Turkish Airlines
2033 Strategy
November 2023
1.
OVERVIEW
2.
INVESTMENT
HIGHLIGHTS
3.
2033 STRATEGY
AND TARGETS
1. Snapshot
2. Group Structure
3. Historical Growth
4. Market Share Development
2
1
st
among network carriers in 9M’23
Turkish Airlines at a Glance
National Flag Carrier
of Türkiye
Flies to more
countries globally
than any other airline
“Most Sustainable
Flag Carrier Airline
in 2023”
World Finance
Istanbul Airport is
the largest hub
1
in
Europe
Surpassed 2019
capacity level by 25%
in October’23
Countries We Fly To: 128
Fleet Size: 435 aircraft
Leadership
Global ranking: 1
st
Global ranking: 1
st
Int’l Destinations: 291
Cargo Destinations: 363
Global ranking: 1
st
Number of Int’l Flights: 237k
Average Fleet Age: 9.2 Years
Global ranking: 9
th
Global ranking: 4
th
Note: All figures are as of 09.11.2023, unless otherwise stated. Fleet age ranking is among the top 10 largest carriers in terms of fleet size.
1
In terms of number of flights. Source: Eurocontrol.
2023
Workforce:
c. 83,000
Global ranking: 7
th
29 years
Avg. Experience:
Founded in 1933, Turkish Airlines has 20 Subsidiaries and JVs
4
Note: For JVs LTM 9M’23 total revenues, not just the portion attributable to Turkish Airlines.
Number of personnel figures are as of 30.09.2023.
Air Transportation MRO & Cabin Interior
Support Services
Vertical integration allows us to keep c.40% of the cash outflow within our organization.
Fuel Ground Handling Catering Other
Cons. Revenue (LTM 3Q’23): 20.6 bn $
Total Number of Personnel: 82,917
Open to Public: 50.88%
Türkiye Wealth Fund: 49.12%
1,722 mn $ 3,920
3,987 mn $ 638
478 mn $ 11,256
498 mn $ 17,725
425 mn $ 6,168
Fully consolidated 11,162
THY Financial
Technologies Inc.
70
98
202
329
350
370
394
435
2002 2007 2012 2017 2019 2021 2022 09.11.2023
0.5
0.8
1.6
3.0
3.1
3.7
5.4
6.3
2002 2007 2012 2017 2019 2021 2022 LTM 3Q'23
2.0
3.7
8.2
11.0
13.2
10.7
18.4
20.6
2002 2007 2012 2017 2019 2021 2022 LTM 3Q'23
Our sound business strategy proved itself many times – even in
the pandemic with 1.4 billion USD operational profit in 2021
followed by 2.7 billion USD in 2022.
Since 2002, Turkish Airlines multiplied in size with increasing
profitability.
Utilizing structural advantages with well executed growth strategy
led to Turkish Airlines’ success story.
By 2023, Turkish Airlines substantially outperformed its
pre-pandemic operational and financial performance.
Historical Growth
5
Fleet Development
Revenue Development
(bn USD)
EBITDAR Development
(bn USD)
2019
Level
2019
Level
2019
Level
Well executed business strategy led to a clear growth trend
Pandemic
Pandemic
4.8%
4.9%
3.4%
2.7%
2.7%
1.7%
1.9%
1.8%
1.3%
United American Emirates Turkish Airlines Qatar British Air France Lufthansa KLM
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 9M'23
24
42
96
173
188
75
128
202
176
0.6%
0.7%
1.4%
1.8%
1.8%
1.6%
2.4%
2.7%
2.4%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
-20,000,000
30,000,000
80,000,000
130,000,000
180,000,000
230,000,000
280,000,000
330,000,000
380,000,000
2002 2007 2012 2017 2019 2020 2021 2022 9M'23
ASK (bn.) Marketshare
Source: IATA.
6
1 2 4 7 8 9
10 11 12
Most market share gaining
airline between 2010-2022.
1
In terms of billion Available Seat Kilometers (ASK). Ranking and market shares in the graph are according to 2022 data.
Turkish Airlines’ market share quadrupled in the last two decades
Global Market Share Trends
1
(2010-9M’23)
Turkish Airlines Market Share Development
2
Turkish Airlines experienced
a robust recovery after the
initial shock of the pandemic
and significantly increased
its market share.
2
In terms of ASK (Available Seat Kilometers).
~3x
Market Share Development
1.
OVERVIEW
2.
INVESTMENT
HIGHLIGHTS
3.
2033 STRATEGY
AND TARGETS
1. Overview
2. Value Accretive Business Model
3. Flight Network and Connectivity
4. Geographical Advantage and Fleet
5. Diversified Revenue Base
6. Resilient Performance
7. Türkiye’s Tourism Potential
8. Competitive Cost Base
9. Strong Balance Sheet
10. Current Results
11. 2023 Expectations
7
Investment Highlights
8
World Leading Network and Connectivity
Geographical Advantage Combined with a Modern Fleet
Diversified Revenue Base
Competitive Cost Base
3
4
5
6
7
2
Türkiye’s Tourism Potential
Resilient Operating and Financial Performance
Value Accretive Business Model
1
Strong Balance Sheet
8
9.5%
9.1%
8.5%
8.9%
7.9%
8.8%
6.2%
-0.5%
7.9%
14.3%
14-15%
4.6%
4.9%
5.4%
7.9%
7.2%
6.8%
6.5%
5.8%
-19.3%
-8.0%
-1.7%
0.6%
0%
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Turkish Airlines ROIC Airline Industry ROIC
9
Turkish Airlines’ value creation is materially above the industry
Return on Invested Capital (ROIC)
Value Accretive Business Model
2012-22 Avg.: 1.8%
ROIC: (EBIT + Op. Lease Interest + Interest Income + Interest Income from Financial Investments - Current Tax Expense) / (Total Debt + Equity + Adj. for Op. Leases).
Source: Turkish Airlines, IATA for the airline industry.
4x
2012-22 Avg.: 7.3%
10
Turkish Airlines ranks #1 in the World by international destinations
1
As of 09.11.2023.
2
Meaningful O&D’s with detour factor <1.4.
3
Including codeshare agreements.
4
On a country basis. World Bank.
Circle sizes represent the number of weekly frequencies.
The boxes show the number of destinations in the corresponding region.
508 international destinations
(including offline
3
)
Europe
Americas
Far East
& Asia
Africa
Middle East
121
Currently no freq.
1-50 freq.
51-100 freq.
101-120 freq.
+121 freq.
23
62
38
47
Detroit, Denver, Orlando, Lima, Santiago,
Rio de Janeiro
Bergen, Glasgow, Iasi, Katowice, Nantes,
Newcastle, Timisoara, Bayburt, Yozgat
Abha, Salalah
Aswan, Brazzaville, Hargeisa, Lome,
Monrovia, Port Sudan, Windhoek
Sydney, Melbourne, Phnom Penh,
Atyrau, Osaka
Future Routes
Seattle, Newark, Dallas, Vancouver
Palermo, Bergamo, Krakow, Tivat,
Rize-Artvin
Kirkuk, Urmia
Juba, Luanda, Lusaka
Cebu, Bukhara, Turkistan, Fergana,
Urgench, Aktau, Turkmenbashi
21 New Routes in 2021-23
Our network reaches more than
90% of the world's population,
GDP and trade volume
4
Americas
Far East & Asia
Europe
Middle East
Africa
Turkish Airlines flies to 291
international destinations in
128 countries
1
Provides 52.2 thousand
connection options
2
Americas
Far East & Asia
Europe
Middle East
Africa
World Leading Network
11
Turkish Airlines offers the most diverse set of flight itineraries with minimum detour
1
Top Airlines by Connectivity
Highest Connectivity in the EMEA Region
1
Detour (Circuity): Increase in the flight distance compared to a non-stop flight.
2
Includes meaningful city pairs with maximum 40% detour (detour factor <1.4).
3
Analysis is based on c.14,000 city pairs with detour factor <1.4.
Source: OAG. As of 13 August 2023.
Number of International City Pairs
2
Europe to the World
1. Turkish Airlines ~17,800
2. Lufthansa ~7,200
3. Air France ~6,300
Middle East to the World
1. Turkish Airlines ~6,800
2. Qatar Airways ~3,500
3. Indigo ~1,600
Africa to the World
1. Turkish Airlines ~4,000
2. Ethiopian ~3,000
3. Air France ~2,200
Detour Advantage
3
to Africa
+12.5%
to M. East
+7.7%
to Far East
+11%
From Europe
Compared to direct flight, transit travel from Europe with
Turkish Airlines increases flight distance by just 12%.
Transit Connection Time
Average international transfer time
decreased by 30% for optimum connectivity.
03:39
03:12
02:50
02:43
02:31
2013
2015
2017
2019
2023
(hour)
-31%
12
Note: Narrow body aircraft range represents 5,000 km non-stop flight from Istanbul.
Source: World Bank (Population, GDP: 2021; Trade volume: 2019)
Leveraging Istanbul’s Ideal Geographical Location with a Modern Fleet
Type Total
-9 21
-9 14
-2/3 49
-300ER 33
117
35
63
-8/9 100
96
294
24
435
Average
Fleet Age
133
(31% of total)
# of New
Generation
Aircraft
Fleet
(9 November 2023)
9.2 years
Airbus
Boeing Split
54% / 46%
Ownership
Owned:
Fin. Lease:
Op. Lease:
26%
49%
20%
EUROPE
Population: 742 million
GDP: 23.7 trillion USD
Trade Vol.: 18.8 trillion USD
Europe
ASIA
Population: 2.1 billion
GDP: 7.4 trillion USD
Trade Vol.: 3.9 trillion USD
M. East & Asia
AFRICA
Population: 1 billion
GDP: 1.8 trillion USD
Trade Vol.: 850 billion USD
Africa
Within Narrow Body Range
99 countries / % of the World
3.8 billion people / ~50%
33 trillion USD GDP / 35%
24 tn USD Trade Volume / 50%
Within Narrow Body Range
29%
24%
13%
12%
13%
9%
85.1%
12.0%
Diversified revenue base increases our ability to adapt to different
macro economic conditions.
Regional revenue distribution provides a natural hedge against FX
volatility as well as geopolitical risks.
60% of our revenues are in hard currencies
1
.
Balanced Exposure to Specific Business Segments and Regions
13
Segment
2017 9M’23
Region
2017
Technic
1.6%
Technic
2.4%
Other 0.9%
Other 1.3%
More than 90% of the revenues are generated outside of Türkiye
84,4%
12,5%
Passenger
Cargo
Technic
Other
29%
24%
13%
12%
13%
9%
Europe
Far East
Domestic
Middle East
Americas
Africa
9M’23
Currency Exposure
2
(9M’23)
USD (bn USD) EUR (bn USD) TRY (bn USD)
1
Currencies that are highly correlated (85%) with USD and EUR comprise 90% of our total revenues.
2
85% correlation with USD and EUR considered as USD and EUR correlated respectively.
Revenues
Expenses
Revenues
Expenses
Revenues
Expenses
Net
Long
Net
Long
Net
Short
USD
USD
Cor.
1
EUR
EUR
Cor.
1
6.1
2.5
+1.0
-7.6
Revenue Net Position
4.3
1.2
+4.0
-1.5
Revenue Net Position
1.4
-2.4
-3.8
Revenue Net Position
32%
22%
8%
10%
21%
7%
85.3%
11.4%
1.6
3.0
3.3
3.1
1.9
3.7
5.4
6.3
16.6%
27.5%
26.0%
23.5%
27.7%
35.0%
29.2%
30.4%
18.6%
18.3%
16.4%
17.1%
-35.0%
4.2%
12.5%
15.3%
2016 2017 2018 2019 2020 2021 2022 LTM
3Q'23
EBITDAR (bn. USD) EBITDAR Margin Peers' Avg. EBITDAR Margin
170
173
182
188
75
128
202
227
74.6%
79.1%
81.9%
81.6%
71.0%
67.9%
80.6%
83.2%
25.0%
35.0%
45.0%
55.0%
65.0%
75.0%
85.0%
0
50
100
150
200
250
300
2016 2017 2018 2019 2020 2021 2022 LTM
3Q'23
Capacity (bn ASK ) Load Factor (%)
Peers’ Avg.
Margin
8.4%
Turkish Avg.
Margin
27.0%
Durable Operational and Financial Performance
3
Turkish Airlines’ operating performance is tested many times against a
number of exceptional events in recent years:
• Strict flight restrictions and drop in global demand due to the pandemic
• 2018 currency crisis and volatility of the Turkish Lira exchange rate
• Numerous terrorist attacks in late 2015 and 2016 across Europe
Resilience of our operating performance reflects the following factors:
• Well analyzed international network expansion plan
• Successful capacity management and lean operational structure
• Strategic & efficient positioning of Istanbul as a regional hub
• Favorable cost base
14
2
1
ASK: Available Seat Kilometers.
2
Peers include: Delta, United, American, Lufthansa Group, AF-KLM, IAG.
1
Resilient performance despite many turbulences
Traffic Performance
(Passenger Capacity and Load Factor)
EBITDAR Development
Full recovery
level
91%
22%
36%
23%
13%
25%
26%
1Q'22 2Q'22 3Q'22 4Q'22 1Q'23 2Q'23 3Q'23
2019 Direct int'l PAX in % Exceeding 2019 direct int'l PAX
Türkiye’s Tourism Potential is an Important Growth Driver
15
1
In terms of tourist arrivals.
Source: UN World Tourism Organization.
Tourist arrivals to Türkiye in 9M’23
exceeded 2019 level by 9%.
+4
compared
to 2017
Top Tourism Destinations in the World by Country
1
Country
2022 Visitors
(million)
Change
(vs.2019)
1
France
79.4 -13%
2
Spain
71.7 -14%
3
United States
50.9 -36%
4
Turkey
50.5 -1%
5
Italy
49.8 -23%
6
Mexico
38.3 -15%
7
United Kingdom
30.7 -22%
8
Germany
28.5 -28%
9
Greece
27.8 -11%
10
Austria
26.2 -18%
As one of the most visited destinations in the World, Türkiye attracted more tourists after the pandemic
Türkiye 2028 Tourism Target:
82 million visitors and 100 billion USD revenue
Direct International Passengers to Türkiye carried by Turkish Airlines
(Change vs. 2019)
International Tourism Recovery by Country
1
(Change vs. 2019)
Full recovery
level
Mexico; -5%
Türkiye; 6%
Spain; 3%
World; -10%
France; -25%
Italy; -11%
Competitive Cost Base
16
1
Ex-fuel CASK: Total Costs Excluding Fuel / Available Seat Kilometers (ASK).
Source: Company reports.
During the pandemic, we continued to invest in our fleet
and workforce while preserving our unit cost advantage.
Doing so, allowed us to capitalize on surging passenger
demand and capture significant market share profitably.
We have one of the lowest ex-fuel unit costs among our peers
9M’23 Network Airlines
Average 7.8 USc
(9M’23 vs. 9M’19)
-35%
Ex-Fuel CASK
1
(USc)
Passenger Capacity (ASK
1
)
+25%
-13% -5% -7% -3% -3% -18%
Number of Aircraft
+25%
-3% 4% -1% -3% 2% -6%
Number of Personnel
+41%
-16% 4% -10% 1% -5% -15%
9.9
9.6
8.4
7.2
6.1
5.2
5.0
9.3
7.1
7.2
7.0
5.4
4.7
4.7
Lufthansa G.DeltaAmericanAF-KLMIAGSingaporeTurkish Airlines
9M'23 9M'19
Strong Balance Sheet
17
We have sound liquidity and comfortable leverage levels
1
Net Debt: Total Debt - (Cash & Cash eq.+ Financial Investments + Short-term PDP Receivables + Restricted Cash)
Liquidity Development
Net Debt & Leverage
Net Debt to EBITDA
Net Debt
1
(bn USD)
Sound Liquidity and
Comfortable Leverage
Deleveraging driven by
operational cash generation.
Net debt decreased by
7.8 billion USD from its
peak at the end of 2020.
LTM Net Debt to EBITDA
decreased to 1.1x
to its lowest level.
We have ~6.9 bn USD
liquidity as of September 30.
Cash and Cash Eqv. & Financial Investments (mn USD)
31 Dec. 2022
30 Sep. 2023
4,866
Cash Flow from
Operating Activities
+4,061
6,864
Net Cash Flow from
Investing Activities
Cash Flow from
Financing Activities
-95
-1,968
14.0
8.5
6.2
31 Dec. 2020 31 Dec. 2022 30 Sep. 2023
7.8 bn USD
decrease
3.0x
3.9x
9.5x
3.4x
1.7x
1.1x
2018 2019 2020 2021 2022 LTM 3Q'23 2023
2,214
1,177
2,502
3,982
4,864
22.3%
23.7%
33.9%
29.2%
30.7%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
9M'19 9M'20 9M'21 9M'22 9M'23
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
EBITDAR (mn USD) EBITDAR Margin
8,459
2,916
4,432
10,448
13,586
1,217
1,881
2,734
2,921
1,809
9,948
4,962
7,377
13,654
15,823
9M'19 9M'20 9M'21 9M'22 9M'23
Passenger Cargo Other
140.6
81.3
116.7
150.9
176.0
9M'19 9M'20 9M'21 9M'22 9M'23
18
Current Results (3Q’23)
Substantial outperformance of the pre-pandemic levels
1
ASK: Available Seat Kilometers.
Passenger Capacity
(billion ASK
1
)
Net Profit
(million USD)
Total Revenues
(million USD)
EBITDAR
25%
59%
Ninth consecutive
quarter with
Net Profit
27%
Exceeded 3Q’22
Net Profit
735
225
161
576
1,515
473
233
635
1,920
3Q'21 4Q'21 1Q'22 2Q'22 3Q'22 4Q'22 1Q'23 2Q'23 3Q'23
2023 Expectations
19
CapEx:
Around 5-5.5 bn USD Gross CapEx in 2023
including aircraft, engines and other investments
Costs:
High-single digit pp. increase in Ex-fuel CASK
compared to 2022 (Total CASK to decline)
Passenger Capacity:
17-19% higher than 2022
Fleet:
435 as of November 9
Year-end fleet expectation 441
New Int’l Routes in 2023:
Started: Planned:
Lusaka Detroit
Krakow Osaka
Palermo
Network:
344
destinations
in 129
countries
1.
OVERVIEW
2.
INVESTMENT
HIGHLIGHTS
3.
2033 STRATEGY
AND TARGETS
1. Industry Overview
2. Strategic Focus
3. Execution and Growth Levers
20
RPK
1
(tn)
1
RPK: Revenue Passenger Kilometers.
2
In terms of RPK. Historical market shares from IATA. 2033 internal analysis.
Source: IATA, Airbus GMF 2022-2041.
Aviation sector always bounced back after global crises and continued to grow
-2
4
9
14
19
1989 2004 2019 2023 2033
WORLD
WORLD
WORLD
TK
TK
TK
Gulf Crisis
Asian
Financial Crisis
9/11
SARS
Financial Crisis
3.8%
2.7%
Covid-19
CAGR 4.0%
CAGR 9.1%
CAGR 5.7%
CAGR 15.1%
1989 - 2004
2004 - 2019
Our
Market
Share
2
0.5%
Global Passenger Traffic Growth
21
CAGR 4.8%
2023 - 2033
WORLD
2022
2033
TK
CAGR 7.6%
2002
22
Industry Overview – Türkiye will be at the center of the aviation growth
1.6x
1.1x
1.7x
1.3x
1.4x
1.6x
1.5x
1.5x
1.6x
1.4x
0 100 200 300 400 500 600 700 800 900 1000
2019
2019-2032
(RPK
1
bn)
1
RPK: Revenue Passenger Kilometers
Source: Boeing Commercial Market Outlook 2023-2042.
WORLD
Air Traffic over
Türkiye (vs. 2019)
2032 2042
1.6x 2.3x
1,7 x
1,1 x
1,7 x
1,3 x
1,5 x
1,6 x
1,6 x
1,5 x
1,5 x
1,3 x
0 100 200 300 400 500 600 700 800 900 1000
Europe--South Asia
Europe--Northeast Asia
Middle East--North America
Europe--Southeast Asia
Central America--Europe
Europe--South America
China--Europe
Africa--Europe
Europe--Middle East
Europe--North America
2019
2031-2019
Regional Passenger Flow Development
Industry Overview – Global Mega City’s 2033
Source: Airbus, GMF 2019
By 2033 more than 90% of the global mega cities will be in Turkish Airlines’ network
Current Destinations Future Destinations
23
1. Industry Overview
2. Strategic Focus
i. Summary of 2033 Targets
ii. Building the Ecosystem
iii. Future of Our Investment Case
iv. Fleet Development
v. Capacity Growth
vi. Revenue Development
3. Execution and Growth Levers
1.
OVERVIEW
2.
INVESTMENT
HIGHLIGHTS
3.
2033 STRATEGY
AND TARGETS
24
Number of Aircraft
12.5 x
2003 2023 2033
65
441
800+
Passengers
(mn)
16 x
2003 2023 2033
10.4
84+
170+
Passenger Capacity
(bn ASK)
20 x
2003 2023 2033
24
235+
480+
Cargo Carried
(mn ton)
39 x
2003 2023 2033
0.1
1.6+
3.9
Revenue
(bn USD)
29 x
2003 2023 2033
1.8
20+
50+
EBITDAR Margin
(%)
2003 2023 2033
28% 26-28%
20-25%
ROIC
(Return on Invested Capital)
2013 2023 2033
8.9% 14-15%
8-10%
Leverage
(Net Debt/EBITDA)
2013 2023 2033
3.0x 1-1.5x
2-2.5x
25
26
Our Strategic Focus
Sustainable Growth & Profitability
Efficiency & Business Excellence
Digitalization
Sustainability
Pillars of our Strategy Our Stakeholders
Building Value Accretive Ecosystem for Our Stakeholders
Continuous focus on value creation
Improving efficiency while elevating passenger experience
Capitalizing on digital transformation
Implementing into all layers of our business processes
Shareholders
CustomersCreditors
Employees Suppliers
Society
27
World Leading Flight Network
Geographical Advantage combined
with a Modern Fleet
Well Positioned Main Brands and
Supporting Subsidiaries
Competitive Cost Base and Lean
Organizational Structure
Türkiye’s Tourism Potential & Strong Aviation
Infrastructure
2.
1.
1.
Top
3
Above Industry Value Creation is our #1 Goal
Leveraging our Strengths
Will lead us to the Top in World Rankings
Paving the way for further value extraction embedded in our business model
Top
3
Most Prestigious
Airline
Air Cargo
Carrier
5-Star
Airline
Int’l Pax
Capacity
Digital
Experience
# of Int’l
Destinations
Strengthening Our Investment Case
✓
✓
28
▪ Increased efficiency via higher
proportion of new generation aircraft
▪ High density aircraft (Upgauging)
▪ Introducing Regional Jets
▪ Cabin transformation
▪ Passenger aircraft to Freighter
conversion
▪ Far East new flight bank
▪ Ultra Long Range flights
▪ New routes in Americas and Asia
▪ Transforming our route network in
Africa from multi-leg to direct flights
▪ Expanding our reach with JVs and
codeshare agreements
▪ AJet incorporation
▪ Focus on high growth leisure market
▪ Decreasing units costs with new
operating structure
▪ Higher ancillary revenue through
merchandising and unbundling
▪ PSS
1
Transformation
▪ Dynamic Pricing & Bundling
▪ Seamless omnichannel experience
▪ Investing in new financial technologies
(e-wallet, PSP
2
infrastructure)
▪ Data driven process management
▪ Transforming passenger experience
through standardizing cabin design,
services and opening new lounges
▪ CDP
3
based segmentation and
customized campaigns
▪ Customer centric signature
experiences
▪ Network and fleet expansion
▪ Doubling SmartIST capacity
▪ Introducing Logistics Ecosystem
▪ Focus on Special Cargo segment
▪ Capitalizing on the express cargo
growth via Door-to-Door delivery
platform (WIDECT)
Fleet Growth
Enhancing Network
Depth & Breadth
Increased Penetration in Low
Cost Market
Digitalization
Elevating Customer
Experience
Extracting Turkish Cargo
Potential
2033
Holistic view on each of the growth and profitability drivers
Roadmap to Our Centenary in 2033
1
PSS: Passenger Service Systems
2
PSP: Payment Service Provider
3
CDP: Customer Data Platform
29
Fleet Growth by 2033 Current and New Orders
Simple fleet structure with the most common aircraft types will provide an efficient growth platform
200
800+
+7%
98%
Total Fleet
AJet Fleet
New Gen.
Aircraft Ratio
Upgauging
Planned
in
Strategy
Major Aircraft Types in Fleet
1
(2033)
82
150-170
400-420
2023 - 2028 2029 - 2033
Existing Firm Orders New Orders and Op. Leases
(seat per aircraft)
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
Cargo Fleet Current New Gen. Fleet Existing Old Gen. Fleet Planned Acquisition
~500
~600
~700
2033
Our modern fleet to be complemented with the new entries
441
~800
230-250
Others
A350 Family
B777/787 Family
B737 Family
A320 Family
1
Indicative representation. May change depending on the negotiations with OEMs.
~300
~150
~120
~30
~200
Airbus
Boeing Split
~50% / ~50%
2023 ASK 2028 ASK 2033 ASK
30
CAGR: 7-10%
CAGR: 4-7%
% of Total Capacity Growth
Higher Frequency and Gauge
New Routes
Targeted Passenger Capacity Growth
Growth Composition
23-28 28-33
93% 90%
7% 10%
Growth will mainly come from frequency increases supported by addition of new destinations
Americas
Future Route Additions
Europe
Middle East
Africa
Far East & Asia
+9
+22
+2
+8
+13
235+
360+
480+
5-10%
15-20%
1
ASK: Available Seat Kilometers
3-7%
5-10%
AJet
TK
AJet
TK
2023-33 ASK
1
CAGR: ~7%
Passenger capacity growth will be around 7% p.a. for the next decade
+54
Revenue Development
We are targeting to more than double our revenues by 2033
31
20+
bn USD
36+
bn USD
50+
bn USD
2023 Revenue TK AJet Cargo 2028 Revenue TK AJet Cargo 2033 Revenue
2023-33 CAGR: ~10%
CAGR: 12-14%
6-10%
20-30%
15-20%
5-9%
5-10%
5-10%
CAGR: 6-9%
3.
2033 STRATEGY
AND TARGETS
1.
OVERVIEW
2.
INVESTMENT
HIGHLIGHTS
1. Industry Overview
2. Strategic Focus
3. Execution and Growth Levers
i. Turkish Airlines – Main Brand
ii. AJet
iii. Turkish Cargo
iv. Turkish Technic
v. Digitalization
vi. Sustainability
32
SUSTAINING OUR
MARKET
LEADERSHIP
PRESTIGIOUS
BRAND
AWARDS BUILDING ON OUR
ACHIEVEMENTS
1.
# of Int’l
Destinations
2023
26
Lounges
2027
83%
Customer
Satisfaction
Best
Airline in
Europe
Skytrax
Top 3
in Digital
Experience
2026
Top 3
Most
Recognized
Airlines
75%
Global Brand
Awareness
2028
2028
World’s
Best
Airline
Skytrax
3.8%
Market
Share in
RPK
2033
Most
Sustainable
Flag Carrier
Airline
2028
2023
2023
2023
2023
2023
Turkish Airlines – Leveraging our main brand to become the Most Prestigious Airline in the World by 2033
33
1
RPK: Revenue Passenger Kilometers
34
Turkish Airlines – Strengthening Our Network
Far East 2. Bank
• Adding a mid-day flight bank in Far East destinations
leads to higher utilization and enhanced connectivity
• Flights to Australia, Chile, Peru and Uruguay
Ultra Long Haul Routes
New Routes & Frequency Increases
• Minimum 2 daily flight availability on North American routes
• Adding 9 new destinations in Americas and 13 in Far East
Africa
• Increasing allocation of wide-body aircraft
• Higher rate of direct flights as the network matures
NARROW BODY
High Density Configuration
• Increasing frequency on routes in the short-haul range
• Improving feasibility in thin markets by lowering unit costs and
break-even load factor
• Adding new secondary cities to our network
• High-density aircraft conversions to increase efficiency
Regional Jets
• Conversion of multi-leg flights to direct
Africa
• Minimum 2 daily flight availability on our routes to Europe
Europe
WIDE BODY
35
Turkish Airlines – Taking Our Offerings to New Heights: Strategic Focus Areas
Augmenting
Our
Offerings
CUSTOMER
EXPERIENCE
BRAND
STRENGTH
DIGITAL
TRANSFORMATION
LOYALTY
PROGRAMS
Brand Awareness
Destination focused campaigns
Major events sponsorships
Brand Perception – Prestige
NPS (Net Promoter Score) > 42 by 2028
Experience Design & Improvement
(Product/Service Management)
Standardizing services
Signature experiences
Customer-Centric Transformation
Flow Customer Experience
Stopover Program, Touristanbul
Customer’s Voice Platform
KPI Tracking (Operational & Customer)
Customer Satisfaction > 85% by 2028
Miles&Smiles and
Corporate Club
Enhanced Interaction
1.5x Membership growth
Omnichannel Sales & Marketing
Diversification of sales channels
Increased focus to direct engagement
Seamless transition across platforms
Simplicity in Corporate Services
One-stop booking management
CRM to CDP (Customer Data Platform)
Segmentation based on behavior and value
Offer customization options and real time campaigns
Increasing customer lifetime value (CLV)
ANCILLARY
REVENUE
BUSINESS
CLASS
Opening new global
lounges
New business class
seats and amenities
Increasing its revenue
share by 30%
Brand Equity
Sustained Investment
Brand Ambassadorships
Expanding Offers
Upselling and cross selling
3rd party collaborations for
additional non-air services
~1.2 bn USD
(5 years)
~600 mn USD
(5 years)
~200 mn USD
(Annual)
3.
2033 STRATEGY
AND TARGETS
1. Strategic Focus
2. Strategy Execution and Growth Levers
i. Industry Overview
ii. Turkish Airlines – Main Brand
iii. AJet
iv. Turkish Cargo
v. Turkish Technic
vi. Digitalization
vii. Sustainability
1.
OVERVIEW
2.
INVESTMENT
HIGHLIGHTS
36
28.3
35.4
15.9
26.2
46.7
2018 2019 2020 2021 2022
37
52%
Türkiye-Europe
2022 LCC Market
Share
35%
Türkiye-Middle East
2022 LCC Market
Share
Low Cost Carriers (LCC) continue to gain market share both in Türkiye and Europe
AJet – Market Overview
Türkiye LCC Market Share
1
(Int’l)
Türkiye Outbound LCC Capacity
Europe LCC Market Share
1
1
In terms of available seats
(million available seats)
Breakdown of 2022
Available Seat Capacity
SunExpress
18%
AJET
17%
Corendon
11%
Jet2 4%
EasyJet 3%
Other 6%
Pegasus
41%
27%
30%
34%
36%
40%
2018 2019 2020 2021 2022
26%
31%
34%
40%
2013 2016 2019 2022
Source: OAG
38
AJet – Increased Focus on International Operations
101 int’l
78 domestic
routes
90
16
25% int’l market share
46% dom. market share
Capacity Growth (bn ASK
1
) Key Facts and Figures
Number of Passengers (mn)
Revenue Growth (bn USD)
aircraft in fleet
mn passengers
in 2022
As of 10.11.2023
Int’l
Share
9%
32% 65%
9%
13%
52%
11.2
9.7
5.4
8.1
7.7
1.1
1.5
2.5
8.6
14.0
2018 2019 2020 2021 2022
Domestic International
15.0
13.3
6.1
9.8
10.0
0.9
1.3
1.0
3.6
6.1
2018 2019 2020 2021 2022
Domestic International
0.5
0.5
0.3
0.7
1.2
2018 2019 2020 2021 2022
1
ASK: Available Seat Kilometers
Int’l
Share
9%
14% 38%
6%
9%
27%
in Sabiha Gökçen Airport
Ancillaries
PSS and Digital
Transformation
Fleet
Transformation
Expanding
Network
Customer
Oriented Service
▪ Focusing on loyalty
and customized
product offering
▪ Generating ancillary
revenue by
merchandising and
unbundling
▪ Sale of onboard
catering and Wi-Fi.
▪ Higher proportion of
online ticket sales
▪ Seamless customer
experience on web
and mobile
▪ Decreasing unit costs
with more efficient
and high density new
generation aircraft
entries
Incorporation
▪ Incorporation
completed as of
August 2023
▪ New brand
positioning to be
announced
▪ Independently
operational in 2024
▪ Increasing depth and
breadth of the
network
▪ Penetration to high
growth leisure and
ethnic travel market
AJet – Building a Growth Platform
39
▪ Higher ancillary contribution
▪ Increasing utilization
▪ Simplified cost structure
International Expansion
40
Fleet Renewal
20242019 2022
13%
Int’l ASK
Share
35% - 65%
Dom.& Int’l
ASK ratio
New Brand Identity
and Positioning
Incorporation 25% - 75%
Dom.& Int’l
ASK ratio
2023
Fully operational
under the new
structure
2020
AJet – Timeline of the New Strategy
RASK up by 20%, Ex-fuel CASK down by 20%
2028
Digital Transformation
1
ASK: Available Seat Kilometers
Fleet
41
AJet – Fleet Renewal and Efficiency
▪ Fleet renewal to be completed by 2029.
▪ Number of aircraft will reach to 200 in 2033, up from 94 in 2023.
New gen.
ratio
100%
98%
37%
9-10%
10-15%
5%
ex-fuel CASK
saving
10-15%
extra ancillary
revenue
potential
New Generation
Aircraft
New generation high density aircraft will allow AJet to reduce
its unit cost by c.20% and increase unit revenue by c.20%.
Young
Fleet
High Density
Aircraft
lower fuel burn
CASK
1
advantage
26%
–
–
37
31
64
94
150
200
2017
2019
2022
2023
2028
2033
1
CASK: Total Costs / Available Seat Kilometers (ASK).
14.3
23.3
34.7
44.2
62.4
2023 2024 2026 2028 2033
Increase market share in SAW from
33% to XX in 2033.
42
Increase market share in SAW from
33% to XX in 2033.
Increase market share in SAW from
33% to XX in 2033.
Increase market share in SAW from
33% to XX in 2033.
Increase market share in SAW from
33% to XX in 2033.
SAW
ESB
AYT
44
Countries
80
Int’l Destinations
in 2033
International and domestic production balance will provide an
additional 7% advantage on ex-fuel CASK.
AJet – Capacity Growth and Network Expansion
Capacity Growth (bn ASK
1
) Network Expansion
Current Destinations
2033 Planned Destinations
Domestic
Int’l
1
ASK: Available Seat Kilometers.
11.5
12.6
14.9
16.3
21.0
2023 2024 2026 2028 2033
14.2
23.3
34.7
44.2
62.4
2023 2024 2026 2028 2033
4.4x
1.8x
5-10%
17-22%
30-35%
2022 2024 2028
International
43
1
1 – 2%
additional annual
revenue
2
Domestic
Total
AJet – Digital Transformation and Ancillary Revenue Potential
Targeting to enhance margins through increasing share of ancillary revenue and direct distribution
3
New Passenger Service System (PSS) will yield to
▪ Better inventory management,
▪ Optimized fare class management based on city pairs.
Share of Ancillary Revenue will be increased through
merchandising and product unbundling.
(Ancillary Revenue % of Total)
The adaption of NDC
1
compatible direct distribution channels will decrease GDS
2
, commission and incentive expenses.
1
NDC: IATA’s New Distribution Capability.
2
GDS: Global Distribution Systems
The ratio of tickets sold through online channels
~30%
~50%
Pre-PSS Post-PSS
~50%
>60%
Pre-PSS Post-PSS
~40%
~60%
Pre-PSS Post-PSS
1. Industry Overview
2. Strategic Focus
3. Execution and Growth Levers
i. Turkish Airlines – Main Brand
ii. AJet
iii. Turkish Cargo
iv. Turkish Technic
v. Digitalization
vi. Sustainability
44
1.
OVERVIEW
2.
INVESTMENT
HIGHLIGHTS
3.
2033 STRATEGY
AND TARGETS
Cargo Market Overview
45
Air Cargo Traffic Over The Next Two Decades (FTK)
1
-
100
200
300
400
500
600
700
2009 2014 2019 2024 2029 2034 2039
FTK (bn)
Yüksek Temel Düşük
TK
World
CAGR 4.5%
CAGR 23.5%
TK
World
CAGR 4.1%
CAGR 6.6%
2009 - 2021
2021 - 2033
Covid-19
1.7%
5.2%
Our
Market
Share
2
7.5-8%
2014
2022
2033
In terms of value, air cargo accounts for 35% of
the global carried cargo, even though less than
1% of the total volume.
As share of e-commerce in global trade
increases, the express cargo segment grows
faster than the general cargo.
Express Cargo’s traffic share rose to 21% in 2021
from 13% in 2008. Its growth pace is expected to
be 80% higher than that of the general cargo.
1
FTK: Freight Ton Kilometer
2
In terms of FTK. Historical market shares from IATA. 2033 internal analysis.
Source: Boeing World Air Cargo Forecast 2022. Airbus GMF 2023.
2.2
2.6
2.7
3.4
4.5
5.6
7.0
7.1
9.1
8.2
5.1
1.5%
1.7%
1.7%
2.0%
2.5%
3.0%
3.7%
4.7%
5.2% 5.2%
5.1%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
-0.5
1.5
3.5
5.5
7.5
9.5
11.5
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 9M'23
Turkish Airlines FTK (bn.) Turkish Airlines Cargo Market Share (FTK)
0.9
1.0
0.9
1.0
1.3
1.6
1.7
2.7
4.0
3.7
1.8
8.9%
8.8%
8.9%
10.2%
12.0%
12.8% 12.8%
40.4%
37.6%
20.3%
11.4%
-130.0%
-110.0%
-90.0%
-70.0%
-50.0%
-30.0%
-10.0%
10.0%
30.0%
-0.7
0.3
1.3
2.3
3.3
4.3
5.3
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 9M'23
Turkish Airlines Cargo Revenue (bn. USD) Turkish Airlines Cargo Revenue Share
Market Share Development (FTK)
1
46
1
FTK: Freight ton kilometer.
Source: IATA.
Overview
Opportunities
• Türkiye’s ideal location as a global hub and
increasing trade volume
• Penetration into fast growing express cargo
segment
• Growth opportunities in Asia through JVs and
commercial partnerships
• Integrated solutions for intermodal transportation
Turkish Cargo Revenue Development
Global Ranking
22.
14.
8.
5.
Flies to 132 countries / 363 destinations with 24 freighters
and 409 passenger aircraft.
Ranks 3
rd
globally in terms of FTK
1
as of August 2023.
Operates in SmartIST, one of the largest air cargo
terminals in the world.
2023
5.
Counterbalancing the pandemic impact
Turkish Cargo Overview
47
Turkish Cargo – Our Strategy
Vision
Strategic
Leverage
Strategic
Pillars
Leadership in People and Culture
Leadership in Special Cargo and Premium Products
Leadership in Technology and Operational Excellence
Leadership in Flight Network and Connectivity
Leveraging our wide flight network and cost advantage with
best-in-class customer satisfaction
To be one of the Top 3 cargo airline by
2028
48
Turkish Cargo – Our Strategy
565
663
720
894
1,132
1,412
1,543
1,487
1,880
1,679
1,600+
3,100
3,900
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
… …
2028 2033
Cargo Carried (thousand tons)
Increasing our reach from 104 freighter
destinations to 150 by 2033.
Expanding our fleet with new generation
aircraft entries and P2F
1
conversions.
Doubling SmartIST capacity to 4 million tons.
Introducing a logistics ecosystem through
partnerships and investments in e-commerce
and technology.
Growing the proportion of special cargo in
our overall cargo revenue from 36% in 2022
to 55% by 2033.
9.5+ bn USD Cargo Revenue in 2033
2.3x
2015-22 CAGR
Turkish Cargo 12.9%
(World 2.1%)
1
P2F: Passenger to Freighter
3,000+
49
Turkish Cargo – Strategic Focus
Targets
Gaining Market Share
1
Logistics Ecosystem
New Products and
Operational Excellence
2 3
Targeting to sustain our above industry
growth trend and profitably increase our
market share
Creating a Logistics Ecosystem by
entering into new business models,
cooperations and JVs on the back of
SmartIST’s infrastructure
Developing new products to increase
our penetration in the special cargo
segment
Door-to-Door (D2D) Market Entry:
▪ Aiming to expand our operations
into express cargo segment
▪ Increasing profit contribution by
offering end-to-end e-commerce
delivery service
▪ Initially targeting Turkish e-
exports, then the transit market
between Asia, Europe and US.
New Hub and JVs in Asia:
▪ By expanding our presence in
Asia, we are targeting to gain
additional market share in the
fastest growing region
Up to 3 bn USD annual revenue
contribution by 2033
Focus in Special Cargo Segment
▪ Offering value-added services to
enhance revenue mix
▪ Introducing additional products to
complement existing services
such as TK Smart, TK Premium
and TK Urgent
2022 2028 2033
36%
45-
50%
50-
55%
Revenue Share of Special
Cargo Segment
1
1
% in total cargo revenues
Projects
Airline Coop.
New
Products
Investments
IT Projects
Shippers Origin Export
Customs
Air
Carrier
Import
Customs
Dest. Recipient
Express
General Cargo
1.3
3.7
5.0
9.6
2.6%
5.2%
7%-7.5%
7.5%-8%
2017 2022 2028 2033
Revenue (bn. USD) Market Share (FTK)
50
Turkish Cargo – Extending Our Reach with Network and Fleet Expansion
Cargo Fleet Size Projection
40-60% ratio is determined
for optimum efficiency
33%
43%
44%
43%
41%
39%
67%
57%
56%
57%
59%
61%
2017 2019 2022 2023 2028 2033
Freighter Belly
Cargo Capacity Allocation
74
88
100
104
120
150
2017 2019 2022 2023 2028 2033
Number of Destinations (Freighter Only)
16
22
23
25
20
21
24
37
44
2017
2018
2019
2020
2021
2022
2023
2028
2033
2x
51
SmartIST is the largest Cargo Terminal in Europe
Istanbul
(IST)
2 M
Tons
1.2 M
Tons
2.2 M
Tons
2.9 M
Tons
1.7 M
Tons
2.6 M
Tons
2.2 M
Tons
London
(LHR)
2.1 M
Tons
1.9 M
Tons
6 M Tons
4 M Tons
2018
2022
In 5 years
(handled
cargo)
(capacity)
5 M Tons
Frankfurt
(FRA)
Paris
(CDG)
Doha
(DOH)
Dubai
(DXB&DWC)
Singapore
(SIN)
Hong Kong
(HKG)
Shanghai
(PVG)
52
Turkish Cargo – Increasing Efficiency Through Digitalization
Artificial Intelligence/Machine
Learning & Robotics
Digital Transformation
Holistic Software Integration
Internet of Things (IoT)
& Full Track and Trace
Data Driven Decision Science
Live
Will be completed soon
Will start soon
Digital Forwarders
Augmented Reality in
SmartIST Operations
ULD Utilization
Work Order
Optimization 2.0
Digital Marketplaces
Digital Payment Channels
Digital GHAs
WIDECT (Wide Direct Connect)
Digital Sustainability Solutions
Automated Warehouse
Systems and Robotics
UAV
UGV
Robotic Wings - RPA
Cargy Chatbot
CargoTrack
Smartdock
Network Modelling &
Optimization
ACRM (Air Cargo Revenue
Management)
1. Industry Overview
2. Strategic Focus
3. Execution and Growth Levers
i. Turkish Airlines – Main Brand
ii. AJet
iii. Turkish Cargo
iv. Turkish Technic
v. Digitalization
vi. Sustainability
1.
OVERVIEW
2.
INVESTMENT
HIGHLIGHTS
3.
2033 STRATEGY
AND TARGETS
53
54
Turkish Technic – MRO Powerhouse
Revenue and Market Share Development
Services and Capabilities
1. Aircraft Maintenance
▪ MRO support for narrow body and
wide body aircraft along with
business jets in 14 types
2. Line Maintenance
▪ Total of 60 stations around the
globe (26 in Türkiye)
3. Component Services and Pool
▪ Repair capabilities for 16k+ types
▪ 31 workshops and 24/7 AOG
support
▪ Offers pool subscriptions to 3rd
parties
▪ 700 mn USD inventory
▪ 96% service level for A320, B737,
A330 and B777
▪ 85%+ customer satisfaction
4. MRO for Engines (TEC) & APU
5. Cabin Conversion and IFE
6. R&D and Training Support
Offers services to 364 airlines from 93
countries.
Main facilities
located in 4
airports in Türkiye
Largest MRO
service provider in
the nearby region
16 wide body and
40 narrow body
MRO capacity in
11 hangars
10k highly
qualified
personnel
11
MRO: Maintenance, Repair and Overhaul
APU: Auxiliary Power Unit
AOG: Aircraft on ground due to technical or other reasons.
(mn USD)
408
624
762
893
936
991
1,016
702
792
1,100
900
166
203
188
168
173
226
305
175
253
414
375
574
827
950
1,061
1,109
1,217
1,321
877
1,045
1,514
1,275
1.0%
1.4%
1.4%
1.6%
1.5%
1.6%
1.6%
1.5%
1.5%
2.0%
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 9M'23
Inter-Segment Sales Third Party Sales Market Share
1. Industry Overview
2. Strategic Focus
3. Execution and Growth Levers
i. Turkish Airlines – Main Brand
ii. AJet
iii. Turkish Cargo
iv. Turkish Technic
v. Digitalization
vi. Sustainability
1.
OVERVIEW
2.
INVESTMENT
HIGHLIGHTS
3.
2033 STRATEGY
AND TARGETS
55
LCC
FSC
1 2 3 4 5
5
4
3
2
1
Ability to Execute
Completeness of Vision
Laggards
Visionaries
Challengers
Leaders
small
medium
large
56
Digitalization – Becoming the IT leader in the sector
Positioning of Turkish Technology
Global
Ranking
10.
2019
3.
2026
Our goal is to be a
"Digital Leader" in our
industry within 3 years
2033
1%
share of R&D
investment in
revenue
Company size
Source: Gartner, internal analysis.
57
Digitalization – Our Strategy
Investing in New
Technologies
Digital Transformation
Allocating necessary
Infrastructure
Growth as a
Technology Company
Save on cost by
increasing the
efficiency of our
products and
services with digital
transformation projects
Improve passenger
satisfaction through
easy-to-use
applications and lean
business processes
Strengthening the
passenger interaction
with our brand
through new digital
interfaces
Closely following new
trends in the aviation
industry and increase
cooperation with the
international
organizations
Implementing new
technologies that have
the potential to
generate income with a
"time-to-market"
sensitivity
Allocating the
necessary system
infrastructure to meet
organizational growth
needs
Providing agility to our
Business Units
Reducing external
dependency with
internally developed
applications
Generating 30% of the
IT revenue from third
parties within 5 years
Designing policies to
attract talents for a
sustainable growth
1 2 3 4
58
Digitalization – Details of Our Strategic Initiatives
PSS Transformation
Mobile Oriented
Seamless Experience
Financial
Technologies
Dynamic Pricing,
Offering, Bundling
Data Driven
Transformation
Cyber Security
New Passenger Service
Systems (PSS)
• Revenue maximization by
better inventory
management, customer
targeting and engagement
• Reducing costs by
simplifying order structure,
distribution mix, payment
and other ad-hoc functions
Initiatives
• Rewriting our proprietary
PSS (TROYA) based on
IATA’s OneOrder standard
• New and customized PSS
for AJet
• Integrating the
Omnichannel Model to
standardize our direct sales
channels (revenue share to
increase from 30% to 45%)
• Fully online order
management
• Just 2 seconds of waiting
time for all online
transactions
• Touchless boarding via
kiosk, self bag-drop and
biometric verification
• End-to-end internet
experience in airports,
lounges and aircraft
• Incorporated Financial
Technology subsidiary in
August’23.
• Positioning of e-wallet-
based "TK Pay" as a in-
house payment instrument
• Providing e-wallet solutions
for individuals, corporate
customers and sales
agents
• Establishing our own
infrastructure for Global
PSP (Payment Service
Provider), intermediation by
directly contacting the bank
for payments
• Increasing security and
transaction success rate
with transition to 3DS 2.0
Dynamic Pricing
• 1.5%-2.5% annual revenue
contribution
• Optimization via AI model
New Distribution Capability
(IATA NDC)
• Increased control over our
offers with the in-house
development of the NDC
API
• Reducing indirect
distribution costs (GDS)
and sales friction
• Presenting customized
product offers, bundling
and merchandising via
enhanced CRM capabilities
• Allowing 3rd party
collaborations for additional
non-air services
• Implementation of AI in
crew planning, flight
operations, customer
experience
• Supporting decision
processes with data at
every stage of business
processes
• Increased usage of data
mining tools
Active Projects: 26
Upcoming Projects: 32
• Ensuring Cyber Security
Standardization across the
Incorporation
• Increasing our international
Cyber Security Level
above 80%
• Established Central Identity
and Authority Management
System
• Fully implementing ISO
22301, ISO 27701, ISO
27001
1.
OVERVIEW
2.
INVESTMENT
HIGHLIGHTS
1. Industry Overview
2. Strategic Focus
3. Execution and Growth Levers
i. Turkish Airlines – Main Brand
ii. AJet
iii. Turkish Cargo
iv. Turkish Technic
v. Digitalization
vi. Sustainability
3.
2033 STRATEGY
AND TARGETS
59
60
Sustainability – Our Strategy
MANAGEMENT FUNDAMENTALS
Corporate Governance
Business Ethics
Legal Compliance
Risk Management
Customer Satisfaction
Financial Performance
RESPONSIBLE COMPANY
Climate Change
Fleet Modernization
Waste Management
RELIABLE OPERATOR
Flight Safety and Security
Employee Health and Safety
Business Continuity
Digitalization
Customer Expectations and
Behavior
FAIR EMPLOYER
Equal Opportunity
Talent Management
Gender Balance
Corporate Sustainability
Management
Investing in New
Technologies
Empowering Workforce
We are incorporating sustainability practices into all layers of our business
▪ Higher proportion of more fuel efficient
new generation aircraft
(from 30% in 2023 to 98% by 2033)
▪ Increasing SAF Usage
▪ Acknowledging diversity and inclusion
▪ Committed to IATA 25by2025
▪ Percentage Of Women In Workforce:
~47%
▪ Fair Remuneration "Equal Pay for Equal
Work"
▪ Sustainability Committee
(Quarterly C-Level Meetings)
▪ Sub-Committees
(Quarterly meetings with the unit leads)
▪ Emissions Management
▪ Corporate Social Responsibility
▪ Sustainable Practices
▪ Sustainability Strategy
61
Sustainability – Our Priorities
Turkish Airlines
Sustainability
Priorities
We set our priorities in collaboration with our external stakeholders and by considering the international standards
The Most Material Issues
Flight Safety and Security
Climate Change
Employee Health and Safety
Changes in Customer Expectations
and Behavior
Fleet Modernization and Development
Digitalization
Business Continuity
Talent Management
Waste Management
High Material Issues
Support for the Social Development
Fair Competition
Water Management
Single Use Plastic
Sustainable Catering
Noise Management
Responsible Supply Chain Management
Innovation
m
Material Issues
Human Related Environmental Disasters
International Crises Global Economic Crises
Animal Welfare Biodiversity Loss
62
Sustainability – Our Efforts
Fleet Modernization
▪ One of the youngest fleets in Europe with an average fleet
age of 9.2
▪ Investment in new generation aircraft
▪ Cabin densification
Sustainable Aviation Fuels
▪ Voluntary usage of sustainable aviation fuel (SAF)
▪ Investment on alternative fuel research projects (Micro-Jet
Project)
▪ Signatory of Global SAF Declaration
Fair Employer
▪ Voluntarily supporting female employment by participating
IATA’s ‘25by2025’ initiative
▪ Advancing Gender Balance
CO₂ Offsetting
▪ ‘CO2mission’ voluntary carbon offsetting program for
passengers
▪ Voluntarily offsetting employee’s duty flights
Waste Management
▪ In-cabin waste separation
▪ Zero Waste Certificate
▪ Transformation to the Future Project
In-flight Practices
▪ Offering wooden toys made from FSC certified forest
products
▪ Reduction of all plastic covers from travel sets
Environmental Management
▪ IATA Environmental Assessment "First airline to directly
obtain the Stage 2 Certificate"
▪ ISO 14001 Environmental Management System
▪ 9 LEED certified buildings
Sustainability Initiatives & Programs
▪ UN Global Compact
▪ The Task Force on Climate Related Financial Disclosures
(TCFD) Supporter
▪ Carbon Disclosure Project (CDP) Climate Change Program
▪ Türkiye Sustainable Aviation Alliance
Turkish Airlines has wide array of sustainability initiatives
63
Sustainability – Specific Focus on Fuel Efficiency
Fleet Modernization
Research in Biofuels
4-D Flight Planning
Flight Operations Practice
(Reduction of auxiliary power unit - APU,
engine out taxi, efficient take off, climb,
descent profiles, shortcuts)
Technical Maintenance Practices
(Engine wash, aircraft weight reduction,
aircraft modifications such as
winglet/sharklet)
Ground Operation Practices
(Center of Gravity (CG) optimization,
monitoring potable water uplift, weight
reduction of cabin interior)
ATC operations
(separation, use of airspace more
effectively)
SESAR Project
(modernization of Europe's air traffic
management)
Military Airspace
Route Optimization
Aerodrome Infrastructure
(New parking areas / taxiways
Assessment of Service Providers’
Equipment)
Investments in New
Technologies
Operational
Optimization
Infrastructure
Improvement
Fuel Efficiency Policy
We are committed to optimize our fuel consumption
No Action Taken 2050
-
10
20
30
40
50
60
2023 2026 2029 2032 2035 2038 2041 2044 2047 2050
Mt. CO
2
Fleet Modernization and Optimization of
Operations
Sustainable Aviation Fuel
Carbon Offsetting
No Action Taken
Net Emissions
Action Scenario (Reduced by
Operational Changes)
-31%
-35%
-35%
64
Sustainability – Carbon-Neutral Airline by 2050
▪ New generation aircraft
consume 10-20% less fuel
than older ones per unit
capacity.
▪ By 2033, at least 95% of our
fleet will be comprised of new
generation aircraft.
▪ Sustainable Aviation Fuel
(SAF) plays a key role in
reducing carbon emissions.
▪ We plan to expand our current
SAF usage as the availability
increases globally.
▪ Emissions that cannot be
prevented will be offset
voluntarily, in addition to the
regulatory offsetting schemes
(CORSIA, EU ETS, UK ETS).
Fleet Modernization and
Operational Optimization
Sustainable Aviation Fuel
Carbon Offsetting
Strategy to Achieve Carbon-Neutrality by 2050
65
Sustainability – Where We Stand in the Industry
Rating scale: A to D- (from highest to lowest)
Rating scale: 5 to 0 (from highest to lowest)
Rating scale: AAA to CCC (from highest to lowest)
Rating scale: 100 to 0 (from highest to lowest) Rating scale: 0 to 100 (from highest to lowest)
Rating scale: 100 to 0 (from highest to lowest)
Our sustainability ratings indicate continuous improvement and above-industry performance
B-
B
B-
2021 2022 Sector Average
44
47
51
29
2020 2021 2022 Sector Average
3.2
3.3
3.5
2.7
2020 2021 2022 Sector Average
BB
BB
BBB
BBB
2020 2021 2022 Sector Average
42
53
60
2020 2021 2022 Sector Average
27.4
24.3
22.0
31.7
2020 2021 2022 Sector Average
44
e-mail: ir@thy.com
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