After presenting its binding offer to become a shareholder of Air Europa, a historic step for the Turkey’s airline, Turkish Airlines wants to take advantage of this strategic move to consolidate its global expansion with its sights set on Latin America, also taking advantage of the growing popularity of the Turkish series to grow in these markets.
The partnership between the two airlines aims to go far beyond a simple integration of routes. According to Ahmet Bolat, chairman of the board of directors of Turkish Airlines, the collaboration will be extended to technical areas such as aircraft maintenance, purchase of new aircraft, passenger loyalty programmes, cabin design and seat manufacturing. “Air Europa is a company that has attracted the interest of many European carriers. It transports passengers mainly to Latin America and North America. It represents a good opportunity for us, it is of enormous strategic importance,” Bolat was quoted as saying by the Turkish daily Milliyet.
According to reports in Spanish newspapers such as El Mundo, the binding agreement between the two companies foresees that Turkish Airlines will provide a loan of 275 million euros converted into Air Europa shares, equivalent to 26-27% of the Spanish airline. The process must now undergo legal review, but Bolat himself believes it will be completed “in a few months”.
“The Air Europa (shareholding) move will be a key pillar for the horizontal growth of our company,” Bolat said during a meeting with journalists on Friday in Istanbul. Turkish Airlines CFO Murat Şeker also said the investment “will be beneficial, we expect a good return. We will have a seat on the management of Air Europa“.
Expansion in Latin America
Bolat further stressed that Air Europa, which carried 22 million passengers last year, is of great value to Turkish Airlines because it shares a similar business model with the Turkish carrier. “Our growth will accelerate in markets where Turkish Airlines has influence (such as Latin America). The strategic importance of this agreement will increase with the aircraft fleet, maintenance, new purchases and leases, and mileage alliances,” said the Turkish Airlines president.
“This will be the first time in the history of Turkish Airlines that a strategic share acquisition like this has been made. We have had strategic partnerships before, such as with Air Albania or Air Bosnia; we have had revenue sharing agreements with Thai Airways; but none before of this magnitude and scope,” he added.
“It will be different from our other partnerships. We will continue to explore opportunities similar to Air Europa in Asia and North America,” said the Turkish Airlines chairman, who also announced the launch of joint projects with Air Europa to bring more Latin American tourism: “We are working on a model that combines a few days in Spain and a few days in Turkey. It will be a good investment for Turkey,” he concluded.
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Edited and reviewed by:
Pablo Gómez is a specialist in Turkey and has been editor-in-chief of Hispanatolia since 2011. He has been analysing current affairs and geopolitics in Turkey and the surrounding region since 2006.
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