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

A Study of the Strategic Responses of Turkish Airline Companies to the Deregulation in Turkey: IntroductionStudies conducted in the deregulated airline markets show that the most significant outcome of deregulation is an increase in competition and that airline companies give strategic responses to this change. In accordance with Porter’s competitive strategies, airline companies have started to position themselves in a clearer way and implement these strategies more consciously. A significant outcome of deregulation in this context is the fact that the cost leadership strategy from Porter’s competitive strategies is now visible in air transportation. Deregulation has ensured that all the restrictions on market entries and market exits, pricing, capacity offered, mergers and acquisitions are removed, so that airline companies are liberated as they will make decisions on these issues that will have an impact on their production output; thus the applicability of competitive strategies is ensured. Payday Loans Online

Deregulation has brought similar impacts and outcomes throughout the world and Turkey followed a similar path after 2003. At different time intervals after this date, eight other carriers entered this market where there used to be only one carrier. As a result of the fact that some airline companies resigned from the market, there are, as of December 2011, six airline companies in addition to Turkish Airlines in the market. After deregulation in 2003, there has been a sudden increase in domestic airline passenger traffic and, by the end of 2004, passenger traffic increased by 58.1% (dhmi.gov.tr). Turkish Airlines’ sub-brand AnadoluJet also created a significant impact in the market. All these developments are proof that along with deregulation, the Turkish domestic airline market has entered into a new process and that there is a need to conduct research into the domestic airline market. Thus, it is now important to conduct research regarding the impact of deregulation on competition in the Turkish domestic airline market and on the kinds of competitive strategies developed. In this study, within this context, we are seeking answers to questions such as how the deregulation affected competition in the market, how Turkish airline companies reacted to deregulation of the market, what sort of strategic competitive tools they started to use and whether they implement a mindful competitive strategy by associating these tools with Porter’s competitive strategies or not.