Turkish Airlines wants to use the weakness of Lufthansa and others

Istanbul While Lufthansa is negotiating salary increases with its employees, Turkish Airlines wants to pay its staff a bonus of several months’ salary. “Today we will pay out 200 million US dollars as a bonus to our employees,” announced Chairman Ahmet Bolat in an interview with the Handelsblatt.

The money is to be transferred to the 72,000 employees this Tuesday – an average of almost 2,800 US dollars per employee. For cabin crew, this corresponds to three to five times a month’s salary. “We want to say thank you for the good work during the difficult Covid years,” explains Bolat.

According to its own statements, Turkish Airlines will make a higher profit than the Lufthansa Group for the first time this year and wants to expand in Europe. The airline wants more slots and thus market share at German and European airports.

“We want to grow by 20 percent in Germany and Europe in the coming year,” announces Bolat. In view of the plans of the low-cost airlines Easyjet and Ryanair not to expand their European capacities or even to reduce them, the statements by the Turkish top manager are a clear announcement that they want to partially fill the gap at European airports.

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And while Lufthansa also wants to grow through acquisitions, growth at Turkish Airlines should continue to be organic. Bolat renewed the offer to the Star Alliance partner and competitor to expand cooperation, for example in East Africa and Central Asia. “Due to the geographical proximity, Turkish Airlines can use smaller and more efficient aircraft than the Lufthansa Group,” argues Bolat. The relationship with Lufthansa boss Carsten Spohr is good.

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The expansion in Europe is to take place primarily via the low-cost subsidiary Anadolu Jet. The current fleet of around 70 machines is to be quickly expanded to 100. “Within the next ten years, we assume that the Anadolu fleet will grow to 200 aircraft.” The partially state-owned company is also pursuing ambitious plans in the USA and wants to attract twice as many tourists to Turkey in the coming year with two million tourists.

In view of the difficult economic situation in the country, it is surprising that Turkish Airlines of all companies is able to expand its business so quickly. Inflation hit a 24-year high at 85.5 percent. The lira has lost more than 28 percent against the US dollar since the start of the year.

But the economy is growing and many companies in Turkey are earning well. The Lufthansa competitor posted a profit of $1.5 billion in the third quarter, with sales of $6.1 billion. For comparison, the Lufthansa Group had earned about 809 million euros ($790.8 million) after a lucrative summer season in the third quarter after expenses.

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Business in Turkey is also growing in other sectors: the Turkish subsidiary of the Swiss supermarket chain Migros increased its net profit by 407 percent in the third quarter, the beer manufacturer Anadolu Efes by 274 percent, the auto joint venture Ford Otosan by 102 percent, the Communications service provider Turkcell is still up 68 percent.

Many multinationals have recently relocated their regional headquarters to the Bosphorus, explains Burak Daglioglu, president of the Turkish Presidential Investment Agency. Managers therefore frequently fly from Istanbul to the region and their headquarters around the world. “Turkish Airlines also benefits from this with its large route network.”

The new Turkish Airlines boss is very familiar with growth in the passenger sector. Since joining the airline in 2005, Bolat has bought around 400 aircraft for the company and leased 150 as fleet manager. In January 2022, the 62-year-old was appointed chairman after his predecessor Ilker Ayci resigned from his post. From the start, his biggest challenge was getting the airline out of pandemic mode. With the war in Ukraine, the prices for kerosene and energy have also risen significantly.

Since the spring, Turkish Airlines has been in the headlines mainly because the company continues to offer flights to Russia. The airline claims that Turkey has not imposed any sanctions on the country.

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When many people wanted to leave the country at the beginning of the war in February and in the course of the announcement of a partial military mobilization of Russia, many Russians were left with Turkish Airlines as the airline to flee the military entry. Some Russians paid more than 1,000 US dollars for a one-way flight from Moscow to Istanbul, for example. In September, portals such as Flightradar24 showed that Turkish Airlines was using larger aircraft than usual in those days to meet demand.

There is no denying that society made a profit when people wanted to leave their home countries for political reasons. Nevertheless, the contribution to the overall result is likely to be small. When asked whether Turkish Airlines also wants to expand in Russia, Bolat gives a clear answer: “No.”

Health tourism: A billion dollar market for airlines too

Incidentally, for further growth, Chairman Bolat not only relies on sun worshipers, but also on health tourists who combine the Istanbul city trip with a cosmetic surgery. Liftings, hair transplants or complicated dental treatments are significantly cheaper in Turkey than in Europe.

Before the pandemic, Turkish companies made a billion dollars a year from it. This year it was $2.5 billion, and according to market estimates it could be $5 billion next year – and Turkish Airlines earns a lot from every patient from abroad, Bolat hopes. “You can book a treatment and a vacation as a package for 6,000 euros – that’s cheaper than some purely tourist trips to another part of the world.”

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