Turkish Airlines Q1 perdite peggiori del previsto. Update : primi 9 mesi 2014 a +71%

[AZ209]

Nonostante le crescite di pax e revenues TK ha postato perdite peggiori del previsto nel Q1 2014, causa concorrenza low cost sul domestico e sull'internazionale, riducendo sensibilmente lo yield. TK ha anche citato i tassi di cambio sulle valute come causa ulteriore.

Turkish Air Posts Deeper First Quarter Loss

Turkish Airlines posted a much deeper first quarter loss than expected on Friday despite rising sales, as it battles tough competition from low-cost competitors.
Turkish, one of the world's fastest growing airlines, said its net loss widened to TRY226.3 million lira (USD$110 million), ten times the loss of a year ago.
Sales rose to TRY5.13 billion lira from TRY3.59 billion in the same period last year.
Turkish Airlines faces growing competition from budget carriers including Pegasus, Onur Air, Atlas Jet and IzAir, all of them serving domestic routes within Turkey, in some cases in addition to short-haul foreign destinations.
"Competition with Pegasus at (Istanbul's) Sabiha Gokcen airport has a major negative impact on its domestic services while competition on European routes hits its international revenues," Efe Kalkandelen, aviation sector analyst at Istanbul-based brokerage Is Yatirim, said ahead of the results.
He said a loss had been expected due to lower profit margins from ticket sales, despite growing passenger numbers.
(Reuters)

Turkish Airlines’ first quarter 2014 consolidated financial statements were reported to Borsa Istanbul

In the first quarter of 2014, 5.1 billion TRY sales revenue was realised.
Turkish Airlines' first quarter 2014 consolidated financial statements were reported to Borsa Istanbul. Compared to the same period of 2013, sales revenue increased by 43% (15% in USD terms) reaching 5.1 billion TRY.
In the first quarter of 2014, Turkish Airlines recorded 226 million TRY net loss, in line with its budget expectations, mainly due to seasonality factors and foreign exchange rate movements. Capacity increase of 21% (available seat km) also put pressure on passenger yields.
During the first quarter of 2014, 12 million passengers were carried impliying a 20% increase while passenger load factor came to 78% systemwide. International to international transfer passengers share in total international passengers increased by 6 percentage points compared to the same period last year to reach 46%. According to the International Air Transport Association (IATA) the overall industry growth for the period in terms of ASK and RPK was 5,8% and 5,6% respectively.
As of today Turkish Airlines has scheduled flights to 45 domestic and 206 international destinations in 248 cities and 106 countries around the world. Being one of the youngest in Europe Turkish Airlines fleet consists of 249 aircraft comprising of 193 narrow body, 47 wide body and 9 cargo aircraft.
Turkish Airlines will continue to exploit its competitive advantages such as its geography, extensive route network and low cost structure in order to pursue its growth story with the aim of becoming one of the leading global airlines in the world.
Kind Regards,
Turkish Airlines Inc.
Media Relations

 

[TW 843]

Re: Turkish Airlines Q1 perdite peggiori del previsto

Non dico niente, aspetto in silenzio.

 

[kenyaprince]

Re: Turkish Airlines Q1 perdite peggiori del previsto

Non dico niente, aspetto in silenzio.

minchia Tony , mi sono pure ricordato come forse meno di 2 anni fa dicevi (oltre che per TK) che in Slovenia presto sarebbe scoppiata una crisi durissima ed ora è sotto gli occhi di tutti come stanno messi.... Dì la verità : non fai davvero l'ormeggiatore di aliscafi!

 

[Mobius]

Re: Turkish Airlines Q1 perdite peggiori del previsto

Being one of the youngest in Europe Turkish Airlines fleet consists of 249 aircraft comprising of 193 narrow body, 47 wide body and 9 cargo aircraft.

Un po' sbilanciata come flotta, se il pericolo maggiore è il low cost del medio raggio 193 macchine sono troppe.

 

[I-DADO]

Re: Turkish Airlines Q1 perdite peggiori del previsto

Un po' sbilanciata come flotta, se il pericolo maggiore è il low cost del medio raggio 193 macchine sono troppe.

In realtà anche se hanno parecchie macchine narrow body hanno un utilizzo molto intelligente delle stesse con rotte transcontinentali anche di molte ore. Col 738 e soprattutto col 739ER servono praticamente quasi tutta l'Africa dove molti altri si servono del 332 magari anche qundo basterebbe qualcosa di meno capiente. In questo modo TK riesce a servire molte più destinazioni sottili.

 

[Simme71]

Re: Turkish Airlines Q1 perdite peggiori del previsto

In realtà anche se hanno parecchie macchine narrow body hanno un utilizzo molto intelligente delle stesse con rotte transcontinentali anche di molte ore. Col 738 e soprattutto col 739ER servono praticamente quasi tutta l'Africa dove molti altri si servono del 332 magari anche qundo basterebbe qualcosa di meno capiente. In questo modo TK riesce a servire molte più destinazioni sottili.

Condivido la tua riflessione, pur non essendo un'analista del settore credo tu abbia evidenziato uno dei punti di forza di TK
Resto tuttavia convinto che rischiano di fare un botto che lo sentono oltre Saturno....

 

[mauro.]

Re: Turkish Airlines Q1 perdite peggiori del previsto

minchia Tony , mi sono pure ricordato come forse meno di 2 anni fa dicevi (oltre che per TK) che in Slovenia presto sarebbe scoppiata una crisi durissima ed ora è sotto gli occhi di tutti come stanno messi.... Dì la verità : non fai davvero l'ormeggiatore di aliscafi!

Il Gufo?

 

[belumosi]

Re: Turkish Airlines Q1 perdite peggiori del previsto

Non dico niente, aspetto in silenzio.

Non mi sembra che la situazione di TK sia preoccupante. Anche nel 2013 hanno segnato un netto di 307.7M$, sia pure in calo. Il network mi sembra equilibrato e il mix di pax int-int prossimo al 50%, dovrebbe allontanare sempre più il destino della compagnia da quello della Turchia. L'impressione che ho è che con il successo travolgente che ha avuto in questi anni, TK si sia un po' appesantita, vuoi come burocrazia, vuoi come personale. E le rampanti LC turche, le stanno sottraendo spazio, soprattutto sul mercato interno. Ma non mi sembra nulla di così drammatico.
A cosa è dovuto il tuo pessimismo?

 

[Farfallina]

Re: Turkish Airlines Q1 perdite peggiori del previsto

Non mi sembra che la situazione di TK sia preoccupante. Anche nel 2013 hanno segnato un netto di 307.7M$, sia pure in calo. Il network mi sembra equilibrato e il mix di pax int-int prossimo al 50%, dovrebbe allontanare sempre più il destino della compagnia da quello della Turchia. L'impressione che ho è che con il successo travolgente che ha avuto in questi anni, TK si sia un po' appesantita, vuoi come burocrazia, vuoi come personale. E le rampanti LC turche, le stanno sottraendo spazio, soprattutto sul mercato interno. Ma non mi sembra nulla di così drammatico.
A cosa è dovuto il tuo pessimismo?

Dici poco...l'enorme espansione non è detto che sia sostenibile se effettuata a scapito di efficienza.
Quando si cresce così già il rischio è fare il passo più lungo della gamba per guadagnare mercato, se poi si perde pure efficienza il rischio diventa enorme.

 

[TW 843]

Re: Turkish Airlines Q1 perdite peggiori del previsto

A cosa è dovuto il tuo pessimismo?

Alla situazione politica (ed economica) della Turchia. C'è gente che sta spostando dalla Turchia un'enormità di capitali. E se lo fanno, un motivo serio forse forse c'è.

Inoltre non puoi continuare a vendere delle MXP-IST-Africa round trip a 250 euro senza pagarne le conseguenze.

 

[AZ209]

Re: Turkish Airlines Q1 perdite peggiori del previsto

Non mi sembra che la situazione di TK sia preoccupante.

TK stessa ammette di avere problemi con lo yield. E' evidente che la crescita aggressiva che hanno fatto a colpi di prezzacci sta portando dei risultati peggiori del previsto.
Oltretutto la volatilita' di certi mercati in cui opera sono un grosso rischio.
Perlomeno un piccolo campanello d'allarme credo sia d'obbligo.

 

[I-DADO]

Re: Turkish Airlines Q1 perdite peggiori del previsto

Non dico niente, aspetto in silenzio.

Comunque dimenticavo:


Ammazza che gufata !!!

 

[belumosi]

Re: Turkish Airlines Q1 perdite peggiori del previsto

Perlomeno un piccolo campanello d'allarme credo sia d'obbligo.

Questo sicuramente. TK come tutti incontrerà le sue brave sfide ed avrà i suoi ostacoli da superare.
Ma il presagire di non essere lontani dal de profundis, mi sembra un po' eccessivo.
Qui comunque c'è il report sul Q1 2014:
http://investor.turkishairlines.com...wnload/sunumlar/IR_PRESENTATION_1Q'14_EN1.pdf
Speriamo che un giorno anche AZ sia nella merxa nella stessa misura...

 

[matteoc]

Re: Turkish Airlines Q1 perdite peggiori del previsto

...
Perlomeno un piccolo campanello d'allarme credo sia d'obbligo.

Ma dai ...
Hanno 706 mln USD di cassa, in aumento rispetto al 31/12/2013 ed una somma circa zero tra trade receivable ed account payables, quindi non stanno neanche nascondendo niente sotto il tappeto.

Non mi ricordo se era TW o qualcun altro a scrivere qui le stesse cose anche di Emirates, fino a non molto tempo fa: stiamo vedendo come sta andando. E' al 26° anno consecutivo di utili!

 

[AZ209]

Re: Turkish Airlines Q1 perdite peggiori del previsto

Qui comunque c'è il report sul Q1 2014:
http://investor.turkishairlines.com...wnload/sunumlar/IR_PRESENTATION_1Q'14_EN1.pdf

Grazie non sapevo che avessero nel loro gruppo una società che disegna e produce sedili per i loro aerei (al momento solo i 738 ma in futuro anche per i 319/20/21).

 

[TW 843]

Re: Turkish Airlines Q1 perdite peggiori del previsto

Ma dai ...

Non mi ricordo se era TW o qualcun altro a scrivere qui le stesse cose anche di Emirates, fino a non molto tempo fa: stiamo vedendo come sta andando. E' al 26° anno consecutivo di utili!

Mai detto niente su EK.
Sono due mondi assolutamente non paragonabili.
Una è una macchina da guerra, l'altra ha una facciata da guerra ma è gestita come si gestisce un kebab.

 

[mauro.]

Re: Turkish Airlines Q1 perdite peggiori del previsto

Mai detto niente su EK.
Sono due mondi assolutamente non paragonabili.
Una è una macchina da guerra, l'altra ha una facciata da guerra ma è gestita come si gestisce un kebab.

Fonte? :clown:

 

[asterix]

Re: Turkish Airlines Q1 perdite peggiori del previsto

Fonte? :clown:

Ogni 10 voli ne danno 1 in omaggio.

 

[carloz]

Re: Turkish Airlines Q1 perdite peggiori del previsto

Mai detto niente su EK.
Sono due mondi assolutamente non paragonabili.
Una è una macchina da guerra, l'altra ha una facciata da guerra ma è gestita come si gestisce un kebab.

Scusa TW, ma questa proprio non la capisco.
Sei uno degli utenti che più seguo e stimo su questo forum e pazienza se, come hai sempre puntualizzato senza mancare occasione, non nutri profonde simpatie per Turkish.

Quello che però mi dispiace è leggere come hai sempre e comunque parole di disprezzo verso questa compagnia, che in questi anni ha dimostrato di non essere esattamente gestita come un kebap. Mi è sembrato anzi che in più occasioni si sia distinta per scelte piuttosto oculate. Quella che tu invece chiami "macchina da guerra", che ha in ordine A380 come fossero noccioline, mi pare faccia affidamento più sul proprio strapotere economico che su mirabolanti capacità manageriali.
Che poi il Q1 di THY non sia roseo, beh, non mi sembra un caso isolato in questo periodo (dove si legge di passivi record per le "rispettabili" compagnie del vecchio continente), ma mi pare quantomeno ingeneroso mettersi in prima fila, nell'attesa di vederle fare il botto.

Con il massimo rispetto.

 

[kenyaprince]

Re: Turkish Airlines Q1 perdite peggiori del previsto

[h=1]Turkish Airlines suffers bigger 1Q losses, but continues to focus on "profit, profit, profit"[/h]

Turkish Airlines suffered wider losses in 1Q2014 as a drop in unit revenues negated the benefit of lower unit costs (both in USD terms). Capacity growth, in ASKs, was more than 21%, but revenues grew by only 15%. RASK was particularly weak in the domestic market, due to capacity growth (especially at Sabiha Gökçen, where it competes with LCC Pegasus) and currency weakness, and was also affected by the shift of Easter into April in 2014.
THY says that booking trends indicate a positive demand outlook and yield pressure should ease in 2H2014 after further weakness in 2Q2014. Losses in the seasonally weak first quarter are not unusual and the year 2014 should certainly end with THY in the black, but it looks likely to see a lower operating profit than in 2013.
No company that grows at double digit rates of volume growth can guarantee an ever upward path of profitability, but CEO Temel Kotil highlighted his priorities when he told analysts and investors at a presentation in Istanbul that the most important things were "profit, profit, profit".

[h=2]

1Q2014 net loss grows by more than 600%[/h]In 1Q2014, Turkish Airlines saw its net loss widen to USD102 million from USD14 million in 1Q2013. The operating result was a loss of USD102 million, compared with a loss of USD48 million a year earlier. Revenues grew by 15% to USD2,315 million.
Note that, while THY's official reporting currency for its statutory accounts is TRY, its functional currency is USD and management prepares all accounts in USD before translating them into TRY for statutory reports. We will present our analysis using the USD figures provided by the Group.
Turkish Airlines summary profit and loss account (USD million): 2009 to 2013, 1Q2013 and 1Q2014

Source: Turkish Airlines
[h=2]ASK growth of 21.5%, faster in the domestic market[/h]In 1Q2014, THY increased its ASKs by 21.5%, while RPKs grew by 21.0% and passenger numbers were up 20.2%. Passenger load factor dipped by 0.3 ppts to 77.7%. Growth was faster in the domestic market, where ASKs were up 34% and passenger numbers 28%, than on international markets, where ASK growth was 20% and passenger growth 15%.
Domestic load factor gained 0.5 ppts, while international load factor fell by the same amount. In recent years, annual changes in overall load factor have been driven by international load factor and so THY will want to ensure that the 1Q2014 decline in the latter is not repeated through the rest of the year.
Within the international segment, THY grew capacity most rapidly to South America, where ASKs were up nearly 36%, and to the Far East, where ASKs were up almost 29%. In South America, demand growth did not match capacity growth and load factor fell by 4.5 ppts, albeit to a still high level of 80.3%. However, South America only accounted for 2% of total international scheduled ASKs and was not the main driver of the fall in international load factor.
There was also a pronounced decline in load factor to Europe, which represented 35% of international ASKs and where load factor was down 2.6 ppts to 74.2% on ASK growth of 18%. By contrast, load factor to North America gained 3.9 ppts to 82.7% on ASK growth of 20%.
Turkish Airlines passenger numbers (million): 2009 to 2013, 1Q2013 and 1Q2014

Source: Turkish Airlines
Turkish Airlines passenger traffic growth: 1Q2014 vs 1Q2013

Source: Turkish Airlines
Turkish Airlines passenger load factor (%): 2009 to 2013, 1Q2013 and 1Q2014

Source: Turkish Airlines
[h=2]Growth in international to international transfer traffic continues to grow faster than the total[/h]The number of international to international transfer passengers increased by 27%, faster than the growth in total passengers, and accounted for 26% of all passengers and 46% of all international passengers. This demonstrates the ongoing success of THY's strategy of using Istanbul as a hub to capture global connecting traffic, while retaining a solid base of domestic traffic (which accounted for 43% of passengers in 1Q2014).
See related reports:

• Turkish Airlines: narrowing the strategic Gulf: Part 1
• Turkish Airlines: narrowing the strategic Gulf: Part 2

This strategy faces some constraints as Istanbul Ataturk starts to reach its capacity limits, pushing THY to place significant new capacity at Istanbul Sabiha Gökçen, which is home to LCC Pegasus Airlines. A connecting strategy works best with a single hub and so Ataturk should remain the principal hub for international to international connecting traffic, with Sabiha Gökçen playing a growing role in domestic point to point, domestic to international transfer and international point to point markets.
Turkish Airlines international to international transfer passengers ('000): 2009 to 2013, 1Q2013 and 1Q2014

Source: Turkish Airlines
Turkish Airlines passenger breakdown: 1Q2014

Source: Turkish Airlines
[h=2]Revenues up 15%[/h]USD revenue growth of 15% year on year in 1Q2014 did not match the 21.5% increase in ASKs. This was the result of the failure of scheduled passenger revenues to keep pace with the growth in scheduled ASKs. Cargo revenues grew by 22%, marking THY's cargo business out from other airline groups, where cargo has been in decline, although this was slower than the 27% growth in cargo tonnes.
Turkish Airlines revenues (USD million): 1Q2014 vs 1Q2013
[TABLE="width: 448"]
[TR]
[TH="width: 185, bgcolor: #00529F"]USD million
[/TH]
[TH="width: 66, bgcolor: #00529F"]1Q2013
[/TH]
[TH="width: 66, bgcolor: #00529F"]1Q2014
[/TH]
[TH="width: 65, bgcolor: #00529F"]Change
[/TH]
[TH="width: 65, bgcolor: #00529F"]% of 1Q2014 total
[/TH]
[/TR]
[TR="bgcolor: #BED4E8"]
[TD="width: 185"]Scheduled passenger revenue
[/TD]
[TD="width: 66, align: center"]1,768
[/TD]
[TD="width: 66, align: center"]2,009
[/TD]
[TD="width: 65, align: center"]13.6%
[/TD]
[TD="width: 65, align: center"]87%
[/TD]
[/TR]
[TR]
[TD="width: 185"]Cargo
[/TD]
[TD="width: 66, align: center"]190
[/TD]
[TD="width: 66, align: center"]232
[/TD]
[TD="width: 65, align: center"]22.2%
[/TD]
[TD="width: 65, align: center"]10%
[/TD]
[/TR]
[TR="bgcolor: #BED4E8"]
[TD="width: 185"]Charter
[/TD]
[TD="width: 66, align: center"]9
[/TD]
[TD="width: 66, align: center"]11
[/TD]
[TD="width: 65, align: center"]27.1%
[/TD]
[TD="width: 65, align: center"]0%
[/TD]
[/TR]
[TR]
[TD="width: 185"]Other
[/TD]
[TD="width: 66, align: center"]48
[/TD]
[TD="width: 66, align: center"]64
[/TD]
[TD="width: 65, align: center"]32.8%
[/TD]
[TD="width: 65, align: center"]3%
[/TD]
[/TR]
[TR="bgcolor: #BED4E8"]
[TD="width: 185"]Total revenue
[/TD]
[TD="width: 66, align: center"]2,015
[/TD]
[TD="width: 66, align: center"]2,315
[/TD]
[TD="width: 65, align: center"]14.9%
[/TD]
[TD="width: 65, align: center"]100%
[/TD]
[/TR]
[/TABLE]

Source: CAPA - Centre for Aviation, Turkish Airlines
Scheduled passenger revenue per ASK fell by 8% year on year, with THY citing a number of factors to explain this weakness. These included yield pressure relating to local currency depreciation in a number of regions, additional capacity at Istanbul Sabiha Gökçen, growth in the share of transfer passengers, the move in the timing of Easter from 1Q2013 to 2Q2014 and political tensions in Russia, Ukraine and Thailand.
This weakness was particularly felt in the domestic market, where USD revenues were flat in spite of a 34% increase in ASKs. Passenger RASK fell by 24% in the domestic market and by 5% in international markets. The domestic market is primarily a TRY market and so the plunge in USD-reported RASK owes much to the 19% fall in the average value of TRY versus USD from 1Q2013 to 1Q2014.
Turkish Airlines scheduled flight revenues (USD million): 1Q2014 vs 1Q2013
[TABLE="width: 445"]
[TR]
[TH="width: 185, bgcolor: #00529F"]USD million
[/TH]
[TH="width: 66, bgcolor: #00529F"]1Q2013
[/TH]
[TH="width: 66, bgcolor: #00529F"]1Q2014
[/TH]
[TH="width: 65, bgcolor: #00529F"]Change
[/TH]
[TH="width: 65, bgcolor: #00529F"]% of 1Q2014 total
[/TH]
[/TR]
[TR="bgcolor: #BED4E8"]
[TD="width: 185"]Europe
[/TD]
[TD="width: 66, align: center"]597.3
[/TD]
[TD="width: 66, align: center"]679.2
[/TD]
[TD="width: 65, align: center"]13.7%
[/TD]
[TD="width: 65, align: center"]30%
[/TD]
[/TR]
[TR]
[TD="width: 185"]Far East
[/TD]
[TD="width: 66, align: center"]444.5
[/TD]
[TD="width: 66, align: center"]529.6
[/TD]
[TD="width: 65, align: center"]19.1%
[/TD]
[TD="width: 65, align: center"]24%
[/TD]
[/TR]
[TR="bgcolor: #BED4E8"]
[TD="width: 185"]Middle East
[/TD]
[TD="width: 66, align: center"]283.9
[/TD]
[TD="width: 66, align: center"]331.3
[/TD]
[TD="width: 65, align: center"]16.7%
[/TD]
[TD="width: 65, align: center"]15%
[/TD]
[/TR]
[TR]
[TD="width: 185"]America
[/TD]
[TD="width: 66, align: center"]184.1
[/TD]
[TD="width: 66, align: center"]216.7
[/TD]
[TD="width: 65, align: center"]17.7%
[/TD]
[TD="width: 65, align: center"]10%
[/TD]
[/TR]
[TR="bgcolor: #BED4E8"]
[TD="width: 185"]Africa
[/TD]
[TD="width: 66, align: center"]172.3
[/TD]
[TD="width: 66, align: center"]208.8
[/TD]
[TD="width: 65, align: center"]21.2%
[/TD]
[TD="width: 65, align: center"]9%
[/TD]
[/TR]
[TR]
[TD="width: 185"]Total international
[/TD]
[TD="width: 66, align: center"]1682.1
[/TD]
[TD="width: 66, align: center"]1965.6
[/TD]
[TD="width: 65, align: center"]16.9%
[/TD]
[TD="width: 65, align: center"]88%
[/TD]
[/TR]
[TR="bgcolor: #BED4E8"]
[TD="width: 185"]Domestic
[/TD]
[TD="width: 66, align: center"]276.1
[/TD]
[TD="width: 66, align: center"]275.4
[/TD]
[TD="width: 65, align: center"]-0.3%
[/TD]
[TD="width: 65, align: center"]12%
[/TD]
[/TR]
[TR]
[TD="width: 185"]Total scheduled flight revenue
[/TD]
[TD="width: 66, align: center"]1958.2
[/TD]
[TD="width: 66, align: center"]2241
[/TD]
[TD="width: 65, align: center"]14.4%
[/TD]
[TD="width: 65, align: center"]100%
[/TD]
[/TR]
[/TABLE]

Source: CAPA - Centre for Aviation, Turkish Airlines
Turkish Airlines capacity and unit revenue development by region: 1Q2014 vs 1Q2013

Source: Turkish Airlines
[h=2]Yield pressures come from strong capacity growth at Sabiha Gökçen[/h]Nevertheless, capacity increases at Sabiha Gökçen (SAW), resulting from the lack of airport capacity at Istanbul Ataturk, have increased the level of direct competition with LCC Pegasus Airlines and this has added to downward yield pressure in the domestic and Europe markets.
Mr Kotil said that capacity growth at SAW was the main reason for falling yields in 1Q2014, but that the Group needed to achieve "critical mass" of capacity at the airport.
This growth at SAW looks set to continue: according to data from OAG, Pegasus increased its number of seats at SAW serving Europe by 22% year on year in the week of 12-May-2014, while THY grew seat numbers by 74% in the same market. Pegasus' share of seats in this market from SAW is 71%, down from 76% for the same week a year earlier, while THY's share is up to 24% from 18%.
In domestic markets from SAW, Pegasus grew its weekly seat capacity by 21% and THY by 46% year on year in week of 12-May-2014. At the same time, THY also increased its seat capacity from Istanbul Ataturk to Europe and the domestic market by 12% and 14% respectively.
The Group will have 42 destinations from SAW in 2014, compared with 30 in 2013. Subsidiary brand Anadolujet is increasing the number of domestic routes from 16 to 22 at SAW and Turkish is increasing its European routes from 10 to 14.
See related report: Pegasus Airlines must not let worsening quarterly profitability become a new trend
Turkish Airlines Group key statistics at Istanbul Sabiha Gökçen: 2013 and 2014

Source: Turkish Airlines
[h=2]Costs up 17%[/h]Operating costs, in USD, increased by 17%, which was less than the increase in ASKs, but faster than the growth in revenues and this led to the lower operating result in 1Q2014. The growth in costs was moderated slightly by fuel cost growth of only 15%, while non-fuel costs increased by 18%. Labour cost growth was limited to just over 3% (helped by the weaker TRY versus USD), but landing, navigation and air traffic charges grew by 30% due to price increases. Passenger services and catering costs, up 29%, also grew faster than ASKs due to price increases and an enhanced catering concept.
Total operating cost per ASK (CASK) fell by 3.5%, with ex fuel CASK down 2.5%, but this was not enough to match the 5.4% drop in total RASK.
Turkish Airlines operating costs revenues (USD million): 1Q2014 vs 1Q2013

Source: Turkish Airlines
[h=2]Fleet of 241 aircraft at the end of 1Q2014[/h]THY's fleet consisted of 241 aircraft at the end of 1Q2014, of which 189 were narrowbodies, 43 widebodies and nine cargo aircraft. Its current fleet plan will see the total grow to 432 in 2021, slightly lower than the 435 target communicated at the time of its FY2013 results in Mar-2014.
The expansion will focus mainly on the narrowbody fleet, which is set to grow by 160 aircraft by 2021, while the widebody fleet is currently planned to grow by 33 aircraft.
THY has for some time been considering a further widebody order and so the widebody numbers could be revised upwards, but its fleet planning is driven by the fact that more than 40% of global international traffic is within narrowbody range of Istanbul.
Turkish Airlines fleet as of 1Q2014 and planned to 2021

Source: Turkish Airlines
[h=2]Turkish Airlines retains its strong strategic position, but carries a near term profit challenge[/h]THY continues to capture a growing share of world passenger traffic flows and is driving forward with double digit growth in capacity and revenues. It already flies to more countries (207) than any other airline and will focus future growth in frequency increases. It is profitable and cost efficient compared with long-haul peers and its longer term future looks assured.
See related report: Turkish Airlines reiterates growth opportunities and a more profitable outlook for SunExpress
However, Turkish faces a near term challenge to increase its profitability. In FY2013, its operating margin (based on its USD accounts) fell from 7.5% to 5.9% as a fall in RASK was unable to offset a stable CASK. In 1Q2014, CASK fell but RASK fell further and THY has now had three successive quarters when the year on year growth in RASK has under-performed against the growth in CASK.
For the full year 2014, THY expects ASK growth of 21%, revenue growth of 19% and fuel costs up 19%. The key elements of its 2014 guidance are that it expects total CASK to fall by 2%, but total RASK to fall by 2.5%. In 1Q2014, ASK growth was in line with this and CASK did better (it fell 3.5%), but RASK was lower by a larger amount (it fell by 5.4%).
The guidance for RASK to fall more than CASK already suggests that THY will not increase its operating profit in 2014 relative to 2013. Although there are three quarters of the year still to come, the 1Q results make this challenge look even harder.
See related report: Turkish Airlines: capacity and network growth stay strong in 2013; profit growth is more challenging
Turkish Airlines year on year growth in USD-reported RASK and CASK by quarter: 2013

Source: CAPA – Centre for Aviation, Turkish Airlines