Turkish Airlines, one of Europe's fastest growing airlines, should beat its 2008 sales target of $4.5 billion in dollar terms despite the financial crisis, but profitability is slipping, its chief executive said on October 30.
The airline expects to post a 2008 operating margin "close to" the 11.4 percent reported in 2007, Temel Kotil said in an interview.
Turkish Airlines' operating margin fell to 12.5 percent in the first half from a mid-2007 level of 13.8 percent. Sales of $4.5 billion would be up 22 percent on last year.
Kotil declined to give a revenue or profit forecast for 2009 but noted that capacity would rise by 20 percent on the back of new aircraft deliveries coming around the end of this year, setting a similar hurdle for revenue growth with flat costs.
Kotil stood by the airline's recently announced plan to buy up to 105 wide-bodied and single-aisle aircraft, saying talks with Airbus and Boeing had not been derailed by market turmoil that has seen some airlines defer growth plans.
"Now is the right time to purchase aircraft. There are more opportunities and we assume earlier deliveries are available than used to be the case," he said, referring to recent order cancellations or deferrals by cash-pinched airlines.
Kotil was speaking on the sidelines of the World Air Transport Forum, where most airlines have expressed alarm about the global financial crisis. Kotil said 80 percent of new capacity to be added to the airline's relatively young fleet would be for growth.
Turkish Airlines (THY), part of Star Alliance, is focusing on a radius of 5 hours' flight time around Istanbul, representing around a third of international traffic, he said. That places it in competition with fast-growing Gulf hubs led by Dubai, which set out plans at the conference to handle 160 million people a year by 2040 at its new second airport. THY aims to double traffic in the next five years, as it did in the last five.