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
The first private airlines that entered the market wished to operate with an extensive network structure in the domestic airline market. However, after having thought that this strategy would not bring any success, they decided to implement more focused strategies. Later on, these carriers developed strategies to operate in city pair markets with excess capacity where there is high demand. Airlines that entered the market later, such as SunExpress, Pegasus and Borajet, focused on markets where there were no competitors and they developed more defensive strategies. These strategies are regarded as being important in the sense that they contribute not only to the success of the airline that executes them, but also to the expansion of domestic airline transportation.
We cannot say that there is competition in all the city pair markets in domestic routes. In major developed cities especially there is strong competition, whereas in certain other markets, monopolies are still apparent; Turkish Airlines is the carrier mostly offering services in these monopolistic markets. 49% of Turkish Airlines is owned by the state and its privatization on the whole is regarded as important to ensure a more efficient and fair competitive environment in the market. After all, privatization is seen as a requirement of deregulated markets.
Although entry the market has been deregulated, there is still a barrier to market entry at Ataturk Airport; the reason being insufficient capacity of the airport that was unable to handle the rapid growth after deregulation. This problem is reflected onto the operations of current airline companies in the form of slot difficulties, but it also makes it impossible to issue market entry permits to new entrant airlines. As slots are unavailable, this has an impact on the strategies of airline companies. There is also the general view that slot allocation among private airlines is not performed efficiently. When we see that the task of slot coordination is under the authority of the General Directorate of State Airports, a public organization, there is the suspicion that it may favor national air carrier. If this function were to be undertaken by an independent entity as is the case in many European countries, it would ensure more efficient slot allocation and greater trust in the market. Additionally, if a certain number of slots is to be allocated to new entries under certain legal regulations, entry the market would be facilitated as well. Human resources problems, infrastructural deficiencies and other operational challenges make the market entry and operating in the market difficult for air carriers; however, these are all challenges that may be overcome.
According to the findings, the most fundamental strategic change encountered by private domestic airlines following deregulation has been their migration from non-scheduled airline operations to scheduled airline operations. This migration means a change of activity areas and the formation of a new mission, so we may conclude by saying that this has altered the corporate level strategies of Turkish private airlines drastically.