Sector Overview

Industry Developments and the Forecast for 2022

Following the unprecedented pandemic year of 2020, the aviation industry entered 2021 with optimism thanks to the discovery of effective vaccines. The measures taken in the first quarter of the year to alleviate the effects of the pandemic revived travel demand in the summer season. However, vaccination rates fell short of projected levels worldwide, variants emerged that altered the spread of Covid-19, and anti-pandemic measures and restrictions greatly differed by country. These issues ultimately slowed the recovery of the aviation sector during the year. While the rebound in international passenger traffic decelerated, growing demand for domestic flights played a central role in the recovery of the aviation industry this year. International passenger traffic reached only 25% of the 2019 level while domestic passenger traffic climbed to 72% of pre-pandemic levels. In 2019, a total of 4.5 billion passengers were carried of which 2.64 billion domestic and 1.85 billion international. In 2021, a total of 2.3 billion passengers were carried of which 1.78 billion domestic and 511 million international.

While the rebound in international passenger traffic decelerated, growing demand for domestic flights played a central role in the recovery of the aviation industry this year. International passenger traffic reached only 25% of the 2019 level while domestic passenger traffic climbed to 72% of pre-pandemic levels. In 2019, a total of 4.5 billion passengers were carried of which 2.64 billion domestic and 1.85 billion international. In 2021, a total of 2.3 billion passengers were carried of which 1.78 billion domestic and 511 million international.

With the improvement momentum that initiated in 2021 in many markets, the general outlook for the aviation industry is positive for 2022. Growth in the aviation sector is expected to pick up pace as of the 2022 summer season. In 2022, total passenger numbers are expected to climb to 3.4 billion or 76% of 2019 levels. Passenger traffic is projected to jump by 51% to reach 61% of 2019 levels.

2021 has been a year which disruptions in the global supply chain persisted after Covid-19 pandemic, and air cargo continued playing a key role. The ongoing impacts of the pandemic, the relative continuity of restriction policies implemented at national borders by countries, and newly emerging coronavirus variants also affect passenger traffic and belly cargo capacity. Despite the increase in capacity offered by cargo aircraft, cargo capacity contracted by 10.9% in January-December 2021 compared to the same period of 2019. This contraction was due to the fall in wide body belly cargo capacity, which accounted for nearly 50% of air cargo capacity before the pandemic.

Changing consumer behavior with the impact of the pandemic and rising consumer expectations of obtaining products faster have made the need for the air cargo sector more evident. In addition e-commerce volume, expected to increase even further in the coming years, will continue to drive air cargo demand positively. At present, e-commerce accounts for 18% of air cargo and is the fastest growing segment; e-commerce is forecast to account for 22% of air cargo in 2022.

Air cargo traffic is projected to increase by 4.9% in 2022. Furthermore, higher wide body and long-haul flight traffic will boost air cargo capacity. Estimates project that cargo unit revenues will decrease by 8% in 2022. Air cargo revenues are expected to fall by 3.5% to USD 168.9 billion due to capacity growth outpacing demand.

Expectations for 2022

Turkish Airlines, after differentiating positively from the airlines in the common market in both operationally and financially in 2020 and 2021, is forecast to record further growth at an increasing pace in summer 2022.

In 2021, Turkish Airlines exceeded its 2019 capacity with additional flight destinations in North America, Central and South America. By boosting the frequency on existing routes, Turkish Airlines increased its capacity in these regions 1.3-fold in the last quarter of 2021 compared to the same period of 2019. Overall for 2021, Turkish Airlines increased its capacity by 8.6% compared to 2019. In 2022, Turkish Airlines plans to open new flight destinations depending on the opportunities and market conditions, and extend its strong growth in these regions with additional frequency.

Restrictions in countries of the Far East are ongoing and the volume of the international passenger departing from the region has not yet reached a sufficient level. As a result, Turkish Airlines does not expect to reach the 2019 capacity in this region until next years. In the other regions, Turkish Airlines is expected to rebound significantly, especially with the summer season, depending on the developments in the market.

After starting its international expansion in 2020 with the AnadoluJet brand, Turkish Airlines continued its international push in 2021. Turkish Airlines plans further consolidation in relevant markets in 2022.

Achieving growth by taking pioneering steps during the pandemic, Turkish Cargo carried 1.88 million tons of cargo in 2021 and ranked fifth worldwide in terms of RTK (Revenue Ton Kilometers) excluding integrators. Despite the changing market conditions with the recovery of belly cargo, Turkish Cargo aims to maintain its strong position in cargo carried.