Miami – Flag carrier Turkish Airlines (TK) is reportedly in talks with the Turkish Wealth Fund (TVF) regarding a potential “bailout” to help the carrier, hit hard by the declining passenger numbers resulting from the COVID-19 pandemic.
Turkish Airlines posted a loss of USD$287m in the second quarter of 2020 and has agreed with a labor union to cut wages by 30 to 50 percent until the end of 2021 while avoiding layoffs.
The Turkish Wealth Fund owns 49.12 percent of TK, which has a market capitalization of USD$1.9bn, with shares having dropped 31% since borders were temporarily closed with domestic and international flights halted after February.
Desperate for Financing
While TK Chairman Ilker Ayci said the airline is “very comfortable” with USD$1.7bn cash on hand, he still expects the airline to burn up to USD$350m per month through yearend with debt expected to reach USD$14bn.
Turkish Finance Minister Berat Albayrak said that recovery in transport had not reached desired levels.
Meanwhile, a source spoke of a similar rescue offer for TK being made to Lufthansa (LH). The source further continued “a sort of capital transfer or providing financing will be possible. Talks are now being held for this and the ideas for the method are being evaluated.”
While TK restarted flights to the United States this summer, passenger numbers have dropped by 65.9% year-on-year as of August 2020. TK is most definitely in need of financial support.
Featured image: TURKISH 787-9 DREAMLINER. Photo: Jennifer Schuld