Paving a new silk road

Taking advantage of their country’s strategic location at the crossroads of continents and cultures, two Turkish entrepreneurs are helping put the country back firmly at the heart of global trade corridors.

Throughout ages past, merchant caravans laden with silk, spices and precious gems travelled from China through Turkey to Europe along the famed Silk Road. Thousands of years later, modern day Turkey’s enviable position at the crossroads of Asia, Europe and the Middle East still makes the country a key hub in the transportation of goods around the globe.

The camels, horses and donkeys of the past have been replaced by sophisticated networks of airlines, trucking companies, railways and shipping ports; and the growing Turkish logistics sector is expected to reach a business volume of US$15 billion by 2010.

ACT Airlines, a cargo carrier founded in 2004 that operates out of Sabiha Gokçen International Airport in Istanbul, is one of the successful Turkish companies that are expanding quickly.

Since a change in ownership in 2006, Turkish aviation pioneers and investors,Yavuz Çizmeci and Cankut Bagana, have moved quickly to initiate bold moves that have set ACT Airlines apart from other Turkish carriers. These include signing a Memorandum of Understanding for the purchase of two new Airbus freighters, developing and constructing a massive aircraft maintenance warehouse and signing an important agreement to operate freighters on behalf of Empost in the UAE.

ACT Airlines is recognised as one of the Middle East’s leading cargo carriers and its present fleet consists of seven A300-B4 cargo aircraft, with two 747-200Fs to be added to the fleet this year.

ACT Airlines’ Chairman and CEO, Yavuz Çizmeci, said there are plans to further expand the fleet with two Airbus A300-BF-203Fs, scheduled for delivery in 2011 and 2012. This will allow the company to further meet Turkey’s demand for air cargo transportation.

“The A330-200F is the ideal complement to our existing aircraft portfolio and builds on our success with the Airbus A300-B4 freighters,” Çizmeci said.

“Its payload range characteristics will open up new possibilities for our customers paired with very attractive operating costs,” he added.

This purchase will allow ACT to offer non-stop services between Istanbul and Hong Kong, Singapore and New York, as well as the ability to offer 30 per cent more volume than other freighters in its class.

The A330-200F is the only mid-size, long haul all-cargo aircraft capable of carrying 64 tonnes over 4,000 nautical miles (7,400 km) in ‘range mode’ configuration, or 69 metric tons up to 3,200nm (5,930 km) in ‘payload mode’.

Another advantage of the Airbus aircraft is that it is the first freighter to introduce a versatile main-deck cargo loading system, which can accommodate both pallets and containers, enabling the operator to service each of these very different markets.

Çizmeci, Bagana and United Statesbased hedge-fund, HBK Investments, have also co-founded affiliate companies myTechnic MRO Aircraft Services and Aviation Management Solutions Ltd (AMS) to further enhance the services offered by ACT Airlines.

The ambitious myTechnic warehouse project is already under construction with a 47,000 square metre facility planned for Sabiha Gokçen International Airport, with plans to provide the full line of maintenance, repair and overhaul (MRO) services for Airbus and Boeing aircraft.

“We had the concept of constructing and developing the number one MRO in this region,” Çizmeci said in a video on the company website.

According to Çizmeci, the facility will be number one, in the context of space, volume and the number and types of aircraft to be maintained, as this will be a maintenance base that will serve all kinds of Airbus aircraft.

The aircraft maintenance facility will perform heavy checks on Airbus A318, 319, 320, 321, A300B4 and A300-600 series aircraft, as well as Boeing 737, 757 and MD80 series.

Engine maintenance for Pratt Whitney JT9D and GE CF6-50 engines is also planned and the facility will be manned by 1,000 employees per shift.

Formed with a capital investment of US$45 million and situated on more than 55,650 sq metres of land, the facility will be divided into 15,600 sq metres of hangar space, 11,100 sq metres of office area and 20,300 sq metres of warehouse and shop area.

Çizmeci said regional countries are expanding in line with Turkey in the civil aviation industry and myTechnic will be well-positioned to take advantage of the projected growth.

“In the last four years, Turkey has increased the number of aircraft from 100 to 250, and in the region of Eastern Europe, Southern Russia, Middle East and North Africa, we have more than 1,000 aircraft,” he said.

“According to IATA statistics and according to the forecasts of Boeing and Airbus, in the next 20 years, one of the highest increasing volumes in aviation will be in this area.”

The growth in the number of aircraft reflects the overall trend of the prosperous Turkish logistics sector which, the Turkish Daily News reports, has developed rapidly thanks to Turkey’s foreign trade volume, as well as foreign investment in the sector from Europe, the United States, Russia and the Middle East.

Logistics in Turkey involves a fleet of 40,000 vehicles, provides employment for approximately 400,000 people, and holds 53 per cent of exports and 24 percent of imports in value.

Despite aspiring for growth and providing a high degree of standardisation, quality and safety across the MRO’s operations, myTechnic’s leadership team is committed to employing ‘lean principles’ throughout its operations which, it hopes, will positively impact both its clients’ budgets and the environment.

The innovative techniques of lean principles were first pioneered by Toyota and aim to eliminate waste, reduce costs and yet, paradoxically, increase quality.

‘Lean’ is considered a ‘holistic approach’ which eliminates items and process steps that the customer does not value, thereby earning a reputation as a ‘customer-centric’ approach.

From the earliest planning stages, the board of directors were determined that the myTechnic installation would infuse lean principles into every aspect, from
the design of the building and layout of shop floors, through to its organisational structure.

Only time will tell if their optimistic investment in the ‘lean’ philosophy will reap dividends, but regardless, joint-owners Yavuz Çizmeci and Cankut Bagana are firmly holding myTechnic, ACT Airlines and AMS as significant players in their local and regional cargo markets.

Together, they form a strong partnership in directing operations of these three businesses with exciting potential, with neither of the two being a stranger to the aviation industry.

Bagana is a 35-year veteran of the tourism industry and is the owner of Onurair, the largest private airline in Turkey, which operates a domestic low-cost carrier within its umbrella of operations and owns 28 new generation aircraft.

He is also a familiar figure with the international investment community having sold his European travel agency network to UK tourist giant Firstchoice in 2001.

Çizmeci was part-owner and managing director of MNG Airlines between 1999 and February 2006.

During his tenure, the airline became one of the leading cargo airlines in the region with 30 aircraft in its fleet and winning several international awards for operating the Airbus A300 freighter.

At a panel discussion in June 2006 at the Wharton Global Forum in Istanbul, Çizmeci demonstrated his foresight when he reminded the audience that Turkey had historically been located at the logistical crossroads for commerce and trade since ancient times, and he believed the nation was poised to be a logistics centre of the future.

He said the trend was for big companies to open branches in Turkey or to buy companies already there, ready to take advantage of the country’s increasing trade, and its sea, truck, railway and aircraft transportation options.

It seems Çizmeci’s keen awareness of Turkey’s rich past, combined with his assured outlook and leadership of highly connected and networked business partnerships, will continue to attract regional attention for ACT Airlines, myTechnic and Aviation Management Solutions in 2008.

And, perhaps, Turkey too can look forward to a new entry in the history books, where it becomes known for winged-caravans of steel, laden with machinery, technology and small goods, once again passing through its borders enroute from East to West or North to South, following in the footsteps of the celebrated original merchants of the Silk Road.