SunExpress to expand capacity to Turkey, eyes more wet leases

SunExpress CEO Jens Bischof
(SunExpress)

SunExpress, a joint venture of Lufthansa and Turkish Airlines, plans to increase capacity throughout its network, despite a difficult operating environment.

“For 2017, we are focusing not only on stabilizing routes to Turkey, but also on adjusting our network if necessary,” SunExpress CEO Jens Bischof told ATW in Frankfurt.

Along with the rest of the European airline industry, Bischof said Antalya-based SunExpress experienced “challenging conditions” in the tourism sector as a result of a series of terrorist bombings and a failed coup attempt in Turkey last year, which depressed yields and slowed bookings as demand decreased.

“SunExpress remains an important bridge between Lufthansa and Turkish Airlines,” Bischof said.

Turkish Airlines CEO Bilal Eksi told ATW recently the Istanbul-based carrier remains committed to the SunExpress joint venture.

Bischof said its Turkish AOC “offers opportunities to tap into new markets like in Russia, the Levant region, Middle East or even Central Asia, to countries like Kazakhstan.”

SunExpress and its subsidiary SunExpress Germany operates a total of 72 aircraft—including 13 Boeing 737-800s for SunExpress Germany and six Airbus A330s for Lufthansa low-cost carrier (LCC) Eurowings—with nearly 4,000 employees.

For the summer 2017, SunExpress will increase capacity to Turkey from Germany, Switzerland and Austria by 26% to 450 weekly flights.

SunExpress wet leases 22 737-800s to Turkish Airlines LCC AnadoluJet, which operates 126 weekly domestic flights. Six Airbus A330-200s and two Boeing 737-800s are under contract for Eurowings.

Bischof said the carrier plans further growth for its A330 fleet from 2018 onward, “but this depends on Eurowings’ long-haul strategy.”

He did not rule out more wet-leases for Eurowings and AnadoluJet. “Our cost base per available seat kilometer is right there like [UK LCC] easyJet or [Irish LCC] Ryanair,” he said.

In 2014, SunExpress ordered 60 Boeing 737s. Of those, 38 still need to be delivered. Six aircraft will join the fleet in 2017, which are on a financial lease contract, reducing the average fleet age to less than 10 years. Deliveries are scheduled through 2021. The deal includes a mix of 737-800s and 737 MAX 8s.

The first 737 MAX 8 is expected for delivery in 2019, but Bischof said the carrier has not yet decided which routes the new aircraft will be flying.

To handle the seasonality of its fleet during the European winter months with less demand, SunExpress signed off five 737s from service at the end of 2016.

For summer 2017, the carrier will operate 780 weekly flights to 80 destinations, including 500 flights from Europe to Turkey. “In 2016, SunExpress announced a turnover of €1billion ($1.06 billion).” He expects the carrier to breakeven in 2017.
 

(Kurt Hofmann - ATWOnline News)