Turkish Airlines chair says Iran crisis accelerating carrier's growth toward top international spot

Turkish Airlines Chairperson Murat Şeker said the conflict triggered by U.S. and Israeli strikes on Iran on Feb. 28 has accelerated the carrier's push toward becoming the world's largest international airline, as disrupted Gulf rivals lose traffic between Europe and Asia.

"The current situation, it might help us to gain that passenger growth faster," Şeker told the Financial Times in his first interview since becoming chair last month. "If that initial demand holds up, we will increase our growth projections for the next three to five years."

Services through major Gulf hubs such as Dubai, Abu Dhabi and Doha have been disrupted since the conflict erupted, while Turkish Airlines' Istanbul base has remained fully operational. The carrier has reallocated planes from the Middle East and the U.S. to Asian and African routes where demand increased. Many of its planes were more than 90% full in March, Şeker said.

"With this capacity shift (we were able) to generate the revenue that we budgeted," he noted. He added that this year's bottom-line profit targets "might be challenging to fulfil," though it is "still a little early to make a final verdict."

Turkish Airlines has cut 21 routes from its network of 350 destinations but retained some loss-making services that supply its hub with passengers for long-haul journeys. "If you make a drastic cut in the network, we know it takes a much bigger effort to recover," Şeker said, citing lessons from the pandemic.

The airline aims to return to its pre-conflict number of daily flights to the Gulf by October, when the peak travel season begins. Şeker said the company would "wait a few more weeks" before restarting scheduled services to the region.

Fuel costs pose a major challenge. Turkish Airlines is 40% hedged on jet fuel but buys the rest at double the pre-conflict price. "This cost pressure is not going to be very easy to digest," Şeker said. However, with capacity adjustments and the first round of frequency cuts, he said the carrier is "able to cope reasonably well with the fuel pressure." The company has also "reflected some of the pressure in surcharges on ticket prices."

On the demand side, Şeker said it remains "still strong in certain parts of the world," particularly Far East Asia, followed by Africa and Europe.

Turkish Airlines has held talks to acquire some planes from Spirit, the now-defunct U.S. carrier that shut down operations earlier this month. Şeker said the airline has been in discussions with leasing companies to buy seven to 10 aircraft, though negotiations are on hold due to the "current situation."

The carrier plans to receive about 36 wide-body aircraft such as Airbus A350s over the next four years, and aims to offer more services to Asia, including China, Japan and Australia, as well as new routes in the U.S., Canada and Latin America.

"We are, of course, aiming for the top position," Şeker said. "But, of course, we have to see how our peers are evolving." The airline's 2033 target includes up to 850 aircraft, which would put it among the three largest carriers by international seat capacity. "With our geographic location, our spacious airport hub, our globally dominating network (and) ... huge order book with both Boeing and Airbus, there are a lot of prospects where we can take Turkish Airlines in the next 10 years," he concluded.