The effects of the pandemic have been devastating for many industries but none more so than for aviation, where commercial flights effectively ground to a halt for the duration. The effects of the pandemic are still being felt, but Turkish Airlines has weathered this storm with effective cash management, a robust expense saving policy, a strong demand environment, a wide flight network and extensive fleet, and was able to quickly adapt to the changing conditions. Despite the pressure on costs caused by the rise in oil prices, Turkish Airlines, which achieved great success with its financial statements, managed to emerge from this prolonged struggle strongly and achieved a significant competitive advantage.
Our organisation, which differentiated positively from the sector with its traffic results in 2022, has increased its pricing power along with its market share. Compared to 2019, with an increase of 28 percent in passenger revenue and 121 percent increase in cargo revenue, the airline generated a total revenue of $18.4bn. As a result, Turkish Airlines generated $2.8bn operating profit and achieved an operating profit margin of 15.1 percent exceeding the industry average in profitability. Despite the difficult conditions of the pandemic and the operational process, Turkish Airlines has made a profit for the last six consecutive quarters and was positioned among the most profitable airlines in the world in 2022.
In addition to the negative financial picture experienced in the sector in 2022, problems caused by the lack of personnel and infrastructure were also felt to a great extent. Despite all this, Turkish Airlines continued its operations uninterrupted thanks to its operational agility and the highly qualified workforce it protected during the pandemic. The company focused on developing a wide range of ecosystems from technology to ground handling services and from catering to seat production with its 16 subsidiaries. As a result, Turkish Airlines carried a total of 72 million passengers in 2022, reaching 97 percent of the number of passengers in 2019. Turkish Airlines ranked first among the European network carriers in terms of flights according to the European Organisation for the Safety of Air Navigation (Eurocontrol).
Istanbul Airport, the headquarters of the flight operations of Turkish Airlines, was Europe’s busiest full-service carrier in 2022 and is frequently ranked first in the list of Europe’s busiest airports. The right strategic steps and investments made by our organisation during these challenging times, and when the aviation industry was in this recovery period, also contributed significantly to Turkey being one of the countries that achieved rapid normalisation in aviation.
According to the monthly statistics announced by the General Directorate of State Airports Authority (DHMI), the number of international passengers arriving in Turkey in 2022 reached 95 percent of 2019. In this process Turkish Airlines, which has the ninth largest fleet in the world, also made significant contributions to economic sustainability while performing its operations without sacrificing safety or service quality.
A bridge between east and west
As one of the most important players in the re-emergence of the sector, Turkish Airlines has become the bridge between east and west in cargo transportation with the Turkish Cargo brand. Air cargo, which served as a lifeline for the aviation industry during the pandemic, has also caught a strong growth trend for Turkish Airlines, and cargo investments have been increased accordingly. According to the 2022 data published by the International Air Transport Association (IATA), our airline has quadrupled its market share in cargo transportation in the last 10 years and has sealed its success by ranking fifth among the top air cargo carriers.
We aim to make Istanbul the logistics centre of the world, thanks to our Turkish Cargo brand, which continues its cargo activities with stronger steps using the SMARTIST facility, the new cargo operation centre where all processes are equipped with autonomous and robotic systems, and our unique wide flight network. We plan to reach additional markets by increasing our product range and capacity with the advantages of our new facility, and to carry more than double the world cargo in the medium and long term with the cargo transported by SMARTIST. We aim to make Turkish Cargo one of the top three air cargo companies in the world in the next 10 years.
Turkish Airlines, having moved its cargo operation to a new facility equipped with the latest technologies, sees digitalisation as a strategy in all its processes, as a company that closely follows technology and understands the importance of digitalisation in terms of efficiency. The steps taken by Turkish Airlines in the digitalisation race have greatly contributed to the company’s value creation function. Turkish Airlines has set a goal to be one of the top three airlines in the world in terms of digitisation within three years as part of its strategic plan.
Our organisation, which has successfully overcome the difficult conditions of the airline industry has implemented the right change management strategy not only in the financial and operational areas, but also taking into account the sustainability issues. In line with our commitment to be a ‘Carbon Neutral Airline in 2050,’ we have expanded the use of Sustainable Aviation Fuel (SAF), which has been included in our plans to combat climate change and that we started to use as of 2022, also adding additional lines in 2023.
Turkish Airlines, which made its first flight to Stockholm with its environmentally friendly fuel preference and ‘Green Class’ concept, applied a special design consisting of leaf patterns to the A321 aircraft that provided this special operation, and continued its flight operations with Sustainable Aviation Fuel (SAF) regularly throughout 2022. With the motto of ‘Green Class,’ Turkish Airlines has aimed to continuously improve the in-flight sustainability practices it has already offered to its passengers, and has designed an environmentally friendly concept that adopts the principle of zero waste. In this way, with the concept of ‘Green Class,’ flight operation is carried out with a sense of responsibility towards the environment and society, with the aim being that passengers have a sustainable flight experience.
In addition to the use of SAF, we also continue to support projects that contribute to the development of this fuel. In this context, our airline has once again demonstrated the importance it attaches to the issue by signing the Global SAF Declaration, which expresses the unity of joint work created by the stakeholders in the aviation, space and fuel sector for the decarbonisation of sustainable aviation fuel.
Additionally, it has taken its place among the supporters of the Climate-Related Financial Disclosure Task Force (TCFD) within the scope of the management of climate change risks, and has started its studies for TCFD reporting, in which climate change risks will be discussed in detail.
Serving the greater good
In line with the increasing sensitivity to sustainability issues and in order to both meet passenger expectations and emphasise the importance of acting together in the fight against climate change, Turkish Airlines launched CO2mission, a voluntary carbon balancing platform, in August 2022. With the CO2mission platform, Turkish Airlines offers travellers a platform where they can easily and practically balance their carbon emissions by enabling them to participate in the fight against climate change.
Within the scope of the project passengers are also offered the opportunity to offset emissions from all flights they perform, not only with Turkish Airlines but also with other airlines. The projects in the portfolio of ‘Renewables,’ ‘Community Care’ and ‘Greener World,’ which are offered to passengers based on their preferences and have internationally valid certification in various regions of the world, serve nine different Sustainable Development Goals.
A carbon balancing certificate is created for our passengers who contribute to the desired portfolio and perform the balancing process. Passengers can access their online certificates on the platform at any time, share their certificates on social media and even gift carbon offsetting to their loved ones. Within the scope of the CO2mission platform emissions from all business travels of our employees are balanced by Turkish Airlines.
Turkish Airlines has become the bridge between east and west in cargo transportation
Turkish Airlines participates voluntarily in the performance evaluations of national and international indices and sustainability rating agencies, which support meeting the expectations of the stakeholders by providing a transparent communication network with all the relevant parties.
This participation both enables the analysis of the current situation in the industry and the monitoring of global trends. It is aimed at increasing performance by ensuring the continuity of participation in the performance evaluations of national and international indices and sustainability rating agencies, such as DJSI, FTSE4Good, MSCI, EcoVadis, Sustainalytics, TPI and Borsa Istanbul Sustainability Index, in which we also participated voluntarily in the previous years. As a result of these evaluations made by the world’s leading rating agencies, both company-based and sector-specific scores were raised to higher levels compared to the previous year.
With the 2021 Sustainalytics ESG Risk Rating Score, Turkish Airlines ranked first in the ‘lowest risk’ ranking among 69 participants in the airline sub-sector, and succeeded in being in the ‘lowest one percent risk segment’ in its sector.
Our airline, which was deemed worthy of an award in the ‘Bronze’ category by Ecovadis in 2021, was awarded in the ‘Silver’ category with its performance in 2022. Turkish Airlines has continued its presence in 2022 in the BIST Sustainability Index, which includes companies traded on Borsa Istanbul with high corporate sustainability performance levels and aims to increase its knowledge and practices on sustainability.
Beyond its presence in the Sustainability Index and the BIST Participation Sustainability Index, as the first and only airline to be included in the BIST Sustainability 25 Index, we ranked first among 47 airlines evaluated by Refinitiv for its sustainability performance.
Making a difference in the sector with its outstanding performance in the last 20 years, Turkish Airlines has more than doubled its sectoral growth rate and consolidated its leadership position with an average growth of over 12 percent. Flying to just 77 international destinations in 2003, Turkish Airlines has become an airline company that now reaches 291 international destinations in 129 countries today. This strong and successful growth is a natural result of Turkish Airlines’ knowing its own potential very well, defining trends perfectly in the world, honing its forecasting skills, making effective use of management mechanisms, being flexible in taking rapid actions and turning crises into opportunities. Turkish Airlines with its ever-expanding fleet and wide flight network, will continue to maintain its presence in the sector by creating value for its stakeholders and contributing to employment and the overall economy.