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.
In 2008, SunExpress started operating flights from Sabiha Gok9en Airport as well and thus opened up a third hub for itself after Antalya and Izmir. The reason for selecting Sabiha Gok9en Airport as the hub is assumed to be the fact that Turkish Airlines, that has 50% ownership of the operator, also wanted to be part of the competition based at Sabiha Gok9en Airport. It is particularly in competition with Pegasus Airlines and thus attempts competitive superiority in the market. Moreover, this is a good example that exhibits the implementation of strategic partnership in order for both Turkish Airlines and SunExpress to be able to compete. Financial service

SunExpress is not in direct competition with all the other airlines in the market. It only faces competition in specific city pair markets where other airlines are also present; and the most important competitive tool SunExpress uses is service quality rather than price. However, SunExpress’ understanding of service quality differs from that of traditional airlines that provide full services because it is also possible to see the practices of low cost airlines in SunExpress. The aim of SunExpress is only to execute practices that would create value in the eyes of the customer. This is why it adopts the practices of low cost airline that would create value for its services in the eyes of the customer and thus it reduces costs and creates that value.
The strategy of SunExpress may be interpreted as an integrated strategy that blends the practices they believe would create value for the customer from differentiation, cost leadership and focus strategies that are in implementation at many airlines around the world. It also employs the strategy of offering affordable prices that would meet the cost of service quality rather than high prices in return for a service of good quality.