The Turkish civil aviation sector developed quite rapidly after 2003. In 2003, it only made up 0.54% of the Turkish economy but as new players entered the sector, the sectoral growth rate of 5% soared to a record growth rate of 53% By the end of 2006, Turkey had reached the total traffic volume increase that international organizations had forecasted for the end of 2015. Moreover, change and improvement in the sector steadily continue. With the recent important developments in our sector, such as the closure of the Atatürk Airport and the opening of the Istanbul Airport, growth will continue, and we will get closer to achieving our true potential. Opportunity abounds with the Istanbul Airport’s anticipated passenger capacity of 90 million and the fact that Istanbul will become a major air transportation city, the largest air transfer hub in Europe. With these important developments in our sector, it is only a matter of time until Turkish civil aviation rises a shining star to be seen by the world, and along with this momentum, Pegasus Airlines continues with full force and capability, working with all of our power and pride to continue to exceed expectations.
2018 was an extremely positive year for us. Guest numbers increased by 8% to 30 million guests. Our occupancy rate grew by 1% to 85%. Side income per guest increased by 18% to €11.9. We increased our revenue to 8.3 million TL with a 55% increase compared to the previous year. We also managed to maintain our profitability at last year’s level despite the increase in oil prices. In short, our operational and financial indicators improved. Given our CASK (Cost per Available Seat Kilometres), 2018 was better than our CASK target, excluding fuel. We increased our daily use of flights. With our new A320neo aircraft added to our fleet, we began optimizing our fleet. We launched Ankara-Baku, Gaziantep-Erbil, Trabzon-Amman and also flights to from Sabiha Gökçen to Basra, Venice, Riyadh, Manchester, Eindhoven and Casablanca. Currently, we fly to 110 destinations in 42 countries with 35 domestic and 75 international flights. We continue to grow with the addition of new routes to serve our guests, and we will grow even more with the exciting new developments in the sector. The unique location of Istanbul will play a significant role in supporting growth and facilitating these developments.
Sustainable growth is a delicate subject against a backdrop of planning. At Pegasus Airlines we identified key business pillars of sustainable growth and the reasons behind them. We have the 3rd lowest CASK in Europe, excluding fuel. We are transforming our fleet step by step with the addition of our Airbus aircraft. Istanbul Sabiha Gökçen Airport’s new position as the closest airport to the city of Istanbul, following the closure of Istanbul Atatürk Airport and with the second runway which is expected to be in service by 2020, will support our growth targets. We will continue to increase our side income with our new additional products and services. We will continue to be ‘Turkey’s Digital Airline’ with the digital transformation that we initiated in 2018 and to improve profitability via our digital solutions. All of these are the main factors that will enable us to continue toward our sustainable growth targets. Our goal is to create a difference in guest experience while improving our operational profitability and efficiency by benefiting from technology...
Technology and digitalization are two concepts that we began to hear a lot about and became actively involved in. As with every other sector in the world, these two concepts have significant influence and impact on the aviation sector. Recently, technological areas such as biometrics - facial recognition applications, blockchain and translation software are among the key talking points in the global aviation sector and inherently many innovative applications in these areas are being adapted to the sector as well.
Pegasus Airlines keeps a close eye on which technologies are being used in the international aviation sector. Using the leading European low-cost airlines as our benchmark, our teams examine digital developments and new applications around the globe. It is clear to us that the Turkish aviation sector places great importance on this issue. We evaluate all of the technologies that we monitor with regard to their ability to improve the travel experience of our guests from beginning to end and to simplify their lives. In addition, by employing robotic technology in our infrastructure to establish self-managed systems, we can lower our costs and increase the productivity of our operations. For this reason, technology and digitalization have been among our key areas of focus over the past few years.
Within the framework of the digital transformation that we started in 2018, we not only renewed our website and mobile applications but also began to introduce many innovations to the airport and in-flight travel experience. As ‘Turkey’s Digital Airline’, we integrated various technological innovations into our systems in order to improve the travel experience of our guests.
By employing robotic technology in our infrastructure, we established self-managed systems. We convert data into value in different lines of business and we know our customers well and we create a positive difference in their experiences with our solutions. Our main areas of focus are digitalization and our guests. We offer our guests brand new digital technologies and unparalleled innovations that will facilitate and expedite their travel experiences from A to Z. We would like to mention a few:
It is very important for us to inform and guide our guests throughout their journey. That was the aim when we developed our Travel Assistant Program, converting our mobile app into a travel assistant. Within the scope of the first phase of the program, we began notifying guests at Sabiha Gökçen International Airport of their gate number and the carousel number where they can reclaim their baggage. In addition, we inform guests’ relatives that the plane has landed at its destination and provide useful information to guests with infants, those with connecting flights and who have checked in online.
Another successful application that we instigated in the second half of 2018 is “Express Baggage.” This option aims to enable our guests to experience a fast, practical and digital journey all the way from ticket purchase through to baggage reclaim. We are the first airline to offer this service at Sabiha Gökçen Airport and the first airline to offer it on domestic Turkish routes. Accordingly, we offer guests who have completed online check-in the option of a self-service bag-drop so they can avoid waiting in line. This service has been in high demand since we began to offer it. Currently, about 16-17% of our online check-in counter transactions are being realized through the self-service Express Baggage facility.
As of February, we have begun to test Travel Technology using the New chip ID card on Turkish routes at gate 208B, in a joint operation with Istanbul Sabiha Gökçen International Airport terminal management. This joint project aims to allow guests, who have completed their online check-in for domestic routes, to proceed directly to their flights using the new chip ID card, without having to obtain boarding cards, thereby eliminating the need to queue up and offering fast and easy flight access. This project is a global first, and we plan to implement it on all domestic flights departing from Sabiha Gökçen Airport by the end of 2019. Thanks to this project we will allow our guests to fly “paperless”, using only their own ID cards or passports, which is a revolutionary transformation. In fact, in the more distant future, biometric information (fingerprints, facial recognition etc.) might be sufficient for flying. New developments are happening worldwide in this area.
We utilize digital transformation in many areas of our operations. In 2016, we eliminated the use of paper in the cockpit and transferred over to electronic flight maps with our Electronic Flight Bag project. In 2018, with Blockchain infrastructure, we ensured the instantaneous transfer of operational information on flights generated by Sabiha Gökçen Airport systems to Pegasus systems. With our Digital Apron project, we began monitoring all of our apron vehicles and planes at Sabiha Gökçen Airport with IoT technology and achieved a reduction in fuel and maintenance costs by maximizing utilization of our personnel and vehicles through automatic task assignments using artificial intelligence. These cost reductions allow us to continue to offer our guests flight tickets at extremely reasonable prices, too.
In order to digitalize the entire travel experience of our guests, we introduced a brand-new in-flight digitalization project. We have successfully completed the installation of an in-flight entertainment system (IFE-Inflight Entertainment), and very soon our guests will be able to access content such as films, games and music on our IFE system on all flights. They will be able to watch these broadcasts by connecting their personal iPad, smartphone or computer screen.
These are just a few of the projects that we have instigated within the framework of our technology and digitalization investments. During 2019 we will continue to introduce innovations that simplify our guests’ travel experiences within the scope of the complete digital transformation of all our processes, from A to Z.
We are hopeful for 2019
Tourism made a great contribution to Turkey in 2018. We forecast that tourist interest in Turkey will continue in 2019 and we are making our plans accordingly. In line with the manufacturing planning of Airbus, we will add 11 new planes to our fleet at the end of this year. In August, we will receive our first A321neo aircraft. With our A321neo aircraft, we will lower our CASK even further. We plan to use a significant part of our capacity on international routes in order to meet the increasing tourism demand.
As a low-cost airline company, our top focus in 2019 will be to control our costs. Besides that, continuing our digitalization investments and optimizing customer experience are among our priority targets. We will continue to be one of the greatest supporters of growth in Turkish tourism and continue our growth in international routes.
With over 5,500 colleagues currently, we work diligently and proudly for our country, sector and company with all our power. But our job is not just to think about today, but also to plan for tomorrow. Thus, we began to offer young people the chance to achieve their dreams of becoming pilots with our “Pegasus Pilot Training Program” that was initiated at the start of this year. This is both a solution-oriented approach to increasing sector need and an important step for Pegasus in helping young people achieve their dreams...
Finally, as we always say, ‘we didn’t initiate aviation in Turkey, but we changed it’. We continue to always do better for our country, our sector and our guests, to tirelessly work every day to change aviation together...