Aviation keeps growing despite profitability fall

ISTANBUL - Reuters

Turkish Airlines CEO Temel Kotil said the sector was still growing despite profit problems, as Turkish Airlines aims to grow by 25 percent this year. DHA photo

International Air Transport Association (IATA) CEO Tony Tyler has said they expect the global aviation sector to post $11.7 billion in profits this year, marking an 8 percent fall. However, speaking at the same press meeting, Turkish Airlines CEO Temel Kotil said the sector was still growing despite profit problems, as Turkish Airlines aims to grow by 25 percent this year.

“Our profit forecast is around $11.7 billion this year, amounting to be around $4 per passenger. We expect to increase this to $5 in the next year,” Tyler said.

However, Kotil stressed that the sector was continuing an overall growth trend, pointing to Turkish Airlines itself. “We aim to grow by 25 percent this year, reaching $9.7 billion in revenue, by carrying around 46 million passengers,” he said.

“The tourist inflow to Istanbul increased by 17 percent this year compared to the previous year. A majority of these tourists are choosing to fly with Turkish Airlines for their trips,” Kotil added.

In a written statement last month, the company announced that it had reached a 24.1 percent on-year-year rise to 36.2 million passengers in the nine months through September.

Its passenger traffic on domestic flights increased 24.5 percent year-on-year in the reviewed period, while its number of passengers on international routes rose 23.8 percent.

Meanwhile, the IATA’s Tyler said the biggest obstacles in front of the sector were the dramatic rise in oil prices and the decline in consumer demand in some emerging markets, specifically in Asia.

Biggest cost item is oil

“The sector has been able to restructure itself to make more profits for a while, but the biggest cost for us is made up of oil costs, at around 35-40 percent of the all costs,” he said.

Tyler had noted earlier in September that they expected oil costs to be 31 percent of costs this year and 30 percent in 2014.

“The spike in oil prices from concerns over Syria has been largely offset by a slight softening of jet fuel prices. And the good news is that we expect a further decline next year. Jet fuel is expected to average $126.4 per barrel in 2013. That should fall slightly to $122.9 in 2014. A decline is good news. But the price is still high,” he had said at the time.