Turkish Airlines Cuts Passenger Forecast on Local Unit

Turkish Airlines cut its forecast for passenger numbers this year to 55.6 million from 59.5 million because of lower-than-expected demand at its domestic brand AnadoluJet.

The parent group’s fleet will also expand at a slower rate than anticipated, increasing to 262 planes by the end of the year -- from 259 last year -- rather than the previously planned 267.

Turkish Air has become one of the world’s fastest-growing carriers as it seeks to establish Istanbul as a hub for travel between Europe and the U.S. and Asia, mirroring the strategies of top Gulf operators. The airline serves more than 210 routes and has been expanding its fleet at a rate of almost three planes a month after ordering 117 jets from Airbus Group NV and 95 from Boeing Co.

“The market was largely expecting a downward revision in key performance indicators for some time,” Oyak Securities said today in a report. Turkish Airlines shares rose 1.4 percent to 6.42 liras at 12:01 p.m. in Istanbul.

The carrier cut expectations for available seat kilometers, an important industry metric, to 136 billion from 141 billion, the company said in a public filing over the weekend. That is still 17 percent higher than 2013. The occupancy ratio, or load factor, will probably be 79.1 percent, up from an earlier forecast of 78.8 percent.

“The expectations for 2014 are related to changes in fleet plans and revisions in capacity management because of the domestic airline AnadoluJet,” Istanbul-based Turkish Airlines, formally known as Turk Hava Yollari AO, said on Oct. 10.

The revised forecasts will not affect the carrier’s earlier guidance of $11.4 billion of sales for the year, and its profitability, it said.

“Third-quarter results will be more indicative for possible market revisions since the company held their top-line and operational guidance flat,” Oyak said in the e-mailed report.

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