(Bloomberg) -- Turkey’s flag-carrier airline reversed a nine-day losing streak as it agreed to an e-commerce cargo joint venture with partners from China and Hong Kong.
Turkish Airlines signed the deal with Chinese delivery giant ZTO Express Cayman Inc. and Hong Kong’s PAL Air Ltd., a unit of Pacific Air Holdings Ltd. The joint venture, to be based in Hong Kong, will have revenues of at least $2 billion in the five years to 2023, Turkish Airlines Chairman Ilker Ayci said in a news conference in Istanbul on Monday.
The venture aims to cut worldwide door-to-door delivery times to as little as 72 hours, ZTO founder and Chief Executive Officer Lai Meisong told reporters. The deal comes as Chinese tech company Alibaba Group Holding Ltd. buys 10 percent of Shanghai-based ZTO for $1.4 billion.
Turkish Airlines shares rose as much as 5.4 percent, and were up 4.5 percent at 4:39 p.m. in Istanbul. Before today, they’d lost almost a quarter of their value since May 28. The airline dropped as much as 11 percent on Friday, the most in almost two years, after May traffic figures pointed to sluggish demand.
“The month of Ramadan is usually a slow month for passenger traffic,” said Ayci, whose company flies to 304 destinations, more than than any other airline in the world. “But we are doing everything to prop up the stock.”
Turkish Airlines, whose formal name is Turk Hava Yollari AO, will commit all 18 aircraft in its cargo fleet to the joint venture, and the number of planes could expand as the business grows, said Ayci. The cargo business could be “carved out” as a separate company in future as its operations through the JV expand, and will be one of the world’s biggest three operators by 2023, he said.
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