Industry Developments and the Forecast for 2015
Decrease in the oil prices (the largest cost item of airlines) has reduced the total costs of airlines and hence, improved their profitability in 2015. According to the International Air Transport Association (IATA), in the first half of 2015, aviation sector has increased its net profit by 70%. Also, IATA’s 2015 full year expectations indicates that the cumulative net profit of the industry will reach 29 billion USD with an increase of 80% compared to previous year. On the other hand, the decrease in oil prices has made high fuel consuming, thus operationally expensive, old aircraft financially feasible and hence postponed their exits from airline fleets. This situation has increased the capacity and competition in global scale, and hence by decreasing the ticket prices boosted the global demand. Global passenger traffic is expected to grow by 6% in 2015.
Turkish Aviation market continues to expand and develop as direct result of the increasing infrastructure and fleet investments which led to more affordable ticket prices and increased connectivity. During the period of 2003-2014, Turkish aviation industry has grown by 13.7% annually, while this growth rate for the global aviation industry was 5.7%. During the same period, passenger penetration in the market (total passengers/population ratio) has almost tripled, yet Turkey still remains underpenetrated compared to the more mature markets indicating its growth potential. According to the General Directorate of State Airports Authority, Turkish aviation market will grow by 6.2% reaching 131 million total passengers in 2015 and 170 million in 2018.