Mehmet T. Nane, Chairperson of the Board of Directors, Pegasus Airlines and Chair, IATA Board of Governors, believes technology benefits are wide ranging.
From providing humanitarian flights and support from the very start of the February earthquake to the future digital strategy of the airline, Pegasus Airlines’ Chairperson of the Board of Directors Mehmet T. Nane says there are many challenges and opportunities ahead for Türkiye and Pegasus.
Tell us how you helped following the devastating earthquake in February?
We are experiencing challenging times as a country. The pain we felt in the aftermath of the earthquake catastrophe on February 6 is still fresh. I would like to again commemorate those who lost their lives—may they rest in peace—and wish a swift recovery to the injured. As a nation and as a company, we believe in the importance of solidarity to overcome these difficult days and to heal. Our primary task is to support those affected by the earthquake in the fastest and most effective way possible, and to sustain this support on a long-term basis.
Pegasus Airlines worked diligently from day one of the earthquake. We operated domestic flights from Adana, Adıyaman, Diyarbakır, Elazığ, Gaziantep, Malatya, Kahramanmaraş, Şanlıurfa and Hatay free of charge between February 7-28, 2023 for those affected by the earthquake. We started flying to Hatay on February 12 after the runway was repaired. Between February 6-28, we evacuated 152,950 people from the earthquake zones with 785 free evacuation flights. During these flights, we carried 110 tonnes of aid materials free of charge. We carried 126,926 people and rescue teams on flights to the disaster zone. As well as continuing our transportation support, we also supported citizens affected by the earthquake with financial aid.
During this period, we also took the decision to support the Federation of Women’s Associations of Türkiye Purple Campus project. The Purple Campus project aims to improve the conditions of women, children, and people in need of geriatric care and disabled individuals in the earthquake zone, creating safe spaces by providing their most basic needs. Pegasus will also contribute air transport. I sincerely believe that as contributions to the Purple Campus project increase, we will make a difference to the lives of those affected by the earthquake.
What are the main challenges and opportunities for aviation in Türkiye?
Türkiye has historically been a prominent travel destination for travelers from Europe and Central Asia, including travelers from the Middle East in the past decade.
Large numbers of visitors travel for sun, sand, and sea tourism, but we are seeing high growth rates in the health, educational, and cultural tourism segments. Türkiye will continue to attract these various types of visitors as the country offers good value for money as well as its unique natural, cultural, gastronomic, and historic attractions, for example.
There is also a large Turkish population living in Europe who frequently travel to Türkiye to visit relatives and friends, which brings a certain resilience to overall inbound travel demand. Moreover, it is worth mentioning that Türkiye is at the crossroads of Europe, Asia, and Africa, offering the best point for transit travelers who need to switch flights while travelling between the continents. So, opportunities are plentiful.
The key challenge is the vulnerability of travel demand to such factors as a slowdown in economic activity, a decline in the disposable income levels of travelers, negative geopolitical developments, and any future pandemics.
What advantages do you see in expanding so rapidly?
Our operating region spans Europe, the Middle East, North Africa, and Central Asia, and we see a significant growth potential both in the total market and in the demand for low-cost carriers.
Our fleet and network investments are dedicated to stimulating diversified growth across these regions while focusing on contribution to the network value. We currently have the lowest unit cost in the world, and we have a sizeable fleet growth in the pipeline to over 120 aircraft in 2025 from 96 in 2022. When the deliveries are complete, we plan for our fleet to consist solely of next generation A320neo and A321neo aircraft, which will further support our efficiency. This will also contribute to our sustainability commitments and help us maintain our leading position in cost metrics.
Has customer behavior changed since the pandemic or has the market simply picked up where we left off in 2020?
The major difference we see post-pandemic is the booking window. The difference between booking and flight date has shortened since people are more likely to make last-minute bookings due to the ambiguity brought on by travel restrictions during pandemic. This previously periodic behavior has turned into a long-term shift. The business travel segment has been the slowest to recover.
We’ve also seen a rapid shift to travelling with minimum contact. At Pegasus we’ve invested in unique innovations in this regard, and our guests can utilise our digital solutions for check-in, baggage drop and boarding processes with reduced contact. Turkish nationals on domestic flights can also check-in online before the flight and board without contact using their ID card with a chip at the gate.
There’s also more emphasis on digital channels. One demographic that stands out when we talk about digital is, of course, Gen Z. This new generation of travelers looks for brands that offer tailored discounts and promotions, value for money products and services, and care about sustainability when making purchasing decisions. As such, as well as our overall digitalisation, we aim to tailor certain products for them such as our recent BolBol Youth, an extension of our loyalty program that targets 12-to-24-year-olds, offering them value-driven promotions and discounts.
Can you tell us about your digitization strategy?
At the start of 2022, we launched a new initiative to take our digitization journey to the next level. Our digital strategy for our guests is based on five pillars: improved digital experience, user experience, search engine marketing (SEM), search engine optimization, and personalized digital experience.
For an improved digital experience, we invest in products and tools that make every stage of the journey easier, better, and seamless. User experience is focusing on web and app redesign, and an app-like mobile website.
We are also focusing on a personalized SEM and dynamic data usage.
It is important to focus on sustainable traffic to our web and app. To do this we are creating content in different local languages, such as German and French, including an English blog and an Arabic language website. We also focus on continuous optimization of our customer journey and personalized booking funnels, targeted banners, and content.
What criteria do you use to evaluate new technology?
We conduct a cost-benefit analysis. On the value side, we score parameters including revenue, savings, company image, and regulation. On the cost side, we add the projected cost for the investment.
Technology investments may not always reduce operational costs and we consider other factors when investing for the long-term growth and sustainability of the business. It is important that the guest has an easy and seamless travel experience and that we can offer low fares.
Moreover, technology is an important factor in driving the sustainability of our industry as part of our commitment to net zero by 2050, and this is also a vital part of our decision-making process. Some of our projects may be in research and development where the benefits are longer term.
It is also important to offer an easy work experience for Pegasus employees. We will continue to invest in these areas to utilize all the possibilities of technology.
How can an airline take better advantage of the data it is producing?
Airlines have an e-commerce structure, and a wide range of operational units, from ground handling to technical teams, from flight crews to safety. To offer a good travel experience, the entire operation needs to work in harmony. It is crucial to use generated data to analyze and evaluate. Utilizing artificial intelligence (AI) offers many value-added possibilities, such as using AI to determine the catering that will be loaded onto the aircraft and reduce waste.
We benefit from the data generated in all projects involving providing low fares for guests and enhancing the entire travel experience.
Can the industry achieve net zero by 2050? What will be the biggest challenge?
Yes, the industry can achieve net zero by 2050. But we need urgent action to achieve this target.
The industry’s main emission source is jet fuel. Projects to replace this with alternative energy sources, such as hydrogen, will provide us with the longer-term solution. But until they become commercially viable for industry-wide use, the industry’s focus will remain on sustainable aviation fuels (SAF).
The challenge is to get abundant SAF production that’s affordable. Today, there is simply not enough supply and the SAF available is several times more expensive than jet fuel. Governments should evaluate the value in the local production of SAF and create incentives for increased production and make it affordable for airlines. This will also boost domestic production and growth. Mandates and taxation alone—where the entire cost of aviation transformation is imposed on airlines and the proceeds of which are seldom used to support the industry’s net zero targets—are unlikely to help.
Does diversity make business sense?
Promoting and fostering diversity and inclusion is the right thing to do no matter what, as it ensures equal opportunities for individuals from all backgrounds and fosters a sense of belonging and respect for everyone. But it also does make business sense. It can lead to better decision-making, increased innovation, and improved financial performance for companies. Companies that prioritize diversity and inclusion are likely to have a competitive advantage.
Diverse teams are more likely to be better at problem-solving, decision-making, and adapting to change. They can also help to improve employee engagement, productivity, and retention.
Has the experience as IATA Chair been a good one? In what areas has progress been made?
It has been an honor to serve as IATA’s Chair of the Board, especially at a time when the industry was emerging from its worst downturn. It has certainly been a busy year and as we have continued to rebuild global connectivity at great pace, we have been addressing such priorities as sustainability, diversity, regulation, operational challenges, and infrastructure costs.
Diversity and broadening IATA membership has been a strong focus and 2022 was a particularly important year as we achieved the milestone of 50% of IATA members joining the 25by2025 voluntary initiative, driving a more diverse and inclusive aviation industry particularly regarding female representation.
We are witnessing real change. Last year alone at least five female CEOs have been appointed. As of April 2023, we have 19 female CEOs among 25by2025 signatories and 24 female CEOs among all IATA members.