Turkish Airlines has been going through major route expansion since entering Star Alliance back in 2008. The biggest aircraft it currently operates is a Boeing 777-300ER which can sit 337 passengers in a three-class configuration. The “Globally Yours” airline has been looking for options to lease or buy bigger aircraft type to fly from its hub in Istanbul (IST) to highly populated cities like Beijing (PEK), Shanghai (PVG) and Tokyo (HND/NRT) where flight slots are more restricted.
At A Glance
After some consideration, the airline may be going to wet-lease 2 Airbus A380s from Malaysia Airlines (MH) which features 494 seats in a three class (First, Business and Economy) configuration instead of ordering new A380s directly. MH’s aircrafts are less than 5 years old and include on board products that are competitive with other European and Asian airlines serving the NRT/HND, PEK and PVG markets.
A wet-lease contract includes a clause stating minimum guaranteed hours (MGH) that the lessee (in this case TK) guarantees to pay to the lessor (MH) at a fixed rate. Even if the aircraft is not flown at all or below the MGH the lessee is obligated to pay the amount guaranteed in that clause (if such exists). If the aircraft is higher utilized than the MGH the lessee has to pay in addition to the MGH. Usually the rate for additional hours is lower than the one for the MGH. The wet lease contract may also include crews and catering service.
Finally, depending on the contract, the planes would likely be repainted into the lessee’s livery. Items like menus and IFE screens would also use the lessee’s products.
The following is an infographic on MH’s Airbus A380:
This is not the first time TK has wet-leased aircrafts to manage its expansion needs. Back in 2010-2013, it wet-leased Jet Airways (9W)’s Boeing 777-300ERs for Asian routes and offered a first class experience. This arrangement ended when TK introduced new on board products in Business Class and received its own 777-300ER from Boeing.
While the deal has not been finalized, the two Airbus A380s would provide TK with a healthy increase of passenger capacity (2,198 passengers weekly representing a 46.5% expansion) to serve key Asian routes where slots are not easy to obtain. The A380 hard products are a plus for TK though it will have to adopt to a F class service again. Also, IST may not be equipped to handle an Airbus A380 currently.
This is a win-win scenario for both TK and MH. For TK, it can obtain a couple of A380s without a lot of risk and waiting as a purchaser. It can utilize the additional capacity immediately on routes where it cannot offer additional frequency due to slot restrictions. MH can obtain additional revenue and eliminate excess capacity in its network. This airline is still recovering from incidents with MH370 and MH17.
Update – March 2, 2015
In a filling with Istanbul today, Turkish Airlines announced that “There is no Board decision regarding the purchase or lease of an A380 aircraft. Turkish Airlines will not be operating an A380 aircraft in 2015.”
This does not mean the airline will not consider the Airbus A380 in the future. However, as noted in the post, it may take some time and costs to re-introduce a first class service.