LA TRIBUNE – When you published your annual results, you indicated that you were aiming for 20% growth in your traffic in 2023. Where are you?
GÜLIZ ÖZTÜRK – Last year we reached 27 million passengers. Internationally, we had growth of around 12% compared to the last normal year, which was 2019. If you look at the operational profitability side, we were the best performing airline in the world with a EBITDA margin (earnings before tax, interest, depreciation and amortization) of 34.1%. We had the lowest cost per seat-kilometre (CASK) with 2.18 euro cents per seat per kilometer in 2022. So we performed well. And this year, we are receiving 16 more planes. This is about a 20% growth in capacity. We will end the year with 103 aircraft. And we will celebrate our 100th aircraft this year, on the occasion of the 100th anniversary of the Republic of Turkey.
With this new growth that you expect for this year, will you try to maintain your impressive EBITDA margin?
Exactly. Our goal is to be part of the group of companies that reaches, or even exceeds, 30%. We may be the only ones, because in 2022 no one has managed to achieve such a performance.
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Are you limited by Airbus’ ability to deliver new aircraft in your development plan?
You make the plans based on your fleet planning. We knew we were going to receive this number of planes a year ago. We haven’t canceled any of our orders and have continued to receive planes, even during COVID times, including 18 last year.
So that’s how you plan your capacity. But this year, for example, we are renting two planes during the summer periods for leisure traffic, because the demand is very high in Antalya.
If it were possible to receive more aircraft – which is not the case with the strong constraints weighing on the ramp-up – would you like to speed up your deliveries?
Yes, the demand exists, for leisure, so-called “visit friends and relatives” flights and domestic traffic. Turkish aviation is strong and Turkey is an attractive and popular destination, with sea and sand, history and culture. So there is room for growth.
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You are currently considering placing a new order to support your development. Have you already detailed your needs?
For the moment, we are working on the prospects. There are therefore no figures yet, nor a detailed plan. We ordered around 100 Airbus A320 NEO Family aircraft in 2012, with first delivery in 2016, then 14 A321s during the COVID outbreak. Our total orders therefore stand at 114 aircraft to date and we will receive an additional 42 aircraft by the end of 2025, all Airbus A321s.
When you look at the airport landscape, capacity will increase. Istanbul Airport’s second runway will be opened in July this year and dual runway operation will start from summer 2024. The construction of a second terminal is also in the pipeline which is due to be completed in 2026. Our main hub is growing, as is Antalya, our secondary base, which is growing with the increase in leisure traffic to Turkey. All of this growth is fueled by aircraft. This is why we will have a new order beyond 2027 – 2028. That’s for sure.
Do you already know where you are going to base the 42 planes that are due to arrive within two years?
Our main hub is Istanbul. We will therefore use our resources to the maximum in Istanbul. The airport is coordinated in terms of time slots: when you request a time slot, you must use it or risk losing it. And with the expansion, the capacity will double and when it becomes available, we will use it to the fullest. And then, if we still have capacity, Antalya will also develop, or even Izmir.
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In terms of network, what would be your development?
If we consider the radius of action of our fleet within 6 hours, there are 60 to 70 countries to serve. For now, we only serve 47 countries and 97 destinations, which leaves us room for growth to 20 countries and 500 additional destinations.
The strategic areas to be developed are the Middle East, the countries of the CIS (Community of Independent States, mainly located in Central Asia, editor’s note), North Africa with new destinations, and also more frequencies in Europe where we have a larger network. We also have correspondence activities. We carry passengers from Europe to the Middle East, from the Middle East to Europe, from the Middle East to the CIS countries. About 31% of our international traffic is online.
Is developing your connections relevant with your low cost model, which requires flexibility and agility?
No, it is not. Our priority is punctuality and the use of aircraft. Last year, our utilization rate was 12.3 hours per day, one of the highest among single-aisle aircraft operators. These are red lines: if there is an impact on our use or punctuality, then connectivity is secondary. So it’s not our primary goal, but it’s a catalyst, a way to increase traffic.
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Some countries, like Spain, are not really developed in your network at the moment. For what ?
It is a matter of traffic rights. We have very liberal agreements with most countries like Germany, for example. But with some countries, there are either frequency quotas, or the carriers of these countries do not fly or hardly fly to Turkey.
We want to fly more in Spain, with new destinations to and from Spain, and more frequencies. However, the air transport agreements between the two countries have a limitation and we are discussing with the civil aviation authorities so that the frequency quota is improved so that we can fly more. We also want to fly more to France, Italy or the UK. These are the countries where we will have the most opportunities.
Do you still fly to Russia?
We currently fly to two destinations in Russia, Moscow and St. Petersburg, from Istanbul and Antalya. Before the war, we had six destinations in Russia. It is only a very small part of our total international traffic. For Ukraine, where we had six destinations, our flights of course stopped and we used this capacity to serve more destinations in the Middle East and Europe.
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Idoes Ukraine’s flight ban complicate your operations?
So some flights are longer now, but we can fly to Europe from the south, no problem. The real problem is that with the closure of Ukrainian airspace, the airspace to be used by all airlines is now reduced, which impacts our punctuality and that of many airlines.
Do you have more Turkish or international passengers?
80% of our operations are international operations and out of these international operations, around 78 – 80% of the sales come from foreign countries. A small part is therefore sold in Turkey, the rest is sold abroad. Traffic entering Turkey therefore feeds our operations.
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Has the earthquake impacted your operations and projections for this year or longer term?
No, it had no impact on future projections. But I must say that sales slowed for the first three weeks after the February 6 earthquake. But at the beginning of March, they resumed their normal course. We therefore do not see or anticipate any impact in the future, either during the summer or in the longer term.
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