Prof. Dr. Ahmet Bolat, Chairman of the Board of Directors Our last topic of discussion with Dr. stated Turkish Airlines plans to carry 88 million passengers and add 6 new destinations to their flight network in 2023.
Considering this year the end of the pandemic, Bolat said that they expected a boom in demand, also emphasizing that they chose not to lay off their employees thinking that the Covid-19 pandemic would eventually be over.
Bolat noted that in certain destinations, the number of passengers carried in the period between January and October exceeded the figures recorded in the same period of 2019, with 60.5 million passengers carried in total, and said, "Our financials are indicative of the fact that we were right. By the end of the year, the number of passengers we carry will reach 72 million. We've achieved a profit of $2.25 billion in the 10-month period. This is the highest number in the history of Turkish Airlines and European aviation. We estimate that our profits will continue to increase and we will marginally exceed the $2.25 billion mark."
Pointing out that most of this profit was achieved from long-haul flights and the profit from short-haul flights to Europe accounted for around 10% of their profit, he also added that the number of passengers arriving at and departing from the country increased.
Bolat stated that the fourth quarter is usually when airline companies burn cash. However, Turkish Airlines will, on the contrary, increase its profit in this period.
"The number of airplanes in our fleet will reach 427"
Pointing to the increase in the number of tourists visiting Türkiye, Mr. Bolat emphasized the increase in the number of passengers arriving at Türkiye, and that they didn't allocate additional capacity for transit passengers.
Sharing the latest updates on aircraft procurement, Bolat said, "There were some problems with the manufacturers but they are about to be solved. Our approved budget for 2023 aims for a capacity increase of 17 to 20%."
Bolat noted that the current number of aircraft in their fleet is 396 and that they will increase this number to 427 by the end of 2023, and added: "We expect our 400th aircraft to be delivered in mid-February. The delivery of Boeing 787 aircraft will start soon. The problems at the factory have been solved. The first addition to our fleet will be delivered at the end of this month."
Stating that AnadoluJet has nearly 30 new-generation planes in its fleet and that they are searching the market for aircraft that meet their needs, Bolat said, "This year, we have allocated budget for 67 planes for AnadoluJet. We aim to increase the number of planes in our fleet, because the demand for domestic flights is extremely high. For AnadoluJet, we are planning a 50% increase in flight frequency as of March. Our international flight network is also expanding. At Sabiha Gökçen Airport, AnadoluJet will become, in the real sense of the phrase, a low-cost carrier, offering extremely practical and affordable travel experiences."
Six new destinations in 2023
Bolat, Chairman of the Board of Directors and Executive Committee of Turkish Airlines, reminded that they currently fly to 342 domestic and international destinations and they fly to 128 countries, 286 cities, and 289 destinations while pointing out that Turkish Airlines is the airline that serves more countries than any other airline.
Stating that they carried an estimated 72 million passengers in 2022, Bolat said, "We plan to carry over 88 million passengers in 2023. This year, we aim to increase the number of international destinations to 293 by adding Denver and Detroit (USA), Katowice (Poland), and Palermo (Italy) to our international flight network. By adding Yozgat and Bayburt to our domestic network, we will increase our total number of destinations to 348."
"We plan to bring $17 billion to our country in 2023"
Ahmet Bolat noted that Turkish Airlines generated a revenue of $18 billion approximately in 2022 and net exports of $14 billion, and said,
"Of this $14 billion, $5 billion remained in our country. We aim to raise this number by $3 billion next year and bring $17 billion in 2023. A little over 30% of the foreign currency we bring in stays in our country. Next year, a little more than $6 billion will remain in Türkiye. Part of this money is kept in our coffers as profit, while the remaining is used for investment. We continue to invest in our country and nation."
Bolat stated that the total number of employees has reached 66,000 with 28,500 being Turkish Airlines employees and that the total number exceeds 75,000 with subcontractors.
He also added, "We are currently recruiting. We are planning to recruit over 2,000 cabin personnel and over 1,100 cockpit pilots. Moreover, we will start recruiting students to our flight academy. After 2 years of training, these students are employed as pilots and take their place in the right seat of the cockpit. We believe that the demand for pilots will continue to rise. So, we are planning to increase the capacity of the Turkish Airlines Flight Academy in Aydın. We've signed an agreement with the Turkish Aeronautical Association. We are increasing our capacity by 50%, to 300 pilots per year. In addition, there are aviation schools in our country. If the pilots trained in these institutions pass our exams, we also offer them the opportunity to work with us."
Talking about 9 to 10 thousand new recruits in total, Bolat said, "These recruitments will not be limited to cabin and cockpit crew. We will recruit employees who will drive our company's growth, including our subsidiaries. We will hire 9 to 10 thousand new employees who will contribute to our growth target of 17%."
Stating that they continued their investments consistently throughout this year as well, Bolat said Turkish Airlines alone invested $2.8 billion in 2022 and that the majority of these investments were made in aircraft and engines.
Reminding that investments were made in IT and construction as well, Bolat added that they opened Europe's largest cargo center and said, "We are planning to invest $3.8 billion in 2023. We've mentioned that $5 billion remained in Türkiye this year. A portion of this money is used for investments. Some of it is kept in our coffers for next year's operations."
Bolat also shared his opinions on Turkish Airline's market value, which rose to ₺191.3 billion (€9.78 billion) in December, and how it surpassed Lufthansa, the flag carrier of German aviation:
"All Turkish Airlines boards since 2003 have observed that Türkiye is not in the position it deserves in the aviation sector. We expect that we will carry our 1 billionth passenger in February or March 2023. We are talking about an airline company whose fleet consisted of 60 aircraft in 2003. Back then, it was a strategic goal to level Turkish Airlines with Iberia (Spain's flag carrier airline). Iberia then ranked 7th among the members of the European Airline Association, whereas Turkish Airlines ranked 15th. Today, we see that Iberia is a prominent airline in Europe with its fleet of 128 to 130 planes, but Turkish Airlines is the best in the region. This year, we've had an average of 1,200 flights per day. Turkish Airlines also ranks first in terms of the number of passengers carried."
"We expect to become the 6th most valuable airline in the world before 2024"
Ahmet Bolat stated that Turkish Airlines has always planned for double-digit growth and successfully achieved that by making a profit almost every year in the last 19-year period with the number of hourly landings and take-offs reaching 120.
Drawing on the advantages Istanbul Airport offers to Turkish Airlines and Türkiye, Bolat said,
"After investors became convinced that TK, AnadoluJet, and SunExpress have clear hub-based strategies and there are no obstacles to their growth, their confidence in Turkish Airlines increased. The increase in the number of arrivals in Türkiye and customers' interest in our company following the operational problems experienced in Europe led to a significant profit. Afterward, they showed great interest in our shares. Currently, Turkish Airlines is valued at over €10 billion. This makes us the 10th most valuable airline company in the world. If we reach the estimated value, we expect to become the 6th most valuable airline in the world before 2024. The difference between us and the holder of the 6th place is not much. We are talking about a difference of €1.5 to 2 billion."
Bolat mentioned the importance of the domestic flight network, direct flights, and transit passengers.
"We want to increase the number of tourists from the USA to 2 million"
Pointing to the fact that direct passengers contribute more to the country's economy than transit passengers, Turkish Airlines Chairman of the Board and the Executive Committee, Bolat said, "If a direct passenger visits the country, let's say, to receive health services, play golf, see historical landmarks and art, or for any other touristic purpose, their contribution to our country's economy may reach as high as $3,000."
Reminding of the campaigns they launched to attract direct passengers to Türkiye and pointing to the increase in the number of tourists visiting the country, Bolat said,
“This year, the hotel occupancy rate in Istanbul has exceeded 85%. We want to keep this trend going. 1 million tourists from the USA visited Türkiye in 2022. We have launched a new advertising campaign and we want to increase the number of American tourists to 2 million. Türkiye achieved a service export of $90 billion in 2022, and this is how we can increase this number. Complementing our distant countries strategy, we focus on the US and South American countries in the West, where Turkish TV series are very famous. In the East, we will launch new campaigns in Indonesia and Malaysia."
Bloat voiced his expectation that among distant countries, China will re-open in 2023 though it is largely closed right now. He also stated that they are planning to add Osaka, Japan back into their network of international destinations and fly more frequently to Singapore, Indonesia, and Malaysia.
Also mentioning the countries they are planning to expand to in the new year, Bolat said, "One of the most important strategic targets of 2023 is seeing our logo soar in the Australian skies. As TK, we currently already have codesharing agreements with 10 airline companies. For our own flights, our plan is to fly to either Singapore or Jakarta first, and then to the other."
"We aim to raise the profit of our subsidiaries to $1 billion"
Sharing that the profit of Turkish Technic reached $110 million in 2022, Ahmet Bolat stated that Turkish Airlines has 19 subsidiary companies and they want to increase these subsidiaries' share of contribution to its overall profits.
Bolat said, "Our 5-year goal is to increase the share of our subsidiary companies to our profitability by at least half. This year, Turkish Airlines achieved a profit of $2.25 billion. Considering that 50% comes from subsidiaries, we are talking about $3.4 billion. Next, we will be developing projects to increase the profits of our subsidiary companies. Our profit goal for Turkish Technic in 2023 is $150 million. We aim to increase the total profit of our subsidiary companies to $1 billion in the next 5 years."
Pointing out that Turkish Cargo is a sub-brand of Turkish Airlines, Bolat said, "It is not a separate company. There are some corporatization plans that we are working on. We are also working to make AnadoluJet a separate company as soon as possible. Initiatives related to cargo are also underway. We will continue its growth with leased aircraft. This year, we ranked second in Europe and fifth in the world in cargo transportation."
Noting that the demand for air cargo transportation dropped in the post-pandemic period, Bolat stated that Turkish Airlines will be able to manage this drop thanks to the cargo logistics center they launched and that the cargo operations will continue to contribute to the company's profits in 2023.
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