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.
Aircraft in its fleet have a capacity of sixty six seats and are suitable for operating in low potential markets in an efficient and productive way. As the number of seats is limited, it is easily able to reach high load factors in these markets and thus reduce unit costs. Additionally, these markets generally have airports with shorter runways and smaller aprons; it may be extremely difficult and sometimes not even possible for large jets to take off from or land at these airports. Borajet is however, able to undertake effective operations at these airports with the turboprops it has. Another advantage these aircraft have is that fuel and maintenance costs are lower than others. In the long run, it can bring an advantage to Borajet from a labor cost perspective as well. All these attributes that are advantageous for Borajet may be a challenge for other airlines in the sense that airlines in the market operating with their larger jet aircraft may have difficulty in implementing this or even if they implement it, they may encounter other efficiency or productivity problems. So, we can say that with this strategy, Borajet is protecting itself against competition and has seized a competitive advantage. In response to this, since the support services and infrastructure for these aircraft have not been put into place yet in Turkey, Borajet is obliged to construct most of the infrastructure itself. For these reasons, the initial costs of Borajet may be higher than those of other airlines, but still the operational cost in the upcoming term will be lower for Borajet than for many others.
While transporting passengers between two points, Borajet is planning to receive passengers on-board from other intermediary points as well. As Ataturk Airport is the normal destination for most of its flights, Borajet is willing to operate from there; however, as it is not able to get any slots from there, it has flights centered at Sabiha Gok9en Airport. Borajet prefers not to enter the routes of its competitors, but rather operates in markets where it can fly for one to two hours with the aircraft in its fleet. It is not able to compete with other carriers in markets where flights take longer than two hours. Additionally, if it enters markets where jet aircraft are operating, its competitive capabilities may diminish. So, Borajet has a regional network strategy in which it flies to short and medium range destinations no other carrier flies to, connecting major and smaller cities through a grid network system.
As we consider all the practices of Borajet, we see that it concentrates its activities in a given geographical area, so it can be seen that Borajet’s strategy is the focus strategy from Porter’s competitive strategies.