Turkish Airlines lines up and wait for Manila departure

20 August 2009

ISTANBUL, Aug 20 - Flag carrier Turkish Airlines (THY) is lining up and waiting for the approval of the Air Service Agreement between Turkey and the Philippines this year as it announces plans to introduce new destinations in the far east.

"We are definitely flying to the Philippines next year" says CEO Temel Kotil. "This month we already started flying five times a week to Jakarta via Singapore, and hopefully we can arrange a deal with the Philippines for rights to Thailand" he said, as the airline intend to service Istanbul-Manila via Bangkok at the initial stage of their operations. "We probably fly direct if got no choice." he added.

The airline which is Europe's fourth-biggest airline in terms of passengers carried, is expanding its fleet, especially long-haul wide-body aircraft, and aims to increase its European market share by one-fifth to 10 percent next year. It is aggressively pursuing the transit passenger traffic by transforming Istanbul to become a major hub between Europe and Asia in competition with gulf-based carriers.

At present, Turkish Airlines serves points in Thailand, Singapore, South Korea, Hong Kong, Beijing, Shanghai and lately Jakarta. It plans to resume service to Kuala Lumpur together with new services to China, the Philippines and Vietnam. It has also plans to make Bangkok its Asian hub for flights to Australia by 2011.

Kotil added that the carrier intends to double its frequency in Asia within the next two years, starting with Tokyo Narita from four-weekly flights to daily operations, to Bangkok which will have an equipment upgrade to double daily triple seven in December 2009, with 4 flights extension probably to Saigon while the additional 3 flights intended as flight extension either to Manila or Guangzhou, depending on the services agreement that will be discussed later between the Philippines.

As a back up plan in case the Philippines would not agree to open up Bangkok, the airline intends to fly the Airbus 330-200 which will join the fleet in February and April next year to fly straight from Istanbul. The actual launch date was not however disclosed.

Turkish Airlines this week confirmed the contract for the purchase of additional seven Airbus A330-300 aircraft that was signed in Paris during Le Bourget Airshow in June 2009. The aircraft that is due for delivery from September 2010 will be powered by Rolls Royce engines and will carry 289 passengers in a two-class configuration.

Meanwhile, its Boeing order for seven extended range 777-300s worth $1.9 billion at list prices was finalize last July that adds to an order for five 777-300ERs placed in April this year or a total of 12 triple seven orders. Its delivery date starts from October 2010. The airline currently operates a fleet of 65 Boeing planes.

The airline publicly disclosed that passenger numbers increased to 9.7 percent in the first seven months of 2009 to 13.7 million, reflecting ambitions to grab market share from European rivals.

"Despite many problems in the industry, we grew at 9 per cent in the first half in terms of passenger numbers both domestic and foreign. However, our yields dropped due to lower demand from premium passengers," Kotil said.

Turkish Airlines flew 21.3 billion RPKs during the first seven months of 2009, up 12.4% over the year-ago period. Capacity rose 19.7% to 30.6 billion ASKs and load factor fell 4.5 points to 69.5% as the company increased capacity.

Its financial results for 2008 reported a net profit of US$874 million, up a strong 26% compared to 2007 figures. Gross Revenue was also up to US$4.719 billion, with proceeds from international traffic accounting for 78% of total revenue, while 22% was from domestic traffic. Shares in the state-run carrier also rose 3 percent to 2.72 lira as of this date.

Dr Kotil credited the company’s very careful oil-price hedging policy as one of the reasons why it was able to grow its 2008 net profit by 328% to USD874 million while other heavy weight world airliners slump.