Overview
Turkey is an emerging aerospace hub for markets in Europe, the Middle East, the Caucasus, and North Africa. Given Turkey’s proximity to developed and emerging markets (over 50 countries are within a three-hour flight from Istanbul), as well as Istanbul’s role as a financial hub, Turkey’s aviation and aerospace sectors have enormous potential. Due to the expansion of private airlines, the number of domestic and international flights has increased significantly over the past decade, leading to a surge in total passenger and cargo traffic.
Aviation, however, was impacted more than any other sector by the COVID-19 pandemic. In 2020, the passenger volume dropped nearly 60% to 82 million before rebounding to 129 million in 2021. Analysts anticipate the aviation sector will increase its passenger volume to pre-pandemic levels by 2024.
In 2021, total cargo traffic increased to 3.5 million tons from 2.4 million tons. The completion of the new Istanbul Airport in April 2019 and the closing of Ataturk Airport after decades of service was a major milestone for Turkey’s aviation sector. Total passenger traffic at İstanbul Airport in 2022 increased to 37 million from 24 million in 2021. Istanbul Airport has become Europe’s busiest passenger airport and currently ranks second globally in hub connections. Sabiha Gokcen, Istanbul’s other airport, served 24 million passengers in 2022. 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. 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 grown in recent years. Maintenance, repair, and overhaul services have grown in Turkey, with several new MRO centers recently established in Istanbul. Turkish HABOM, based in Istanbul at Sabiha Gokcen Airport, is a large MRO facility consisting of a Turkish Airlines (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 has contributed to a significant increase in the number of flight destinations with and outside of Turkey. Currently, airlines within Turkey fly to 52 domestic destinations from seven hubs and to 262 international destinations in 124 countries. 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 372 aircraft and holds around 2% of the global market. 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 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. Currently there are 86 private jets owned by businesses and 39 air taxis. These numbers are expected to increase. Turkey is now one of the fastest growing markets in private jet usage.
The government has prioritized growth of the aviation sector, as 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, as well as tax reductions for ticket fares and jet fuel, have been implemented. THY is now over 50% publicly traded and recently signed several bilateral service agreements. The Civil Aviation Authority is active in the international arena. Construction of new airports and aviation infrastructure continues.
Space Programs
The Turkish Space Agency (TUA) was established in December 2018 to develop technologies for rocket launches and space exploration and coordinate all commercial space activities. Although the agency reports to the Ministry of Industry and Technology, it has financial and administrative autonomy. TUA coordinates space efforts for relevant Turkish entities by streamlining their activities and serving as the main point of contact for international organizations. The GoT already funds several space research centers and TUA 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 has allocated nearly $1 billion to its space program. Turksat 6A, the first domestically designed and manufactured telecommunications satellite, was allocated $546 million and is expected to be completed in 2021. Upon completion of the Turksat 6A, Turkey will join the league of 10 countries with communication satellite production capabilities.
Turkey’s involvement in the space sector is primarily in the realm of satellites, software development, and ground station technologies. Turkey’s space sector 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 companies are the leading suppliers of these components.
Turkey currently has five communication satellites (Turksat 3A, 4A, 4B, 5A, and 5B) 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.
Turkey announced a new space program in 2021. This program consists of 10 targets, including a lunar mission in 2023, the centennial of the Republic of Turkey.
Leading Sub-Sectors
- Aircraft / aircraft parts
- MRO activities
- Satellites and launch services
- Civil aviation and air traffic control systems
Opportunities
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 Build-Operate-Transfer (BOT) model is the preferred airport development model. The State Airports Authority (DHMI) remains the largest procurement authority for air traffic control equipment, navigation aids, airport infrastructure, and airport security systems.
For further information on this section or more on potential opportunities, contact:
Ceren Okumus
Commercial Specialist