Wednesday, December 8

Turkey’s wealth fund in talks over urgent support for hard-hit Turkish Airlines -sources

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The source added that TVF conducted a broader study of struggling Turkish companies in the transportation and tourism sectors, suggesting other bailouts could be forthcoming.

TVF owns 49.12% of Turkish Airlines, which has a market capitalisation of 14.6 billion lira ($1.9 billion). Its shares have dropped 31% since borders were temporarily closed and domestic and international flights were halted after February. They rose 2.5% after the funding news on Friday.

Chairman Ilker Ayci said after the second quarter the airline felt “very comfortable” with the $1.7 billion of cash on hand, credit lines and other funding capacity it had until the beginning of 2021.

But it expects to burn up to $350 million per month through year end, when net debt is expected to be some $14 billion.

Finance Minister Berat Albayrak, announcing the government’s three-year plan on Tuesday, said the recovery in some sectors including tourism and transportation had not reached desired levels.

Another source told Reuters efforts were being made for a similar style rescue for Turkish Airlines to Lufthansa.

“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,” the source said.

The company’s passenger numbers tumbled 65.9% year-on-year in August, company data showed. Its load factor dropped 17.2 percentage points to 67.6% in the same period. ($1 = 7.7695 liras) (Reporting by Ebru Tuncay, Birsen Altayli and Orhan Coskun; Editing by Jonathan Spicer and Elaine Hardcastle)