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Instability, political and economic challenge growth

Instability, political and economic challenge growth

Turkish Airlines Cargo has had a rough ride so far in 2015. Turkey’s proximity to the conflict in Syria alongside the political and currency problems experienced by some of its neighbours in Eastern Europe have not helped.

Turkish Airlines’ vice president of sales and marketing for cargo, Halit Anlatan, lists a catalogue of negative influences that have added challenges to an already competitive and margin-driven market.

“Cargo movement in the region, foreign currency devaluations against the US dollar, cyclical economic conditions, plunging oil prices and regional instabilities and geopolitical risks have all been negative factors and challenged our business in the first half of the year,” he tells Air Cargo Week (ACW). “As for the start of the second half of the year, Turkish Cargo has begun to recover but the effect of currency devaluation is still having some negative effects on export cargo volumes from the region. We are optimistic, however, that everything will turn around.”

Anlatan says Istanbul’s unique geographical position means Eastern European destinations are a natural part of its network and future business strategy. “Istanbul, located at the heart of world’s airfreight business, offers us quick access to both East and Western Europe, along with links to the Middle East and Far East,” he says.
“Recently, the airfreight business of Eastern Europe has faced serious political and economic problems following the events we have witnessed in Greece, Russia, Hungary and the Ukraine,” he explains. “Nevertheless, Turkish Cargo is continuing to grow its share of the East European market, having also opened freighter services to Sarajevo, Belgrade [and] Tallinn. This demonstrates the importance of those regions to us.”

Anlatan says Turkish Cargo cooperates closely with customers in Eastern Europe to overcome wherever possible any political and economic difficulties that may impact airfreight deliveries. “Many shippers from the automotive business, foodstuff and electronic sectors, as well as pharma manufacturers, are located in those countries and so rely on our expertise.
“We are also increasingly concentrating on highly sensitive product shipments like live animals, valuable and perishable cargos. Recent investments in our Istanbul hub have given us the necessary facilities to handle such products,” he adds.

Turkish Cargo’s main export products from East European countries include pharmaceuticals, car parts, machinery and aircraft spare parts, engines, foodstuff, textiles and electronics.
“In the first half of 2015, we had a trend of single-digit gains, whereas many of the major European carriers suffered from shrinking cargo volumes,” says Anlatan.
Between the start of the global financial crisis around 2008 and now, Anlatan describes the gains of between 20 and 35 per cent made by Turkish Cargo as, “phenomenal”.

“It is inevitable that the gains of the past could not go on forever and now we are seeing gradually diminishing returns,” he says. “But, Turkish Cargo is the still one of the only major carriers in Europe to post gains in first quarter of 2015. We recorded double-digit increases by the end of May 2015 and plan to keep it that way until the end of year.”
Anlatan is realistic, however, in his assessment that further growth in Eastern Europe for Turkish Cargo will likely be heavily influenced by future developments, particularly if any restrictions on civil aviation are introduced.


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