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10 Aug, 2009

Turkish Airlines Seeks Stronger Bangkok Links, Eyes Australia Traffic

One of the major objectives of last week’s visit to Bangkok by Turkish Airlines CEO Dr Temel KOTIL was to boost the joint market share of his carrier and Thai Airways International on the Australia-Turkey sector, using Bangkok as a transit point.

Turkish Airlines officials said that in the 12-month period July 2008 – June 2009, the total number of passengers who had flown between Australia and Turkey were 56,987. Of that, Singapore Airlines had a market share of 31% and Singapore Airlines 28%. The combined share of Turkish/Thai was a meagre 3%.

“We need to change that,” said one senior official accompanying Dr Motil. “This should be our market.” He said the Turks were presenting their Thai counterparts with a number of proposals and options of what could be done, especially to tap the potential of the several thousand Turkish immigrants living in Australia.

Both SIA and Emirates have an extensive network across all the key Australian metros as well as direct connecting flights to Istanbul from their respective hubs in Singapore and Dubai (SIA five a week, and Emirates 11 a week).

This leaves Bangkok in the cold. Thai flies to Australia but not to Istanbul. Turkish flies to both Singapore and Bangkok but not to Australia. A number of passengers also fly the route via Hong Kong.

Although there was no immediate word on the response from Thai Airways, there is huge interest among the Turks in building up Bangkok as their primary hub in Asia in a way that would develop the network capabilities of the two airlines, using their respective hubs in Bangkok and Istanbul.

“We are both members of the Star Alliance, but there is not much synergy between us,” the official said.

Since privatisation was initiated in 2002, Turkish Airlines has been cut loose from government protection and now has to compete in the international and domestic arena. It has embarked upon a significant aircraft purchase programme and sees the Asia-Pacific as a major growth area.

Istanbul, a city at the legendary crossroads of Europe and Asia, is felt to be a natural transit point for travellers from Asia wanting to head for Central Asia, Central Europe and North Africa. In turn, Turkish Airlines wants to develop Bangkok as a transit point to develop feed from neighbouring ASEAN point like Ho Chi Minh City and Manila, as well as southern Chinese cities like Guangzhou.

With Hong Kong declining to grant it an increase in capacity, the airline is planning to double its flights from daily to double daily to Bangkok in December 2009. That huge capacity increase is a major reason why it needs to develop feeder-traffic from across the Asia-Pacific.

The airline is due to inaugurate flights to Jakarta next month as an extension of the flights to Singapore. The official said this is an attempt to bolster load factors on that under-performing sector, especially by attracting Muslim religious traffic from Indonesia which may wish to transit via Istanbul either on the way to or from Saudi Arabia.

It also flies five times a week to both Beijing and Shanghai and is seeking rights to go daily.

Turkish Airlines is marking its 20 th anniversary of flights to Bangkok this year, but in fact its first flights to Asia were to Singapore in 1988.

Since 2003, transit traffic has been the highest growth segment, up 230% f rom 470,200 passengers to 1.553,000 in 2008. The airline claims that in the same period, its annual passenger numbers have more than doubled from 10.4 million to 22.5 million, the number of destinations grown from 104 to 155 and the number of aircraft from 65 to 132.

In 2009, the target is for 26.7 million passengers, including 14 million international passengers and over two million transit passengers. New destinations expected to be on the routenet by the end of this year include Ufa, Meshad, Dhakar, Nairobi, Sao Paulo, Benghazi, Göteborg, Lviv, Toronto and Jakarta.

In spite of the global financial crisis, which has brought the passenger yield down by 10%, Dr Motil credited the company’s very careful oil-price hedging policy as one of the reasons why it was able to grow its 2008 net profit by 328% to USD874 million.

The biggest untapped potential, however, is point to point visitors between Thailand and Turkey. Although both are major tourism destinations in their own right, the bilateral visitor flow is negligible. Turkish visitors are not even reported on the official list of Thai arrival statistics, merely lumped together under the category of “Others”.

The national tourism organisations of both Turkey and Thailand have almost no profile in each other’s countries. Next year, Istanbul will hold a series of events under the tagline “European City of Culture 2010” but virtually no promotions have been done in Asia.

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