Northern Cyprus Airlines will reportedly be founded today by a consortium of state and private investors and Turkish Airlines (18-Jan-2011) (World Bulletin/turkishpress, 17-Jan-2011). The new airlines company will be established after Turkish Cypriot Airlines (KTHY) declared bankruptcy in Sep-2010. The new company will operate to 11 destinations with three aircraft initially with services to commence at the end of Mar-2011.
Northern Cyprus Airlines to be founded on 18-Jan-2011
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SunExpress: "Lufthansa's biggest strategic project"
The Turkish leisure airline SunExpress and its German subsidiary SunExpress Germany have historically had a fairly low profile, certainly among European air travellers. Nevertheless, their combined total of 7.9 million passengers puts SunExpress in the top 20 European airline groups in 2016, ahead of Brussels Airlines.
Jointly owned by Turkish Airlines and Lufthansa, SunExpress and its German counterpart brought about a consolidated result that fell into loss in 2016 as passenger numbers and revenue both declined. When the observer scratches beneath the surface of the headline figures, a picture of significant strategic change at SunExpress Germany starts to emerge.
The larger Turkish SunExpress has maintained its focus on Turkey-Germany routes, whereas SunExpress Germany has abandoned this country pair. It has instead developed leisure routes from Germany to elsewhere in Europe and in North Africa, in spite of not having an obvious competitive advantage in those markets. Within these new market areas, SunExpress Germany has undergone substantial changes in its route portfolio. Lufthansa wetleases capacity from SunExpress Germany for its Eurowings low cost operation and this may help to make some sense of these outwardly random network changes.
Turkish Airlines: unprecedented loss provokes slowdown in expansion and int'l transfer strategy
Since adopting its strategy of rapid growth, driven by capturing global connecting traffic flows via its Istanbul Ataturk hub, Turkish Airlines (THY) has expanded its capacity in ASKs at double digit rates for 13 consecutive years. However, in 2016 it plans ASK growth of only approximately 3%, with cuts in the winter 2016/2017 season. Moreover, its long haul capacity will be almost flat in 2017, and it seems probable that it will not repeat its habitual increase in the number of passengers transferring between international flights this year.
The prompt for this unprecedented change in THY's growth path was a slump into loss in 2016, also unprecedented – at least, since the airline adopted its connecting strategy in 2004. This loss was itself the result of a slump in demand for air travel to/from Turkey, coupled with overexpansion. The consequent slide in unit revenue could not be mitigated by a matching cut in unit cost, in spite of lower fuel prices.
Recent management changes at THY raise the possibility of a new approach, but the airline cannot hide its pride over its history of growth and market share gains. It will need to balance this against the imperative to restore profitability.