Turkish Airlines cites security, economic pressure for earnings drop

Turkish Airlines recorded a net loss of US$644 million for the first half 2016, ending June 30, compared to a profit of $350 million in current dollars for the same period a year ago. The carrier credited political instability, security challenges in a number of its markets and an economic downturn for its poor results.

Cargo tonnage carried rose 12 percent to 389,000 tonnes in the first half, however revenue fell by $1 million, year-over-year, to $464 million. The sources of cargo revenue also shifted, y-o-y. In the first half of 2016, revenue shifted from freighters to bellyholds, with freighter revenue falling 8.3 percent to $176 million. Bellyhold cargo revenue for the same time period rose 5.5 percent.

While the latest reports from Turkish do not specify freight tonne kilometers or other cargo-specific metrics, the carrier’s breakdown of route profitability sheds light on where the carrier is taking a beating. Regional yield development, measured in dollars and adjusted for cargo operations, fell the most on routes servicing the Americas, and the Middle East by 19.4 percent and 20.9 percent respectively.

Interestingly, Turkish’s traffic in Europe and the Commonwealth of Independent States (CIS) was down less, decreasing 14.5 percent despite Russia-Turkey trade suffering from a diplomatic spat over a downed Russian Sukhoi Su-24 along the Turkey-Syria border last year.