Turkish Airlines' (THY) net profit more than doubled in the second quarter of the year, sending its shares higher, as the flag carrier increased its passenger capacity while its revenues rose amid the strong performance of its cargo business.
Shares in Turkish Airlines were up 4% on Tuesday as the company reported a net profit of TL 30.40 billion ($915.19 million) compared to TL 13.75 billion a year ago, exceeding market expectations.
Brokerages Ziraat Yatırım and Halk Yatırım expected the stock to react positively to the results. Market consensus was expecting a profit of $596 million, according to Ziraat Yatırım.
"The strong beat was a combination of better than expected operational performance and B/S management," J.P. Morgan said.
The stock is among the top performers on Türkiye's BIST 100 index, which rose 2.4% early on Tuesday, marking a rebound from losses on Monday spurred by a major global sell-off.
Despite the ongoing geopolitical tensions on a global scale, bottlenecks in aircraft production and engine issues, THY continued its growth uninterruptedly thanks to its agility and wide flight network and carried a total of 22.1 million passengers in the second quarter of the year, the company said in a statement.
This marked a 7.7% increase when compared to the same period last year.
Moreover, according to the data published by the International Air Transport Association (IATA), while the global passenger capacity in the second quarter of 2024, when competition was intense, only reached the figures before the COVID-19 outbreak, Turkish Airlines continued to be one of the leading airlines in the sector by exceeding its 2019 passenger capacity by 38%.
Turkish Cargo took a significant share of the e-commerce growth that accelerated in the second quarter of the year with its activities carried out at Smartest, Europe's largest air Cargo operation center.
At the same time, it also offered an important alternative to shippers who did not want to be affected by the adversities in the Suez Canal. Thanks to this, the company increased the amount of Cargo it carried by 32% in the first six months of the year compared to the same period in 2023 and became the third largest air cargo carrier in the world, according to IATA data.
In the April-June 2024 period of this year, THY's total revenues increased by 10% on an annual basis and reached nearly $5.7 billion.
Passenger revenues, which constitute 81% of the total revenue, surged to $4.6 billion with the strong contribution of the Far East region, while cargo revenues jumped by a staggering 48% compared to the same period of the previous year and were recorded as $885 million.
Due to the competitive pressure on passenger unit revenues and the negative effects of global inflation on costs, the main operating profit decreased by 26% to $591 million.
The airline, which aims to have a fleet exceeding 800 aircraft by 2033, bolstered its fleet by 9% in the first half of the year and increased the number of aircraft to 458, despite the bottleneck in aircraft production.
