This is a best prospect industry sector for this country. Includes a market overview and trade data.
Turkey is an emerging aerospace hub for markets in Europe, the Middle East, the Caucasus and North Africa. Given its proximity to developed and emerging markets (over 50 countries are within a three-hour flight from Istanbul), its growing economy and population base, Turks have come to rely increasingly on domestic and international air service over the past decade. Due to the expansion of private airlines, the number of domestic and international flights has increased significantly in recent years, leading to a surge in total passenger and cargo traffic.
The Turkish civil aviation sector continued its steady growth in 2019 as well, with total passengers reaching 209 million. 100 million passengers flew domestically while the remaining 109 million flew to international destinations. Total cargo traffic was around 2.3 million tons. A major milestone for the aviation sector was the grand opening of the new Istanbul Airport in April 2019 and the closing of Atatürk Airport after decades of service. Total combined passenger traffic at Atatürk Airport and subsequently İstanbul Airport in 2019 reached 68.5 million, continuing as Europe’s fifth busiest airport with respect to direct, indirect and hub connection passengers. In terms of hub connections, Istanbul Airport ranks ninth globally. Sabiha Gokcen, Istanbul’s other airport, served 35.4 million passengers in 2019, bringing the city’s total passenger count to over 100 million. With completion of the second runway at Sabiha Gokcen in early 2021, the airport is expected to reach an annual passenger capacity of 66 million. The Istanbul Airport, once all phases are complete, will have a 90-million passenger capacity and is expected to be the largest airport in the world. With three runways now operating, the airport has triple simultaneous take-off and landing capability, which only a few airports have globally. By 2033, Istanbul is expected to host more than 50,000 long-haul passengers per day.
New private airlines, including low cost airlines, have emerged or have grown. According to a Turkish Exporters Assembly report, Turkey was the third largest service exporter in aviation, generating $11.2 billion in service exports in 2018, following the United States and UAE. Furthermore, in 2019, five of the top ten service exporters in Turkey were aviation companies. There has also been growth in maintenance, repair and overhaul (MRO) activities, with new MRO centers being established in Istanbul. Turkish HABOM, based in Istanbul at Sabiha Gokcen Airport, is a large MRO facility consisting of a THY Technic joint venture for wide- and narrow-body aircraft repair and maintenance. Sabiha Gokcen also hosts an engine repair shop and various other MRO facilities of varying size and scale. Growth in the aviation sector also brought a significant increase in the number of flight destinations, reaching 56 domestic destinations from seven hubs and 328 international destinations in 126 countries in 2019. Turkish Airlines (THY) flies to the most destinations nonstop from a single airport. There are more than 55 countries within narrow-body reach, which makes Istanbul a natural global hub for aviation. THY currently has 360 aircraft and holds 2% of the global market. In March 2018, the Boeing Company signed a contract with THY for 25 Dreamliners (787 aircraft) with an option to purchase an additional five.
Turkish MRO companies like THY Technic, Pegasus Technic and others are also competing to increase their share of the MRO market and expand their customer portfolios. According to aviation industry experts, 12% of the airline industry costs pertain to aircraft maintenance, which provides significant opportunities for MRO companies.
Overall growth in the aviation market has also been buoyed by the private jet market. While markedly impacted by the financial crises in 2001 and 2008, demand for private jets since then has been on an upward trajectory, more than doubling since 2009. As a result, Turkey is now one of the fastest growing markets in private jet usage.
The government has made the aviation sector a priority, evidenced by a variety of incentives to attract both customers and airlines. Low-cost airlines have become more popular, regulations pertaining to fares have been revised and discounts in airport service, landing and passenger fees and tax reductions for ticket fares and jet fuel have been implemented. THY is now over 50% publicly traded, bilateral service agreements have been signed, the Civil Aviation Authority has become more active in the international arena and construction of new airports, including the new Istanbul Airport, have been completed or have begun.
The Turkish Space Agency was established in December 2018 to develop technologies for rocket launches and space exploration. The agency will also coordinate all commercial space activities. Although the agency reports to the Ministry of Industry and Technology, it has financial and administrative autonomy and its own budget. It will coordinate space efforts for relevant Turkish entities by streamlining their activities and serving as the main point of contact for international organizations. The Turkish Government already funds several space research centers and the new agency will coordinate their activities as well as those of Turkish Aerospace Industries (TAI), Roketsan (Turkey’s leading rocket producer), and Turksat (semi-private satellite organization).
Turkey’s total budget allocated to space programs has reached $1 billion. Turksat 6A, the fist telecommunications satellite, to be designed and manufactured locally, has been allocated $546 million. It is expected to be completed in 2020-2021. With the completion of Turksat 6A, Turkey will join the league of 10 countries with communication satellite production capabilities.
Turkey’s involvement in the space sector has been primarily in the realm of satellites. Turkey has also engaged in mission software development, ground station technologies, and integration and testing of satellites. It is generally seen as an untapped market with significant opportunities for U.S. companies, as it is heavily import-reliant, specifically at the component level. Although Turkey has some design capability, it relies on imports for smaller components such as chips, circuits and heat-resistant materials. U.S., Canadian, European and Asian (particularly Korean) companies are the leading suppliers of these components.
Turkey currently has three communication (Turksat 3A, 4A and 4B) and three reconnaissance satellites (RASAT, GOKTURK 1 and 2) in orbit and actively in service. The latter serve the Turkish Military and various government agencies. Tubitak Space and Turksat also have ongoing satellite projects of various types and scale.
Given Turkey’s lack of experience in the space sector, it is an untapped market, expected to grow in multiple dimensions.
- Aircraft / aircraft parts
- MRO activities
- Satellites and launch services
- Civil aviation and air traffic control systems
The Turkish aerospace market is heavily import-reliant, particularly for air platforms and related equipment. U.S. companies have the largest share of this market (followed by their European and Japanese competitors), providing a wide range of aircraft, helicopters and other air platforms as well as subassemblies, aircraft parts/components, landing systems, radar systems, x-ray and scanning equipment, ground control equipment, safety/security systems, communications equipment, runway and landing lighting, automated landing systems, avionics and more. The preferred model for airport development in Turkey is the Build-Operate-Transfer (BOT) model. The State Airports Authority (DHMI) remains the largest procurement authority for air traffic control (ATC) equipment, navigation aids (such as Automatic direction finder (ADF), inertial navigation, compasses, radar navigation, VHF omnidirectional range (VOR) and GNSS), airport infrastructure and airport security systems.
- General Directorate of State Airports Authority (DHMi) – www.dhmi.gov.tr
- Turkish Airlines (THY) – www.thy.com
- Directorate General of Civil Aviation – www.shgm.gov.tr
- Ministry of Transport and Infrastructure
For further information on this section or more on potential opportunities, contact:
Senior Commercial Specialist
U.S. Commercial Service Turkey