Dear Vision AAA,
While no published case-study about the Turkish aviation idustry was
found, there is a researcher who studies this topic and whose
publications and researches would probably help you integrate such a
case study. Kıymet TUNCA ÇALIYURT and Adil Oguzhan of the Trakya
University lectured and wrote on the subject (The homepage of the
department is http://www.trakya.edu.tr/Eng/Faculty/iibf/giris.htm ;
Prof. TUNCA ÇALIYURT's email is available at
http://www.balancedscorecard.org/webbbs/config.pl?read=1009 ).
The roots of the Turkish airline industry could be traced back to
1933, when Turkish Airlines (THY) was founded. Between 1933 and 1982,
it was the only player in the Turkish airline industry. According to a
governmental site, it was profitable in some years, but could not meet
its expenditures in others (Source: Turkish Directorate General of
Press and Information (DGPI), "Airlines in Turkey Come of Age",
Newspot, September 1998
<http://www.byegm.gov.tr/yayinlarimiz/NEWSPOT/1998/Sep/N7.htm>).
Until 1982, Turkish Airlines was the only airlines company operating
in Turkey, and had no domestic competitors. In 1982, the market was
deregulated. At that time competitors entred the airline market and
began to operate domestic and international flights. However, the
fierce competition left many bankrupt: of the 29 airlines established
in 1982, 22 were soon bankrupted (DGPI, ibid.). According to DGPI,
"This was due to a lack of trust among potential passengers. To
overcome this lack of trust, and earn more credibility, private
airline companies paid high prices. To survive they had to work with
lots of credit, guarantees and mainly dealt in cash." (ibid).
DGPI also report, that "Today there are nine private airline companies
in Turkey. They have over 60 planes. The number of planes owned by THY
is 65. But this does not reflect the number of seats, or the number of
passengers. The number of seats in private companies is nearly 12,000,
whereas the seating capacity of THY is 9,903." (ibid).
In other words, the private firms control the Turkish international
flights market today. According to DGPI's data, "In 1990, foreign
carriers controlled 63% of the international market, while THY had 24%
and private airline companies had 13%. By 1997, the foreign carriers'
share had dropped to 43% while THY had 21% and private carriers
controlled 36%. The shift was due largely to the fact that private
carriers generally offer cheaper tickets than either THY or foreign
carriers." (ibid).
This issue of regulation and privatisation could be, indeed, a basis
of comparison between the two industries. The airline industry in the
United States is, officially, much more privatised than that in Turkey
and deregulation took place few years earlier.
September 11 caused damage to this industry, as it has in other
countries. Soon after 9/11, the "Turkish Daily News (TDN) report, that
"National carrier Turkish Airlines (THY) incurred $1.5 million losses
due to the halt in air traffic in the United States in the wake of
[9/11] (Source: Elif Kelebek, "Turkish airline companies not immune to
global crisis" Turkish Daily News, 18 September 2001
http://www.turkishdailynews.com/old_editions/09_18_01/econ.htm). This
came at a bad time for the company, since the company had a market
capitalization of around $1 billion just before 9/11, which plummeted
to around $650 million (ibid.). Eurosun, one of the private airlines,
bankrupted and dissappeared in 25 November 2001, as part of the 9/11
aftermath (see a related interesting draft, yet not to be quoted - by
Yossi Aharoni from Tel Aviv University, "The Globalizer that cannot
Globalize - The world Airline Industry",
http://www.aueb.gr/deos/EIBA2002.files/PAPERS/C214.pdf. The paper also
includes bibliographical sources that could help you in your
analysis).
However, later it was found, that relatively, the Turkish airline
industry was not as hurt as others and THY also got no assistance from
the government, unlike some US airlines (and here is another point of
comparison). In February 2002, the Turkish Daily News published a new
analysis, regarding THY's condition , titled "Turkish Airlines - A
Success Story" (http://www.turkishdailynews.com/old_editions/02_01_02/feature.htm).
THY managed to come out with a profit in 2002, and "THY has moved into
profit since IMF-backed reforms gave it power to cut unprofitable
routes and shake up its pricing." (Source: Cached version of Reuter's
report "Turkish Airlines gets $2 bln incentive for planes"
http://216.239.51.100/search?q=cache:7bXC-zCav9IJ:asia.news.yahoo.com/030530/3/yjen.html+turkey+%22airline+industry%22+thy&hl=en&ie=UTF-8).
DGPI add, that "In 1997 the number of passengers carried in domestic
and international flights reached 35 million. Of the total 2.10
billion dollars worth of foreign exchange earned by these flights only
$1.20 billion was obtained by THY while the remainder was brought in
by private airline companies. The market is continually growing. The
number of passengers is increasing with each passing day. In 1997,
including transit passengers, this number rose to 35 million." (DGPI,
ibid). A similar halt in the industry occured during the Gulf War.
In the cargo and domestic market, the situation is different. DGPI
report, that "[C]argo transport increased from 577,000 tons to 792,000
tons in 1995. The share of international flights in cargo traffic is
around 73%, while the share of international lines in cargo traffic is
approximately 73%. In 1997 domestic and international flights
increased by 9.4% and reached a total of 407,662 flights." (ibid). In
the domestic airline market, the dominant power is THY: "Private
airline companies have scheduled domestic flights in a restricted
number. 88% of the 7.7 million passengers flying by domestic lines
flew Turkish Airlines (THY) in 1997. The private airline company which
followed Turkish Airlines in domestic flights was Istanbul Air. "
(ibid).
Recommended Reading
===================
"Boeing: Making a difference in Turkey" 23 March 2000, Turkish Daily
News, http://www.turkishdailynews.com/old_editions/03_23_00/feature.htm
Post September 11 "Message from the Chairman", THY,
http://www.turkishairlines.com/faaliyet_rap2001/alt3_en.htm ; also on
the post 9/11 THY see "Well Done THY" Editorial by Ilnur Cevik
(Turkish Daily News)
http://www.turkishdailynews.com/old_editions/01_25_02/comment.htm ;
Some information on the Turkish case could be also found at Alamadri
and Morrell, "The impact of 11 September on the aviation industry"
http://www.ilo.org/public/english/dialogue/sector/techmeet/tmica02/tmica-wp181.pdf
Turkish Daily News, World Bank urges Turkey to speed up sell-offs, 9
February 2002 http://www.turkishdailynews.com/editions/current/econ.htm
Case Study: The European Airline Market
http://www.tutor2u.net/Case_Study_European_Airlines.pdf
Airline Industry News -
http://www.dotheresearch.com/travel/travelnews/travelregionalnews.cgi?location=Airline%00industry%00news&locationtitle=Airline+Industry+News
Headline Spot Airline Industry News -
http://www.headlinespot.com/subject/industry/airline.htm
Spids latest news in the Airline Industry
http://www.safe-travel.com/spids/v3/news.html
Yahoo! Asia Airline Industry News
http://asia.news.yahoo.com/bizind/air/index.html
Press Release (March 2001) "Introducing Free Bird Airlines: New
Turkish Carrier Promises to be a "Breath of Fresh Air" for the
European Airline Industry"
http://groups.google.com/groups?selm=20010227215317.02693.00000180%40ng-ct1.aol.com&output=gplain
Airlines / Air Transport links
http://www.geocities.com/CapeCanaveral/2456/avairlin.html
I hope this answered your question. I used a search strategy where I
looked for terms such as "aviation industry" (or "airline industry")
with the words "turkey" or "Turkish" and with relevant terms for other
cases. If you need any clarifications on this answer, please let me
know. I'd be pleased to clarify my answer before you rate it. |
