An airline’s key marketing message is frequently built around the products offered, great customer service, and - in some cases - the airfares. However, for Turkish Airlines - while all of these are important - they place equal emphasis on their core message that they fly to more countries than any other airline. And on the 17th March Melbourne, Australia puts another dot on the map for the airline.
It’s taken some time for Australia to be added to Turkish Airlines’ destination list, now it’s finally here let’s explore what the likely impact will be.
Reasonable Local Market Demand
By the end of November 2023, there were 35,000 passenger bookings between Istanbul and Melbourne. Dubai was the main gateway (9,500) accounting for just over a quarter of connecting traffic, with Doha in second spot with some 6,000 bookings. Interestingly, fellow Star Alliance hubs in Bangkok and Singapore were ahead of Abu Dhabi, although we can probably expect those connecting gateways to see a reduction in volumes with a new one-stop service entering the market. Turkish Airlines' gain may be Thai Airways' loss, but all’s fair in love and alliances!
The local market demand is always important and Turkish can certainly build some demand trading on the strength of their brand loyalty and frequent flyer programme to get a share of that market, but the real attraction of the new service is access to a share of that lovely 6th Freedom flow from Europe to Melbourne and that’s where the real prize is.
LOVELY 6TH FREEDOM FLOWS
There is no doubt that the new Istanbul airport is a superb hub for connecting traffic, and with a mixed fleet of wide-bodied and single aisle aircraft Turkish Airlines have been building a very competitive position that rivals Dubai for connecting traffic. Indeed, geographically no other hub airport has probably benefitted as much as Istanbul from the closure of Russian airspace to many airlines resulting in passengers considering alternate routings, especially to Central Asia as we’ve been finding out recently.
The Europe to Melbourne market is likely to be close to one million passengers a year; based on the performance to the end of November 2023 and allowing for the inevitable peak demand in December. With the top ten source markets accounting for over two-thirds of existing bookings, and all of them served with multiple frequencies by Turkish Airlines, squeezing some additional long-haul connections onto existing services makes great sense for the airline - it really is network growth with zero-risk for an airline such as Turkish.
Inevitably, every winner has a potential loser and the current favourite connecting hubs for Melbourne - Dubai, Doha and Singapore - will see some marginal impact, although in all three cases the broader strengths of their networks could see those losses recovered elsewhere. Increased competition will perhaps also lead to some more competitive fares, although with the amounts of indirect traffic some would argue they are already as competitive as they could be.
For Turkish Airlines, Melbourne acts as a “first base” position in Australia and with its large diaspora an obvious choice. Brisbane and Perth will certainly be on the drawing board, Sydney may be more of a challenge given the available slots and restrictions, but perhaps the new Western Sydney Airport at Badgery’s Creek will be of interest to the airline.
But looking outside of Australia, what countries are next on the radar for the airline?
WHERE NEXT FOR TURKISH AIRLINES?
Currently, three country markets could be under consideration which have larger indirect local markets from Türkiye than Australia:
Libya has its political challenges but does have potential connecting traffic via Istanbul (that perhaps would not be the case for the other two markets) and with limited capacity, could offer some higher yields than other opportunities.
Equally, some country markets were previously served and for a range of reasons are no longer operating including:
So, when the opportunity arises there are currently around five or six realistic options of additional country markets for Turkish Airlines to consider.
However, perhaps the real potential in the coming years for Turkish Airlines is to increase frequencies to existing destinations, either at existing airports and cities or by adding new destinations in existing country markets - which is what makes Australia such an attractive proposition for the airline.