Exploring the impact of socio-political crises on the operational performance of the Turkish Airlines

This study investigates the impacts of socio-political events on the operational performance of the Turkish Airlines, by referring to the firm-specific factorsi.e. available seat kilometers (ASK), revenue per kilometer (RPK), passenger load factor (PLF) and passenger carried (PC) over the period of 2010M1-2018M12. To conduct the study, we selected four critical events among many others that had a serious impact on the Turkish socio-political environment. These events, by chronological orders, are; Gezi Park, the shooting of the Russian military jet, the attempted military coup and electronic devices ban. To detect the outlier impact, we run four different outlier algorithms, namely outlier detection algorithm (ODA), breakout detection algorithm (BDA), change-point algorithm (CPA) and causal impact analysis on a regional basis. The findings suggest that the socio-political crises have changing impacts on the operational performance of the Turkish Airlines regionally. CPA successfully detected the Gezi Park in domestic, Africa and North America regions for RPK and in domestic, Europe, Far East, and North America regions for ASK. ODA detected an outlier impact in Africa and North America for RPK and ASK for the shooting of the Russian military jet. ODA had an outlier impact in Europe, the Middle East, and North America regions for the attempted military coup. Finally, for the electronic devices ban while ODA successfully detects an outlier effect in domestic, North and South America regions, CPA reveals an impact in Africa, Far East, and South America for RPK. The impact of the crises in PLF has been less visible. These findings show that although the crises had an immediate effect on the operational performance, Turkish Airlines recovered from each crisis very promptly. This proves the resilience and agile management ability of the company. Keywords: Causal impact, Operating Performance, Outlier Detection Analysis, SocioPolitical Crises, Turkish Airlines