The impact of the financial crisis on the airline industry Essay

The impact of the financial crisis on the airline industry - Essay Example Nonetheless, an economic crisis occurred in between the year 2000 and 2001. Within this period, Turkey faced one of the worst economic turmoil, with the unemployment rate reaching over 11%. In addition, the Turkey government borrowed an additional 23 billion dollars (Reinhart &Â  Rogoff, 2009). This paper will analyze the impact of the financial crisis on the airline industry, focusing on Turkish Airlines. The Aviation sector is expanding by day with progressing technologies and economies. Developments on aviation sector affect airlines operations. The Airline industry or sector is connected with international trade laws or policies. The Turkish Airline sector is growing fast and has a large significance to economic progress. Their international and countrywide financial crisis also had a tremendous impact on Turkish Airlines. At the period of the financial crisis, Turkish Airlines was faced with decreased air travels, massive retrenchment of workers, among others. This also contrib uted to the economy of Turkey becoming delicate, not only domestically, but also internationally (Rigas, 2001). Not only, did the financial crisis affect Turkish Airlines and its workers, it also affected businesses that were depending on the Airline services, for example, tourism and shipment of goods from Turkey to other areas. Turkish Airlines is the Turkish national transporter airline in Turkey. Turkish Airline headquarters is situated in the capital city, Istanbul, at Ataturk Airport. Turkish Airlines offers its air travelling services to over two hundred and four domestic and international destinations in the Americas, Africa, Europe, and Asia. In addition, Turkish Airline offers its carrier services to an additional ninety one countries (Rigas, 2002). This makes its destination system from one area the largest in the whole world. Turkish Airline’s central station is Ataturk International Airport. Turkish Airlines has been on the rise since 2006. The number of passenge rs using Turkish Airline increased from 17million passengers in 2006 to 29 million passengers in 2010, earning over $15 million dollars over the five years. A report released in 2011 showed the airline had employed 18,188 workers. Turkish Airline has also been a constituent of the Star Alliance network from 2008. Turkish Airline also co-owned B&H Airlines, AnadoluJet, North Cyprus Airlines, SunExpress, and Cyprus Turkish Airlines. Turkish airline has been affected by financial crises since the olden days. Turkish Airlines suffered financial losses between 1987 and 1988, mainly because of significant expenditure on its numerous new Airbuses. This is according to a report released by Air Transport World. The fleet of airplanes also comprised DC-9s and Boeings. Turkish Airlines finished the period with less than 10,000 airline workers. In addition, after the Persian Gulf War, Turkish Airlines also suffered in the world wide economic crisis (Rigas, 2002). Nonetheless, Turkish Airlines g ot back on its feet in the middle of 1990s. The largest contribution to its financial development came from destination in North America. Turkish Airlines capital continued to increase, attaining the 10 trillion mark, in 1995. During the same year, Turkish Airline had switched some of its Boeing to cargo planes. Turkish Airline attained a $6 million profit within the same year. Nonetheless, Turkish Airline had to compete with the extreme inflation of the country due to