Turkey and Turkish Airlines: Facing challenges of competitiveness

Abstract: This case addresses the recent competitiveness challenges that Turkey and Turkish Airlines are struggling with. The real GDP growth per annum in Turkey slowed down from 6.1% in 2015 to 3.2% in 2016, and the Turkish Lira devaluated by more than 40% from July 2016 to December 2017. There was also a significant decrease in inward foreign direct investments, and the inflation was rising to double digits. The failed coup attempt on July 15, 2016, acts of terrorism since July 2015, and the shooting of a Russian warplane on November 24, 2015, leading nearly to the freezing of economic relations between Russia and Turkey challenged Turkey’s competitiveness. The most serious impact was on the tourism sector, and Turkish Airlines, the flag carrier of Turkey, got its share. In 2016, Turkish Airlines needed to ground 30 aircraft and reported an operating loss of 130 million USD (compared to a profit of 1,076 million USD in 2015). How will Turkey and Turkish Airlines recover to maintain their competitiveness?

Authors:

Emmi Matila, corresponding author, International Business student from JAMK University of Applied Sciences, School of Business, Rajakatu 35, 40200, Jyväskylä, Finland, emmi.matila (at) gmail.com

Murat Akpinar, JAMK University of Applied Sciences, School of Business, Rajakatu 35, 40200, Jyväskylä, Finland, murat.akpinar (at) jamk.fi

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URN

http://urn.fi/urn:nbn:fi:jamk-issn-2341-9938-43

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