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Air Service One talks in person to Majid Khan – Vice President Aviation Development – iGA Airport Istanbul.

iGA Interview Air Service One

  • IGA has been Europe’s busiest airport since July and doesn’t look like losing that position any time soon. What have been the key factors in this?

We are the most resilient airport. There are many reasons, the main one I would probably say is that we didn’t have too much to lose when the pandemic arrived as we had just moved from the old airport to the new one. The old one, Atatürk, was very congested. We couldn’t speak with any airlines because they couldn’t fly, there was no capacity. We started off with rebuilding the market. We are doing quite well when it comes to traffic between Europe and Asia and between Europe and Africa. We are weaker on point-to-point traffic, and this is something we are working on.

Before the pandemic we had 66 airlines and all of them left during the first COVID wave. Now we have 71 airlines including 11 new ones. What we are missing are those coming from Korea, China and Japan. The Asian market hasn’t recovered. Most of our network has recovered. We had 288 destinations before COVID now we have 262 including 26 new. The 11 new airlines are mainly from Russia, Ukraine, Middle East and CIS countries and mainly point-to-point. SkyUp Airlines started with Kiev in Ukraine and we have five destinations now. We also welcomed Air Arabia and Ural Airlines. The Russian market is a huge market for us.

There was no need to promote Istanbul because we couldn’t fly anywhere. The new airport has created new opportunities for us. We also have a catchment area of well over 20 million within a two-hour drive. When we look at our network in terms of destinations, Europe has mostly been covered but not in terms of load factor. We do see very high load factors from destinations where there is a VFR potential like Germany, France, Italy and UK, but we see low load factors from Eastern European markets. The best long-haul market for us is the US. We have 11 destinations. One of the successes of the US market is that a lot of the European airlines reduced their capacity, so we saw a lot of transfer demand from anywhere, including Scandinavia, via Istanbul to the US.

 

  • Turkish Airlines accounts for around 75% of all flights at IGA at present and serves more countries than any other airline. Is the airline’s dominance a problem when trying to attract new services from other airlines to the airport?

In my opinion no, but we had some concerns from other airlines, especially when you speak to new airlines, they do mention Turkish Airlines. We have no interest in cannibalizing our traffic. We want to stimulate the market. It is about looking at which opportunities we are missing at the moment when speaking to new airlines.

 

  • While Turkish Airlines competes with Pegasus Airlines at its main base at the other Istanbul airport, Pegasus only has one route from IGA to Izmir. Do you think Pegasus will be looking to expand from IGA in the coming years? Is it something that IGA is actively pursuing?

If you look from the commercial point of view, it makes sense, and the main reason is Pegasus is very strong on the domestic point-to-point market. They are very strong on VFR and leisure market from Europe via Sabiha Gökçen airport to Middle East countries like Iran, Iraq, Jordan and Lebanon. They are really strong, especially for that segment. We have the leisure market but not the low yield leisure market via Sabiha.

At Istanbul we don’t have operational issues. It is an airport built for the future. We have space for new airlines who want to establish a base. I also believe we don’t have a well-covered European market. We have around 120 destinations in Europe, but our analysis shows that we have 93 destinations which are unserved, which have potential either for point-to-point traffic or VFR/leisure potential to Istanbul, or beyond to Middle East and Africa. These destinations may not make sense for Turkish Airlines but probably for Pegasus because of their business model.

 

  • So am I right in saying you haven’t got the world yet? There is lots of opportunity and you are open to conversation with anyone.

We are open to everybody. Istanbul is not only for one airline. All the new airlines are welcome – we don’t have a fixed model – the new ones, especially low cost, have different operational needs, we adjust ourselves to their needs.

 

  • Since the pandemic started, IGA has welcomed a number of new services from Russian carriers. The Russia-Turkey market has had some ups and downs in recent years because of political intervention but how significant is the market to IGA and how do you see it evolving?

Russia is a huge focus market for us. Beside Aeroflot, Pobeda and Turkish Airlines the only one we are missing among the main airlines in Russia is S7. We believe it is only a matter of time with them. Even Pobeda now has five new destinations from regional airports, which is purely point-to-point into Istanbul. The Russian market is definitely significant for us. We know it is mainly the point-to-point market we have been missing, particularly from the regional destinations.

They cannot feed into Istanbul hub at the moment because they are not from the Star Alliance. We have just developed our new transfer programme: ISTANBUL WORLD CONNECT. As you know, 75% of our traffic is from Turkish Airlines, but we would like to develop our market, so we would definitely want some of the foreign airlines coming with air traffic delivering to Turkish Airlines or vice-versa so that we can stimulate the market.

We have struck a strategic agreement with trip.com, their booking platform will be used and passengers will be able to fly from anywhere to anywhere in the world via Istanbul.

There are always two main risks with this self-transfer model. First, what happens if your flight is cancelled or delayed. Who takes the risk? That would not be on the airline. This is solved. The second issue is obviously the luggage. At this stage passengers need to collect the luggage but they can easily do transfer within two hours which we think is very efficient given the size of our airport.

There will be fast track dedicated bag drop compounds from the 566 check-in compounds in Istanbul.

So dedicated compounds for IWC passengers, those that have more than a two hour transfer time up to 24 hours. We will also offer discounted access to the iGA lounge, city tours with lunch at discounted prices, spa and massage options.

 

  • Which country markets do you see as being underserved at present and with the greatest potential? What is stopping these markets from being developed?

Russia, Korea, China, Japan are our main targets. We are happy that we got most of the Russian airlines now. We now have the likes of Pobeda, Ural Airlines and Utair and we can slowly see signs of more airlines They can definitely see the success in the point-to-point market.

I would like to see more destinations from Poland. At the moment there is an issue with traffic rights. There is a huge market of 48 million people, and I would love to see secondary routes into Istanbul. Otherwise, the UK VFR market has potential for transfer to the subcontinent and Middle East, but we would like to see point-to-point routes as well, such as Leeds Bradford and Bristol. Our advantage versus the middle eastern carriers is that Turkish Airlines can operate narrowbody aircraft into the UK market.

 

  • The big goal here is Russia and its market, right?

S7 and Pobeda are our main targets. Turkey is open, so anyone can enter Turkey if they have a negative COVID test taken in the last 72 hours as it is difficult for Russian to get into Europe, at the moment. Therefore, it is an opportunity for Istanbul.

 

  • The big conversation is the environment. You have a brand new airport? What are your targets?

I believe we are committed to achieving net zero by 2050 like many others. Sustainability is important. Also, if we get more routes for Istanbul because of our geographic location East and West, North and South obviously the flight time is less than if you have to go through some of the other airports.

I like to stress that airlines don’t fly to an airport they fly to a market, we have a market of 20 million people within two hours of Istanbul that is our catchment area. Next year we are going to get a Metro line from the airport to the city.

We have just invested 10 billion Euros in the airport, we have very competitive charges, we have no plan to increase our charges. It is a big topic in Europe at the moment. There are no slot restrictions, we are open 24/7 for operations, and we have five runways including 2 ancillary.

Passengers will be even more demanding in a post-COVID era, there will be a greater focus on health and safety, and also on enhancing the customer’s experience. What we have decided during this pandemic, despite no traffic from Asia at the moment, we have developed ourselves as a Chinese friendly airport in terms of standards of sanitation. We have done the same with the Pakistani market. I call it the sleeping tiger, a market of 220 million people. British Airways and Virgin Atlantic have launched new flights from Manchester and London, and we expect to become Pakistani friendly in the next couple of months. There will be more and more focus looking at the big markets and developing products which can give a good customer experience and then, obviously, passengers will come back.