Aviation: Turkish Airlines will continue to maintain its leading position
Ilker Ayci is chairman of the board and executive committee of Turkish Airlines. He was named to the position in 2015, following the resignation of his predecessor, Hamdi Topcu.
Since the 2016 Terror attacks at Istanbul Ataturk Airport–the airline company’s main base, there possibly has been no time in the airline company’s 84 years when the need to reposition itself as a global player was more far-reaching. Despite the setbacks suffered as a result of the terror attack, the airline rebounded increasing its fleet and efficiency as well as running high-profile ad campaigns featuring world-renowned celebrities.
With a campaign push that’s getting deeper things have come full circle and the airline company has once again piqued the interest of many international travelers. Under llker’s leadership, Turkish Airlines achieved record revenue growth, operational performance and profit margins that outpaced most industry peers. More importantly, he has been a vocal proponent of airline industry consolidation and corporate governance which provides a more stable and competitive industry for employees, customers, communities and stockholders.
Turkish Airlines seems to run a very strong system of corporate governance. What’s the background to these measures?
Our corporate governance system is based on principles of transparency, and accountability and is hugely representative of the Turkish aviation industry. We have also been very consistent in continuously improving the airline’s corporate governance in compliance with the Corporate Governance Principles. In this context, routine sustainability reports are prepared for monitoring our works. All Partnership policies, systems and procedures within the Corporate Governance are then revised from time to time.
What did you place importance on when you became board chairman of Turkish Airlines?
In recent years, sad and worrying events occurred in Europe, that echoed in Turkey and as well as in Turkey. The incurred tension affected tourism, people’s travel choices, as well as the aviation sector. Therefore; managing liquidity, assets and equities and decreasing costs were highly important. In all of these, we were able to determine our priority by increasing effectiveness and productivity and reducing our costs. To this end, we have been very proactive in terms of essential/ urgent processes such as capacity optimization, successful savings policy and the sacrifice demonstrated by our employees. Through all of these, we were able to boost to meet the rising market needs. So far, our efficiency has been upped to meet up with our previous successes.
What sort of management style do you think Turkish Airlines should cultivate?
Management style must be sensitive to the dynamics of the industry. Also, it is very important for a Management to closely follow technological updates and analyze them because by so doing, it would be possible to differentiate its strategies from others. Our strategies have been of great importance for the accomplishment of our objectives.
What is the largest opportunity and also the greatest challenge for 2017 and beyond?
Since the beginning of this year, we have been able to assuage the effects of the recent terror attacks. So far, the number of passengers we carried during the first eight months of the year exceeded the number of passengers we carried during the same period of 2016. Our goal is to outdistance the traffic and financial data for 2016 by end of 2017. As you know, Istanbul’s new airport will be opened on October 29th, 2018. The new airport, which will have capacity for 90 million passengers, will be the world’s largest. The overall capacity, once fully completed will be about 200 million passengers when all phases are completed. We’re planning to move our operations and all other services to the new airport. The new airport will provide many great opportunities for the Turkish Aviation Industry and the ultimate goal is to maximize passenger satisfaction by taking the advantage of state-of-the-art facilities of our new airport.
How has the airline full government ownership impacted the company?
First of all, Turkish Airlines is not a government institution. 49% of our partnership belongs to the Turkish Asset Fund and 51% is open to the public. This allows our business processes to progress more quickly and be more flexible, especially when making strategic decisions. As the airline company continues to expand its fleet, in which geographic areas would you like to increase the Turkish Airlines footprint, and what are the criteria used when selecting new destinations We will continue to maintain our leading position as the only airline flying many destinations around the world.
The Asia-Far East region is one of the most important markets. Our strategies for Asia’s fast-developing markets are so important for us; but we are also willing to develop passenger market in Europe and South America at the same time. Our growing network of flights in Africa will also continue. Our narrow bodied aircraft reach over 60 capital cities. Our hub, Istanbul, is a uniquely positioned city with very high route connectivity and in this respect; we give priority to the markets that have meaningful traffic potential for us.
Turkish Airlines main goal of reaching the top-tier in the international airline industry has been achieved. Looking ahead, what have you identified as the main objectives?
We believe that the important thing at this point is the sustainability of success. We have caught our recent growth trend in 2017, after a rapid and effective recovery programme from the effects of recent terror attacks in our region. We will continue to fly to more countries than any other airline in the world by growing our fleet and network. Beside this, we aim to be amongst the top 10 airlines in terms of global market share. To achieve this goal; we will increase our number of passenger and fleet over 500 by 2023.
How is the airline planning to expand in the long term in order to accommodate the growing demand of the industry?
Airlines are heading for various commercial agreements according to their regional to improve their market share. Developments in customer and airline benefits come to exist with merger decisions. We are in the process of signing commercial agreements with Anadolu Jet, as a low cost airline (LCC). Through this, we also aim to grow in important markets like China over the coming years.
The ever-increasing development of local airlines, as well as global giants, has created a highly competitive environment, and Turkish Airlines attracts its fair share of envious glances. How has the company’s strategy adjusted to deal with the increased competition?
Despite the increasing competition in local and international markets, Turkish Airlines continues to expand its fleet to meet up with competition. In addition, we see that there’s a growing demand for low-cost carriers in the aviation sector and we are considering such for our domestic and international routes with our planned agreements with Anadolujet, which currently operates domestic routes.
Rising fuel prices, regional political unrest, and global economic woes are creating challenging times for the airline industry. In what ways are these factors impacting the airline?
The airline industry is directly affected by rising oil prices, regional political risks and economic woes. The security aspect also seriously affects the travel tendencies of people. But with many travel preferences in terms of destination, they still feel inclined to travel.
What is Turkish Airline’s ongoing strategy in the quest to establish a robust global presence?
As the national flag carrier of Turkey, serving many international destinations around the world, Turkish Airlines will continue to develop its competitiveness with a focus on expanding network and reflecting an excellent service approach in every area of our service so as to protect our brand values for the long term.