Some airlines are doing more than just renewing their fleets and keeping pace with growing demand: they’re aiming to grow massively in order to change dimension and play a new role on the world stage. Among these are Turkish Airlines, Thai and Royal Air Maroc.
Since the end of the COVID crisis, aircraft orders have been soaring for two main reasons. The first is the need to renew fleets with more efficient aircraft, and the second is the speed of the recovery and unexpected growth in demand. Surprised by the strength of the rebound, many have reactivated the A380s they had retired while waiting to receive new aircraft.
Keeping pace with growth is the current watchword of the airline industry, and nothing could be simpler: when you consider that Airbus and Boeing have more than 10 years’ worth of orders ahead of them, one shouldn’t be in a hurry to receive recently ordered aircraft.
For others, however, the ambition is quite different: not only to keep pace with growth, but also to equip themselves with the capabilities that will enable them to take market share from their competitors sucking some of the traffic into their hubs and thus changing their standing by positioning themselves among the unavoidable hubs of global traffic.
In this article:
- Air India and Indigo capitalize on growth in the Indian market
- Turkish Airlines: the mega-order everyone’s been waiting for
- Thai’s unexpected resurrection
- Royal Air Maroc’s new ambition
- Not everyone can win the growth game
- Bottom line
Air India and Indigo capitalize on growth in the Indian market
We won’t dwell on the subject, which we’ve already covered in our report on the Paris Air Show 2023, but it’s worth recalling. This year, Indian airlines kicked off the “mega-orders” with 540 aircraft for Air India and 500 for low-cost carrier Indigo.
Of course, the Indian market is still in its infancy and offers huge growth potential, but that doesn’t justify such large orders.
There is also the desire, particularly on the part of Air India, to become a hub for traffic between Europe and Asia, and to make Delhi a hub capable of competing with Bangkok, Singapore, Dubai and Istanbul.
Turkish Airlines: the mega-order everyone’s been waiting for
Earlier this year, we spoke to you about the trajectory and ambition of Turkish Airlines, which was quickly confirmed by the announcement of a future mega-order from the Turkish airline, which has also retained its title of best European airline.
We’re talking about an order for 600 aircraft, 400 single-aisle and 200 twin-aisle, made up equally of Airbus and Boeings, which will take the company from 390 to 800 aircraft by 2033. By comparison, Lufthansa has 326 and Air France 209.
And I’m not even talking about the Istanbul hub, which is fully dimensioned to handle traffic growth for the next 50 years.
This order was supposed to take place “on the occasion of a major event”, probably the Paris Air Show, and… it didn’t happen.
A simple desire to create a buzz? Ambitions downgraded? Not at all.
Everyone knows how important engines are to an aircraft’s efficiency, and this is all the more true given that Turkish Airlines will be starting services to Australia at the end of the year. First with a stopover in Singapore, but we suspect that it would also like to benefit from aircraft enabling it to go there non-stop, which is totally within the realm of possibility as it is less demanding than Qantas’ Project Sunrise. The company is all the more vigilant given the recurrent problems it has experienced with certain Pratt & Witney engines in recent times.
Turkish Airlines is therefore in advanced discussions with the various engine manufacturers to make the best possible choices, and a decision should be made official very shortly.
Thai’s unexpected resurrection
More surprising is Thai Airways’ announcement that it intends to double the size of its single-aisle fleet. Let’s not forget that the Thai company has been in bad shape for a very long time, and that COVID almost gave it the coup de grâce.
At one point, we even thought that the Thai government was going to give up on the airline, as it seemed impossible to find a solution to make it profitable.
La has been in a restructuring plan under bankruptcy protection since 2021 and is beginning to look to the future with confidence. Furthermore, it plans to slightly increase its long- and medium-haul fleets in the fairly short term.
The company plans to re-list on the stock exchange in 2025, and to double its medium-haul fleet in the process. No glittering figures, but we’re talking about going from 20 to 40 aircraft, which just goes to show the extent to which the company had to downsize to save itself.
Why medium-haul? This is because the airline is betting on the very dynamic Asian markets, and in particular India (the market everyone’s watching), before perhaps one day going back on the offensive in the long-haul market.
And while we’re on the subject of Thai Airways, we’ll be watching with interest to see what comes of its recently announced joint venture with Turkish Airlines, provided that it’s just the beginnings of something bigger.
Royal Air Maroc’s new ambition
While it’s well understood that the future of air transport lies somewhere between Europe and Asia, we mustn’t overlook the African continent, which doesn’t yet boast any superpowers in the sector. At least for now.
With the positive momentum generated by its entry into OneWorld, Royal Air Maroc has declared its intention to quadruple the size of its fleet by 2037, from 50 to 200 aircraft. If this seems modest in the light of the figures given above, you need to understand that it’s a lot for an airline on this continent to date, and that it’s the equivalent of the Air France fleet or twice that of KLM.
This project is the backbone of the government’s drive to develop tourism and eventually attract 65 million tourists a year to the country, which will mean state investment in the airline to finance its growth.
In particular, we can expect to see an increase in the number of medium-haul destinations in Europe, both to serve the Moroccan diaspora living there and to target tourist customers just a few hours’ flight away.
Not everyone can win the growth game
We don’t know whether all these airlines will succeed in their gamble, or whether some will crash into the wall of reality, but in view of the figures announced, even with strong growth in traffic, their plan will hardly work if they are content to ride the wave. They will also have to succeed in capturing a share of existing traffic, to the detriment of some of the current majors.
Perhaps a little less so for Air India and Indigo, whose domestic market is a goldmine whose exploitation is only just beginning.
Turkish Airlines will aim to continue taking customers from both the European majors and its near-neighbours in the Gulf.
Thai will have to compete with its Asian rivals and the fast-growing Indian airlines.
As for Royal Air Maroc, it will mainly be targeting European airlines to capture the bulk of the leisure market to the region.
If they all succeed in their plans, and despite the growth in demand, it is mainly the European airlines and (to a lesser extent) those from the Gulf and Asia that will lose out.
While most airlines are trying to capture the current growth in demand, others are thinking much bigger. With ambitions to multiply fleet size by factors of 2 to 4, Thai, Turkish Airlines and Royal Air Maroc are also aiming to turn their hubs into essential hubs and grow at the expense of their current competitors by capturing their customers.