Turkish Airlines reports 9-month loss of US$463 million

Having posted a net profit for the same period one year ago of US$877 million, Turkish Airlines has posted a net loss of US$463 million for the nine-month period, 2016. This comes despite a 4% increase in passenger numbers at 48.3 million. Revenues decreased 6.1% to US$7.6 billion, while an operating loss of US$154 million was declared, compared to an operating profit of US$894 million for the same period, 2015.
It was reported that excluding America and Africa, passenger and cargo revenue dropped in all market sectors, including domestic routes. Over the nine-month period, the carrier operated 357,000 flights. ASKs increased 14%; RPKs were up 8.2% and load factor was down to 74.5% compared to79% for the same period in 2015. The EBITDAR margin for the same period was 17.4%, down 8.8 percentage points year-over-year.
Part of the problem has been that Turkey has seen a dramatic decline in tourism, which was reported as down 23% for the first five months of the year compared to 2015, according to the Harvard Business Review. Much of this can be put down to the death of over 250 civilians in the terrorist attack on Istanbul’s Atatürk Airport on June 28, plus the growing threat from ISIS and domestic Kurdish insurgency. According to the World Travel and Tourism Council, it can take up to 13 months for a country to recover from a terrorist attack, appreciably longer than it does from a natural disaster.
The Istanbul stock exchange was informed by the Star Alliance member On October 7 that it would reschedule deliveries of 92 Airbus A321neos, 65 Boeing 737 MAX 8s and 10 737 MAX 9s, with narrow-body deliveries being reduced from 34 to 10 in 2018; from 40 to 35 in 2019; and from 52 to 42 in 2020.
Though it has not been confirmed by Turkish Airlines, analysis of flight data has revealed that up to 30 of the carrier’s aircraft may been grounded as a result of weakened demand.