24-Dec-2014 12:27 PM

Turkish Airlines will add six new destinations for 2015 in Africa, for a total of 48 cities

Analysis

Turkish Airlines is planning further growth in Africa in 2015 with at least six new destinations. Turkish already has the largest network in Africa among foreign carriers, overtaking Air France and Emirates as it has added a staggering 25 African destinations over the last three years.

By the end of 2015 Turkish will have at least 45 destinations in its African network across 30 countries. North Africa continues to account for most of its African capacity but Turkish also has established a large presence in east, central and west Africa.

Turkish is able to enter relatively thin underserved African markets by offering a myriad of connections to Europe, Asia and the Americas. Narrowbody aircraft have been the driver of its African expansion strategy as it has used 737-900ERs to open up destinations as far as seven hours from Istanbul.

Turkish plans to add six African destinations in 2015

Turkish Airlines CEO Temel Kotil said on the sidelines of the 17-Dec-2014 Star Alliance executive meeting in Delhi that six of the 15 destinations the carrier plans to add in 2015 will be in Africa. This includes two unnamed destinations in Egypt, Abuja in Nigeria, Bamako in Mali, Conakry in Guinea and Juba in South Sudan.

Among the six planned new African destinations Turkish so far has only set a launch date and begun sales for Abuja, which will be served five times weekly from 3-Mar-2015 with 737-900ERs. Abuja will be Turkish's third destination in Nigeria after Lagos and Kano.

Turkish currently serves 39 destinations in Africa across 27 countries, according to OAG data. Bamako, Conakry and Juba will extend Turkish's African network to 30 countries as the airline does not currently serve Mali, Guinea or South Sudan.

Turkish has not yet set launch dates for any of these routes, some of which are likely to be tagged to existing destinations, following the normal Turkish formula for expanding to thinner African markets. Conakry is also not expected to be launched until the Ebola virus, which has significantly impacted traffic in Guinea, subsides.

Turkish will be the fourth airline from outside Africa to serve Abuja, joining British Airways, Emirates and Lufthansa. It will be the third non-African airline in the Bamako market after Air France and TAP Portugal. Air France and Brussels Airlines serve Conakry while flydubai is the only non-African airline serving Juba, according to OAG data.

Turkish's presence in North Africa grows as Egyptian network expands

In Egypt Turkish already serves four destinations - Alexandria, Cairo, Hurghada and Sharm el-Sheikh. These are the four largest international airports in Egypt based on current seat capacity. There are currently another six airports in Egypt with international services but only three of these are significant (over 1,000 weekly seats) - Luxor, Marsa Alam and Sohag. All three could potentially support service from Turkish, particularly given the airline's typical low frequency small aircraft strategy for serving secondary markets in Africa.

The only African country that currently has more than four destinations is Algeria, where Turkish serves Algiers, Batna, Constantine, Oran and Tlemcen. Algeria and Egypt are logical markets for Turkish given their proximity to Istanbul. The two combined account for about one third of Turkish's total African capacity.

North Africa overall accounts for 56% of Turkish's total African capacity - or about 5% of its total global seat capacity. Central/West Africa and East Africa each account for approximately 20% of Turkish's African seat capacity while Southern Africa, where Turkish currently has only one daily flight on an Istanbul-Johannesburg-Cape Town rotation, accounts for only about 5%.

Turkish is keen to pursue opportunities for expansion in all regions of Africa. In North Africa there are clearly expansion opportunities in Egypt, particularly as Egypt's tourism sector gradually recovers. Turkish has about a 5% share of international seat capacity in Algeria and a slightly less than 3% share in Egypt. It has about 8,600 weekly seats in Algeria and about 14,000 weekly seats in the larger Egyptian market, according to CAPA and OAG data.

Turkish has the largest African network

The six new destinations will also extend the gap between Turkish and its rivals in the Gulf, which have also been pursuing rapid expansion in Africa. Emirates currently serves 22 destinations in Africa while Qatar Airways has 19 and Etihad only seven, according to OAG data.

Air France has the second largest African network after Turkish among European carriers with 34 destinations. Turkish is categorised as a European carrier and is a member of the Association of European Airlines but strategically is more like a Gulf carrier. Turkish also competes more with the Gulf carriers given Istanbul's location at the crossroads of Europe and Asia, including for passengers travelling between Africa and Asia. European and Gulf carriers both compete for Africa-Europe and Africa-North America traffic.

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Brussels Airlines has the third largest network in Africa among European carriers with 19 destinations, while British Airways has 18 and Lufthansa 13. (Note: destinations only served by freighters are excluded in all these figures.)

By the end of 2015 Turkish could even have a bigger international network in Africa than every African carrier. In terms of international destinations, Ethiopian currently has the biggest African network with 43 destinations followed by South African Airways with 38 and Kenya Airways with 37. (When including domestic destinations Ethiopian and SAA will continue to have a much larger African network than Turkish.)

Turkish is third behind Emirates and Air France when it comes to Africa capacity

While Turkish has more destinations, Emirates is still by far the largest foreign carrier in Africa based on capacity. Emirates has about twice as much seat capacity as it is an all-widebody operator while most of Turkish's African routes are now operated with narrowbody aircraft. Air France is also nearly 50% larger in Africa based on seat capacity.

In addition Emirates has more flights in the African market than Turkish. Turkish currently operates 432 weekly frequencies while Emirates operates 477 frequencies, according to OAG data. Air France also has slightly more frequencies in the African market, with 456 based on schedules for the week commencing 22-Dec-2014.

Top 10 foreign carriers in Africa ranked by seat capacity and frequencies: 22-Dec-2014 to 28-Dec-2014

Rank	Airline		Total Seats	Weekly frequencies
1	EK	Emirates	149,800	477
2	AF	Air France	101,100	456
3	TK	Turkish Airlines	71,334	432
4	SV	Saudia	61,542	308
5	QR	Qatar Airways	55,728	288
6	BA	British Airways	49,630	203
7	FR	Ryanair	46,872	248
8	ZI	Aigle Azur	39,528	242
9	U2	easyJet	36,552	218
10	KL	KLM Royal Dutch Airlines	35,617	111

Turkish, however, has been growing faster in Africa than Emirates and much faster than Air France. Since Dec-2011, Turkish has nearly doubled its seat capacity to Africa from about 38,000 to about 70,000 weekly seats. In the first 11 months of 2014, its ASK growth to/from Africa was 15%.

Istanbul Ataturk Airport to Africa capacity by carrier (one-way seats per week): 19-Sep-2011 to 7-Jun-2015

Emirates capacity to Africa has increased over this period by approximately 65% from about 90,000 weekly seats to nearly 150,000 weekly seats, according to CAPA and OAG data. Air France capacity to Africa has been relatively flat over the last three years.

Turkish has added 25 African destinations in only three years

Over the last three years Turkish has expanded its network in Africa from 17 to 39 destinations. Turkish has added 25 destinations over this period as three of its Libyan destinations - Benghazi, Sabha and Tripoli - are currently suspended due to the turmoil in Libya. (Two of its suspended Libyan destinations, Benghazi and Tripoli, were launched prior to 2011 while Sabha was launched in late 2012.)

If Turkish is able to resume services to Benghazi, Sabha and Tripoli in 2015 its network in Africa would grow to 48 destinations when factoring in the 39 existing destinations, the six new destinations and potential three resumed destinations. Turkish already resumed services in Oct-2014 to Misurata in Libya. Turkish originally launched services to Misurata in Dec-2011 - the first of a string of 25 new African destinations added over the last three years.

Adding 25 destinations in a single region in a span of only three years is an impressive accomplishment and has required significant investment. Only a few airlines have added that number of destinations globally over the last three years.

Turkish Airlines Africa destinations launched since Dec-2011

Country	Destination	Current Frequency	Aircraft
Algeria	Batna	Two times weekly	A319
Algeria	Constantine	Three times weekly	A319
Algeria	Oran	Three times weekly	A319
Algeria	Tlemcen	Two times weekly	A319
Benin	Cotonou	Four times weekly (via Abidjan)	737-900ER
Burkina Faso	Ouagadougou	Five times weekly (tagged with Niamey)	737-900ER
Cameroon	Douala	Four times weekly (tagged with Yaounde)	737-900ER
Cameroon	Yaounde	Four times weekly (via Doula)	737-900ER
Chad	N'Djamena	Four times weekly (via Kano)	Mixed
Congo	Kinshasa	Five times weekly	737-900ER
Cote d'Ivoire	Abidjan	Four times weekly	737-900ER
Djibouti	Djibouti	Four times weekly (tagged with Mogadishu)	A320
Egypt	Hurghada	Five times weekly	A320
Egypt	Sharm el-Sheikh	Four times weekly	A321
Eritrea	Asmara	Three times weekly (via Tarif, in Saudi Arabia)	A319
Gabon	Libreville	Three times weekly	737-900ER
Libya	Misurata	Two times daily	Mixed
Libya	Sabha	SUSPENDED	N/A
Kenya	Mombasa	Daily	737-900ER
Mauritania	Nouakchott	Daily (via Dakar)	737-900ER
Nigeria	Kano	Four times weekly (tagged with N'Djamena)	Mixed
Niger	Niamey	Five times weekly (via Ouagadougou)	737-900ER
Rwanda	Kigali	Daily (tagged with Entebbe)	737-900ER
Somalia	Mogadishu	Four times weekly (via Djibouti)	A320
Tanzania	Kilimanjaro	Daily (via Mombasa)	737-900ER

Turkish also has added capacity over the last three years to several of its original African destinations. For example Accra, Alexandria, Dakar, Dar es Salaam and Entebbe have all been upgraded to daily (from three or four weekly frequencies) while the Lagos flight has been up-gauged from 737-900ERs to A330s.

Turkish Airlines Africa destinations launched before Dec-2011

Country	Destination	Current Frequency	Aircraft
Algeria	Algiers	Two to three daily	Mixed
Egypt	Alexandra	Daily	A320
Egypt	Cairo	Three times daily	A321
Ethiopia	Addis Ababa	Daily	Mixed
Ghana	Accra	Daily	737-900ER
Kenya	Nairobi	Daily	Mixed
Libya	Benghazi	SUSPENDED	N/A
Libya	Tripoli	SUSPENDED	N/A
Morocco	Casablanca	Daily	A330
Nigeria	Lagos	Daily	A330
Senegal	Dakar	Daily (tagged with Nouakchott)	737-900ER
South Africa	Cape Town	Daily (via Johannesburg)	A330
South Africa	Johannesburg	Daily (tagged with Johannesburg)	A330
Sudan	Khartoum	Daily	Mixed
Tanzania	Dar es Salaam	Daily	737-900ER
Tunisia	Tunis	Two times daily	Mixed
Uganda	Entebbe	Daily (tagged with Kigali)	737-900ER

Turkish still has untapped opportunities to expand in Southern Africa

South Africa is one of only a few African markets where Turkish has not increased capacity since Dec-2011. But Turkish recently announced plans to launch daily non-stop flights to Cape Town from 25-Oct-2015. This will result in a doubling of the carrier's capacity to South Africa, which is currently served with one daily flight on an Istanbul-Johannesburg-Cape Town routing.

Turkish also has been looking at serving Maputo in Mozambique and Luanda in Angola. The airline initially unveiled plans in late 2012 to serve Maputo but never launched flights. Turkish announced plans to launch service to Luanda in Sep-2014 but after delaying the launch the route was scrapped.

Maputo could be revisited in 2015, potentially as a tag to Cape Town or Johannesburg. Luanda also remains a possibility although at this point not as likely as Maputo. Either would give Turkish a third destination in Southern Africa.

Southern Africa is the most challenging of the African regions for Turkish to penetrate because it is the only region that cannot be served with narrowbody aircraft. Turkish has a primarily narrowbody fleet and long-haul growth aspirations in the Americas and Asia compete for its relatively limited number of widebodies (about 60 aircraft). But as Turkish expands its widebody fleet, and its network in the Far East and the Americas start to mature, there should be opportunities to pursue more widebody flights to Africa.

Turkish has long been pondering an order for additional widebodies (beyond the 12 A330-300E and 16 Boeing 777-300ER aircraft that are currently on order, according to the CAPA Fleet Database). It is reported to be considering A330neo and A350 and Boeing 777X and 787 aircraft. At the larger end of the twin aisle market, Turkish is also reported to be considering the A380 and 747-8 aircraft.

Johannesburg, Cape Town, Casablanca and Lagos are currently Turkish's only African destinations that are entirely served with widebody aircraft. Widebodies are also used on a limited basis (certain frequencies during peak days or peak seasons) on some dense short-haul routes to North Africa.

Casablanca and Lagos are also within narrowbody range but are served with widebody aircraft to meet high demand. Lagos was up-gauged from 737-900ERs to A330s in 2013.

The 737-900ER has been a key component to Turkish's Africa strategy

Turkish primarily operates 737-900ERs on long thin routes to Africa while its other narrowbody types - including 737-700s, 737-800s, A319s, A320s, A321s - are used on shorter routes. Turkish began operating 737-900ERs in late 2011 and has since been using the type to pursue expansion in sub-Saharan Africa. Turkish currently operates 10 737-900ERs with five more on order, according to the CAPA Fleet Database.

Turkish now relies entirely on the 737-900ER to serve 14 of its African destinations. Almost all these flights are over six hours in duration and in some cases are over seven hours. The 737-900ER is also used on some short-haul flights to Africa but generally Turkish uses other variants of the 737 or A320 family aircraft on its North African routes.

Turkish operates its 737-900ERs in a light 151-seat two-class configuration consisting of 16 business class and 135 economy seats. This gives the airline the opportunity to fully utilise the aircraft's range. Africa has the yields and premium traffic to make such a configuration work, particularly as most of the markets served with the 737-900ERs have limited competition.

Turkish configures its smaller 737-800s with more seats - 155 to 159. Turkish also operates A321s, which is similar in size to the 737-900 but has less range. Turkish configures its A321s with 188 seats and generally uses the aircraft on short dense routes including to some destinations in North Africa. Turkish also uses 126-seat A319s on some African flights but generally short and thin routes.

Turkish has fewer 737-900ERs than any other narrowbody type. But the aircraft has an important niche and has been essential in developing the carrier's African network.

Turkish included 10 737-9s in its 2013 order for new generation 737 MAX aircraft, an indication that the airline plans to maintain a sub-fleet of the largest 737 variant well into the future. The 737 MAX 9 will also offer improved range, giving Turkish an opportunity to use narrowbodies to penetrate deeper into Africa while improving the economics of its current 737-900ER routes.

Turkish Airlines fleet summary: as of 23-Dec-2014

Aircraft	In Service	In Storage	On Order*
Total:	231	2	207
Airbus A310-200	0	1	0
Airbus A310-300(F)	2	1	0
Airbus A319-100	14	0	0
Airbus A320-200	33	0	0
Airbus A320-200neo	0	0	4
Airbus A321-200	43	0	25
Airbus A321-200neo	0	0	60
Airbus A330-200	16	0	0
Airbus A330-200F	5	0	0
Airbus A330-300E	18	0	12
Airbus A340-300	3	0	0
Airbus A340-300X	3	0	0
Boeing 737-700	3	0	0
Boeing 737-8	0	0	55
Boeing 737-800	65	0	20
Boeing 737-9	0	0	10
Boeing 737-900ER	10	0	5
Boeing 777-300ER	16	0	16

Turkish's Africa strategy is bold but sensible

Africa has a rather niche role in the Turkish network as it only accounts for about 10% of the carrier's total seat capacity. But it is an important niche and one Turkish is obviously keen to grow as it continues to pursue rapid expansion globally.

Offering a large and unmatched African network gives Turkish a competitive advantage as it is able to offer more city pairs to and from Africa than any other carrier. The Africa market is relatively small but is growing rapidly and is generally high yielding.

Turkish has the right fleet mix and the global network required to successfully exploit some of the huge opportunities Africa offers. Turkish will not be shy to continue testing out new African destinations, particularly as it is able to significantly mitigate risk by deploying narrowbody aircraft and tagging destinations.