Air Transport World

THY in transition: major aircraft order propels Turkish Airlines' vision to become a global carrier.(Turk Hava Yollari A.S.)(Company Profile)

Low-profile but profitable, Turkish Airlines is roll with an order for 51 new aircraft and plans to build a new $350 million technical base (see box, p. 42), soaring on the winds of a robust economy and rising demand for leisure and business travel. Earnings are at record highs and passenger traffic was up 26% in the first half of the current year.

This success is occurring against a backdrop of increased competition from private Turkish carriers led by Onur Air, Fly Air and Atlasjet International Airways--rivals not only in the burgeoning core domestic market serving a population of 70 million but also on lucrative quasi-scheduled charter flights between European cities and Turkey.

All of them are banking on the growing popularity of the country's Mediterranean coastal holiday resorts in places like Bodrum, Dalaman and Antalya as well as the Aegean port city Izmir, not to mention tourist magnet Istanbul itself. Some 9.3 million people visited Turkey in the first seven months of 2004, up 37% from the prior-year period, according to official statistics. The largest number, 2 million, were Germans, followed by visitors from the Russian Federation. With 14 million tourists generating $13.2 billion, tourism was Turkey's leading source of foreign earnings in 2003, although it is difficult to know how recent terrorist attacks in Istanbul will impact future demand.

Turk Hava Yollari, as the national carrier is known at home, generated 253.1 trillion lira ($214 million) in net earnings in 2003 with an operating profit of $154 million on total revenues of $1.6 billion, up 2.7%. "Annual results this year will be even better," President and CEO Abdurrahman Gundogdu told ATW here. Expectations are high for the rest of 2004, with gains anticipated that will compensate for a net loss of $60.4 million in the traditionally weak first quarter.

Annual turnover is expected to soar to $2.5 billion within three years through expansion to be made possible by MOUs this year for 51 Airbus and Boeing jets with a total book value of $4 billion. …

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