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Turkish Airlines Goes Low Cost.  
User currently offlineFiriko From United Kingdom, joined Nov 2005, 151 posts, RR: 0
Posted (8 years 9 months 2 weeks 2 days 12 hours ago) and read 3127 times:

According to Dunya Gazetesi(I would say Financial Times of Turkey)Turkish Airlines has informed Istanbul Stock Exchange today that it will start a new low cost carrier using 737-400 aircraft currently in TK fleet after modifying them. The new company will have its own logo and brand name. Low cost carrier will operate domestic and international European cities and will start services early 2006. Here is the article in Turkish I will post it here when and if I find it in English.
http://www.dunyagazetesi.com.tr/news_display.asp?upsale_id=242846

[Edited 2005-12-05 23:10:19]

18 replies: All unread, jump to last
 
User currently offlineRJ100 From Switzerland, joined Nov 2000, 4119 posts, RR: 29
Reply 1, posted (8 years 9 months 2 weeks 2 days 12 hours ago) and read 3120 times:

Hehehe, they will use 737-400, not 747-400  Wink

Wow, the Turkish market is really getting interesting. So many new companies offering services.  Smile

Regards,
RJ100



none
User currently offlineFiriko From United Kingdom, joined Nov 2005, 151 posts, RR: 0
Reply 2, posted (8 years 9 months 2 weeks 2 days 12 hours ago) and read 3095 times:

Quoting RJ100 (Reply 1):
Hehehe, they will use 737-400, not 747-400

Sorry my mistake just corrected it
Thanks


User currently offlineOrion737 From , joined Dec 1969, posts, RR:
Reply 3, posted (8 years 9 months 2 weeks 2 days 11 hours ago) and read 3016 times:

Wont a low cost Turkish airlines flying internationally compete and take away business from the mainline Turkish airlines. I cant imagine why TK wants to create a subsidiary who will take trade away from the parent airline.

Bonkers!


User currently offlineGokmengs From United States of America, joined Mar 2005, 1123 posts, RR: 2
Reply 4, posted (8 years 9 months 2 weeks 2 days 10 hours ago) and read 2997 times:

Quoting Orion737 (Reply 3):
Wont a low cost Turkish airlines flying internationally compete and take away business from the mainline Turkish airlines. I cant imagine why TK wants to create a subsidiary who will take trade away from the parent airline.

I agree with you somewhat, but then you have to think about the Turkish market. TK has been losing customers domestically to Atlas Jet big time, and maybe that client base who tried and liked Atlas Jet started flying them to Germany etc.(I don't know for sure if Atlas Jet flies scheduled international yet) I' ve heard nothing but good things about atlas jet and no doubt they took business away from TK.
I just don't know if TK's LCC is a great especially on international routes, whick TK has been operating with very healthy profits.



Gercekleri Tarih Yazar Tarihide Galatasaray
User currently offlineOrion737 From , joined Dec 1969, posts, RR:
Reply 5, posted (8 years 9 months 2 weeks 2 days 10 hours ago) and read 2989 times:

Exactly, while an LCC TK for domestic routes may work, TK would be silly to create a LCC subsidiary to fly to prime international destinations as it would be a direct competitor with the parent and reduce yields considerably.

Many European destinations that TK serve like LHR, AMS and CDG are quite distant for an LCC subsidiary and as they are high yield are much better served by a full class, full fare TK.


User currently offlineBabybus From , joined Dec 1969, posts, RR:
Reply 6, posted (8 years 9 months 2 weeks 2 days 10 hours ago) and read 2958 times:

Let us not forget that it was Iberia and their low cost carrier VIVA that started this trend back in the 80's or 90's.

To my mind, it's a good way to segment the market. However, it didn't seem to work too well for Iberia. Not exactly sure why.


User currently offlineOrion737 From , joined Dec 1969, posts, RR:
Reply 7, posted (8 years 9 months 2 weeks 2 days 10 hours ago) and read 2946 times:

Viva flew to destinations not served by IB itself like LHR-ALC and LHR-PMI, scheduled routes with a large leisure market. Viva was full service and full fare and never directly competed with IB but opened international routes not served by IB itself.

TK is entirely different and I cannot see them creating an LCC flying from airports like Bodrum to London as that market is almost entirely IT market. Any international LCC subsidiary would likely have to operate from Istanbul to international destinations and therefore be a direct competitor and threat to TK itself.


User currently offlineLaxintl From United States of America, joined May 2000, 25356 posts, RR: 49
Reply 8, posted (8 years 9 months 2 weeks 2 days 9 hours ago) and read 2915 times:

Quoting Orion737 (Reply 3):
Wont a low cost Turkish airlines flying internationally compete and take away business from the mainline Turkish airlines. I cant imagine why TK wants to create a subsidiary who will take trade away from the parent airline.

One must consider two things.
1 - THY faces an incredible amount of competition from Turkish LCC's whom by default basically operate what is a significant "scheduled service" network to Europe with bargain basement charter fares.
2 - European LCC have begun to enter the Turkish market. ie -Germanwings.

Much of THY's European network in reality does not require the airlines 2 class product perse. This is especially true in the German and Benelux coutries were the carrier basically serves the lower yield ethnic Turkish passenger or Eurpean tourist.
In reality majority of THY's German network to cities like Hanover, Berlin, Stuttgart, Hamburg were formerly charter routes for the carrier called "isci - worker" flights that were converted to scheduled service in the late 80s/90s to provide higher visibility.

While THY has the lowest cost amongst members of Association European Airlines they do feel the pressure of LCCs mounting.

Quoting Gokmengs (Reply 4):
if Atlas Jet flies scheduled international yet

Dusseldorf recently became the carriers first scheduled service point in Europe. The remainder of the 20 or so European destinations are served via charter authority, but operate pretty much as scheduled service flying.
More and more of this network will become fully scheduled service going forward. The carrier has 4 new A319s due to arrive shortly that will help expansion.
The carrier also has established interline agreements with over 30 airlines including ones like BA, KLM, Delta, Singapore which now sell Atlasjet connections preferentially over THY.

Quoting Orion737 (Reply 5):
Exactly, while an LCC TK for domestic routes may work, TK would be silly to create a LCC subsidiary to fly to prime international destinations as it would be a direct competitor with the parent and reduce yields considerably.

Many European destinations that TK serve like LHR, AMS and CDG are quite distant for an LCC subsidiary and as they are high yield are much better served by a full class, full fare TK.

Who says the LCC division would serve main capital airports like LHR, CDG etc??

Like mentioned above many of of THY's destinations only really require a single class product.
The carrier would by launching a high density single class product using B734's in select markets is able to reduce CASM to better compete against the extensive network of Turkish LCC's in Europe and fend off better for an inevitable invasion of foreign LCCs.
Also an inhouse LCC would allow THY to provide added seats in markets like London were slots are a premium. The LCC could launch service to an airport like Stansted , while allowing more higher yield demand to be served by mainline at LHR.
An inhouse LCC would also offer benefits to the consumer such as interline connectivity and frequentl flyer benefits.

At the end of the day, in my view an inhouse LCC could potentialy do well for the airline by selectively overlaying the current network, and also allowing entry to some additional markets which might not make sense with a 2 class mainline products and its operating cost. An in-house LCC if properly targeted would not cannibalize mainline traffic, instead could add to the viability of the greater THY network, while helping the bottom line.



From the desert to the sea, to all of Southern California
User currently offlineA388 From Netherlands Antilles, joined May 2001, 9818 posts, RR: 11
Reply 9, posted (8 years 9 months 2 weeks 2 days 9 hours ago) and read 2909 times:

Didn't THY recently start scheduled flights to London Luton Airport? That airport is increasingly being used by more European LCCs right?

A388


User currently offlineGokmengs From United States of America, joined Mar 2005, 1123 posts, RR: 2
Reply 10, posted (8 years 9 months 2 weeks 2 days 6 hours ago) and read 2865 times:

Quoting Laxintl (Reply 8):

Good post as always laxintl.

Quoting Laxintl (Reply 8):
One must consider two things.
1 - THY faces an incredible amount of competition from Turkish LCC's whom by default basically operate what is a significant "scheduled service" network to Europe with bargain basement charter fares.
2 - European LCC have begun to enter the Turkish market. ie -Germanwings.

I agree with this. But,

Quoting Laxintl (Reply 8):
Much of THY's European network in reality does not require the airlines 2 class product perse. This is especially true in the German and Benelux coutries were the carrier basically serves the lower yield ethnic Turkish passenger or Eurpean tourist.

although you are right about the amount of worker(isci) traffic(especially the huge turkish population in Germany and most neighboring countries) you have to remember that Turkey does 3 quarters of its export to E.U. People like me who depend on exporting goods to E.U. is a large group. The business pax that spent the bucks on these routes I think are the back bone of TK's European income. There is basically so much business between Turkey and E.U. premium pax is not something can/should be denied. I mean just the fact that LH is marketing credit cards with Turkish banks that allow mile accumulation is a simple example of the demand existing.

Quoting Laxintl (Reply 8):
The carrier also has established interline agreements with over 30 airlines including ones like BA, KLM, Delta, Singapore which now sell Atlasjet connections preferentially over THY.

I was totally unaware of this can you talk about this a little bit more? Is SQ selling say ESB tickets by codesharing with Atlas for example?

Quoting Laxintl (Reply 8):
At the end of the day, in my view an inhouse LCC could potentialy do well for the airline by selectively overlaying the current network, and also allowing entry to some additional markets which might not make sense with a 2 class mainline products and its operating cost. An in-house LCC if properly targeted would not cannibalize mainline traffic, instead could add to the viability of the greater THY network, while helping the bottom line.

What I couldn't understand with your post is; are you saying TK should serve secondary airports and destinations with this product? Because IMO that would be the only way to go, since like I mentioned above I think there is demand for 2 class service in many destinations that TK already serve from IST to E.U.
I'm pretty certain you know more about the subject so your input/clarification will be appreciated.



Gercekleri Tarih Yazar Tarihide Galatasaray
User currently offlineLaxintl From United States of America, joined May 2000, 25356 posts, RR: 49
Reply 11, posted (8 years 9 months 2 weeks 2 days 5 hours ago) and read 2850 times:

Quoting Gokmengs (Reply 10):
The business pax that spent the bucks on these routes I think are the back bone of TK's European income. There is basically so much business between Turkey and E.U. premium pax is not something can/should be denied

Yes there is certainly business demand, however its heavily concentrated in a handfull of markets such as LHR, FRA, MUC, ORY, ZRH.
Much of the remaining European network as HAJ, DUS, STR, HAM Scandinavia, primarily produce either Turkish VFR or European tourist traffic with more limited premium class traffic.

Quoting Gokmengs (Reply 10):
I was totally unaware of this can you talk about this a little bit more? Is SQ selling say ESB tickets by codesharing with Atlas for example?

Not codeshare but simple interline ticketing. Atlasjet has negotiated rates with several airlines whom now sell Atlasjet over THY on domestic legs.

Here are a couple Turkish articles that touch on the subject.
http://www.zaman.com.tr/?bl=butun&trh=20050804&hn=198735
http://www.airporthaber.com/hb/detay.php?id=2418

Quoting Gokmengs (Reply 10):
TK should serve secondary airports and destinations with this product?

Exactly. Particularly on routes with minimal business demand and those with heavy compeition from Turkish charter carriers. By providing an all economy product THY can spread its cost/reduce CASM, be more price competitive and thus hopefully be able to reduce the errosion of traffic by these LCCs. This should be able to occur in many markets without a significant spill of business traffic as it was minimal to begin with.
An inhouse LCC would also potentialy allow THY to enter some markets that currently dont make sense with a two class product and cost structure.



From the desert to the sea, to all of Southern California
User currently offlineTriStar500 From Germany, joined Nov 1999, 4695 posts, RR: 42
Reply 12, posted (8 years 9 months 2 weeks 2 days 3 hours ago) and read 2797 times:

Would this move permit THY to steer the ethnic travel volume (e.g. the millions of Turks living and working in Germany, who want to visit their families in their homeland) away from the plethora of Turkish charter carriers?

As an outsider to Turkish ethnic travel, it often seems to me that there are specialized travel agents and tour operators, which have large scale agreements with some rather dubious "seasonal" airlines like Fly Air etc. - would a attractively priced product from a quality carrier like THY serve to take market share away from such operators?



Homer: Facts are meaningless. You could use facts to prove anything that's even remotely true!
User currently offlineEgmcman From United Kingdom, joined Jun 2005, 898 posts, RR: 8
Reply 13, posted (8 years 9 months 2 weeks 2 days 2 hours ago) and read 2751 times:

Quoting Laxintl (Reply 8):
Also an inhouse LCC would allow THY to provide added seats in markets like London were slots are a premium. The LCC could launch service to an airport like Stansted , while allowing more higher yield demand to be served by mainline at LHR.

They serve STN with services from IST, Ankara & Antalya these started this year.

Viva failed because of industrial relations at Iberia.


User currently offlineLaxintl From United States of America, joined May 2000, 25356 posts, RR: 49
Reply 14, posted (8 years 9 months 2 weeks 2 days ago) and read 2693 times:

Quoting Egmcman (Reply 13):
They serve STN with services from IST, Ankara & Antalya these started this year.

And would be good for a LCC product. Also routes that bypass Istanbul would work very well for a LCC due to the the low mix of premium traffic.

Quoting Egmcman (Reply 13):
Viva failed because of industrial relations at Iberia.

I think much of its failure actually had to do with Lufthansa's withdrawal from the joint ownership of the carrier. Iberia subsequently never managed to properly position Viva, flipping the carrier back and forth between being a scheduled service and a charter airline.



From the desert to the sea, to all of Southern California
User currently offlineBahadir From United States of America, joined Oct 2001, 1787 posts, RR: 10
Reply 15, posted (8 years 9 months 2 weeks 1 day 20 hours ago) and read 2584 times:

I think this is a very smart and wise move from THY's perspective. After the demise of Istanbul Airlines which was running scheduled flights to foreign destinations, THY was all alone. AtlasJet has been a success story that will invade some of these secondary markets with their nice product. THY is trying to protect their market share on these routes that may go to KK if they don't act on this.

Obviously an aircraft with all Y config has better $$$ earning potential than C-Y config on a market like DUS-TZX.

There are different examples of both success and failure in attempts like this. Germanwings/Lufthansa, Ted/United are good examples to follow. Continental/CoLite, SAS/Snowflake are not.

I am a bit doubtful about the aircraft choice though. I am not sure 737-400 will perform well in hot/high/heavy configs for a flight. Remember that 170 all Y will have heavier pax/cargo load than a 150 seat C/Y config aircraft.



Earthbound misfit I
User currently offlineGilesdavies From United Kingdom, joined Dec 2003, 3021 posts, RR: 2
Reply 16, posted (8 years 9 months 2 weeks 14 hours ago) and read 2430 times:

Quoting A388 (Reply 9):
Didn't THY recently start scheduled flights to London Luton Airport? That airport is increasingly being used by more European LCCs right?

A388

No, there are no scheduled passenger services between LTN and Turkey.

MNG Cargo fly freight services to the airport using their A300's which is one of the largest aircrafts you see at LTN on a regular basis.

The Turkish carrier SunExpress operated two weekly chartered services to Luton during last summer and Thomas Cook will be using them again for the 2006 Summer Season to Antalya and Dalaman.

These are the only two Turkish Airlines operating out of LTN other than the odd charter that may arrive. When Turkey becomes a member of the EU it would not surpise me if we do see a carrier flying regularly to Turkey, like Helios Airways that operates daily flight to both PFO and LCA in Cyprus.


User currently offlineA388 From Netherlands Antilles, joined May 2001, 9818 posts, RR: 11
Reply 17, posted (8 years 9 months 2 weeks 10 hours ago) and read 2363 times:

Ohh I see, I thaught TK operated to London Luton but it's London Stansted. Aren't they the first foreign scheduled airline to fly to London Stansted?

A388


User currently offlineOrion737 From , joined Dec 1969, posts, RR:
Reply 18, posted (8 years 9 months 2 weeks 10 hours ago) and read 2356 times:

No not by a long way. Tarom used to fly to Stansted and El Al and loads of others.

Its always good to see a full service carrier starting flights to Stansted. Makes a change to all the LCCs.


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