Boeing Redress Lifts Turkish Airlines Profit to Record in 2019

(Bloomberg) --

Turkey’s flagship carrier posted record profit in 2019, thanks to a one-time gain incurred due to compensation for grounded and undelivered Boeing 737 Max aircraft.

Turkish Airlines’s net income of 4.54 billion liras ($745 million) beat the highest estimate in a Bloomberg survey of 17 analysts. Profit was boosted by 1.07 billion liras of “insurance, compensation and fine income,” while revenue rose almost 20% from the year-earlier period.

The state-run airline foresees as much as $14.8 billion in sales this year from about $12.3 billion in 2019, though the impact of the coronavirus remains unclear. The company is working on various scenarios regarding the epidemic, Chairman Ilker Ayci said at a press conference in Istanbul on Friday, without elaborating. Turkish Airlines has so far suspended flights to China, Iran and Italy.

The outbreak will cost the airline industry $63 billion to $113 billion in lost revenue from passengers this year, the International Air Transport Association said on Thursday. That would represent a 19% drop from 2019, IATA said. Turkish Airlines carried 74.3 million passengers last year, 59% of which were international.

Turkish Airlines traded 4.5% lower at 2:13 p.m. local time as concerns over the spreading coronavirus unnerved stock markets worldwide. The company is down 23% this year, compared with a 4.5% decline in the benchmark Borsa Istanbul 100 index.

--With assistance from Tugce Ozsoy.

To contact the reporter on this story: Taylan Bilgic in Istanbul at tbilgic2@bloomberg.net

To contact the editors responsible for this story: Onur Ant at oant@bloomberg.net, Jon Menon, James Cone

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