoid the disruption that we experienced last year and increase transparency and predictability for passengers as well as businesses. When we have all these problems hanging in the air, I will say that our hands will remain tied and we will continuously go through tough times when the blanket traveling bans are still imposed like in UK.
Kadri Samsunlu: What we need for Turkey and for all the big touristic destinations and also for the continent a progressive and coordinated restart of international travel for summer 2021, which is not there yet, but it's worrying me. There also good signs that encourages us for the coming months. One of them is basically the United Kingdom's recent move to work on a coordinated restart of the international travel. I hope other countries will follow UK's footsteps. The evidence from Israel is basically demonstrating that the vaccines are effective against the transmission. It's also pretty positive and obvious there's a significant pent up demand. You know last summer when the restrictions loosen a bit, we have seen a huge... let's say movement all around Europe and as well as in tourist locations like Turkey.
Kadri Samsunlu: Of course, as I said 2021 is a year for normalization I think the recovery will take longer for sure. What we need as the players of the industry, definitely restoring passenger confidence through progress on vaccination is key. Testing and also health precautions should remain very strong for airports and for airlines. Maybe should eye global economic growth, as long as the growth is there, people will have more disposable income so they can spend for traveling. Airline capacity ramp up is an issue. You know we have over 15,000 aircraft grounded at the airports. We should definitely plan how to ramp up this capacity back to business and bounce back of businesses is also key because that's the lucrative part of the sector as a whole.
Wes Charnock: Yeah. Thank you. You mentioned that the UK market obviously is a huge outbound leisure tourism market therefore important for you. What other markets do you need to see reopened or what are your white spots at the moment you need to reopen your networks in order to get some normalization by all those key networks?
Kadri Samsunlu: Basically our flagship carrier Turkish Airline is our prior to one partner and they're making almost 78% of our traffic. We are very much working closely with them in terms of opening of our businesses and we should also follow their tariff and route opening plan for us. As the airport, of course what we see is around Turkey, there are key markets like Russia and CIS, the Commonwealth of Independent State countries. They are showing a significant demand to Turkey because they have visa requirements. They are facing series visa requirements to travel to Europe.
Kadri Samsunlu: This group is a huge potential for Turkey in the last quarter of 2026, new airlines from Russia start flying to Turkey. This is very encouraging, we see similar trend in Ukraine. Of course, Asia is also a pretty important market where the growth is very strong. We see the recovery in Asia is much better than our continent. That's why we will definitely continue focusing on building more relations with the Asian carriers. Middle Eastern market is also very, very close to Turkey. Turkey is an automatic tourism destination for most of the people living in the Middle East. I hope the mass traveling becomes more possible and the restrictions are lifted. We will see significant recovery from the Middle East as well.
Wes Charnock: Thank you. One of the things you touched on there that's really interested to them and I think it's all of the new startup carriers. You mentioned this new startup carriers in Ukraine and then Turkish is such a big part of the story there but obviously I'm sure your doors are open to anybody who wants to fly in. How are those conversations progressing? Do you see maybe a different airline mix or more airlines flying in, in the recovery?
Kadri Samsunlu: First of all, what I should say is in the past there were many airlines who wanted to come to Istanbul, European side of Istanbul. Due to the capacity constraints of the old airport they were not able to obtain the slot rights at the right time around the peak hours of the day. That's why we lost a lot of business to other airports. The second airport of Istanbul. Then I told insight, today our airport has no problem in any capacity on the air side or on the land side. That's why we are welcoming almost all airlines commencing services to Istanbul.
Kadri Samsunlu: The importance of Istanbul is that we have around 16 countries within two hours flight. We can easily be a mega hub operation for those 16 countries located in our catchment area. What we are proposing to them is that they can come to Istanbul with narrow body aircraft by having certain load factors. Then we can mix them up with... through interlining or having a code sharing or some other arrangements with Turkish airlines and transferring their passengers to final destinations. This is important because small regional airports are going to recover a bit later than big hub airports like us. Opening a direct route from one destination to the rest of the world is first of all, economically don't make sense. Only through Istanbul, we can offer to many airlines, new airlines located in our catchment area, reaching over 200 destinations we just want to stop.
Kadri Samsunlu: I think that's a good proposition and we are pushing that a lot with new airlines, as well as the existing airlines as an idea to entertain. If this idea flies we will be able to help those regional airports and also the regional airlines grow their indirect market through Istanbul. To do that Turkish airline is key and then we are also working with them to develop this full potential together. It's a long process, it's a tiring process but we are very hopeful that we can put in a proposition which will have a win-win for Turkish Airline and all other airlines at the same time.
Wes Charnock: Okay, perfect. No more questions from me, I guess. So I just wanted to say thanks very much for your time today. It's been really interesting and best of luck in your recovery. I hope to be back to Turkey soon.
Kadri Samsunlu: Yeah. Thank you very much.
Wes Charnock: Thanks very much Kadri.
Kadri Samsunlu: Thank you. Bye bye.