Turkish Airlines has said it posted a loss of 1.9 billion Turkish Liras ($644.4 million) in the first half of 2016, while also revising its year-end passenger and revenue target, Reuters has reported.
Analysts had already expected the parity losses to hit the company’s balance sheet in the second quarter, as a dramatic decrease in the number of tourist arrivals and rising competitiveness have put airlines’ profitability under pressure.
While Turkish Airlines’ sales in the second quarter rose to 7.1 billion liras ($2.4 billion) from 6.8 billion liras in the same period of 2015, the company suffered a loss of 656 million liras in the second quarter, it stated on Aug. 19. The company posted a net profit of 661 million liras in the same period last year.
The national carrier’s sales revenue rose to 13.5 billion liras ($4.4 billion) in the first half of the year with a 10 percent increase from the same period of 2015, but it also posted a 1.9 billion-lira loss in the same period.
In this vein, Turkish Airlines revised its year-end target to 63.4 million passengers, down from 72.4 million. It also revised its year-end sales revenue target to $9.5 billion, from 12.2 billion, and its EBITDAR margin from 20-22 percent to 12-14 percent.
Turkish Airlines, which had estimated some 12 percent of increase in its total fuel consumption, said its average euro-dollar parity prediction is at about 1.11, its average dollar-lira parity prediction is at 3.00. The cost of jet fuel costs, including hedges, is currently at around $577 per ton, it stated.
With the revised targets, the company expects a decrease of 5-7 percent in its unit costs, Reuters reported.
The company also announced a target load factor, which measures an airline’s capacity utilization, of 72-74 percent. In 2015 its load factor was 78 percent.