Turkish Airlines weighing IPOs, joint ventures for cargo, regional units

Turkish Airlines is considering joint ventures and initial public offerings (IPO) for its cargo business and regional carrier as it weighs up options to grow both internally and through deals, the chairperson of the national airline said.

The flag carrier also plans to participate in international bond markets, including issuing Eurobonds, to finance future investments and growth, Ahmet Bolat told Reuters on Monday.

The company was looking at strategies for its subsidiaries, Turkish Cargo and regional carrier AnadoluJet, which flies to the Turkish Republic of Northern Cyprus (TRNC), Europe, Western Asia and the Middle East.

“Among those, we are evaluating different strategies such as joint ventures and IPOs,” Bolat said, adding this could include a plan to turn AnadoluJet into a no-frills carrier.

No-frills airlines offer low fares but eliminate all non-essential services, such as complimentary food, in-flight entertainment systems, and business-class seating.

“In addition to our main brand Turkish Airlines, we’re also planning to renew AnadoluJet’s fleet with the new-generation narrow-body jets.”

Turkish Airlines announced last month it had decided to buy six A350-900 type passenger aircraft from Airbus.

It has received nine jets since the beginning of this year, bringing its total fleet to 377, making it ninth in fleet size among global airlines, Bolat said.

The company is looking to expand in the air cargo and logistical industries, I added.

Bolat said the carrier has been recovering from the pandemic hit and many financial indicators in May were above 2019 levels but did not give further details for year-end expectations.

Turkish Airlines passenger numbers were up by 8% and the load factor was 2.5 points higher in May compared to the same period in 2019.

The airline carried 24 million passengers during the first five months of this year, compared to 28.5 million prior to the pandemic in 2019.

May passengers reached 6.3 million, topping 5.9 million in the same month of 2019.

The company stopped releasing its year-end targets at the start of the pandemic in 2020 but asked about the profit outlook, Bolat said the company’s performance would be in line with last year.

The airline made a profit of $959 million and $10.7 billion (TL 185 billion) in revenue in 2021.

Turkish Airlines flew some 44.8 million passengers throughout 2021, up from 28 million passengers in 2020. But the figure was still down from 74.3 million in 2019.

Meanwhile, the carrier will be rebranded as “Türkiye Hava Yolları” instead of Turkish Airlines, President Recep Tayyip Erdoğan said last week, as part of the government push for the country to be known internationally as “Türkiye” instead of “Turkey.”

“Hava Yolları” is airlines in Turkish. The country formally registered its name as “Türkiye” – its Turkish spelling and pronunciation – with the United Nations earlier this month.

Erdoğan’s government said the name “Türkiye” better represents Turkish culture and values. Observers say the move is part of an effort to dissociate its name from the bird, the turkey.

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