Turkish Airlines adjusts strategy amid rising fuel costs

Sefer Levent-ISTANBUL

Following soaring fuel prices and disruptions caused by the war in Iran, Turkish Airlines has announced a new revenue and cost management strategy.

Murat Şeker, chairman of the board and executive committee, outlined the plan at a press conference in Istanbul.

Şeker noted that flights to 21 destinations in 10 countries have been suspended, accounting for about 6 percent of total capacity. To offset losses, the airline will reduce capacity in low-demand markets while increasing frequencies in stable ones, according to Şeker.

Under the new strategy, strategic investments will be prioritized, while non-essential projects will be postponed. Negotiations with airports and suppliers for discounts are also underway.

Overall, the company will try to reduce its expenses. The main goal is to reflect the rising cost of jet fuel onto ticket prices as little as possible.

“When flights in the Middle East were suspended, we redirected our aircraft to Africa, Central Asia, the Far East and Europe. We will fly wherever we see profitable opportunities,” he said.

“As during the [COVID-19] pandemic, we have also focused on cargo. Cargo is performing strongly, and we are updating our forecasts,” Şeker added.

He stressed that fuel supply risks are not expected until July or August, with Socar and Tüpraş as main suppliers.

“However, due to rising fuel prices, the second quarter will be challenging and will limit profitability,” he said.

The company’s fuel expenses, initially budgeted at $6.1 billion, could rise to $9.5 billion, he explained.

Measures taken are expected to offset a potential $2.5 billion negative impact, said Şeker.