Turkish Airlines net loss of US$77 million sees plane orders postponed

Security issues severely hit the Turkish tourist industry in general in 2016, and Turkish Airlines in particular. Having posted a profit of US$682 million in 2015, 2016 revenue dropped 6.9 percent to US$9.8 billion, while operational expenses rose 3.1 percent to US$10.14 billion, resulting in an overall net loss of US$77 million.
At the beginning of 2017 the Statistics Institute in Turkey (TÜIK) reported that the country’s tourism revenue had dropped 29.7 percent to US$22.1 billion. This was the major consequence of the 30 percent fall in foreign tourist numbers to 25.3 million and foreign visitors being responsible for 72.8 percent of tourism revenue.
The number of Russian tourists visiting Turkey saw a 76.2 percent decline in 2016, plummeting to 866,256, while the UK, which had been the third-largest source of foreign visitors to Turkey, saw numbers drop to 1.7 million. Turkish Airlines was also badly affected by a 24.6 percent drop in departing visitors to 31.4 million.
In RPK terms, passenger traffic was up 6.3 percent on an ASK capacity increase of 10.7 percent, resulting in a 3.1 percent drop in load factor to 74.6 percent. Turkish Airlines carried 62.8 million passengers in 2016.
Resulting from this reduced growth, Turkish Airlines has delayed the delivery of 92 Airbus A321neos, 65 Boeing 737 MAX 8s and 10 737 MAX 9s that were due to enter service between 2018 and 2022. Aircraft deliveries will now be 10 in 2018, 35 in 2019, and 42 in 2020.