Jump in oil prices is the biggest pressure on costs this year, airline chairman says
Turkish Airlines in talks with Boeing on 777X jet order for ultra-long haul plans
Turkish Airlines is assessing a potential order for Boeing 777X jets, as it eyes ultra-long-haul routes, the carrier's chairman said.
Turk Hava Yollari AO, as the carrier is known, is studying the feasibility of the latest generation widebody jet's performance and fit into its fleet plans, Ilker Ayci, Turkish Airlines' chairman, said on the sidelines of an airlines meeting in Sydney last week.
"We’re still making our calculations and working very closely with the OEMs [original equipment manufacturers] on the feasibility of the new generation aircraft for the ultra-overseas," Mr Ayci said. "After we’ve seen the clear feasibility of that aircraft’s performance, we’ll make our decision."
On Friday, the carrier's shares closed 11 per cent lower, the biggest fall since nearly two years as it reported May passenger figures that reflected a slowdown in demand. Last month, the airline carried 6.1 million passengers, a rise of 3.6 per cent, but the increase was less than a quarter of April's 15 per cent boost.
Following the feasibility study, the airline may look into a "trial" order to try out the aircraft within its fleet before potentially making the "main" order, Mr Ayci said.
The airline will make a decision on the purchase after it finishes the feasibility study, finalises any remaining questions and is completely satisfied by the data, Mr Ayci said, declining to provide a timeline for the conclusion of the assessment.
Turkish Airlines would use the aircraft to boost ultra-long-haul destinations, the chairman said, without specifying potential routes.
"Turkish Airlines right now is very equally balanced in terms of destination allocation," he said. "We are thinking of increasing frequencies – its more important right now than opening new destinations."
The Star Alliance carrier has already signed deals for 25 Airbus A350 and 25 Boeing 787-9 widebody aircraft in March, including options for five jets of each type, with deliveries to begin next year.
Rising oil prices will be the biggest pressure on the carrier's costs this year, and it is "very carefully" following the changes in jet fuel prices.
"We have our own policies to manage that risk, but that’s a pressure on cost for everyone – for every carrier that’s a risk, a challenge," he said.
IATA predicted global airlines' profits will drop 12 per cent this year on rising fuel costs and labour costs.