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, the report 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%).