Turkey Freight Transport Report Q4 2009

Turkey Freight Transport Report Q4 2009

According to its company chairperson in early September, Turkey’s national airline, Turkish Airlines (or
THY), was planning to grow and open routes to all major world destinations within the next three years
(he told this to the Asia Pulse news agency). Mr Candan Karlitekin, said that THY would add around 20
destinations to its network over that time scale, including: Los Angeles, Washington, Bologna, Glasgow,
Salzburg, Vilnius, Bratislava, Colombo, Kinshasa, and Ho Chi Minh City. He added that, in the last year,
the airline had carried 10% more passengers and had boosted its capacity by 16%, despite a 15% global
fall in aviation demand. “We have completed the first half with a net profit below (that of) the previous
year’s,” he was quoted as saying, “but we had tough days in the global economic downturn”. “The second
half will definitely be better,” he added.
Since our last report, we have maintained our 2009 forecast for Turkey. These are our latest figures and
may supersede those in the preceding section. We now see the 2009 recession involving a gross domestic
product (GDP) fall of 6.2% (no change). But for 2010, we expect a stronger recovery with 3.4% GDP
growth (up from 1.7% previously). We also expect 2011 to witness stronger growth (4.6%, up from
4.2%). We now believe Turkish GDP growth over the 2009-2013 period will reach an annual average of
2.3%, down on the 6.1% rate achieved in the preceding five-year period of 2004-2008. The effect on our
freight traffic forecasts across the two five-year periods is, therefore, significantly negative. We maintain
some of our earlier mode-specific freight forecast adjustments (which can be seen as ‘non-GDP’ factors
affecting the outlook). We continue to expect road haulage to catch up gradually and get just ahead of the
GDP trend in the forecast period. Rail freight, however, will lag behind, due to limited capacity and a lack
of new investment, although prospects on the latter count are now beginning to improve. Airfreight and
pipeline throughput will recover quickly after the current recession, but shipping may take longer to
overcome the global downturn because of excess capacity. Pipeline throughput will rise throughout the
period as various interconnecting pipeline projects come to fruition. We expect that the net effect of all
these movements is that total freight tonnage across the main modes of freight transport will increase by
an annual average of 2.5% over the 2009-2013 forecast period.
According to our latest estimates, transport and communications GDP rose by 1.6% in 2008. This was 0.5
percentage points faster than overall GDP, which we estimate to have increased by 1.1%. For the 2009-
2013 forecast period, we expect the transport and communications (T&P) sector to continue outpacing the
economy as a whole. It will achieve average annual growth of 2.5%, versus 2.3% for overall GDP. The
total value of T&C GDP will rise to US$131.3bn in nominal terms by 2013, representing 11.4% of
Turkey’s GDP.
Although the recession will take a heavy toll, BMI has made positive forecasts for the freight transport
industry up to 2013. This is due to a number of factors, including Turkey’s geographical location as a
‘bridge’ between Europe and Asia, its programme of transport infrastructure improvements, and its
attempts to harmonise with the EU’s systems of transportation. Other factors are the country’s
encouragement to large foreign players to form partnerships with its local transport and logistics
companies, as well as the expected medium-term strength in the country’s economic performance. The
current domination of road and sea freight transport is likely to continue for the next few years. Postrecession,
the minor sectors of rail and airfreight transport are also forecasted to grow, although budgetary
constraints and a lack of political commitment are likely to hinder government plans for a rail overhaul.
By the end of the forecast period to 2013, sea freight is anticipated to be the largest sub-sector, accounting
for approximately 59% of all shipments, compared with 36% for road freight. By transport mode, we
expect the fastest growing mode to be airfreight (annual average of 4.5%), followed by pipeline
throughput (3.1%), maritime cargo and road haulage (both at 2.5%), and rail freight (1.3%).

Executive Summary ....5
SWOT Analysis............7
The Baku-Ceyhan Oil Pipeline Industry SWOT .. 7
Turkey Political SWOT ...... 7
Turkey Economic SWOT.... 8
Turkey Business Environment SWOT.... 8
Business Environment Rating .......9
Table: Europe Freight Transport Business Environment Ratings........ 9
Freight Industry Ranking. 10
Turkey Performance Index (LPI) ... 11
Political Risk Summary.... 12
Economic Risk Summary.. 12
Business Environment...... 13
Legal Code/Corruption.... 13
Red Tape....... 13
Labour Force 14
Industry Trends And Developments .........15
Road ............. 15
Rail . 16
Air... 16
Sea .. 16
Pipelines ....... 16
Industry Forecast Scenario ..........18
Global Oil Products Market Review... 18
Table Global Oil Prices, 2003-2013 (US$ per barrel).... 22
Macroeconomic Outlook.. 22
Table: Turkey – Economic Activity, 2006-2013 24
Transport Outlook ........... 24
Table: Freight Turnover, Domestic And International, 2006-2013..... 26
Table: Freight Turnover, Domestic And International, 2005-2012..... 27
Trade Environment....28
Table: Total Value Of Imports, 2006-2013 (US$mn)...... 28
Table: Total Value Of Exports, 2006-2013 (US$mn)...... 29
Table: Top Export Destinations, 2002-2006 (US$mn).... 30
Table: Export Trade, 2003-2006 (% growth y-o-y)......... 31
Table: Import Trade, 2003-2006 (% y-o-y)....... 31
Table: Top Import Sources, 2002-2006 (US$mn) ........... 32
Trade Environment....33
Multi-Modal....... 33
Infrastructure 34
Competitive Landscape: Multi-Modal. 35
Road..... 37
Competitive Landscape: Road ....... 37
Rail ...... 38
Competitive Landscape: Rail ......... 38
Air........ 41
Competitive Landscape: Aviation .. 41
Company Profile: Türk Hava Yollari (Turkish Airlines, THY)........... 45
Table: Türk Hava Yollari’s Key Ratios (%) ...... 46
Water ... 47
Competitive Landscape: Maritime. 47
Pipelines ............ 50
Competitive Landscape: Pipelines. 50
Country Snapshot: Turkey Demographic Data ...........55
Section 1: Population....... 55
Table: Demographic Indicators, 2005-2030..... 55
Table: Rural/Urban Breakdown, 2005-2030 .... 56
Section 2: Education And Healthcare. 56
Table: Education, 2002-2005 ........ 56
Table: Vital Statistics, 2005-2030.. 56
Section 3: Labour Market And Spending Power ............. 57
Table: Employment Indicators, 2001-2006....... 57
Table: Consumer Expenditure, 2000-2012 (US$) ........... 57
BMI Methodology ......58
How We Generate Our Industry Forecasts ....... 58
Transport Industry ........... 58
Sources ......... 59