Possible Growth Strategy of Turkish Airlines
Possible Growth Strategy
The limit of the Turkish Airline’s growth may be the hub airport capacity. Turkish Airlines operates a hub and spoke network out of Ataturk Airport in İstanbul. Since Ataturk Airport has not much room left for major growth, this situation may limit Turkish Airlines’ growth. Furthermore, the labor pool in Turkey has saturated and the airline has started to recruit internationally, which will lead to an increase in labor costs. However, Turkish Airlines can sustain its growth by focusing on its service quality.
By focusing on business class Turkish Airlines can convert economy class customers into business class customers and increase its profitability. As it can be seen in exhibit 2, the total passengers travelled has reached to a saturation point in 2008. Therefore, trying to convert existing economy class costumers to business class customers is a better and more profitable idea than trying to increase the number of economy class passengers. In addition to that, when exhibit 3 is examined, it can be seen that the increase in the number of business passengers has a minor effect on the number of total passengers of Turkish Airlines. Hence, there is a growth potential in business class. Their marketing and advertisement efforts like special agreements making the airline the official carrier of well-known and successful football teams and sports people are also in parallel with this strategy. Moreover, one of the strategic goals of THY is to enhance its service level to a 5-star level. When we look at the comparison of SKYTRAX rankings of Turkish Airlines and Singapore Airlines, it can be concluded that improvements in the business class may lead THY to a 5-star level. Furthermore, by having new planes that have a separate business class Turkish Airlines has a competitive advantage compared to European competitors. Hence, focusing on business class will also serve to the airlines goal of reaching Europe’s top full-service spot,
The limit of the Turkish Airline’s growth may be the hub airport capacity. Turkish Airlines operates a hub and spoke network out of Ataturk Airport in İstanbul. Since Ataturk Airport has not much room left for major growth, this situation may limit Turkish Airlines’ growth. Furthermore, the labor pool in Turkey has saturated and the airline has started to recruit internationally, which will lead to an increase in labor costs. However, Turkish Airlines can sustain its growth by focusing on its service quality.
By focusing on business class Turkish Airlines can convert economy class customers into business class customers and increase its profitability. As it can be seen in exhibit 2, the total passengers travelled has reached to a saturation point in 2008. Therefore, trying to convert existing economy class costumers to business class customers is a better and more profitable idea than trying to increase the number of economy class passengers. In addition to that, when exhibit 3 is examined, it can be seen that the increase in the number of business passengers has a minor effect on the number of total passengers of Turkish Airlines. Hence, there is a growth potential in business class. Their marketing and advertisement efforts like special agreements making the airline the official carrier of well-known and successful football teams and sports people are also in parallel with this strategy. Moreover, one of the strategic goals of THY is to enhance its service level to a 5-star level. When we look at the comparison of SKYTRAX rankings of Turkish Airlines and Singapore Airlines, it can be concluded that improvements in the business class may lead THY to a 5-star level. Furthermore, by having new planes that have a separate business class Turkish Airlines has a competitive advantage compared to European competitors. Hence, focusing on business class will also serve to the airlines goal of reaching Europe’s top full-service spot,