Turkish Airlines Backtracks on Guarantee Demand

Turkish Airlines Backtracks on Guarantee DemandTurkish Airlines Backtracks on Guarantee Demand

The state-owned Turkish Airlines has decided not to increase the bank guarantee it had recently demanded from Iranian travel agencies.

Previously, the airline had sought to increase the 300-million-rial ($8,333) guarantee to four billion rials ($111,111), much to the dismay of Iranian travel agencies doing brisk business with the northwestern neighbor.

However, Mohammad Hassan Kermani, head of Iran’s Association of Air Transport and Tourist Agencies, told the Ministry of Roads website that “the Turks have agreed to provide every travel agency with 22 tickets per week in return for the original guarantee sum ($8,333).”

Travel agencies submit sales reports every two weeks; however, they can put in an order for more tickets if they run out within a week.

While this may be welcome news for Iranian tour operators who had tried to persuade Turkish Airlines to rethink their unilateral decision to increase the guarantee, it does not necessarily mean it benefits Iran’s aviation and tourism industry.

It is a well known that Turkish Airlines has a monopoly over Iran’s air travel market, mainly due to domestic airlines’ poor service quality and aging fleet.

Iranian airlines’ inability to mount a challenge against their Turkish counterpart has made the neighboring state’s national airline complacent, with some accusing the Turks of shortchanging Iranians in terms of service quality and hiring individuals with less-than-stellar performance to oversee the company’s Iran office and improve their resumes.

According to Kermani, Iranian officials have given Turkish Airlines “free reign,” but the sentiment is not reciprocated.

“Even though Turkey is the most popular foreign destination for Iranian tourists, domestic airlines do not fly directly to major Turkish cities, including the capital Ankara,” he was quoted as saying last month by ISNA.

Iranian airlines do not have permission to land in the Turkish capital, giving Turkish Airlines an unfair advantage over their Iranian counterparts.

“They need to understand this is a business relationship; as such, cooperation is essential. Just as we abide by Turkish regulations, Turkish companies should do likewise when they work in Iran,” he said.

Turkish Airlines offers flights to and from seven Iranian cities, including Tehran, Mashhad, Shiraz, Isfahan, Tabriz, Kermanshah and Ahvaz.

Iran plans to buy 450 new planes — between 80 and 90 planes a year — from American planemaker Boeing and its France-based counterpart Airbus to renovate its fleet once the western-imposed sanctions are lifted, which could help Iranian airlines increase the quality of their services and offer frequent flights to more destinations.

However, experts are of the opinion that the government needs to get actively involved in the industry and offer low-interest loans to domestic airlines to boost their odds of reclaiming the country’s lucrative air travel market, which generates $3 billion a year for the 32 foreign airlines that operate in Iran.