Issue No. 702

Istanbul the Airline Hub Is Back

Welcome, Istanbul, to the distinguished club of cities with at least 100m airline passengers annually. In the 12 months to November, the city’s main Atatürk airport, together with its secondary Sabiha Gökçen airport, handled almost 102m passengers, up 8% y/y and a record for the city over a 12-month period. This means Istanbul will certainly cross the 100m mark for all of calendar year 2018 too. In doing so, it joins London, New York, Tokyo, Shanghai, Beijing, Paris, Los Angeles, Chicago, Atlanta and Bangkok as the only cities in the prestigious 100m club.

For a while, it didn’t look like Istanbul would get there as quickly as it did. In 2016, a year of tremendous turmoil for Turkey’s airline sector, foreign visitor arrivals sank to 25m, from 36m the year before. Worst hit were Turkey’s beach destinations like Antalya—Istanbul, in fact, saw a bit of growth in 2016. But would traffic fall again in 2017? Would Istanbul’s incredible climb from aviation backwater to global transport hub come to a halt?

It didn’t. Traffic recovered in the second half of 2017 and continued to grow strongly in 2018. In the year to November, Atatürk’s traffic was up 7% y/y, with international traffic alone (72% of the total) up 10%. At Sabiha Gökçen on the Asian side of Istanbul, where roughly two-thirds of the traffic is domestic, growth was an even brisker 10%, lifted by 13% international growth. It all seems to confirm what leasing companies like ALC often say about airline traffic when severely disrupted by shocks: It almost always bounces back, often quickly and sharply.

Istanbul’s revival comes as rival Gulf hubs on the Arabian Peninsula lose some of their luster. Abu Dhabi feels the pinch from the disintegration of Etihad’s expansion plans. Doha feels the pinch from a Saudi-led embargo on Qatar. And even Dubai, although still a powerful and growing global hub, seems to have seen its glory days pass as Emirates slows growth and posts weak profits.

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