Turkish Airlines chief Temel Kotil is leaving behind a carrier which, after more than a decade under his leadership, is unrecognisable from the organisation he took over.

Kotil moved from running the group's engineering business to heading the airline in the spring of 2005, just as the carrier was embarking on ambitious expansion plans against the backdrop of the deregulation of the country's aviation market.

Over the course of the next 11 years he led, in idiosyncratic style, the company's transformation. For much of the time this took place in the shadows of the fast-expanding big Gulf carriers – but Kotil has undoubtedly overseen Turkish Airlines' ascent onto the global stage.

During his tenure the airline joined Star Alliance, enjoyed a decade of unbroken double-digit revenue and traffic growth to the extent it outgrew its Istanbul Ataturk home, and increased its global exposure through a series of high-profile commercial deals.

Back in 2004, the airline just made it into the world's top 50 carriers by traffic and revenue. But by utilising Istanbul, a traditional trading point between east and west, Turkish Airlines achieved a growth surge by establishing itself as a bridge between Europe and Asia.

Revenue stood at just under $2 billion in 2004. A decade later, that figure had risen to $11 billion. In 2004 the carrier had just recorded a third year of modest operating profit after incurring losses in 10 of the previous 12 years. It has remained in the black at an operating level ever since, although a confluence of events, including considerable geopolitical challenges, mean it is arguably facing its biggest financial challenge since those days.

Turkish Airlines snapshot

The increased financial muscle of the airline has been achieved through expansion. Passenger numbers have risen more than fivefold, from almost 12 million at the end of 2004 to more than 61 million last year.

At the start of 2005 the airline had a fleet of 77 aircraft. Today it has more than that number in long-haul jets alone, and its total fleet nears 300 – or 330 including low-cost unit Anadolu Jet.

Growth was aided by the carrier's entry in 2008 to the Star Alliance, which also supported efforts to lift is global presence. It has continued to raise its profile through commercial partnerships – notably its sponsorship of soccer club FC Barcelona.

Turkish Airlines' expansion rate may have mirrored that of the Gulf giants, but it has followed a different model. Emirates, Etihad Airways and Qatar Airways have built their growth predominantly around long-haul aircraft. But around three-quarters of the Turkish carrier's fleet is made up of narrowbodies and, while all three Gulf carriers have embraced the Airbus A380, Turkish Airlines is yet to make move into ultra-large aircraft territory.


Turkish Airlines' expansion has left it with a slightly uneasy relationship with some of its partners. Its Star Alliance and SunExpress partner Lufthansa unilaterally ended its codeshare with Turkish Airlines in late 2013, and reduced the terms of frequent-flyer points.

The two carriers later initially appeared at odds over Lufthansa's interest in possibly using SunExpress as the vehicle for a new lower-cost long-haul venture. Lufthansa ultimately used pilots from its CityLine unit for its Jump project, which launched in 2015.

While Turkish Airlines has often been seen as a potential investor in other carriers, little has come to fruition. The airline took a 49% holding in B&H Airlines in 2008 only to relinquish the stake in 2012. It also showed preliminary interest in taking a stake in LOT Polish Airlines in 2012, before abandoning the approach.

Co-operation with LOT returned to the agenda last summer when the two Star Alliance partners agreed a strategic partnership which they expected to lead to a "major expansion of commercial ties". More than a year on, that remains only a possibility, but with little obvious outward sign of momentum.

It hasn't all been plain sailing for Kotil either. In 2013 there were suggestions his future at the helm of the carrier could be in doubt after he took leave amid threatened industrial action by unions. The company issued a statement saying the leave was related to a family illness, and Kotil returned to his position. Kotil, a former chairman of the Association of European Airlines and IATA board member, was also linked with the IATA director general position earlier this year.


Kotil resigned from the airline on 21 October to take up a role as the new head of Turkish Aerospace Industries.

Yet if the challenge for Kotil was to implement the airline's expansion plan, the immediate priority facing his successor – civil aviation authority head Bilal Eksi – is to moderate this growth in line with tough market conditions.

The carrier remains on a growth path, with more aircraft incoming. It envisages its fleet increasing by more than 100 aircraft to reach 436 in 2022. But the market climate is as tough in Turkey as it is anywhere. Terror attacks, including that at Istanbul Ataturk in late June, have hit travel demand, particularly leisure traffic. Further uncertainty followed the failed coup in the country in July.

Turkish Airlines began this year eyeing an increase in passenger numbers to more than 72 million, and revenues topping $12 billion. But it is already feeling the pinch. Passenger numbers over the first nine months of the year are up only 3.9% – slow growth compared with double-digit increases of the previous decade – and traffic has fallen well short of the additional 14% of capacity added. Passenger load factor over the first nine months is more than four points down. It has, however, continued to increase its transfer traffic – up nearly 18% during that period.

First-half revenues are down 3% at TL4.63 billion ($1.50 billion). It has swung from a first-half net profit of $406 million to a loss of TL647 million over the first six months of the year.

Against this backdrop it has already acted to moderate its growth. Earlier in October, it revealed it is deferring deliveries from its order for 167 re-engined narrowbodies due to join the fleet between 2018 and 2022, including pushing back 24 aircraft originally set to arrive in 2018.

Having revised the schedule, Turkish says it will take 10 jets, rather than 34, in 2018. It will also take 35 aircraft instead of 40 in 2019 and 42 instead of 52 in 2020. The delivery schedule for 2021 is not affected, but for 2022 the number rises from six to 30. In 2023, there will be 15 narrowbody deliveries.

Much will depend on market and geopolitical developments over the coming months and years. It remains to be seen when Turkish Airlines' expansion efforts might move back into top gear.

Source: Cirium Dashboard