Turkish Airlines produced a strong first quarter of 2022, benefitting from pent-up demand and a sharp increase in capacity. This translated into a $161 million net profit, up from $61 million in Q1 2021, the airline reported on April 28. Q1 results were down on Q4 last year, however, when The carrier produced a $225 million profit. Turkish Airlines benefits from jump in capacity.
Turkish said it “increased its capacity by taking into account the passenger demand at the points where the restrictions were lifted.” Capacity was back at on average 91 percent of 2019 levels, with international traffic at 93 percent and domestic at 77 percent. Passenger numbers reached 76 percent of pre-Covid levels at 12.7 million, up from 6.4 million in 2021. International passengers carried was 7.6 million, domestic 5.1 million.
Profit from main operations (EBIT) improved to $163 million from $-41 million. EBITDA improved to $610 million from $379 million in Q1 last year. Total revenues increased to $3.051 billion, up from $1.796 billion. They are now 10.2 percent ahead of 2019. Passenger revenues ended at $1.990 billion (2021: $901 million). By revenue per passenger kilometer (RASK), the Far East, the Middle East, and Africa saw the strongest growth, ahead of the Americas and Europe. Turkish produced a $959 million profit for the full year of 2021.
Cargo revenues up from last year, down from Q4
Turkish earned $980 million with cargo compared to $824 million. Although $240 million was down on Q4, cargo revenues were up 141 percent from 2019. The airline had a fleet of twenty full freighters (including two leased) and six converted passenger aircraft available to carry 390 tonnes of cargo, down from 433 tonnes in Q1 last year. In February, the airline transferred all remaining cargo operations to the new Istanbul airport.
Turkish Airlines and its subsidiary SunExpress spent $2.9 billion on operating expenses compared to $1.9 billion in Q1 2021 and also more than in Q4. Higher fuel costs of 129 percent year-on-year were the biggest factor here, but overall, the airline reduced its operating costs by two percent following salary cuts across the board.
The airline expects international traffic to recover this year to 92.7 million passengers carried compared to 59.7 million last year, with onward growth to 102.7 million in FY23. Domestic traffic will lag behind from 34.4 million last year to fifty million this year and 56.7 million in 2023. Capacity should recover close to 2019 levels this year.
One of the markets that remains open to Turkish Airlines is Russia. Following the Russian invasion of Ukraine on February 24, the carrier has suspended services to Ukraine and Belarus but continued flights to Russia. Although it says that the geographical position of Turkey has limited the impact of the conflict, Turkish is taking longer routes to Moscow around Ukrainian airspace, requiring more fuel. Until December, 34 percent of the fuel is hedged, but this will increase to a maximum of sixty percent using derivative instruments.
Turkish ended the first quarter with $3.1 billion in cash and cash equivalents and net debt of $11.7 billion, down from $12.2 billion in December. Turk Hava Yollari, as the airline is called in Turkish, has a fleet of 373 aircraft, including 105 widebodies, 248 narrowbodies, and twenty freighters. Only 68 aircraft are owned, most of them older narrowbodies. Until 2028, the airline plans to take delivery of 56 Airbus A321neo’s and fourteen A350s. All twenty Boeing MAX 8s on order have been delivered, the last one in January.
