Çelebi Aviation has been rapidly expanding its ground handling and cargo business in India. Why has India been a target for Çelebi's ongoing international expansion?
Train travel has always dominated transportation in India. Only recently has its aviation sector established itself as a safe, affordable, and credible alternative. The number of passengers traveling with Indian airlines has more than doubled over the past seven years, compared to just a 6% increase in railway passengers. The growth is not only in passenger traffic, but also evident in the volume of air cargo transshipments, bolstered further by growing pharmaceuticals and perishables. Moreover, as the world's largest democracy with a population of over 1.3 billion, India's potential for further growth and industry development is clear. We expect air passenger numbers to, from, and within India to increase by 3.3 times over the next 20 years to more than 500 million passenger journeys per year—increases underpinned by a growing middle class increasingly able to travel. Çelebi Aviation is already seeing its investment opportunities grow in India. This strong growth outlook for air passenger demand will see India overtake Germany, Japan, Spain, and the UK within the next five years to become the world's third-largest air passenger market. The air transport market in India employs more than 390,000 people and supports another 570,000 more in the supply chain. Overall, the industry contributes some USD30 billion annually to India's GDP. These are exciting times for air transport in India and for Çelebi Aviation's Indian subsidiaries.
How does the privatization and commercialization of an aviation sector—such as the case of India—dictate into which markets Çelebi enters?
India is one of the two mainstays of Çelebi Group's ground handling and cargo business; the other is our home market, Turkey. Çelebi will stay focused on both organic and inorganic expansion opportunities in India for the foreseeable future, such as a selection of independent ground handlers at all airports operated by the Airport Authority of India and divestment of the ground handling business of Air India. That being said, Çelebi is always on the lookout to widen its footprint. The privatization and commercialization of new aviation markets has been an ongoing trend in our business for quite some time now and will definitely continue at an increasing pace. In this context, we are closely following opportunities in certain countries in ASEAN and Africa. Where the incumbent service providers are mostly government owned or controlled, the trend is now catching up with them, and they are eying opportunities to monetize and divest their ground handling and cargo-related businesses.
More broadly, in which regions is Çelebi interested in for expansion?
The Middle East is always a focus for reasons of growing trade and new airport projects that indicate an ever-growing region of interconnecting flight hubs and transfer points. Northern and Eastern Africa are other areas of interest, as there is an emerging middle class and increasing capacity and demand for regional exports that will inevitably fuel air traffic growth. The economic hubs of APAC and ASEAN are other regions we are focused on. Large populations with steady growth, coupled with major economic growth and proximity to other export and manufacturing bases, make those regions not only highly attractive but also fiercely competitive.
How has the opening of the new Istanbul Airport impacted and challenged Çelebi's operations?
The preparation for that was challenging, though surprisingly, within the third day we were almost at the right on-time performance level in terms of our handling. In terms of challenges, the average taxi for aircraft is about 22 minutes and can take up to 40 minutes. Çelebi Aviation's costs have risen by about 30-35%, mainly because of the distances involved, and we have had to increase our workforce to serve the same number of passengers.