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“We were seeking to recommence our flights on May 28 if everything had progressed well. But after deliberations, we decided to push the date for the resumption of the flights forward to June”, Chairman Ilker Aycı ​said​ on May 19.
When operations resume, the flight frequency will be considerably lower than what customers are used to from Turkish Airlines, according to Ayci.
“Initially, we will probably launch flights to 12 to 14 destinations inside Turkey,” he said, without providing any details on the likely available international flights.
Turkish Airlines carried a total of 2.8mn passengers in March, marking a sharp 53% decline from a year ago. Turkey reported its first officially logged coronavirus case on March 11.
The number of international passengers served by the airline plunged 59% y/y in March while the domestic passenger tally fell by 45% y/y.
9.2.4​ Retail corporate news
Fitch Ratings on April 29 revised the long-term issuer default rating (IDR) and senior unsecured rating on Turkey's real estate company Ronesans Gayrimenkul Yatirim (RGY) to 'B+' from 'BB-' and put its ratings on Rating Watch Negative (RWN)​.
It said the downgrade reflected the impact on RGY’s revenue streams from the closure of its shopping centres in the effort to slow the coronavirus (COVID-19) spread, combined with material foreign-currency risk.
Fitch added that it expected to resolve the RWN when it has more visibility on the length and financial effects of the lockdown.
The rating ageny added in a statement: “Coronavirus Mall Closures: Since 20 March 2020, shopping centres across Turkey were closed to help slow the spread of coronavirus. RGY has since collected no rent, apart from a small office portfolio that generates around 9% of rent, as well as essential businesses such as grocery stores and pharmacies. Retail markets in 2019 had already been affected by a weak economy and volatile lira in 2018 and 2019, which compelled RGY to increase incentives to help alleviate the financial stress on its tenants. The ability of shopping centres to bounce back once the lockdown is eased is unclear, but favourable demographics—including a young, growing, urban population—and e-commerce penetration of under 5% will help.“
Fitch also commented on “Significant Foreign-Exchange Risk”, saying: “The Turkish lira has been highly volatile over the past few years. Consequently, in October 2018, the government temporarily banned domestic companies from indexing or denominating contracts in foreign currencies. This forced RGY to delink its leases from the euro, eliminating its hedge against the falling lira. The decree is scheduled to end in October 2020, but given the negative economic effects of the coronavirus, the decree may be extended. The lira has depreciated more than 12% against the euro so far in 2020.”
RGY, Fitch observed, has delayed its deleveraging plans. “Lira depreciation, as well as a fall in rental income due to COVID-19, will hinder RGY's plans to reduce leverage, which was high owing to significant development spend. Fitch calculated proportionally consolidated net debt/EBITDA was 11.3x at end-2019, which we forecast to increase to 12.9x in 2020 then de-leveraging towards 11x by 2022. Although RGY has liquidity to service its short-term debt, continued lira deterioration will put pressure on cash-flow leverage, even after
62​ TURKEY Country Report​ June 2020 ​ ​www.intellinews.com