january 2015 global competitiveness forum at the crossroads how saudi arabia can leverage its unique...

January 2015GLOBAL COMPETITIVENESSFORUMAt the Crossroads How Saudi Arabia can Leverage its Unique Position and Become a Leader in Global Transport

Dr. Temel Kotil, CEO of Turkish Airlines

Air Passenger Numbers

1994

1.2 billion2034

7.3 billion

x2.2

2014

3.3 billion

Source: IATA, GACA, domestic arrival/departures dived into two to find passengers *2014 and 2034 forecasts are based on ACI values

x2.7

18.8 million 47 million* 115 million*

WO

RLD

SAU

DI

ARAB

IA

X2.5X2.5

Passenger Flow DevelopmentTotal Scheduled Revenue Passenger-KilometersTo/From and Intra Regions (Trillions)

2.0

3.9

North America

0.6

1.9

2.0

4.6

0.30.9

Africa

0.6

2.2Middle East

2.2

7.4

2013

2033Europe

Asia Pacific

Latin America

Source: Boeing Current Market Outlook 2013-2033

Asia & Pasific

28%

Eu-rope26%

Middle East8%

Africa4%

Latin Amer-

ica8%

North Amer-

ica26%

Asia & Pasific

35%

Europe22%

Middle East11%

Africa4%

Latin Amer-

ica9%

North Amer-

ica19%

2013 2033

Passenger Flow DevelopmentTotal Scheduled Revenue Passenger-KilometersTo/From and Intra Regions (Trillions)

2.0

3.9

North America

0.6

1.9

2.0

4.6

0.30.9

Africa

0.6

2.2Middle East

2.2

7.4

2013

2033Europe

Asia Pacific

Latin America

Source: Boeing Current Market Outlook 2013-2033

Asia Pasific28%

Europe26%

Middle East8%

Africa4%

Latin America

8%

North America

26%

Asia Pasific35%

Europe22%

Middle East11%

Africa4%

Latin America

9%

North America

19%

2013 2033

World Outlook For 2015

Load Factor Passenger Numbers Revenue Passenger km (RPK)

3.3 billions

Source: IATA Fact Sheet December 2014

3.5 billions%79.9

2014F 2015F

+0.2

points

-0.3

points

%79.6

%5.5 %6.8

2014F 2015F

6.1trillions

6.5trillions

%5.7 %7

2014F 2015F

Driving The Center Of Gravity Of Traffic To The South And East Geographic center of gravity of departing/arriving/connecting passengers per city

1971

1981

1991

2001

2011

20212031

Source: Airbus Global Market Forecast 2012

Development of Passenger Market Share by Airline Domicile

Source: IATA, Airbus 2014 GMF.

2003 2013 2023 20330%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2% 2% 2%5% 5% 6% 6%4%

9% 12% 14%

36% 26% 21% 18%

27%27% 24% 22%

25% 30% 34% 37%

Africa Latin America Middle East North America Europe Asia&Pasific

Market share of European carriers

has been going steady

Market sharecan be lost to Asian& Middle Eastern

carriers.

Market Share in Revenue Passenger km (RPK)

International Passenger Growth

Source: ACI 2012-2031 Traffic Forecast

Regional International Passenger Growth (2011 - 2031)

*The diameter of spheres show extra passenger number in 2031 compared to 2011

2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0%0

500

1,000

1,500

2,000

2,500

Africa

Asia - Pasific

Europe

Latin America Middle EastNorth America

Average

2011-2031 Annual Average Growth (CAGR)

2031

Pas

seng

er N

umbe

r

Europe will still be the driver

of international traffic

Asia & Pasific & Middle East will be expected to grow faster

58 million jobs

2.4 trillion USD GDP

Economic Benefits Of Aviaiton

Today

3.4% of World GDP

105 million jobs

6 trillion USD GDP

In 20 Years

4.1% of World GDP

X1.8

X2.5

Source: ATAG, *Total (direct, indirect, induced) effect, Today values are 2012 values.

Impact Of ConnectivityConnectivity can boost the productivity and growth of economies

Connectivity& Network development

Source: IATA economic performance 2014

1994 2013

8,000

16,160

Unique City PairsToday,

we are more connected

Widens markets

Improves efficiency & productivity

Encourages investment

Labor Productivity vs Connectivity

Connectivity per $ Billion of GDP

Labo

ur P

rodu

ctivi

ty –

GD

P/H

our

Developed Asia

Developing Asia and Africa

North America and Western Europe

Emerging Europe

Transitioning Asia and South America

Network Today & Tomorrow

Source: Airbus 2014 GMF

> 50,000 daily long-haul passengers



42 Mega Cities

2013

Network Today & Tomorrow

Source: Airbus 2014 GMF




203391 Mega Cities

JEDDAHRIYADH

Knowing the Customer

Low price sensitiviyTime sensitiveHigh service levels

Price sensitive Low time sensitivity Medium service levels

Long-Haul

Personal Travel %70

%50-60 Of Revenue

Price sensitive Extremely time sensitive Some cross-over to LCC

Highly price sensitive Time sensitive Minimal service levels

Business Travel %30

%40-50 Of Revenue

Source: Boeing

Trav

el D

ista

nce

Short-Haul

%35 long-haul

%65 short-haul

Travel Purpose

Who We Are

Passenger / Our Boss

Network

Human Capital

Aircraft

Aviation

Customer Satisfaction in Aviation Sector

Assuarance

Responsiveness

Flight Patterns

EmployeesFacilities

Reliability

CUSTOMERSATISFACTION

RegulatoryEnvironment

Technology

PassengerExpectations

Airline andIndustry

Strategies

CUSTOMIZATION

Kaynak: Boeing

Drivers For The Development Of Aviation

Drivers

Social & Economical

developments Infrastructure investments

Regional Future Air Passenger Demand

Growth Forecast

Domestic Market Growth

Airport Passenger growths

Local Demand Potential

Regulations & Liberalization

Yearly Airport Passenger Growth Since 2012

Regional Airport Passenger Growth

Source: General Directorate of State Airports Authority (DHMI)

Middle East L. America Avrupa World Airports Asya & Pasific Africa N. America0%

2%

4%

6%

8%

10%

12%

14%

8.6%

6.5%5.6%

5.0% 5.0%

3.9%3.5%

201220132014F

Middle East is the fastest

growing region in airport

passenger numbers.

World average

International Demand Growth Potential

Source: Boeing Current Market Outlook

%5.4

%7.4

%7.3

%6.3

2013-2033 annual revenue passenger km growth

Diversed traffic to all

other regions

Flow to all regions will be expected to grow fast

2003-2013 Annual Passenger Growth

Airport Passenger Traffic Growth


3 3.5 4 4.5 5 5.5 6-1%

4%

9%

14%

19%

0.0178907457114768

-0.00380359785030715

0.0337171729406873

0.04720417283425470.0431962119489564

0.065407316090758

0.0143855237625197

0.0320249807563964

0.007536723084099250.0154131431889071

0.03854028725078740.02447935171523

0.0265659556269169

0.00205964649293167-0.000845330538018052

0.016584294435493

0.011045403139011

Africa Asia Pasific Europe L. America Middle East N. America

2003

-201

3 CA

GR

Saudi Arabian hubs have been

growing much faster than the world’s

biggest European and American hubs

9-10% growth ratesFa

st G

row

th R

ate

-1 to 5% growth rates

Saudi Arabian Airports


2013:68 million airport passengers

1 million toncargo & posa

RUH JED MED DMM AHB

9% 9% 10% 10%12%

Annual Average Growth Last 10 Years# Of Scheduled Weekly DeparturesConnectivity with

scheduled traffic has been increasing fast

and constantly

Connects to about 90 unique

international destinations.

90 Int. Dest.

56İnternational

link

78İnternational

link

2nd largest country (after U.A.E.)

in terms of total passengers in

the region.

Domestic Passenger Potential


2013:

30 million domestic passengers at ariports

Strong domestic market

Demand For Air Travel

Source: ATAG 2014)

Propensity to fly is close

to 1Propensity To Fly

Local Passenger Potential

Source: Pew Research Center

23% of the world’s population, Islam is the second-largest religion.

1.6 billion Muslims

Local Passenger Potential

Source: Arabnews, Ministry of Hajj

2009 2010 2011 2012 2013 2014

2,313,278.0

2,789,399.0

2,927,717.0

3,161,573.0 1,980,

249.02,085,238.0

# of Hajj Visitors (in millions)

About 3 million Hajj visitorsAbout 6 million Umrah visitors

10-20% growth potential

Social & Economic Advantages

Source: IMF, CIA Fact sheet,

Young & growing

population

Largest exporter of

petroleum in the world2014E GDP:778 billion

USD

Urban Population:

90%

Strong economic

performance

GDP per capita 2014E:

25,400 USD

Population:About 30 million

GDP annual avg.Growth (2014-2019):

%4.4

Etnic traffic - 10% of

population is etnic.

About Turkish Aviation Market& Turkish Airlines

Total Passenger Numbers (millions)

Turkish Aviation Market Growth

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014F 2015F0

20

40

60

80

100

120

140

160

4 6 10 14 16 18 21 26 30 33 38 43 4825 30 34 36 38 45 44

5359 65

7380

90

Domestic International


29

(million)

3644

50 5463 65

7989

98111

1232004 - 2014CAGR = 13%

138

Network Coverage

Aviation in Turkey

2003: 25.3 M

216% Increase

International Passenger

Revenue:

627% Increase

2003:

$2.2 billion

2003: 26

# of Airports:

100% Increase

2003: 162

172% Increase

# of Aircraft: 2003

2014

2014: 441

2014: 80 M

2013:

$16 billion

2014: 52

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015B0

10

20

30

40

50

60

70

5 5 6 7 9 10 11 12 14 15 16 20 22.7 25.95 5 6 7 8 10 12 13

16 1823

2832

37.1

10.3 10.4 11.9 14 16.9 19.7 22.6 25.129.1

32.739

48.154.7

63

Domestic International Total

2004 - 2014CAGR = 17%

Turkish Airlines’ Passenger Numbers (in millions)

Turkish Airlines’ Passenger Volume Development

Grew more than 3 times faster than the world

Turkish Airlines’ # of Landings, Destinations & Passengers

Achieving Multi-Dimensional Growth

90 110 130 150 170 190 210 230 250 270 2901,000

3,000

5,000

7,000

9,000

11,000

# of Destinations

# of

land

ings

(wee

kly

aver

age)

The diameter of the sphere illustrates total annual passenger number

2003 200410m

200514m

200617m

200720m

200823m

200925m

201029m

201133m

201239m

201348m

2014 55 m

2015B 63 milion pax

Number of Landings

Number of Destinations

Number of Passengers

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january 2015 global competitiveness forum at the crossroads how saudi arabia can leverage its unique...

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