Turkish Airlines suffers bigger 1Q losses, but continues to focus on "profit, profit, profit"

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".