Turkish Airlines SWOT: more growth for the Istanbul superconnector
The Turkish lira crisis, accentuated by a diplomatic row with the United States, further weakened an already sluggish currency. In early Oct-2018 the lira was down by 38% year-on-year against the US dollar. This highlights uncertainties about the macroeconomic and geopolitical backdrop for airlines operating in Turkey. In 2016 Turkish Airlines (THY) reported a rare loss as a result of a demand slump following a series of terrorist attacks and a failed coup.
Nevertheless, in 2018 THY expects to grow passenger numbers by 9%, to add USD1.5 billion in revenue, and to achieve an EBITDAR margin of 25%, compared with its 10-year average of 20.4%.
Turkey is a large and growing aviation market and provides a solid platform for THY's global connecting strategy. THY has an efficient cost structure, a young fleet and orders to ensure continued growth. Compared with its Gulf-based superconnector competitors it has a small Asia Pacific network, but is strong in regions lying within narrowbody range of its Istanbul hub. Faced with capacity constraints at Atatürk Airport, the Istanbul New Airport is scheduled to start operations in late Oct-2018 and will provide THY with plenty of room for further growth.
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