THY has upbeat prospects
ISTANBUL – Boosted by a buoyant tourism sector and growing domestic demand, state-controlled Turkish Airlines (THY) expects to sustain last year’s strong growth in 2006, a top company executive said yesterday. Chief Executive Officer Temel Kotil said the fleet will grow in August to 100 planes, including both Airbus and Boeing Co planes, from 82 last year and about 60 the previous year. A dynamic economy and positive expectations for Turkey’s European Union accession process are fueling the expansion, despite increased competition and rising fuel costs. In the first nine months of last year, the company’s revenues jumped 30 percent from a year earlier to $1.8 billion. Kotil said full-year growth would be around similar levels. «The year 2005 was a very good one for Turkish Airlines,» Kotil told Reuters in an interview. «Our plane total rose to 82 in 2005 and we will reach a level of 100 planes in 2006.» The company is benefiting from a boom in Turkish tourism, where revenues jumped 14 percent in 2005 to $18.15 billion and are targeted to reach $20 billion in 2006. «We expect growth in 2006 to be parallel to that in 2005,» Kotil said, adding that the company planned 24 new international routes during the year. New destinations include African, European, Middle Eastern and Asian cities. Kotil also said the company had a profit margin of around 5 percent. In the first nine months of last year, net profit climbed 31 percent to $106 million. Amid the strong growth, Turkish Airlines was able to absorb the sharp rise in fuel prices. The proportion of fuel expenses in the company’s total costs rose to 23 percent from 18 percent last year, Kotil said. In the nine-month period, the company’s passenger numbers rose 20 percent to 11 million. It aims to increase passenger numbers to 18,000 by 2008. The load factor rose three points to 74 percent last year, Kotil said. Some 25 percent of Turkish Airlines is listed on the Istanbul Stock Exchange after it held a public offering at the end of 2004, reducing the state’s stake in the firm to 75.2 percent. Kotil said he could not comment on the possibility of a further public offering. Deputy Prime Minister Abdullatif Sener has said the state was not planning to sell off more than 50 percent of Turkish Airlines. Successive governments tried to privatize the firm and the failure to do so over the last decade held up company reform.
