Hello Mr. Turhan, please tell us about yourself.
Although I was born in Van, Erciş, I am originally from İzmir. My childhood was spent in many parts of Anatolia, due to my family being civil servants; from Erzurum Aşkale to Isparta and from Cyprus to Çorlu. After completing my primary education, I passed the exams and went to boarding school at Galatasaray High School. Then I attended Boğaziçi University’s Business Administration Department. In the last years of my university life, I worked as a sales specialist in the management pool of an automotive company belonging to the Koç Group.
While working at Koç Group, I had decided to complete the Executive MBA program, which I started with a scholarship at Koç University, and continue with my doctorate in Organization Management. However, due to my workload, I had to quit while I was at the thesis stage. My career, which started in the Koç Group in 1991, primarily progressed in the automotive sector, in the commercial vehicles group consisting of trucks, buses and trucks, with sales-marketing operations, logistics and supply chain. In my working life, which lasted for about 15 years, I worked as a manager and group manager.
At the beginning of 2000, at the TNT Logistics company, which stepped into Türkiye for the first time in partnership with the Koç Group, I took part as the first Turkish manager; first in production logistics, then as a distribution operations group manager and an assistant general manager responsible for operations.
TNT Logistics merged with an American company between 2006-2007 and became CEVA Logistics. Here, I first worked as the assistant general manager responsible for operations, and then as the assistant general manager responsible for sales and business development. With my transition to regional and global roles, I served as CEVA Logistics’ vice president of sales and business development in the Middle East and Africa region for a period and, later, as the head of global pharmaceutical, health and pharma. Together with my colleagues, I was the General Manager for Africa and the Middle East at CEVA Logistics, based in Dubai, where we undertake all worldwide operations.
Towards the end of 2016, I joined our national brand, the Turkish Airlines family.
I am married and have 2 children. My son is doing his master’s degree in psychology and my daughter also graduated from the 7th grade this year. My wife is a chemistry professor at Piri Reis University.
What an interesting career, Mr. Turhan. Please tell us about Turkish Cargo – how would you describe this brand?
As Turkish Cargo, we are the airline that flies to the most destinations in the world. This ongoing success story dates to the early 2000s.
I should note that the competitive environment in aviation for the last 10 to 15 years has compelled airline companies to focus on air cargo transportation. Our global competitors are trying to carry out passenger transportation and air cargo transportation together, which we call a “combined airline”. Airlines that benefit from cost-sharing are more successful, as the market, demand and customer dynamics of the two sectors are different, increased revenue is generated by carrying passengers in the upper cabin and cargo in the aircraft’s hold.
In this context, our major competitors in Europe since the early 1990s, our Gulf competitors since the 2000s, and the airlines in the Far East, which is considered the factory of the world, have prioritized air cargo transportation at an increasing pace. As the flag carrier national brand, we have been closing the gap quickly since 2015.
To briefly describe our development and promotion process: As Turkish Airlines, our market share in cargo transportation was around the levels of 1000 in the 2010-2015 period, reaching 1.8 percent until 2016, when I joined. It is now a successful business unit ranked 22nd among global air cargo companies. Following this rise, we showed the world that we will focus specifically on the air cargo transportation sector by promoting the cargo transportation business unit to the Assistant General Manager (Cargo) with the decision taken by our Board of Directors in 2016.
With this new structure, from 2016 we’ve addressed shortcomings in the process. With the support of our partnership’s flight operations, human resources, information technologies, ground operations and other units, our air cargo transportation has become another success story, like our success in passenger transportation.
From this point of view, cargo should be viewed as one of the two most important income streams for airlines and a common profit provider – this was amply demonstrated during the pandemic. However, as a vital link in the global supply chain, air cargo transportation is constantly developing and growing in line with market dynamics and competitive conditions.
As Turkish Cargo, we transport valuable, costly and time-critical products from point A to point B. While this is one percent of global trade in tonnage, it corresponds to 35 percent in value. With the spread of e-commerce, it is expected to reach 40 percent. More than one-third of world trade is via air cargo; as such, global brands operating in both passenger and air cargo areas, such as Turkish Airlines, need to make serious structuring and investments in the air cargo sector. Especially during the pandemic period, the importance of the air cargo industry rose – urgently needed and valuable export products, including test kits, vaccines and other drugs, and intermediate products used in production, required rapid and precise movement.
As of 2019, as Turkish Airlines, we began distinguishing ourselves from competitors by focusing on the cargo sector; we started in 2010 and have been gaining momentum since 2016. During the pandemic, we experienced the advantages of investing in cargo and passenger transportation as two different areas and we will continue to reap these benefits. In summary, we can define Turkish Cargo as our national brand, one that is continuously rising in value in line with global developments; a brand that is agile and pioneers technological developments with its innovative structure.
I saw on the website, Mr. Turhan, that while global air cargo market shrank almost 30 percent, Turkish Cargo’s market share increased to five percent. Is this pre-pandemic data?
The global market share of our brand was 1.8 percent in 2015 and rose 4.5 percent in 2019 with the support of other units in our partnership. At the beginning of 2020, when the pandemic affected the world, we, together with our esteemed general manager and related managers, decided to use passenger planes in cargo transportation in view of the crisis environment. With the support and approval of our Civil Aviation General Manager, we made this decision feasible in a very short time – approximately 12 days – and thus included passenger aircraft as well as cargo planes in the capacity.
In this context, we started to use planes’ cargo/baggage compartments and the cabins. In cabins, cargo was placed between and above the seats and in aisles, secured with special nets and with all safety and security measures taken. As one of the first implementers of this project worldwide, we made our first flight to Kiev on March 20. Since that time, we have carried out more than four thousand flights, carrying the needs of both our exporters in the Turkish economy and our customers throughout the world, especially health products. In response to this work, as of the first three months of 2021, our market share increased to 5.2 percent and we became the fifth largest air cargo carrier in the world.
You said that e-commerce has expanded due to the pandemic. I recently read an article stating that the rate of e-commerce in all trade, which was nine percent before the pandemic in Türkiye, increased to 15 percent with the pandemic. This increase is likely to be the case worldwide. In some countries, such as China, the increase is even higher. How do you think this marginal growth in Turkish Cargo will look after the pandemic? Do you have a prediction?
As the effects of the pandemic subside, we believe that the air cargo market will reach an important point, with growth approaching 10 percent per year in the 2021-2024 period. E-commerce has a serious impact on this growth. In this context, we follow the projections of global research institutions and evaluate the compatibility of these estimates with our own targets. We prepare our plans, fleet, organization, technological infrastructure, marketing and operation infrastructure according to the needs of this growth. Within the scope of this plan, we aim to be one of the top three air cargo brands in the world by expanding our market share, which rose to 5.2 percent, to 7.5 – 8 percent in the 2023-2025 period. While fulfilling this serious goal, we act with awareness that we have significant competition in Europe, the United States and the Far East, but we progress and grow without compromising our understanding of customer satisfaction and quality service.
In addition to the increase in e-commerce volume, health transportation, which has become more visible with the pandemic, has also been a factor in the growth of Turkish Cargo. Although the priority is vaccine transportation in the current period, it is also important to deliver all kinds of drugs, complementary products and medical equipment from production centers to the market by air cargo, due to reasons such as not keeping stock in production, rapid turnover from production to consumption, and distribution of the production source to many different points instead of a single center. From this point of view, we again observe that we are in an advantageous geographic position. As the national brand Turkish Cargo, we transport an important part of our country’s air cargo exports, worth 50 times the average export value per kilogram, to 127 different countries.
As Turkish Airlines, we can easily say that we are a leading service exporter with both passenger and cargo transportation, while ensuring that the value-added products of our country’s economy and manufacturers reach global markets at the most competitive times and prices, and with the best services. In this sense, we consider that airline logistics, and therefore Turkish Cargo, will grow in parallel with the growth of the global market and our country’s economy.
Will the entire operation shift to Istanbul Airport with SmartIST? Or will a hybrid operation be carried out together with Atatürk Airport?
In the upcoming period, we will first move our satellite facility and then our entire cargo organization to SmartIST, our new home at Istanbul Airport. Therefore, the entire operation will be carried out under one roof at Istanbul Airport.
While I was researching Turkish Cargo, I was surprised. Honestly, I didn’t know much beforehand. From coronavirus vaccines to endangered animals or historical artifacts, you have a business category you call special cargo transportation. As far as I understand, these are sensitive operations. Can you briefly describe them?
Air cargo includes the transportation of precious, irreplaceable and valuable cargo not only in terms of speed but also in terms of precision and risks, all of which are different areas of expertise. As Turkish Cargo, we began developing the training and infrastructure of these specializations in our own teams in 2015. We received our first certificate in drug transportation in 2016 and, at the beginning of 2020, we became the air cargo company with the highest number of certificates in IATA’s special product certifications.
Even before the pandemic, we were among the top three air cargo brands in health transportation; our market share rose from 5.5 percent in vaccine and drug transportation to 8 percent. The major driver of this success is our close marketing and commercial relations with the world’s largest pharmaceutical companies. From the beginning, we evaluated vaccine- and cold chain-oriented preparations and explained our service quality to these companies; after seeing our facilities, these companies transferred their business to us.
Vaccine transportation is a good example of our special cargo operations. Vaccines are sensitive and should not deviate even one degree during transportation; this includes all handling processes such as loading and unloading, at the airport, on the apron or in the warehouses. Special equipment is used to protect these precise measurements, and the entire process must be managed without the slightest risk, together with technical expertise for the management and use of this equipment. For us, these processes are products. In this sense, the cold chain is a product and a controlled process for us. These processes require competence and certification and are frequently monitored by independent auditors. If there are deficiencies or shortcomings, the certificates are canceled.
As Turkish Cargo, we also transport radioactive cancer drugs with a half-life of less than 24 hours. Our customer manufacturer produces these medications – which lose their effectiveness if delayed for more than two hours – for patients in West Asia, Africa, Eastern Europe, and India, and we deliver them throughout the world.
Of course, some of these operations have nothing to do with illness. For example, we delivered three lions, who were living under harsh conditions in a Ukrainian circus, to their natural habitats in South Africa. We transported Dobrila, an 18-month-old rare griffon vulture injured in Southeastern Anatolia, to its natural park in Serbia. To convey these animals requires a wealth of relevant training, expertise, technology, and ongoing certifications.
We also carry the most expensive cars in the world, from Ferrari to Lamborghini. I’d like you to come and see it one day. It is like the world’s largest gallery; even a scratch is a huge risk, and each vehicle requires individual high-standard treatment. All these standards are fulfilled by our trained expert personnel, highly rated technological equipment, and finally, external audit certificate firms that inspect us often.
Very visionary approaches, Mr. Turhan. On the other hand, while we were discussing this special cargo issue, we also considered visiting you and writing a blog post on how to transport historical artifacts or endangered animals, for example. These are very interesting topics.
As Turkish Cargo, we transport many types of livestock, from the hippopotamus to racehorses, from penguins to lions. We carry out the transportation of these creatures to their natural environments, where they can live in better conditions, within the framework of agreements we have with many authorities in this field, especially the United for Wildlife Buckingham Palace Declaration (UFW) and the World Wildlife Fund (WWF). These animals travel with their veterinarians and their grooms; they are always delivered to the right place and, as the flag carrier brand, we see this sort of transportation as a social responsibility.
I understand. Let me come to another subject. I watched your Cargo People videos recently. I think the videos are very entertaining and interesting. In those videos, Aska, the explosives detecting dog, and his partner Sezer Bey caught my attention. In fact, until I saw that video, I had no idea that these security measures existed or that there was such a detailed security scan. Does all cargo undergo x-ray scanning? Does Aska sniff all the cargo? Or are the animals involved at a certain stage?
Since we need to ensure that air cargo can indeed be transported by air and that incompatible cargo does not travel in the same aircraft, we x-ray all cargo. This is an important step in terms of flight safety and security.
For example, we need to comply with space requirements in the cargo compartment to prevent respiratory issues in some livestock species. These calculations are made with reference to IATA standards and additional standards determined by our partnership, in addition to the regulations, rules and procedures set worldwide.
In our cargo operations, we use complex x-ray devices that are double-angled and capable of both 2D and 3D color scans, unlike the simpler devices that scan hand luggage at the airport. Although this equipment is indispensable tools in ensuring safety and security at the highest level, it may be insufficient in some cases. At this stage, trained K9 dogs, which can detect even the minutest traces of explosives at milligram level, come into play.
I’d like to describe an incident that I witnessed personally. While conducting checks with our team, our specialist and his dog stopped at a parcel for further investigation. We opened the parcel; it was a textile parcel coming from and going abroad. It contained jeans, but we couldn’t find any other suspicious substances. We traced the transportation process of the parcel and the following had occurred: The worker who had packed the parcel a few earlier had gone hunting the night before. This K9 dog detected traces of gunpowder from the hunting rifle used by the worker, who had traces on his fingers which were then transferred to the parcel. These dogs perform an indispensable service: they are friends who come to our aid when technology is not enough. As a national brand that carries out transit cargo transportation worldwide, as long as technology does not produce devices as sensitive as a dog’s nose, these friends will continue to be our most valuable business partners.
Some important cargo in terms of time and precision is transported by air cargo. A new platform, SmartIST, will be launched at the new airport. In terms of carrying capacity, are there any global companies willing to invest here in terms of this new platform?
Towards the end of last year, a technology company of Chinese origin reached us through an investment agency and our Board of Directors and, as a result of their evaluations, they decided to establish a factory in Türkiye. In deciding between three different countries, this company chose Türkiye – and therefore Turkish Cargo – taking into account the transportation network and our future plans. I believe that such important investments will increasingly continue.
In addition, we continue to contribute to the delivery of value-added products of investors in Türkiye abroad. In just one example, we contribute to our farmers by transporting cherries by air cargo to distant markets where they are more valuable. With the increasing capacity of SmartIST, we will continue to provide a significant competitive advantage in the delivery of value-added products to the global markets, whether it is domestic or foreign capital, and our developments in this direction will pave the way for new investments.
You’ve already explained some aspects but I’m still curious: What are some of your more challenging operations? Such as products that are difficult to transport, or large in volume?
As a global-scale air cargo carrier, we follow and adapt to global developments that affect transportation modes. An unusual situation we encountered recently is a good example.
Last March, air cargo demand from the Far East Region, especially China and Hong Kong, along with Europe, suddenly increased. The spike in demand was driven by the disruption in container traffic caused by the week-long Suez Canal blockage. As a global-scale carrier, we had to monitor this closure and its impact, calculate which points of our flight network it might affect, and produce instant solutions.
So, you need instant information on a multitude of levels?
It is the supply chain that creates the global economy and enables production and consumption. Air cargo is one of the important transportation links in this supply chain. Thus, we need to follow all developments, both major and minor, closely and concurrently. As an example, to enable automobile factories in the USA and Canada to continue production without missing even a chip, we have to have dynamic and flexible planning capabilities.
It’s like an action movie!
It is, somewhat, like an action movie! Our Advertising Department created a commercial with our Corporate Communications Department. The commercial has an action movie music theme and depicts how many people and how many companies our work touches, with 5 and 10 second clips.
Another example is vaccine transportation: Although imports to our Ministry of Health is a priority, we also transport other vaccines in transit. For example, we transported the Sinovac vaccine from China to Brazil and other South American nations. In all of our operations, we see the happiness and excitement of the officials who receive the vaccine. Again, we experienced the joy and pride of reaching 100 million doses of Covid-19 vaccine in the past days.
We also export a mushroom species that grows in the Toros (Taurus) Mountains but is not preferred in Turkish cuisine. Although the annual harvest varies (around 40 to100 tons per year) according to seasonal conditions, we transport these Matsutake mushrooms to Japan for use in the best and most expensive dishes. Such an operation has a positive effect on both Japanese cuisine and for the farmers in our country.
These are beautiful stories. They need to be told. Let me introduce another topic. You were at the command center during the transfer from Atatürk Airport to Istanbul Airport. Can you describe some of the challenges in that operation?
Our work on this historical relocation started almost two years earlier. We prepared plans B and C against the risks that could occur by creating a minute-by-minute timeline; we continued this on a weekly basis for almost two years, together with all our top managers, and practiced the necessary applications.
On the night of April 5, 2019, we gathered at the control center at 18.00 with our Minister, the Chairman of the Board of Directors, the General Manager, and all officials. We personally followed the moving process, which was carried out twelve hours earlier than planned, via CCTV cameras and instant reports throughout the night.
Although the relocation of a massive enterprise like Turkish Airlines is something that happens rarely, that the relocation was planned to take 45 hours and completed in a record-breaking 33 hours marks a first in the history of the world aviation industry. In this context, the National Geographic channel turned this historical move into a documentary covering both operation centers.
Currently, our under-flight cargo operation continues to be managed from Istanbul Airport, and our cargo aircraft from Atatürk Airport. By completing our SmartIST project this year, we aim to carry out all our cargo plane operations from Istanbul Airport.
You’ve explained some aspects, but let’s go into detail anyway. Artificial intelligence is used in certain operations. Can you provide some information about this, especially its association with SmartIST?
Technology plays a major role in this adventure – one that has brought Turkish Cargo from ranking 22nd to fifth worldwide. At the beginning of last year, we commissioned our robotic process automations (RPA) in the field of artificial intelligence and started to use these robots more actively with the onset of the pandemic.
These robots, named Alpha, Bravo, Charlie, and Delta, can calculate and report the analysis of processes and possible deviations, alleviating our workload and permitting our human colleagues can attend to areas that require more expertise. In this context, we continue tests to implement the optimization of SmartIST, which has the world’s largest automatic stocking system, with augmented reality technologies. We are aware of the need to use technologies that can facilitate the work of our customers, and to use technology wisely, and our developments are informed by this awareness.
Let’s continue discussing technology. There was a webinar called Cargo Talks and, from what I understood, airline transportation is transitioning to 4.0 technologically. People try to learn software like they’re learning a new language but are there new software development opportunities for the upcoming generation or for those who want to work here? For example, for someone who wants to develop an application or a new software project for air cargo.
Air cargo transportation is a sector segmented in its own world as a value chain, along with logistics companies, customs, warehouses, airport operations and apron management.
The virtual integration of these departments within digital transformation is a great success criterion. Therefore, there are ample opportunities, especially in the field of logistics, for software developers and entrepreneurs who are interested in this type of software. In addition, the logistics industry and the global supply chain require traceability, that is, structures whereby different logistics partners can transfer data with each other, track invoice and waybill information, share financial and accounting movements, and especially produce software, applications and solutions that allow the end customer to monitor simultaneously. Every industry and every country has different applications in a wide area.
From this point of view, we believe that intermediary solutions and integration solutions are very important, but “blockchain” solutions are not yet implemented and there are no clear examples in our sector that create an economic value in a divided structure. Apart from this, we foresee that solutions that provide simple mobile phone applications, traceability, and basic billing and movement information will spread further. When we look at central solutions, “Human-Machine Interface” technologies become important. In short, applications between humans and machines are important – we cannot completely remove the human factor from the logistics sector and air cargo due to safety, security and quality issues.
As I mentioned in the K9 dog example, dogs and their handlers will continue to be our indispensable colleagues until a sensor technology that is more sensitive than a dog’s nose is produced. In human-machine cooperation, we need to strengthen the interfaces of our warehouse workers and machines. In this context, we also focus on wearable technologies – applications such as glasses and gloves – but applications and algorithms on “big data”, artificial intelligence and data mining, even algorithms that produce and learn from their own past, are of greater importance. After the finance sector, the logistics sector produces the most data in the world. In this sense, we believe that an algorithm that processes this data and draws conclusions from it can make more accurate decisions. In short, when we consider the supply chain and logistics; air, land, sea and e-commerce sites etc. – when we think about these together, we can certainly assert that this sector produces the most data after the finance sector. Therefore, it is clear that there is a need for technology and software in this field.
I see. And as we come to the end of this interview, I’d like to ask about your thoughts on opportunities for youth employment if Turkish Cargo becomes a corporation? What would you recommend to people who seek a career in air transport?
The cargo business unit is the unit that has grown the most in the last decade and this growth will continue to increase. In parallel, Turkish Cargo will provide youth employment with our colleagues in both the white-collar area and in the field.
We can say that young people who want to learn a lot and learn quickly in a dynamic field are more suitable in this field. The aviation industry needs dynamic, entrepreneurial, development-oriented young people who will contribute to automation processes. As Turkish Cargo, we aim to employ the best air logistics experts, the best planners, the best operators, the best salespeople, the best IT specialists, the best advertisers and the best human resources specialists in the world, in line with our goal of being one of the top three air cargo carriers in the world. We are waiting for young people who can say “I learn quickly, I like movement, I am open to working around the world, I am persistent, I immediately seek new tasks when I complete a job”. Together with these young talents, I believe that we will move the world’s fifth largest air cargo company into the ranks of the top three.
Then we welcome those who want a dynamic life to Turkish Cargo. Finally, as in the logistics sector, the number of female managers is growing rapidly in the air transport sector. Can we get some information about this?
We take diversity seriously in our business processes, so the number of women employees is important to us. When we look at the current ratios, we are not yet where we want to be in terms of female employee and manager ratios. Specifically, we aim to increase the number of women employees and managers by taking this as a mission and carrying out studies to improve and develop it with our human resources.
Thank you very much, Mr. Turhan. This was a pleasant and informative interview!
My pleasure.
