E-Commerce from an Airline Perspective...Country City Europe 43 114 Far East 22 37 Middle East 13 34...

© 2018 Turkish Cargo All Rights Reserved © 2018 Turkish Cargo All Rights Reserved

E-Commerce from an Airline Perspective

E-COMM MENA – Dubai, UAE

© 2018 Turkish Cargo All Rights Reserved

Table of Contents

01

Introduction

03

Our Corporate Approach

• Turkish Cargo Timeline

• Facts & Figures

• Turkish Airlines Network

• TK e-Commerce

• TK Mail

• TK Courier

• TK Plus

• HUB Connectivity

• Our Network – MENA

• IT Solutions

Global e-Commerce

• Trends & Analysis

• Air Transport Involvement

• Airlines Focus Points & Our Strengths

02 04

Future

• İstanbul New Airport

• Our Vision

• Q&A


First B 777F joined

the fleet.

Turkish Cargo Timeline

1933

1947

1972 2000 2004

1995 2000

First international cargo

was carried in 1947

2 DC-10 aircraft joined

the fleet

Turkish Cargo brand was

established within

Turkish Airlines

2010

First A 330F joined

the fleet

2 C-47 cargo aircraft

joined the fleet

3 B727-200 aircrafts

were converted to cargo

planes.

First A310F was

operated

889k tonnes of freight was

carried in a year

Turkish Airlines was

founded in 1933.

In the meantime, Turkish

Airlines carried small

packages and post

2016

2017

1 million 130k tonnes of

freight was carried in a

year.

INTRODUCTION

01 Timeline


Turkish Cargo’s Growth

Turkish Cargo achieved above 25% yoy growth on tonnage in

2017, Turkish Cargo carried 1 Million and 130 thousand tonnes of

cargo by the end of 2017.

198 236 313 386 465 565 666 717 889

1130

0

200

400

600

800

1000

1200

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

KTo

nn

es

Tonnage Carried

INTRODUCTION

01 Facts & Figures


Turkish Airlines Network

Americas Europe Far East

Middle East Africa

Country City

Europe 43 114

Far East 22 37

Middle East 13 34

Africa 34 52

Americas 8 17

114 17 37

34 52

17%

Airport Domestic Destinatons

83%

Airport International Destinatons

121 Country

302 City Airport

International Destinations

3 0 5 Airport Total

Airport Domestic Destinations

5 1 2 5 4

51 Turkey


INTRODUCTION

01


EUROPE 32%

AMERICAS 11%

AFRICA 18%

FAR EAST 24%

MIDDLE EAST 15%

Turkish Airlines Freighter Network

66 Country

81 City 85

Total Airport

Americas Europe Far East

Middle East Africa

Country City

Europe 23 29

Far East 11 12

Middle East 12 20

Africa 14 14

Americas 6 10

29 10 12

20 14


INTRODUCTION

01


E-Commerce Trends Worldwide

Source: IPC global e-commerce figures 2017

Major Market Players Regarding to Regions

Online Retail Sales CAGR 2015-20

32%

60% 67%

39%

21% 18% 26%

15% 10%

3% 4% 5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

2010 2017 2021F

Asia-Pacific North America Western Europe Other

Perc

enta

ge

Regional E-commerce Sales Share of Global E-commerce

Trends & Analysis

GLOBAL E-COMMERCE

02


E-Commerce MENA

Trends & Analysis

GLOBAL E-COMMERCE

02

MENA E-Commerce Market Size

$- $1 $2 $3 $4

UAE

KSA

Egypt

Kuwait

Lebanon

Jordan

Billions

2014 2020

$-

$2

$4

$6

$8

$10

$12

$14

$16

2014 2020

Bill

ion

s

Arab World E-Commerce Market Size

Source: Payfort report, 2015

0%

5%

10%

15%

20%

25%

30%

0

10

20

30

40

50

60

2016 2017 2018 2019 2020 2021

Bill

ion

s (U

SD)

MENA Retail E-Commerce Sales 2016-2021

Retail E-Commerce Sales % Change % of total retail sales

Source: eMarketer, 2017


Global E-Commerce Analysis

58.8% 30.2% 11% SENDER

Large Business SME Other

53.8% 35.7% 10.5% FLOW

B2B B2C Other

Source: IPC global postal industry report

2016

Segments of the CEP Market

Size of goods, parties of the trade and the distance between parties will affect the delivery features.

84.5% 15.5% DESTI NATI ON

Domestic International

19%

62%

14%

5%

Packets (200g - 2kg)

Parcels: up to 5kg

Parcels: 5-10kg

Parcels: 10-30kg

10%

90%

Express delivery

Standard delivery

Trends & Analysis

GLOBAL E-COMMERCE

02


Delivery Operators

• Integrators

• NPOs

• Drop-Shippers

• 4PLs

• Courier Consolidators

Day 1-2

•First-mile delivery

•Consolidation and sorting

•Export goods / Clearance

Day 2-3

•Air shipment depart (loose units/ULD/...)

•Airline carriage

Day 3-4

•Air shipment arrival

•Import goods / Clearance

Day 4-5

•Last-mile delivery

Air Transport Involvement in E-Commerce

Time in transit (in working days) – CEP e-commerce cross-border – Standard delivery

Air Transport Involvement

GLOBAL E-COMMERCE 02

E-shopper E-retailer Delivery Operators

• Integrators

• NPOs

• Drop-Shippers

• 4PLs

• Courier Consolidators

Airline E-shopper


Airlines Focus Points to Meet E-Commerce Trends

Ph

ysic

al

Feat

ure

s

Dis

tan

ce

Tim

e A

dd

Val

ue

Serv

ices

Co

st o

f D

eliv

ery

• Mostly less then 1 kg • Up to 5 kg goods • Not high value • Post Mail is major channel of dist.

• Growth on overseas • The US and China has highest share • Mostly domestic and neighboring

countries

• Same day (within 24h) • Within a particular time slot • Express • Standard delivery

• Tracking & tracing • Information services

• Free delivery trends • Mostly e-retailer pays • E-retailer tries to decrease the cost

• Belly cargo under pax

flight is an advantage

• CEP and Mail Cargo

• Connectivity with main sources (China and the US)

• Truck connectivity with other closer hubs

• Customs clearing time • Inspection equipment time • Cargo handling time • Warehousing time

• Integration among the parties of delivery

• High level of IT

• Increasing the Load Factor

• Consolidating cargo

Recent Trend of E-Commerce Focus Point for Airlines

Fleet Size &

A/C Types

Wide Network & High Frequency

IT

Implementation

Product

Differentiation

Hub & Spoke

Airlines Focus Points & Our Strengths

GLOBAL E-COMMERCE 02


100

110

120

130

140

150

160

170

180

190

200

JAN

FEB

MA

R

AP

R

MA

Y

JUN

JULY

AU

G

SEP

OC

T

NO

V

DEC

JAN

FEB

MA

R

AP

R

MA

Y

JUN

JULY

AU

G

SEP

OC

T

NO

V

DEC

2016 2017

E-Commerce* Cargo Growth Index (2016 January is set to 100)

Turkish Airlines and E-commerce

23% CMGR

*Known e-commerce shipments

Planning new projects to Explicitly Identify E-commerce Shipments

TK e-Commerce

OUR CORPORATE APPROACH

03


Turkish Airlines and Courier

TK Courier


03

-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

2016

Courier Carried

2016 2017 2018

Wide network

High level of connectivity

Prioritized acceptance gate

Track and trace with EDI messages

Notification by pre-alert messages

Prioritized loading & unloading

QRT option available upon request

Dedicated courier team

Ton

s


TK PLUS Service Parameters

*Applied according to approval prior to booking.

**This service is coordinated with Cargo Capacity Planning Management on a periodic tender basis.

***Subject to local regulations

Dedicated and prioritize acceptance & delivery gates

Special expedited handling process

Guaranteed capacity*

No weight limitations**

Expedited delivery*** Shorter connection times for TK + shipments in transit

24/7 TK call center for Express cargo

Flown as booked

Proactive communication

Prioritized loading & un-loading

Dedicated TK + opearation control team

Highest quality and reliable service

TK

PLUS

TK Plus


03


Connectivity

0 10 20 30 40 50 60

LH Group

AF/KL

IAG

Other/EU/EFTA

MEB3

TK

Others

INDIRECT CONNECTIVITY FROM THE EU TO OTHER WORLD REGIONS BY AIRLINE GROUPS

2010 2017

LH Group

AF/KL

IAG

Other/EU/EFTA

MEB3

TK

Others

INDIRECT CONNECTIVITY FROM THE EU TO ASIA PACIFIC BY AIRLINE GROUPS

2010 2017

0 20 40 60 80

FRA

AMS

DFW

CDG

ATL

IST

ORD

LHR

CLT

YYZ

MUC

EWR

DEN

DOH

DXB

IAH

SVO

MAD

MSP

ZRH

ACI World Connectivity HUB Connectivity of Top 20 Airports

Source: ACI EUROPE AIRPORT INDUSTRY CONNECTIVITY REPORT 2017

HUB Connectivity


03


0 20 40 60 80

FRA

CDG

AMS

LHR

MUC

MAD

VIE

ZRH

FCO

CPH

MXP

HEL

IST

SVO

BCN

PRG

OSL

BRU

ARN

LIS

2010

0 20 40 60 80

FRA

AMS

CDG

IST

LHR

MUC

SVO

MAD

ZRH

VIE

FCO

HEL

BRU

LIS

CPH

DUS

OSL

DUB

WAW

TXL

2017

Source: ACI Europe Airport Industry Connectivity Report, 2017

IST has the fastest increase regarding connectivity among the European Hubs by 591%.

In 7 years from 13rd to 4th rank in Europe

IST is the 5th Airport in Europe

according to Direct Connectivity

Connectivity (Ctd.)

HUB Connectivity


03



TK Freighter Network – MENA Region

Our Network - MENA

03

FREIGHTERS

MIDDLE EAST STATION CITY NAME FREQ. ROUTES

AMM AMMAN 2 ISTAMMIST

ISTBEYAMMIST

BAH BAHRAIN 1 ISTBAHPNHHYDIST

BEY BEIRUT 1 ISTBEYAMMIST

BGW BAGHDAD 4 ISTBGWIST

CAI CAIRO 2 ISTCAIIST

CMB COLOMBO 1 ISTMAACMBIST

DAC DHAKA 2 ISTASBDACIST

ISTKWIDACIST

DMM DAMMAM 2 ISTDMMNBOADBMSTIST

ISTDMMPNHHYDIST

DOH DOHA 3 ISTDOHBOMIST

ISTDOHIST(2)

DWC DUBAI 3 ISTKWIDWCIST(2)

ISTDWCIST

EBL ERBIL 2 ISTEBLIST

IKA TEHRAN 2 ISTIKAHANDELIST

ISTIKAKHIIST

KWI KUWAIT 3 ISTKWIDACIST

ISTKWIDWCIST(2)

RUH RIYADH 3

ISTRUHHANDELIST

ISTRUHNBOADBMSTIST

ISTRUHEBBNBOADBMSTIST

NORTH AFRICA

STATION CITY NAME FREQ. ROUTES

ALG ALGIERS 4

ISTALGMXPIST

ISTALGVIEIST

ISTALGZRHIST

ISTALGTUNIST

CMN CASABLANCA 2 ISTCMNMXPIST

TUN TUNIS 3

ISTTUNIST

ISTTUNZRHIST

ISTALGTUNIST



TK Passenger Network – MENA Region

Our Network - MENA

PAX

MIDDLE EAST


AMM AMMAN 16 ISTAMM

AQJ AQABA 3 ISTAQJ

AUH ABU DHABI 7 ISTAUH

AWZ AHWAZ 3 ISTAWZ

BAH BAHRAIN 7 ISTBAH

BEY BEIRUT 22 ISTBEY

BGW BAGHDAD 22 ISTBGW

BSR BASRA 7 ISTBSR

CAI CAIRO 23 ISTCAI

DMM DHAHRAN 10 ISTDMM

DOH DOHA 12 ISTDOH

DWC DUBAI 1 ISTDWC

DXB DUBAI 21 ISTDXB

EBL ERBIL 16 ISTEBL

ELQ GASSIM 3 ISTELQ

HBE ALEXANDRIA 9 ISTHBE

IFN ISFAHAN 7 ISTIFN

IKA TEHRAN 35 ISTIKA

ISU SULAYMANIYAH 3 ISTISU

JED JEDDAH 33 ISTJED

KWI KUWAIT 30 ISTKWI

MCT MUSCAT 7 ISTMCT

MED MADINAH 21 ISTMED

MHD MASHAD 7 ISTMHD

NJF Al NAJAF 7 ISTNJF

RUH RIYADH 19 ISTRUH

SSH SHARM EL SHEIKH 7 ISTSSH

SYZ SHIRAZ 7 ISTSYZ

TBZ TABRIZ 7 ISTTBZ

TIF TAIF 3 ISTTIF

YNB YANBU 7 ISTYNB

NORTH AFRICA


ALG ALGIERS 22 ISTALG

CMN CASABLANCA 7 ISTCMN

CZL CONSTANTINE 7 ISTCZL

KRT KHARTOUM 8 ISTKRT

ORN ORAN 7 ISTORN

TUN TUNIS 16 ISTTUN

CAI CAIRO 23 ISTCAI

HBE ALEXANDRIA 9 ISTHBE

HRG HURGHADA 7 ISTHRG

03


IT Solutions

FSU MESSAGES

BKD BOOKED

AWR AWB DOCUMENT RECEIVED

RCS ACCEPTANCE

FOH FREIGHT ON HAND

PRE PREPARED FOR LOADING

MAN MANIFEST DETAILS

DEP DEPARTURE

ARR ARRIVAL

RCF BREAKDOWN

NFD NOTIFIED

DLV DELIVERY

DIS DISCREPANCY

AWD DOCUMENTS READY FOR CONSIGNEE

RCT IN BOUND CTM

TFD OUTBOUND CTM

TRF TRANSFER CUSTOMS

OFLD OFFLOAD

Handheld Terminals (FSU Messaging) Supported EDI solutions COMIS (iCargo) Pre-Alert Notifications

IT Solutions


03


İstanbul New Airport Cargo Facilities & E -Commerce

Mail & E-Commerce Operations

5.000 m2

Express Cargo Operations

2.000 m2

E-Commerce HUB

More Connectivity Increased Slots Sorting Systems

Modular Design

&

Easy to Expand

Reserve Areas for Future Expansion

Integration with Postal and Express

Services

Istanbul New Airport

FUTURE 04


Turkish Cargo E-Commerce Projection

Existing Future

Port to Port Logistics

• Collaboration with Courier firms and Integrators

• Collaboration with NPOs

• SLA/SOPs with stakeholders

• Dedicated e-commerce team

• Training programs

• Joint venture with other stakeholders

• Seminars/Conferences

Our Vision

FUTURE 04

E-Commerce from an Airline Perspective...Country City Europe 43 114 Far East 22 37 Middle East 13 34...

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