Interview with Turhan Ozen, the chief cargo officer for Turkish Airlines
Turkish Airlines, founded in 1933, operated its first international air cargo shipment in 1936. Today Turkish Cargo, the cargo division of Turkey’s national flag carrier, is one of the fastest growing air cargo brands of the world and offers services to 120 countries. For the first half of 2017 Turkish Cargo reported an income growth of 24 percent year-on-year basis. In the recent past it has launched seven new services to take its total cargo destinations to 72 which in the beginning of 2016 stood at 55. In an exclusive interview Turhan Ozen, the chief cargo officer for Turkish Airlines, speaks to Reji John about the carriers performance in 2017 and the aggressive network expansion around the globe. Ozen was appointed to the current position less than a years ago. Edited excerpts.
Could you please give us an update on the Turkish Cargo performance in the first half of 2017?
Our growth rate January to July amounted to 28 percent on revenue and transported volumes. This growth is naturally built on positive trends of global air freight market, on which we got a significant market share. We are also determined to continue to outpace market growth rates and make our momentum sustainable in the coming years.
There has been quite an aggressive network expansion in the first half of 2017 with new freighter destinations added to your network in Africa, Far East, Europe and South America? What has been the response to these network additions? Do you see the demand improving in those regions where you have introduced freighter coverage in the recent past?
During 2017 we reached up to 72 destinations with the openings of Africa (Johannesburg, Madagascar, Kano and Dakar), Europe (Prague, Oslo, Paris, Riga) and South America (Sao Paulo). We succeed to expand our business and increase our market share in all of the new destinations sooner than planned.
What was the average load factor seen in the first half of 2017? Do you expect to see the load factor improving in the months ahead?
Since the beginning of this year, we increased our load factor by 7 to 8 percent. We expect it to further increase with another 2-3 percent until the end of the year.
What has been your focus on high yield cargo like pharma and perishables from some of the key markets that you operate?
We focused intensely on pharma and temperature controlled cargo worldwide. We have seen remarkable demand mainly in Western & Central Europe and in India. The total volume increase in these segments is up to 30 percent in some markets.
Do you think over capacity and low yield are still the overall problems of the air cargo industry? And how have you managed to address these issues at Turkish Cargo?
Over capacity and low yield problems have diminished since the fourth quarter of 2016 due to soaring cargo demand worldwide. However, I expect that the growth has already reached its peak and the market will eventually start to stabilize soon in relatively lower growth rates. By the beginning of next year the capacity investments will probably catch up. The yield and over capacity will become a challenge again.
How is Turkish Cargo approaching the proliferation of e-commerce and e-retail and do you see increasing volume and demand from this sector in your overall volumes?
E-commerce and express business is the fastest growing products of our portfolio mainly ex China and Far East. We keep on our investments with our systems and throughout our network to grow even further.
What is the status of the new cargo facility being built in Istanbul for Turkish Cargo’s growth and what plans do you have to increase the volume of cargo carried?
Istanbul’s new airport will be opened in the last quarter of 2018 and by then Turkish Cargo hub capacity will be doubled. With additional investments, Turkish Cargo handling capacity can reach up to 3.5 million tonnes by 2023.
Under your leadership how do you intend to differentiate Turkish Cargo from other carriers? Is there a focus on directly connecting with your high yield shippers?
All the shippers, high yield or low, are very important for Turkish Cargo as they’re all our customers. We should understand their evolving expectations, requirements very well and accurately translate them all into our offerings. This is the reason why we always aim to keep close to the shippers. From the commercial perspective, our customers are always our local and worldwide agents and forwarders and will be so in the future.
How crucial is the digitalisation process at Turkish Cargo and what are some the specific steps you are taking to transform all cargo process into digital?
E-AWB adoption is one of the most important targets of Turkish Cargo and its advantages play critical role in increasing the quality of customer service. Today we are living in a digital world where data exchange is the key indicator of E2E integration between stakeholders. E-AWB is the most significant step of digitalisation in air cargo business because awb is the main document of the air transportation. As Turkish Cargo, our E-AWB penetration is more than 80 percent in several origins. We will keep our momentum and we will focus on further steps such as single process, e-freight in near future.