Aviation industry
Geostrategic position
Regulations
Comment


The Turkish economy has grown at an unprecedented rate during the past decade, averaging an annual rise of 4% (higher than many well-established European economies). This macroeconomic success has inevitably spread to several business sectors, of which aviation is one of the most significant.

Aviation industry

The growth of the aviation industry in Turkey has exceeded even the national growth rate. At present, the industry employs more than 150,000 people and generates revenue of $15 billion. During the past seven years, flight traffic has grown at more than 10% annually and passenger traffic has increased by 14%. Today, this equals more than 1.1 million flights and more than 85 million passengers. When international flights are included, the number of passengers reaches 130 million. At the end of 2012 the market share of domestic flight passengers was 49.4%, putting Turkey in 12th place worldwide in terms of passenger numbers and in sixth place in Europe. In the medium term, flight traffic is expected to reach 1.8 million and passenger numbers are expected to exceed 150 million.

Regular flights take place at 49 airports and 54 heliports are in operation. There are 173 established aviation companies, of which 15 are registered as airlines. The industry has established 30 flight training schools, 47 ground handling companies and 35 maintenance organisations.

Geostrategic position

Turkey's geographic position, located between Asia and Europe, is also a contributory factor in the development of its aviation sector. As a result of this location, Turkey has managed to transform itself into a transit hub, in particular for transatlantic flights departing from North America and flying to the Middle East. Turkey has also increasingly established itself as a maintenance repair and overhaul centre for the Eurasia region, due to the low costs associated with the local labour market.

Regulations

The Directorate General of Civil Aviation (DGCA) is the main body regulating the civil aviation industry in Turkey. In order to meet demand for a highly trained workforce in this burgeoning industry, the DGCA has signed a collaboration protocol with the Higher Education Council. The protocol is intended to establish higher standards for the training of civil aviation staff. Moreover, a related regulation provides easier electronic access to DGCA documents for all DGCA services, including:

  • e-state applications;
  • its electronic document management system;
  • its revenue tracking system;
  • ramp inspections for foreign aircraft;
  • its mobile inspection system;
  • its scanner certification system for digitally carrying out air traffic controller and air traffic safety electronics personnel tests;
  • authorised capacity for simulators; and
  • aircraft maintenance licences (under the Aircraft Personnel Licensing Directive (SHY 66) and Part 66 of the European Aviation Safety Agency regulations).

The latest DGCA directive (issued in November 2013) rearranged the licensing procedure for companies that have been established or are to be established in order to carry passengers or cargo on domestic or international flights. The directive includes clauses on licence revocation and suspension procedures, as well as the general qualifications that owners and employees of such companies are obliged to meet.

Comment

The prospects for the aviation industry are positive, not least because of the affordable price of air transport in Turkey. One decade ago, average ticket prices were registered as TRY100, which means that inflation-adjusted prices should be more than TRY200 as of December 2013. However, prices remain at around TRY111, which generates high demand for air transport on the part of Turkish consumers and allows the industry to take advantage of economies of scale. Furthermore, the Turkish authorities have been doing their best to raise standards within the industry, as demonstrated by the aforementioned regulations and directives. The drive for greater liberalisation of the industry during the past three decades is a clear sign of the authorities' intention to open the sector to competition.

For further information on this topic please contact Altug Atilkan at HERDEM&Co by telephone (+90 216 290 1277), fax (+90 216 290 1278) or email ([email protected]). The HERDEM&Co website can be accessed at www.herdem.av.tr.