Çelebi Aviation’s focus on emerging markets has positioned the firm for both strong growth opportunities and significant geopolitical challenges – both of which have been in strong evidence this year. Group CEO Dave Dorner talks to Will Waters about growth, opportunity, and risk
As an international airport services and cargo handling operator with a focus on emerging markets, Çelebi Aviation is positioned for both strong growth opportunities and also significant geopolitical challenges; and both of those things have been very much in evidence this year.
Established in 1958 in Turkey, Çelebi operates ground and cargo handling at 61 airports across three continents, in five countries – Germany, Hungary, Indonesia, Tanzania, and Turkey (Türkiye), with more than 8,000 employees. With a deal in Kenya expected to close in January 2026, this will increase to six markets.
Group CEO Dave Dorner, a Canadian national who has led the Istanbul-headquartered company since 2017, characterises this year as one marked by distinctly different outcomes across the company’s global markets. While some mature markets such as Germany have remained flat, Çelebi’s operations in Hungary experienced substantial growth, particularly within the air cargo segment. Ground handling operations have also performed strongly, with the company’s initial market Turkey another that has recorded robust growth this year.
India upheaval
Çelebi had spent more than 15 years building very significant cargo and ground handling businesses in India, with a total of nine stations covering most of the country’s busiest airports – in Mumbai, Delhi, Cochin, Kannur, Bangalore, Hyderabad, Goa (GOX), Ahmedabad, and Chennai airports. But political issues this year between India and Turkey have forced Çelebi to withdraw completely from the India market, after the aviation authorities in India in May revoked Çelebi’s airport security clearances – after Ankara had expressed support for Pakistan during the military confrontation between Pakistan and India earlier this year. More on that topic later in this discussion…
Elsewhere in Asia, Çelebi’s entry into Indonesia in mid-2024 is still in its early stages, and initial efforts have focused on building teams and infrastructure. But the company sees Indonesia “as a key driver in its southeast Asia strategy”. Following Çelebi’s initial entry with ground handling, the company is now adding cargo services, beginning with operations at a new cargo terminal at Kualanamu International Airport (KNO) in northern Sumatra. The 8,000sqm terminal handled 58,000 tonnes of cargo last year for airlines including Garuda Indonesia, Singapore Airlines, Malaysia Airlines, Saudia, and AirAsia Group. The aim is to combine local partnerships and global standards, along with modern processes and equipment, to “set new benchmarks in both speed and customer-centricity”.
Turning to Africa, where Çelebi has operations in Tanzania – another country experiencing some political turbulence this year – Dorner observes that parts of the continent are still struggling to recover from the impacts of the Covid-19 pandemic, leaving overall market activity below pre-pandemic levels. Nevertheless, in late October it was revealed that Çelebi’s German subsidiary Çelebi Cargo GmbH had signed a binding agreement to acquire Transglobal Cargo Centre Ltd. (TCC), a Nairobi-based air cargo and ground handling operator at Kenya’s Jomo Kenyatta International Airport, marking Çelebi’s first cargo handling operation in Africa.
Emerging markets expertise
Dorner describes Çelebi’s approach to the Africa region as “open-minded but selective”, seeking opportunities that align with the company’s growth strategy, rather than expansion for its own sake.
That typifies Çelebi’s strategy overall: “to be a leader in the emerging market space”, where the company draws on significant experience in markets that are often characterised by higher levels of operational volatility – “because of the nature of the economies there”, Dorner says. That includes Turkey, from where the company’s philosophy developed – and then Hungary, having entered that market in 2006 when it was still, effectively, an emerging market. (Germany is something of an outlier in the company’s portfolio, as an already-developed aviation market; but a good opportunity emerged in 2011 to enter Frankfurt’s cargo handling market.)
Dorner continues: “We’ve had that history of being very flexible, resilient, lean, and focused in our approach, and ready for any eventuality; and I think that’s in our DNA. That helps us in emerging markets; that’s primary for us.
“The second thing is, we’ve always tried to think beyond our immediate boundaries. I’m sure our competitors would say similar things, but we really have tried to take whatever we know about improving the ecosystem to the airport operators, to the regulators – because, in emerging markets, they tend to be more open to ‘how do we improve this’?
“If you’re in a very evolved market, you have more constraints.” That’s partly because solutions and systems are mostly already in place. “But in emerging markets, we can add more to the ecosystem,” he notes. Geographical development is, therefore, principally about “where are the opportunities within the emerging market sphere?”.
Indonesian potential
Dorner continues: “Indonesia is an interesting case in point. It’s a very big country – wider from east to west than the US. It’s 17,000 islands. You’re going to have a greater need for air transport, both for people and for cargo, than in some other markets that are similar in population, or GDP. It’s 280 million people. It’s going to grow; and they’re going to become more middle-income. So, we think that’s a great growth opportunity; a really good place to deploy our capabilities, and our money.”
Although the multitude of islands does make Indonesia somewhat unique, Dorner says its aviation market is in some ways quite similar to Turkey – with two or three relatively large international airports, and a couple of dozen much smaller operations within a network of 26 stations, including lots that only have domestic traffic.
Consistency and standardisation
Like all international handlers, Çelebi faces the challenge of how to provide the consistent service that an international airline wants across its network, when operating multiple stations of very varying sizes – including some that have very few flights and cannot justify sophisticated handling systems.
On the process side, Çelebi maintains a unified ground operating manual and training curriculum, although local adaptations are sometimes necessary to comply with market-specific regulations or physical environments. Or in some cases, the airport’s systems are inadequate.
“There are different needs in different airports,” he notes. “And if the system or process isn’t available, then we can try to support that to the extent that it’s necessary.”
Evolving cargo landscape
This year has clearly been a volatile period for those involved directly with US air cargo – and particularly its e-commerce flows – although the impacts have spread to other parts of the world. Çelebi has seen a big surge in cargo volumes to its handling operations in Hungary, although not all of this is connected with this year’s US market changes.
Dorner notes: “I think there’s a link, but the huge growth we’ve seen is particular in Hungary: over the last two years, I would say it’s grown almost 200% in cargo volumes.”
That creates significant challenges. “We try to be realistic in our budgeting, in our forecasting, so we can bring on the systems, the people, to make things happen, and have the capacity,” Dorner notes. “But it’s hard to keep up when growth is that strong. It’s been quite phenomenal and somewhat surprising.
Budapest growth story
“Having said that, a few years back, we made the conscious decision to partner with the airport operator at that time, and try to grow the cargo market together. And it was one of the better co-operations we’ve had, where we weren’t just a service provider. We actively went out with the airport operator to market the airport, and it was successful. They then sold the airport to the new owners. But that volume has continued.
“That’s part of the story. And part of the story is that Hungary is really one of two gateways for e-commerce into Europe from the Far East. I would say Hungary and Belgium are the two gateway markets.”
He continues: “Obviously, there are other flows in other places. But those have really been focal points. And so, Budapest, as an airport, has been very successful. And on the back of that, we’ve had huge growth. And we were actually there helping create that – which is, for us, a step forward from what our normal role is.”
Specialist handling
Although some of the fast-growing volumes of e-commerce can be treated, in handling terms, as a type of general cargo, Çelebi has also invested in its capabilities to handle e-commerce more effectively. Nevertheless, part of the investment has been into “upgrading our systems for cargo across our whole network, not just for e-commerce”, says Dorner. Whereas Çelebi’s ground handling business has for some time been somewhat standardised, using a consistent ground operating manual and software platform, each of its cargo operations “had its own way of doing things”, Dorner says.
“We have tried over the last few years to bring it in line, under one cargo brand, one cargo operating manual, and a more-consistent platform across all of our operations; and then bring the data analytics and KPIs through that software platform.”
But in two of its locations, in Hungary and Turkey, Çelebi has also “started to do more of the sorting”, with its own sorting capability. “We were doing a lot of work for FedEx in Istanbul, and for Cainiao’s affiliate in Hungary,” says Dorner. “That was a change from what we did in general cargo; sorting wasn’t part of our repertoire.”
That has prompted questions “about how far to take this”, says Dorner. “I think that will be evolving.”
Different cultures
One issue is a somewhat different culture in parts of the e-commerce logistics business. “When I look at Hungary, they [Cainiao] had a different way of thinking – even about how they motivate and compensate their labour force,” he notes.
“That raised questions like: ‘Do we want to adopt that? How does that impact our existing staff? Yes, it’s a different line of business; but if they’re all working for Çelebi, then there has to be a consistency. So, how do we rethink compensation if we want to be in this line of business?
“There have been learnings that we had to do. But the foundational point was getting more into the sorting part of the business; that wasn’t really part of the general cargo, historically, for us.”
Investment decisions
Dorner says the question of how much to invest in specialist capabilities – whether for e-commerce, or pharma or dangerous goods – needs to be looked at on a case-by-case, or location-by-location, or customer-by-customer basis. And it also involves “looking at the competitive landscape, and what’s out there”?
His conclusion was that “the operating model was to get into the sorting side. But it’s harder in certain places.”
He continues: “We’re about 85-90% to peak capacity in Frankfurt, so there’s no space to dedicate to sorting for us right now. If I want to get into that line of business, either I have to reallocate capacity by winding down one existing customer relationship so that I can free up space, or I have to invest in an additional facility.
“In Hungary and Turkey, we had the space to do that business, bring in the customer, and do that additional line. So, it’s also situational; are we in the right position to do this right now, in this location?”
Regulatory headwinds
The expansion of e-commerce logistics has clashed this year with substantial regulatory headwinds, especially related to changing tariff and ‘de minimis’ rules in major markets such as the US, and to a lesser extent Europe. Dorner is pragmatic about the need to remain responsive to these regulatory shifts, acknowledging that policy changes – such as those affecting shipments from Asia to the US versus Europe – may drive cargo flows in new directions with little advance warning.
Dorner acknowledges the “capital-intensive” nature of cargo facilities and the difficulty in predicting long-term demand. In general, the solution is to build “optionality and flexibility” into new facilities – such as designing warehouses with the physical capacity to upgrade or expand automation technologies if and when demand grows.
Despite these measures, Dorner cautions that “it’s hard to turn it off” – once significant investments are made in infrastructure, they are not easily reversed in the event of a market downturn. This reality informs Çelebi’s approach to risk management and investment, particularly in regions exposed to volatility.
Çelebi’s ground handling and related non-cargo activities currently account for about 65% of the company’s business, with cargo comprising the remaining 35%. But EBITDA margins tend to be higher in cargo, due to its higher capital intensity and relative lack of flexibility, making effective risk management all the more important.
Political risk
Nowhere is the political risk inherent in emerging markets more evident than in Çelebi’s recent exit from the Indian market. Following the confrontation between India and Pakistan earlier this year, the Indian government took steps that effectively forced Çelebi – a company headquartered in Turkey but with international institutional investors – to withdraw from the Indian airports in which it operated. India had formed a very significant part of Çelebi’s global business, including around half of its cargo throughput.
“We were in eight out of the 10 largest airports in the country, in terms of volume. And we had the largest and most-productive cargo terminal in the country, in Delhi,” Dorner highlights.
Being forced out, with little notice, was clearly an unwelcome experience, although there are still legal proceedings taking place.
Dorner acknowledges that “there’s always a political risk calculation” when operating in emerging or frontier markets, and Çelebi continually reassesses the stability and predictability of new market opportunities, with particular attention to the rule of law and local regulatory compliance.
Stable rules
“What are we looking for? Stable rule of law; and predictability – that’s what business wants,” he explains. “Tell me what the rules are going to be going forward, and then I can invest and build a business – as long as I’m treated equally with everybody else, whether I’m a domestic player, locally based, or an international investor. If those are the rules of the game, then we can play.”
India had seemed a stable business environment – a democracy with a functioning legal system, based upon English law, and a fairly strong judiciary. “So you would expect some predictability and rule of law; and that’s what we look for in any market,” Dorner observes. “In this particular case, we’ll see how things play out.”
There are clearly some markets that most international companies – and their investors – probably wouldn’t want to touch, such as North Korea; and probably not Afghanistan; nor, currently, Iran.
“There are others you try to assess: How do I view the stability going forward? And is there a way to mitigate that?” Dorner notes.
That’s balanced out against the potential opportunity – bearing in mind, also, “what’s the payback period?” Dorner notes.
Partnership with local firms
Drawing on his own experience of entering the Turkish market 25 years ago as a Canadian entrepreneur, one option Dorner favours is partnerships with local firms that are knowledgeable in local processes, regulation, and business culture – and in some countries, majority local ownership is a legal requirement.
Looking forward, he notes that global political risk appears to be rising again – after a period of 20 or 30 years in which multinationals could mostly count on governments being “in the background.” Increased government activism and assertiveness means that companies must adopt even more rigorous approaches to managing and mitigating the unpredictable effects of geopolitical shifts.
And Çelebi’s very recent exposure in India to the downsides of political risk is a sobering experience – including for many international companies considering new international investments and the exposure of their existing international businesses.
“It is getting more political,” Dorner acknowledges. “So, we have to be even more cautious about how we think about managing political uncertainty. It’s a lesson; an expensive lesson.”
