Turkey’s geographic location in a region mired in conflict and civil war is driving Turkish logistics players to hone their survival skills. Besides conflicts in Syria, Iraq and other countries, Turkey faces uncertainty resulting from its ongoing spat with Russia, impacting its trade ties with that country.

Turkish operators are trying to offset their market losses by intensifying their business ties with countries such as India, China and the United States. This strategy was also visible at the Air Cargo India Forum 2016 in Mumbai, with Turkish Cargo executives saying there that India and other big markets presented a “rare opportunity” to build up good business in certain segments, like India’s booming pharmaceutical export sector, which have an inherently strong business potential.

Halit Anlatan, Turkish Cargo’s vice president (cargo marketing and sales), was particularly bullish about India’s pharma exports to the rest of the world via the carrier’s hub in Istanbul.

“Pharmaceutical shipments will account for a substantial part of our traffic from India to several major markets in the world, particularly to the United States, which is India’s largest market for this product group,” Anlatan said in an interview with Asia Cargo News in Mumbai. Turkish Airlines, the parent company, operates a daily service each to Delhi and Mumbai, transporting cargo in the aircraft belly. Over and above, Turkish Cargo operates twice-weekly freighter service to Delhi and once weekly to Mumbai.

“Yes, we are looking for new destinations in India,” he confirmed when asked about Turkish Cargo’s planned expansion in India.

Anlatan emphasized that Turkish Cargo was “extremely careful” in handling temperature-sensitive cargo such as pharmaceutical products, including medicine, raw materials for pharmaceuticals, vaccines, sera, plasma and other biotechnological and medical materials which tend to lose their effectiveness if not stored at right temperatures, and claimed that his carrier can transport pharmaceutical cargo “when and where it needs to go at the ideal temperature range”

Anlatan also pointed out that the cargo carrier’s hub at Istanbul Ataturk International Airport, which serves as a transit point, was equipped with state-of-the-art spacious storage facilities, including cooling and refrigeration facilities, to maintain pharma products at the right temperatures.

Turkish Cargo transported a total cargo volume of some 730,000 tons in 2015, up 8% over the previous year’s volume. The cargo carrier’s fleet, at present, has 10 freighters, including seven Airbus A330F aircraft and three A310F aircraft. But its growing passenger aircraft fleet also transports a substantial volume of bellyhold cargo; it maintains 300 passenger aircraft, of which 80 are widebodies and the 220 are narrowbodies.

Though North America is another “promising market,” Anlatan said that the lion’s share of its business is, in fact, accounted for by the rest of the world, notably Asia, Western Europe and Turkey itself.

Discussing the cargo carrier’s operations in North America, Anlatan said, “In North America, we 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 existing capacity for Washington and Los Angeles, where we will have two daily passenger flights. We have once a week freighter service to JFK, and a once a week freighter to Chicago and Atlanta each.”

With its “incredible growth potential,” Asia continues to be an important region for Turkish Cargo; it already flies to three cities in China – Beijing, Shanghai and Guangzhou – deploying passenger Boeing 777 aircraft. The cargo carrier will have an additional freighter service to Guangzhou, increasing it to twice a week, besides operating a thrice-weekly freighter service to Shanghai. The carrier has six weekly passenger flights to Hong Kong, in addition to a freighter service (four times a week with an A330F).

Turkish Cargo operates a twice-daily passenger service and three weekly freighter flights to Seoul, while serving Japan with a twice-daily passenger flight to Tokyo with an A330 aircraft.

The newly-created ASEAN Economic Community (AEC) in Southeast Asia is also attractive for the cargo carrier. “We are increasing our capacity to [Kuala Lumpur] using two flights a day, deploying an A330 passenger aircraft,” Anlatan said.

The migration of companies shifting their manufacturing operations from China to Vietnam, thanks to the former’s economic slowdown and rising production and labour costs, has helped Vietnam become the “new China,” with a strong export-oriented economy leading to a steady rise in export cargo meant for major markets in North America and Europe. The carrier operates a combined daily passenger flight to Ho Chi Minh City and Hanoi, but it will fly separately to the two cities in its winter plan, in addition to the three weekly freighter flights to Hanoi. Cambodia, a new destination, is expected to share capacity with Hanoi.

Turkish Cargo operates a daily passenger flight and a weekly freighter service to Dhaka, which exports high-end value products such as garments, textiles, etc. by air.

Reviewing the current global cargo situation, Anlatan said declining oil prices in 2015 had an impact on air cargo traffic. According to IATA cargo statistics, some US$65 billion worth of global air cargo shipments were handled in 2012, but the figure had declined to US$50 billion in 2015. Anlatan acknowledged that the express business was growing faster than the cargo business.

But Turkey’s deteriorating relations with both Russia and Iran have also contributed to a decline in Turkish Cargo’s overall cargo volume.

Anlatan emphasized that the carrier had a “good business relationship” with Russia, which faces sanctions from the West and does not derive enough revenue from oil sales, which have sharply declined.

Turkish Airlines flies to six cities in Iran but does not operate a freighter service to that country. “In Tehran we sometimes use widebodied aircraft and transport dates and other perishable items,” he said.

Turkish Cargo already placed in 2012 an order for three aircraft of the A330F type; two of these freighter aircraft will be delivered to the carrier this year, while delivery of the third one is expected in February 2017.

By Manik Mehta

International Correspondent | Mumbai