LONDON– Earlier this week, Turkish Cargo hosted its first online webinar, an online press conference with various industry-leading experts having their say on the current state of the business.
Turkish Cargo also detailed how it has dealt with the impacts and consequences of the ongoing coronavirus pandemic. Let’s dive in and see what outlook the webinar provided the industry and the future outlook of Turkish Airlines (TK) and Turkish Cargo.
The webinar was hosted by aviation vlogger Sam Chui. The opening speech highlighted the significant of the pandemic and how the industry has had to adapt very quickly in order to survive. It also mentioned the importance of air cargo to the global economy and in fighting the pandemic, with the transportation of critical medical supplies such as PPE and Vaccines.
Airlines have also been resorting to some very extreme measures to still afloat throughout the pandemic. In addition, carriers have been going into new territory to generate revenue. All subjects were covered in more detail throughout the webinar, as well as the increasing move to a more digitalized operation and the future of the air cargo industry in 10 to 15 years’ time.
First Speech – M.IIKER, Chairman of the Board of Directors and the Executive Committee – Turkish Airlines
M.IIKER in his speech highlighted some key points about both TK and the pandemic in general. The air cargo industry is indispensable during the pandemic and how airlines are resorting to extreme and different measures to survive. The same as what was said in the opening.
Additionally, he dived more into TK’s response to the pandemic. Impressively the airline has managed to retain all 60,000 employees who work for the airline. Very few airlines in the world have been able to retain all their staff since the pandemic began.
Turkish Airlines also operated over 1000 evacuation flights between March and June 2020, repatriating 140,000 Turkish Citizens from 59+ countries. He also added Turkish Airlines ended 2020, as the busiest network carrier in Europe and was amongst the Top 5 worldwide.
Since 2009, IST has grown by 363%. It was also confirmed Turkish Cargo will become its own subsidiary, rather than a sub-brand. He touched upon Turkish Cargo, but this was covered more in-depth in the next speech.
Second Speech – Turhan Ozen, CCO, Turkish Airlines
Turhan Ozen’s speech mainly focused on Turkish Cargo operations throughout 2020 and their future ambitions. The biggest piece of news is soon the cargo division will have a new dedicated facility, which is due to open soon. Their dedicated cargo terminal, Smart IST, with a space of 340,000 m2 and will be able to handle 4 million tons of air cargo per year.
This facility will be very advanced, with automated storage systems, 3d planning, and unnamed ground vehicles. Turkish cargo to set a new benchmark in the industry once the facility comes online. Turkish’s future ambitions are to carry 1 of 10 of, all air cargo in the future, doubling their cargo from the current 1 in 20 of all air cargo.
Since the pandemic, Turkish Cargo has also grown to the 6th largest air cargo company in the world, with one of the youngest aircraft fleets. During the pandemic, 50 Preighters joined 25 dedicated cargo freighters. Since the pandemic began, many airlines have converted passenger aircraft to temporary freighters, stripping out the seats to transport cargo.
These have been dubbed as Preighters, which have become vital in transporting crucial medical supplies and PPE around the world. Preighters have been especially useful for countries with scarce aircraft capacity. Turkish also managed to operate mainly cargo flights to around 130 destinations. At the start of 2020, Turkish cargo already operated dedicated cargo flights to 96 destinations.
Additionally, he touched on the state of the aviation industry during the pandemic. According to ICAO, in 2020 passenger numbers declined globally by 60%. 2020 has been a very challenging year for both the supply chain and the airlines. Compared to 2019, there was a 50% reduction in the seats offered by airlines. £370bn loss of revenue of passenger operating revenues for airlines in 2020.
Travel restrictions and lockdowns had a big impact and caused the passenger trends to head downwards significantly. The Industry has also been affected by severe supply demand drops and sudden increases since the pandemic began, grounded passenger planes added to this problem. Ocean and ground supply chains have also been disturbed, which has had a knock-on effect on air cargo. Despite this, the air cargo industry has grown on average 2.5% per year, in the last 10 years.
The speech closed with details of TK’s COVID-19 vaccine transportation plans and their improvements to their digital operations. These were expanded further later in the webinar.
In the end, due to the pandemic, there’s more demand than the capacity to cope, but in 10 to 15 years’ time this could flip. In the short to medium term it will stay the same, long term though, that’s a completely different ball game. Trade blocs changing will also impact supply and demand, the UK’s recent departure from the EU is a prime example of this.
Supply and demand will also be impacted by the battle for control of the market, with Amazon trying to take control of the air cargo sector from airlines, creating a monopoly. Whether this happens or not in 10 to 15 years’ time is very hard to predict. The increased need for sustainability and emerging sustainable practices were also touched upon throughout. Both panels concluded with each panel agreeing mostly on all issues discussed.
The Future and Digitalization of Air Cargo
Both panels interlinked with each other and covered a range of points. Firstly, the increased digitalisation of the industry. Many practices are moving to more digital platforms and unmanned loading is a growing trend within the industry. So are unmanned cargo drones for short shipments. Drones are years away, but they are closer to reality than people may realise.
2040 is closer than 2000 to put this into perspective. Digitalization is also reliant on correct data, which is something new technologies need to exist and enhance the industry. Data is key to the evolution of technology, without it, everything would stay the same.
The shift in types of air cargo was also highlighted, such as increased E-commerce cargo. Currently it’s 10% of all air cargo and is expected to double by 2030. The destination type which air cargo is transported to is changing, its’ moving from secondary destinations to primary destinations.
This is because people now want their cargo quicker than before. There is also the prospect of integration in the market, such as mergers of key players. The most recent large-scale merger was US Airways and American Airlines (AA) in 2013. Market integration is far from over.
Presented by Frank Van Gelder, there were few key points mentioned during his speech. Firstly, to get out of this pandemic sooner rather than later, joint operations and cooperate is needed from all sies of the industry. This is to transport vaccines much more quickly and effectively, allowing countries around the world to ramp up their vaccination programs.
As 2021 progresses more vaccines are getting approval for mass use. The only threat to the vaccine ramp-up is the emergence of new covid19 strains, which could make them less effective. Essentially the sooner everyone is vaccinated worldwide, the sooner the world will see the back of the pandemic and can start to recover in a post covid world.
He also revealed Turkish airlines currently transports 7.5% of all pharmaceuticals worldwide and has the capacity to transport 40 million doses of covid vaccines each day around the worldwide. This capacity is ready as Turkish have created a vaccine taskforce to deal with transporting all these does worldwide.
The speech ended with optimism about the end of the pandemic being in reach, as long as the industry moves quickly and shows it is worth to the world once again, after transporting vital medical supplies since the beginning of the health crisis.
Conclusion and Verdict
From the webinar, it can be concluded that the airline and air cargo sectors are rapidly changing, especially with a post-COVID world on the horizon. The increased push towards digitalization and the change in cargo types pose big challenges for the future.
The industry needs to adapt to survive. The supply and demand fluctuation also poses complications. The make or break of the final push of the pandemic will be how quickly vaccines can be transported and rolled out around the world. It is therefore very hard to predict when things will turn to normal and how quickly numbers pre covid will return.
It can also be concluded that TK has been one of the stronger airlines through the pandemic, which has not been as affected compared to others. For example, the airline has maintained all 60,000 employees when many other travel companies have made mass redundancies.
Turkish Airlines has tried to take full advantage of the situation by trying to imagine it as best as possible. So far, TK seems to be exceeding at it whilst many airlines struggle. The next few years will be unpredictable, to say the least. The pandemic and the consequences from it are far from over, but there is a gleam of hope for the industry.
Featured image: Turkish Cargo Airbus A330-200F, Photo Credit: Alberto Cucini/Airways