Page 89 - TURKRptOct19

In the first eight months of the year, the airline carried a total of 49.8mn passengers with the load factor declining to 81.2% from 81.8%.
The domestic passenger number dropped 7.2% y/y to 20.8mn, while the international passenger total increased only 1.9% y/y to 28.9mn in January- August.
Shares in the airline closed 1.56% lower on September 12 to trade at TRY11.99, giving the company a market capitalisation of TRY16.6bn.
Turkish Airlines’ net income declined by 70% y/y to TRY133mn in Q2 despite tax revenue of TRY342mn, while revenues grew 35% y/y to TRY18.7bn, the company said on August 8 in a stock exchange filing.
“Cost per available seat kilometer (CASK), excluding fuel is expected to increase by 7%-9% in 2019,” the airline also said in its filed statement. In January, the company said it expected CASK to increase between 3% and 5% this year.
The airline has hit significant teething troubles at Turkey’s new mega airport, named Istanbul Airport, while its budget rival Pegasus (PGSUS) has benefited from passengers shifting to its main hub Sabiha Gokcen International Airport, Istanbul’s second airport, located on the Asian side of the city. The problems at the $12bn Istanbul Airport, built 20 miles outside Istanbul city centre, include poor transport links for passengers aiming to reach it.
Given the new popularity of Sabiha Gokcen, Pegasus shares have hit bubbling form since the beginning of the year while Turkish Airlines shares were oversold.
Foreigners’ holdings in the Turkish Airlines’ share free-float fell to 38.43% as of September 4 from 65.23% at end-2018 while their holdings in Pegasus’ free- float jumped to 56.5% from 28.17%, according to an Is Invest daily bulletin.
Turkish Airlines shares closed the day at TRY13.43 on February 20 when Reuters reported that Switzerland-based investment bank Credit Suisse had cut its share price target for the airline to TRY14.4.
Turkish Airlines shares closed the day at TRY12.76 on July 26 when Bloomberg quoted Ekaterina Iliouchenko of Germany’s Union Investment Privatfonds as saying Union saw Turkish non-financials like glass manufacturer Sisecam, Turkish Airlines and steel maker Erdemir as “looking more attractive”.
BlackRock’s stake in Turkish Airlines had declined to 4.96% from 5.24%, the US-based investment giant said on August 23 in a stock exchange filing. BlackRock on August 21 sold 3.99mn Turkish Airlines shares at a price of TRY11.1715.
Particularly since August 8 when Turkish Airlines and Pegasus released their Q2 financials, sales of Turkish Airlines shares have sharpened. The Pegasus share price, meanwhile, jumped into the TRY72s as of September 2 from TRY47s as of August 8.
On August 9, Turkish Airlines signalled a downward revision in its 2019 guidance.
Pegasus’ net profit jumped to TRY324mn in Q2 from TRY16mn a year ago while the company posted a net profit of TRY109mn in H1 versus a net loss of TRY100mn a year ago, according to the financial statements released on August 8.
The market had expected a net profit of TRY79mn in the second quarter.
89 TURKEY Country Report October 2019 www.intellinews.com