Turkey’s location as a burgeoning crossroads for international trade, combined with growing demand for air freight capacity, is leading to new shipping investments there. Turkish Airlines, the fourth-largest cargo airline in the world by volume — not including FedEx and UPS — and small independent carrier MNG Airlines continue to add to their fleets, with startup Air Anka joining the field in recent weeks.
Logistics experts say Istanbul airport offers opportunities for cargo transfers between the East and the West because of its proximity to Europe, but it will be difficult to match the Middle East transshipment strongholds of Dubai and Doha, Qatar. Emirates and Qatar Airways, respectively, channel traffic through their home-country hubs to connect to more countries in which they have takeoff and landing rights.
And, said Mark Diamond, vice president of consultancy Strategic Aviation Solutions International, Turkey needs airlift to support its substantial domestic market. Turkey is the 23rd-largest economy in the world and has eight times the population of the United Arab Emirates.
Turkish Airlines is the cargo leader with massive global scale and scope, incorporating more than 350 passenger aircraft and 20 widebody freighters.
“Turkish Cargo’s growth has demonstrated the value of an integrated passenger belly and dedicated cargo fleet. It has also benefited from the power of global connectivity linking hundreds of global origins and destinations via a cargo-supportive airport encouraged by a supportive government,” said Glyn Hughes, executive director of The International Air Cargo Association.
Other all-cargo operators in Turkey include ULS Airlines Cargo, with three standard Airbus A310 freighters; and ACT Airlines, which flies five Boeing 747-400s and specializes in short-notice charter flights.
Turkish Airlines Cargo has moved from a 1.8% market share in 2016 to 5.2% last year, according to figures from the International Air Transport Association. It is now the largest European carrier in terms of cargo volume.
The airline continued to invest in cargo during the pandemic, including the construction of a new mega-cargo terminal at Istanbul Airport that opened at the end of 2021.
“We made cargo a core business. Now we are working on our next 2025 vision: to make Turkish top three in terms of service. This will take us high in volume too, but we want to focus on customer reliability and experience,” Turhan Ozen, chief cargo officer, said on STAT Media Group’s “Cargo Masterminds” podcast in April.
The company said in its annual report that it is steadily boosting performance in key metrics such as cargo flown as booked and on-time rates.
In 2021, Turkish Cargo set a revenue record of $4 billion, beating its strategic target by two years, and outperformed the industry on volume growth. Freight-ton-kilometers, a measure of volume carried by distance, increased 34% to 9.1 million compared to a sector gain of 22%. The company expanded the number of cargo destinations from 95 to 98, including Newark International Airport in New Jersey.
The airline reported first-half revenue grew 12% year over year to $2 billion.
A diversified service portfolio, an extensive route network and interest in space guarantees because of tight industry capacity have helped attract customers, with key accounts now representing more than a third of total cargo revenue.
From Istanbul, Turkish Cargo is able to hit 60 capitals within seven hours’ flight time.
Turkish operated more than 3,200 cargo-only passenger flights last year using 16 widebody aircraft, including two A330s optimized for cargo transport with their seats removed. During the peak of the pandemic, when passenger flying nearly stopped, the company utilized 35 auxiliary freighters. The airplanes were phased back into passenger service this year as travel demand rebounded.
The freighter fleet consists of two Airbus A310-300s, 10 A330-200s and eight Boeing 777-200 aircraft.
The global hub, dubbed SmartIST, will be one of the largest air cargo facilities in the world when the second phase is completed, with 3.7 million square feet of space able to handle 4.4 million tons of cargo per year. The current facility has 2.2 million square feet of storage capacity.
The facility is not only very large, but it’s also technologically advanced.
It is being built with a lot of automation and technologies to speed up processing and minimize physical labor, including automatic storage systems, robotics process automation, a fully integrated warehouse management system and digital tracking to reduce sorting errors. Future plans call for the integration of augmented reality and unmanned ground vehicles.
The autonomous systems can transfer cargo to storage locations without the use of lifting equipment. The high-bay racks actually move up and down in shafts, stopping at the main level for placement or retrieval. Specialized scanners automatically measure the volume and weight of air containers, which are then routed by the system to their storage location, according to Turkish Cargo’s website.
Automated systems integrate work orders into the workflow, which shortens the distance cargo is moved within the facility by reducing wasted movement.
“The global air cargo value chain is very fragmented. There are lots of regulations. It creates lots of steps and several parties that need to act in coordination to provide maximum service,” Ozen said on the podcast. “We believe digitalization provides a unique opportunity to integrate with partners so we can act like one unit according to the customer’s needs.”
SmartISTist has dedicated operation areas and cargo acceptance doors for perishables, express, valuable and e-commerce cargoes to ensure quality service. A SmartDock system directs delivery drivers to the correct door for truck transfers, which the company says minimizes traffic congestion.
Turkish Cargo more than doubled temperature-controlled space at the hub.
It is also introducing a revenue management system this year to make bookings more responsive as more sales migrate to digital channels.
In July, Turkish announced an outsourcing agreement with YTO Cargo Airlines, an express operator in China, to fly four weekly flights on its behalf between Xi’an and Tashkent, Uzbekistan. Shipments departing from China are connected to Turkish Airlines’ Tashkent-Istanbul flights the same day and then routed through Smartist to their final destination.
MNG Airlines, a contract carrier for express delivery and general freight customers, plans to grow its all-cargo fleet by more than 50% over two years as it invests in acquiring and converting passenger aircraft to hold containers instead of people.
The extra assets will allow privately held MNG, which hauled 20% more cargo — 240,000 tons — last year than in 2020, to offer shippers more scheduled and charter service to more destinations. From its home base in Istanbul it goes up against Turkish Airlines, a top five cargo airline by tonnage.
The company recently announced it had received a second Airbus A330-300 from conversion specialist Elbe Flugzeugwerke GmbH, an Airbus subsidiary, and planned to deploy it by the middle of September. The overhaul took seven months, slightly longer than normal, because EFW and other remodelers continue to experience material shortages due to supply chain backups.
The latest addition brings MNG’s fleet to nine aircraft, including six A300-600 converted regional freighters, a factory-built A330-200 and the first reconfigured A330-300 that began operating in November. The initial A330-300 allowed MNG Airlines to offer scheduled service between Cologne Bonn airport in Germany and New York’s John F. Kennedy International Airport three times a week, benefiting German and Benelux exporters.
The A330-300 has a payload capacity of 61 tons and more volume for light packages than the -200 variant.
MNG said it has already made deposits with EFW for the reconstruction of two additional A330-300s and revealed it also intends to add standard-size A321 converted freighters in 2023 and 2024 to go after more business in the short-haul market that is increasingly dominated by e-commerce shipments.
Spokesman Ipek Akyildiz declined to provide details, including how many A321s the company plans to acquire and change to cargo haulers. At a minimum of two orders, MNG would have added at least five aircraft between now and 2024, a 55% increase in fleet size.
The A321 converted freighter is a new product for cargo operators, first brought to market by EFW two years ago, that is increasingly popular for express delivery networks as an alternative to the Boeing 737-800. A U.S. company also now offers its conversion design for the A321.
Passenger-to-freighter conversions involve removing seats, lavatories and galleys, strengthening the floor’s foundation and adding a large cargo door, cargo handling system and fire protection.
MNG Airlines is also investing in digital upgrades to its systems.
Air Anka received its air operator certificate from Turkey’s aviation authority in August, giving it the right to commence using aircraft for commercial purposes.
The company has partnered with air broker Merkur Jet to sell charter flights with its two jets, an Airbus A330-200 and A330-300 with the seats removed from the main deck to allow extra room for light boxes.
The decision to go ahead with a zero-seat configuration lacking an approved cabin redesign that incorporates permanent features such as smoke and fire detection systems is potentially risky. The European Union Aviation Safety Agency’s (EASA) emergency COVID exemption allowing airlines to modify passenger cabins for cargo carriage without following normal modification procedures expired July 1.
The vast majority of airlines pulled back on cargo-only flights with passenger aircraft because of the exemption, the need to return airplanes to passenger service as the pandemic subsides, and the combination of lower cargo rates, high fuel prices and extra manual labor for loading that undermine their economic viability.
Merkur officials suggested via email that Air Anka can still operate the airplanes using lower deck compartments and possibly to certain countries that don’t follow EASA or U.S. safety policies.