Saturday, 1 November 2014

Pegasus harnesses the best of both worlds

Full article in PDF format

When Pegasus Airlines was acquired by ESAS Holdings and re-branded as a low-cost carrier (LCC) in 2005, the airline’s incoming management team were faced with an immediate strategic dilemma.

On the one hand, their home nation of Turkey was poised to embark on a decade of break-neck civil aviation growth matched in scale and ambition only by the Gulf mega-hubs. Istanbul’s geographical location at the crossroads of three continents was enabling Turkish Airlines (THY), the country’s flag-carrier, to transform Istanbul Atatürk Airport into one of the world’s pre-eminent intercontinental hub-and-spoke networks.

On the other hand, across Turkey's western border with Europe, LCC giants Ryanair and EasyJet were perfecting the art of ultra-low-cost travel, tearing up the rulebook for hub economics and unlocking the full potential of the point-to-point business model...