Turkish Airlines’ Boom and Learning Points for Nigeria Said Samil Karakas

Kunle Hamilton

By year 2023, if all goes according to plan, Turkish Airlines would have grown its revenue to 30 billion dollars per annum, its passenger volume to 150 million and its fleet to 500 aircraft. What’s more? By 2018, Turkey would open its new airport, which is designed to be the third biggest airport in the world with 150 million passenger capacity. This would not be by magic but by due diligence.

Driving around Istanbul, Turkey’s most populous city recently, you could tell that the country is deeply religious and deeply Islamic. Under the Roman Empire, the country was predominantly Christian. But with its overthrow by the Ottoman Empire, it became overwhelmingly Muslim.

“With over 3,000 mosques in Istanbul (also known as Constantinople and Byzantium), you should not be surprised about the heavy evidence of Islam here. Churches were initially about 500, but only about 50 of them are still active now,” explained my tour guide, Ece. Yet Turkey still has one of the most liberal attitudes in the Islamic world and this continues to help boost its tourism revenues.

Istanbul houses Turkish Airlines’ headquarters, about 10 minutes from the airport. There I met with Said Samil Karakas, Vice President, Marketing and Sales, South Saharan Africa. He spoke very frankly and with pride about the past, present and future of Turkish Airlines, which Skytrax has voted Europe’s Best Airline for five years running.
Karakas is smart and dapper. He talks about Turkey and Turkish Airlines with keen patriotism. Yet there is nothing myopic about his views of aviation growth around the world and in his country. You might first be fooled as he speaks to you from the newest document signed by his CEO, Dr. TemelKotil (March 2016). You might think Turkish Airlines belongs to the government of Turkey as the defunct Nigeria Airways was government business.

But then Karakas said, “The government is supporting Turkish Airlines to grow but not financially. There is a mental support. There is a stable country and government which allows businesses to grow. The income per Turk grew from $3,000 to about $11,000 in 10 years. It also shows that as the country is growing, Turkish Airlines will also be growing. Turkish Airline is participating in the growth of Turkey.“

Turkish Airlines fly to 236 international destinations; the largest in Europe. As a hub in Europe, when you compare connectivity plus passenger volume, Istanbul is already faring better than Frankfurt, Paris and Amsterdam.
According to 2014 figures that show the world’s 3.3 billion passenger numbers, hub-Turkey alone had 123 million slice of the aviation action. For instance, while flights to London Heathrow from Paris peaked at 224, from Frankfurt 226 and from Amsterdam 216, flights from Istanbul to London LHR climbed to 262 in the same period.
Istanbul has some things working in its favour, no doubt. It is both a transit hub as well as a tourist destination. It also has a geographical advantage lying between Europe and Asia.

“Istanbul has the biggest connectivity in the world,” says Karakas. “It is the fifth favourite city in the world and third in Europe. About 13 million tourists visit Istanbul. To grow an airline (and national economy), it is not enough to simply have aircrafts; you must also have a destination – with sights that people would love to visit and see for themselves.”

To grow a successful and profitable airline or national carrier, first you must have one. Nigeria failed with the Nigeria Airways as well as its operational pact with Richard Branson’s Virgin Atlantic and Jimoh Ibrahim’s green-white-green Nicon Airways. Let us note this however; the growing success of Turkish Airlines directly grows a substantial part of Turkey’s national economy by boosting its tourism business.

Key factors that determine passengers’ choice of an airline and the eventual profitability of the airline include low price sensitivity, flight time sensitivity, onboard comfort and service, ground crew efficiency, airport protocol and conveniences.

These variables are efficiently managed by the airline in focus. Indeed, its preference for narrow body aircrafts allows the airline to fly many other routes that other big carriers ignore, thus making it more network efficient than some of its older and bigger competitors around the world.

“Forty years prior to 2003, there wasn’t any significant growth in our aviation industry. But since 2003, our government hasn’t changed. We have had a stable government. People have therefore developed trust in the aviation industry, we have been investing in the aviation business and we are growing accordingly” explained Karakas.

So in just 12 years, due to stability in governance and the economy, Turkish Airlines grew from 162 to 482 aircraft. It had only 25 million international passengers in 2003 and 84 million in 2015. Domestic passenger volume grew from just five million in 2003 to 50 million (ten times more) in just 12 years.

What endeared Karakas the more to the select media team he made a presentation to in his conference room was his desire to see the Nigerian aviation industry grow too. His words, “Ladies and gentlemen, all this is very important to know and to give this information to your country (Nigeria).

“For instance, why our domestic passenger volume grew from five to 50 million is because we keep investing in the aviation business and we are opening new routes to give connectivity to the people. That means the more travel connectivity people have in your country, the more business they will do. The more aviation investment and business expands, the more people will fly.”

Tell Karakas that you are sorry, Nigeria does not have a national carrier and as such there is a severe limit to aviation expansion and he will disagree. “You have Arik and other Nigerian airlines that fly domestic and international routes,” he said.

Yes, he is right, Nigeria should build on that. But there is presently no clear cut policy on how Nigeria intends to widen and deepen its connectivity to the whole world. Should President MuhammaduBuhari and his aviation minister agree on resuscitating and privatizing a new national carrier or do they simply want to encourage privately owned airlines to fill and deepen Nigeria’s aviation space? No one knows for sure.

Istanbul, Turkey’s most populous city, has had one of the highest connectivity growths in the world in the last five years because all the airlines now fly to Istanbul and people fly into Turkey from all over the world to do business.

The March 2016 overview of Turkey’s aviation industry under the subtitle ‘Economic Benefits of Aviation’ shows that aviation business alone has created 58 million jobs and added 2.4 trillion dollars to world GDP – about 3.4% whereas in Turkey, aviation success has added 5.9% to Turkey’s GDP.
In 20 years, it is expected that aviation would account for 105 million jobs across the globe and it would have contributed six trillion dollars to world GDP. Nigeria can still get it right if the Buhari administration is serious about diversifying the economy away from oil wells and trade. But then there is still a lot of work to be done with integrity to boot.

For one thing, government has no business funding and running a national carrier as an extension of its aviation ministry. For another, there must be transparency in the sector.
Karakas was asked the bureaucracy of signing new routes in Nigeria compares to what is obtainable in other parts of Europe for example. With loads of political correctness he answered:

“Though some parts of the world are easier for the aviation business, the Nigerian government has been so cooperative. We have now increased our Abuja flights from five to seven. We are now asking for Port Harcourt and double daily flights to Lagos, and we are sure we will get them. Yes, in some countries it may be easier and not that easy in Nigeria. But we have a very good relationship with Nigeria and the Nigerian Civil Aviation Authority.
“In Africa, certain countries just have one airline from Europe flying into the country but once we enter the country, the prices will drop. This makes it efficient for the people of the country. Now, African governments are coming to Turkish Airlines and asking us to fly. In most of them, since we have the aircraft and the commercial capacity, we fly. Even where we see the smallest potential, we fly.”