A Study of the Strategic Responses of Turkish Airline Companies to the Deregulation in Turkey: Discussion

Following deregulation in the Turkish Domestic Market in 2003, there has been a remarkable increase in the number of scheduled airlines in the market and thus increased competition. Eventually, this competitive environment caused airline companies to develop new competitive strategies in order to ensure competitiveness in the long run.
Turkish Airlines as well as other airlines that entered the market after deregulation, tries to stay competitive in the domestic airline market by using a network structure, service quality and price. Each of these three components is strategic tools airlines may shape as they wish, thanks to deregulation. Private airlines that recently entered the market prefer to compete with the price component whereas Turkish Airlines continues competition with its wide network structure and service quality component. Findings show that network structures are at the center of competitiveness. The airline that forms a network structure accurately in the market (the hub selected, network model and city pair markets for operations) will obviously gain an important competitive advantage from the beginning. Electronic commerce

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A Study of the Strategic Responses of Turkish Airline Companies to the Deregulation in Turkey: AnadoluJet

A Study of the Strategic Responses of Turkish Airline Companies to the Deregulation in Turkey: AnadoluJetAnadoluJet was established as a sub-brand of Turkish Airlines and it may be regarded as the most important reaction of Turkish Airlines to deregulation. In order to operate efficiently and productively in the domestic market where the dynamics underwent a change after deregulation, and to better respond to customer needs, Turkish Airlines established the AnadoluJet brand which operates a different strategy than its own competitive strategy. The basic reasons for establishing AnadoluJet were as follows: to respond to the demands and requirements of the customer profile in the domestic airline market with a more accurate product; to enhance the efficiency of Turkish Airlines’ flights from Ankara; and to make it profitable making Ankara a new hub for Turkish Airlines. As Ankara Esenboga Airport was structured as a hub for the domestic airline market, the aim was to relieve Turkish Airlines transit traffic at Ataturk Airport and make improvements concerning this traffic. Direct marketing

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A Study of the Strategic Responses of Turkish Airline Companies to the Deregulation in Turkey: Turkish Airlines

Competition that came along with deregulation, forced Turkish Airlines to make changes in its current strategy. Turkish Airlines used to operate on its own in the market and in those times it not only operated flights, but also established an air transportation system, offered services in other areas such as ground handling, maintenance, and training services as well as providing full services to all its customer groups with its network structure on a global scale; so, Turkish Airlines used to follow a differentiation strategy until the deregulation period. However, it was clearly understood that it was no longer possible to compete in the newly-established deregulated market using existing strategies, so it has undertaken certain strategic changes that would inevitably impact the operator. The most significant change has been the modification of the business model and the execution of the elements in certain strategic areas that are required by this new model. Prior to deregulation, Turkish Airlines used to operate the ‘yield increase’ model whereas in this new context, it migrated to a new strategic target of ‘increase of passenger numbers’. In other words, the operator’s main aim is to benefit from scale economies by increasing the amount of production and decreasing the unit costs in the domestic market. In order to increase the number of passengers, the aim is to reduce costs and reflect the reduction onto prices, to the benefit of passengers.
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A Study of the Strategic Responses of Turkish Airline Companies to the Deregulation in Turkey: Borajet

A Study of the Strategic Responses of Turkish Airline Companies to the Deregulation in Turkey: BorajetAfter deregulation, air transportation between major cities, where there is high passenger potential in domestic routes gained momentum. However, although many new markets opened up in this structure, in cities where passenger potential is low or where there is usually STOL (Short Take-off Landing) type airports, air transportation did not develop. This gap was seen as an opportunity by Borajet and so it started scheduled flights in domestic routes with a strategy that may bring these markets to life. All other private airline companies that entered the market before Borajet had first been charter airlines before transiting to become scheduled airlines whereas Borajet was established and started operations back in May 2010 as a domestic airline with scheduled flights. Buyer seller

Borajet entered the market with a regional airline model that basically connects smaller cities to bigger cities in order to capture the momentum it was targeting in domestic routes. Its network and fleet structure were designed according to this strategy as well. With ATR-72 type turboprops in its fleet, it aims to collect passengers from small cities where other airlines do not operate, bring them to major cities and leave the rest of their travel from this hub to other airlines; or another perspective, Borajet is willing to undertake the distribution of passengers to smaller domestic destinations from the hub where they were transported by major airlines. In this context, Borajet is willing to feed airlines that fly between major hubs in the market.
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A Study of the Strategic Responses of Turkish Airline Companies to the Deregulation in Turkey: SunExpress

Established in 1989 through the partnership of Turkish Airlines and Lufthansa, in order to operate international charter flights to and from Antalya, SunExpress decided to structure all its flight operations based in Izmir and selected a niche geographical market in domestic market instead of entering markets where there were other carriers present following deregulation. Thus, it enabled the opening up of new markets with the domestic flights it operated from Izmir and started operating in a grid network structure model that is based on connecting cities with one another that had not previously been connected. Eventually, it paved the way for the development of a new flight structure in the domestic market. On the one hand, selecting markets that lack competition and that had never previously been flown brought SunExpress a competitive advantage. However, it proved a challenge for the airline to create passenger potential in these markets.
In addition to its strategy of operating in niche markets, SunExpress entered into high volume markets where passengers are accustomed to using air transportation and attempted to operate there as well, by offering additional capacity. So, one can say that SunExpress is executing both network strategies.
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A Study of the Strategic Responses of Turkish Airline Companies to the Deregulation in Turkey: Pegasus Airlines

A Study of the Strategic Responses of Turkish Airline Companies to the Deregulation in Turkey: Pegasus AirlinesAs Pegasus Airlines operated in charter transportation, it was acquired by ESAS Holding in 2005, and then built itself a new mission, ‘being a low cost airline company operating scheduled flights in domestic and international routes’. Thus, it started operating scheduled flights in the domestic airline market the very same year. It realized that the most effective and easy way to move from charter transportation to scheduled transportation was primarily through having a presence in the domestic market. The necessary ground was set as the barriers facing private airlines were eliminated in the domestic market. Airlines were supported by government incentives and the economic conditions at the time were suitable for operation in the Turkish market. Payday Loans Online

Pegasus Airlines entered the domestic market with its cost leadership strategy. Prior to entry the market, some European low cost airlines such as, Ryanair and Easyjet, were analyzed and the operators were re-structured in accordance with a cost leadership strategy in line with conditions in Turkey.
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A Study of the Strategic Responses of Turkish Airline Companies to the Deregulation in Turkey: Atlasjet

Atlasjet used to operate charter flights within its tour operating system, but later started its activities in scheduled domestic transportation following deregulation; Atlasjet made all the changes required by the scheduled airline transportation business after having started operating in domestic routes and formed its organizational structure accordingly.
Atlasjet was the first private airline in Turkey to become a member of the International Air Transport Association – IATA. It benefited from this advantage and focused on ‘interline’ transportation in the domestic market. For this purpose, Atlasjet signed interline traffic agreements with many other airlines members of IATA, became member of global distribution systems and migrated to electronic ticketing. Thanks to these agreements and to the technological infrastructure investments it has made, Atlasjet undertakes domestic transportation of international passengers that come to Istanbul. This strategy which developed after deregulation is regarded as a conscious action taken to ensure a competitive advantage against the other airline companies.
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A Study of the Strategic Responses of Turkish Airline Companies to the Deregulation in Turkey: Onur Air

A Study of the Strategic Responses of Turkish Airline Companies to the Deregulation in Turkey: Onur AirOnur Air was a charter airline before 2003 when it became one of the first carriers to introduce domestic scheduled airline transportation as deregulation gave the right to enter this market. Until 2003, there was only one airline company operating in the domestic market and, as the prices were most of the time high, it was only high income level customers that were targeted; however Onur Air, with its entry the market, targeted middle income level customers. In order to fulfill this strategic objective, Onur developed a strategy of offering low fares with low cost and a low profit margin and addressing the needs of an extended group of customers in the domestic market with low fares. This strategy became feasible as domestic market was deregulated and restrictions on market entry and prices were abolished. When compared with Turkish Airlines, Onur Air has a more advantageous cost basis and with Turkey having a wide geographical structure, these factors are regarded as important aspects that form the basis for the execution of this strategy. Onur Air uses this cost advantage that forms the essence of its strategy in order to offer lower prices by reflecting them onto fares and thereby attracting more passengers, instead of gaining higher yield. Service design process

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A Study of the Strategic Responses of Turkish Airline Companies to the Deregulation in Turkey: Competitive Structure

Price determination in the Turkish domestic airline market was deregulated in 2001 by way of an amendment made in Law (numbered 2920) on Turkish Civil Aviation. However, it is not possible to claim that this amendment alone brought about deregulation. The actual deregulation came into force in 2003, when the barriers to market entry were removed; this provided the primary condition for competition. After 2003, the domestic market broke away from the monopolistic structure and was converted into a market where multiple numbers of airlines operate. In Table-1, airlines that entered the domestic market up until December 2011 following deregulation are shown, where prior to 2003, it was only Turkish Airlines operating; dates they entered the market and their current status can also be seen in the Table. Findings show that competition among airlines in the domestic market is shaped according to the network structures formed by the carriers. Although all scheduled airlines in the market compete with one another in the general sense, airlines that select Ataturk International Airport in Istanbul as their hub for flight operations and airlines that select Sabiha Gok9en International Airport in Istanbul as their hub, actually enter into direct competition among themselves. As a result, Turkish Airlines, Atlasjet and Onur Air in one group, and Pegasus Airlines, AnadoluJet and SunExpress in another group are firms that directly regard one another as competitors. Food supply Chain

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A Study of the Strategic Responses of Turkish Airline Companies to the Deregulation in Turkey: Methodology

A Study of the Strategic Responses of Turkish Airline Companies to the Deregulation in Turkey: MethodologyIn this research, qualitative research methods and techniques that enable the undertaking of in-depth and multi-dimensional analysis on current developments in any environment and explain why and how decisions related to social events and cases are made were employed. In this qualitative work, the aim is to present a descriptive and realistic picture related to the topic. All the qualitative data collected has been analyzed using a descriptive analysis method. Buyer seller relationships

Research data was collected between 07.07.2010 and 07.09.2010 via a semi-structured interview method. With this in mind, an interview form relating to the literature was prepared and interviews were carried out with senior managers of airline companies in the research population. Both during the preparation of the interview forms and during the analysis of the data, Porter’s ‘Five Forces Model’ and “Generic Competitive Strategies” formed the basis of this work.
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