Turkish Airlines, Turkey's flagship carrier, is shifting its strategic focus towards aircraft leasing by establishing a dedicated subsidiary in Ireland. This move is part of a broader fleet modernization plan that involves retiring older aircraft models and replacing them with newer, more efficient aircraft. The airline's current fleet comprises 361 aircraft, including Airbus and Boeing models such as the Airbus A319, A320, A321, and the Boeing 737 and 777 families.
The new leasing company aims to generate approximately $2.2 billion in revenue with about 100 employees, leveraging Ireland’s favorable regulatory and tax environment, which is regarded as the global hub for aircraft leasing. By managing a large part of its fleet through leasing, Turkish Airlines intends to create a stable income stream and reduce operational risks associated with fluctuating fuel prices and geopolitical tensions.
Strategic advantages and fleet modernization
The airline's fleet modernization involves phasing out models like the Airbus A319, A320, A321, A330, and Boeing 737 and 777 variants. Many of these aircraft, still in excellent condition, will be leased to regional carriers or emerging markets, turning them into valuable capital assets. The leasing operation will empower the airline to retain control over its aircraft and adapt quickly to market demands while diversifying its revenue sources.
"The leasing business offers higher margins and a stable revenue stream, which is crucial for a diversified business model," said Ahmet Bolat, Chairman of the Board of Turkish Airlines.
By taking advantage of current market conditions, such as rising acquisition costs for new aircraft and supply chain issues, Turkish Airlines aims to lease its used aircraft at attractive rates. The move could position the airline as a significant player in the global aircraft leasing industry, supplementing its core passenger business with a profitable financial arm.
