Monday, 1 June 2020

Slow recovery for Turkish Airlines as domestic flights resume

There will be a long slow recovery in global demand for air travel towards the end of the summer months according to Turkish Airlines, who expects passenger numbers will drop by as much as 60% for this year - compared to initial expectations.

Chairman Ilker Ayci warned the figures will be lower than expected because of the ongoing coronavirus COVID-19 crisis and the apparent slowness of countries relaxing travelling restrictions and opening borders.

Turkish Airlines has resumed many domestic flights today, Monday, after a suspension of around two months.  The airline is expecting to restart some of its international flights next Wednesday, June 10th, but the timetable will be a far cry from the 126 countries it served before the outbreak took hold globally.

Ayci told the media on Friday that the airline expects available seat kilometres to drop around 55% from its initial expectations for this year and indicating the company was taking a great many decisions to decrease operational expenses and secure longterm liquidity.

Such measures include deferring tax payments, delaying ticket refunds, halting recruitment and renegotiating contract terms with suppliers. Another key area where the airline plans to save vast amounts of money is new aircraft deliveries.  The firm was due to take delivery of over 180 new aircraft between 2020 and 2024, however now, according to Ayci, the airline is in deep negotiations with the manufacturers to postpone many of those deliveries.  The hope is this move will also postpone pre-delivery payments and ensure the carrier has the right fleet size for the lower demand.

Turkish Airlines is also negotiating for the sale and then lease back either the same or different types of its aircraft, which will see liquidity rise dramatically and help the carrier weather the economic storm caused by the pandemic.

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