Turkey has recently seen a spiralling of violent acts, including the deadly June 28 terrorist attack on Istanbul’s Atatürk Airport, followed by the failed military coup of July 15. Even as passenger and cargo traffic limps back to normalcy, experts do not rule out short- to mid-term repercussions of these incidents on Turkey’s aviation sector.

Aviation is, usually, the first casualty of any airport attack. Besides disrupting traffic, it causes mayhem, panic and nervousness among travellers and air cargo shippers. This was also evident at Brussels airport following the March 22 deadly suicide bomb attacks that ripped through the heart of that airport, though fortunately, the air cargo infrastructure was, largely, unaffected, according to Brussel airport officials.

Unlike Brussels, Atatürk Airport is one of Europe’s five biggest airports, the others being London Heathrow, Paris CDG, Frankfurt and Amsterdam Schiphol. Indeed, Istanbul surpassed Frankfurt last year in passenger numbers, and was well on its way to overtaking Paris as well this year.

In an average hour, 7,000 passengers pass through Istanbul airport which is being groomed to become a hub that would rival Dubai; Turkish Airlines, recently ranked among the top five airlines of the world, already flies to more destinations worldwide than any other carrier.

The attack on Istanbul airport could hurt Turkey’s ambitions of making it an aviation hub similar to those in the Gulf. Turkish Airlines, which gets 60% of its revenue from transit passengers, has been trying to push Istanbul into a global transit hub for traffic to and from the Americas, Europe and Asia. The new Istanbul airport, to be opened in 2018, was hailed by some Turkish experts as “Turkey’s aviation jewel.”

The new airport was to start with an annual capacity exceeding 80 million passengers, increasing the numbers to 150 million eventually. Istanbul, as many aviation experts agree, has been a convenient transit point offering alternatives to other transit airport hubs in the region.

The new airport was conceived and designed when Turkey was perceived as a hot tourist destination; tourism contributes some 13% to Turkey’s GDP, and is one of the country’s biggest forex earners. But even before the bomb attack at Istanbul airport, Turkey’s tourist arrivals had already dropped by 10% in the first five months of the year over the year-earlier period.

Turkey was the world’s sixth most attractive destination in 2014, recording 36.8 million visitors, according to the Association of Turkish Travel Agencies. It was expected to receive 42 million tourists in 2015, before the incidents occurred. About 4.5 million Russian tourists visited Turkey annually until last year. There was also a steep decline in Russian tourism flow to Turkey after the latter shot down a Russian plane. After a suicide bombing killed 32 people in Suruc last July, many countries such as the USA, Germany, France and others cautioned their nationals against travel to Turkey.

The signs of a declining tourism inflow were already visible in the first few months of 2016. The number of passenger flights, which carry bellyhold cargo, also declined. In April, tourist arrivals declined by 28% to 1.75 million, with the declining trend continuing in May, which saw a drop of 23%. Although the June figures are not yet available, US experts envisage a further decline.

Many experts doubt if the Turkish Government’s official forecast of attracting at least 30 to 33 million tourists this year can be realized, and fear that tourism earnings could fall below the official target of US$30 billion. Air cargo shipments from Turkey could also possibly decline.

Nevertheless, the World Bank still forecasts 3.5% growth this year, a sharp contrast to the double-digit growth Turkey posted some 10 years back.

After the Istanbul airport attack, Turkey experienced a failed coup attempt on July 15, setting off alarm bells in global financial circles. Investors are wary about Turkey’s disruptive politics, instability and rising number of terrorist attacks.

Trying to calm investors, Turkey’s prime minister, Binali Yildirim, has said that the government plans a multi-billion dollar infrastructure fund to keep growth on track.

According to Halit Anlatan, vice president of cargo at Turkish Airlines, the airline’s schedule was back to normal after the failed coup.

Turkish Cargo transported a total of some 730,000 tons in 2015, up 8% over the previous year’s volume. The cargo carrier’s fleet, at present, comprises 10 freighters, seven of which are A330-200Fs and the remaining three A310-300F aircraft. Three more freighters of the A330F type are on firm order; delivery of all three is expected to be completed by spring 2017.

But its passenger aircraft fleet, currently at 300 of which 80 are widebodies and the remaining 220 narrowbodies, has become an important medium for transporting bellyhold cargo.

The cargo carrier has been eyeing the big emerging markets: India, with huge volumes of outbound pharmaceutical air shipments, is one of the world’s largest pharmaceutical suppliers. Turkish Cargo transports substantial pharmaceutical supplies to major markets, including North America, Western Europe and Turkey itself, Anlatan said during a recent interview in Mumbai. It would be interesting to note if India’s pharmaceutical shipments on Turkish Cargo to North America, India’s biggest pharmaceutical market, would be affected by recent incidents in Turkey. Similar sentiments would also be valid in the case of other Asian countries such as China, South Korea, Vietnam and Japan.

“In North America, we have started operating to two new destinations last year – San Francisco and Miami. This year we will start operating to Atlanta and Panama, and will be increasing our capacity for Washington DC and Los Angeles where we will have two daily passenger flights. We have a once-a-week freighter service to New York JFK, and a weekly freighter service to Chicago and Atlanta each,” Anlatan maintained before the incidents. However, questions are also being raised about cargo traffic to North America maintaining the past momentum.

The coming weeks and months will provide crucial indicators about Turkey’s economy – and its aviation sector – and also the extent of the impact of the incidents on both passenger and cargo traffic.

By Manik Mehta

International Correspondent | New York