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Istanbul Stock Exchange has outperformed Turkish Airlines
by World Nioki Go Travel Since the beginning of the year, Pegasus' stock on the Istanbul Stock Exchange has outperformed Turkish Airlines' stock by almost 1%. The difference in the performance of the two companies' shares is reinforced by investors betting that Pegasus will fare much better in the short term compared to Turkish Airlines, which is facing adjustment problems and much higher rent at its huge new Istanbul airport. Pegasus mainly uses Sabiha Gokcen airport on the Asian side of the city as its base. In contrast, a traveler who has chosen to fly with Turkish Airlines will have to travel 50 km to reach the new Istanbul airport, which officially opened its gates on April 6 and is currently facing criticism for flight delays, long queues for taxis and other "infant" problems. Of course, reports of problems like these do not excite would-be passengers who prioritize comfortable and seamless travel, with Pegasus being the big winner, at least for now. Although the problems Turkish Airlines is facing are likely to be temporary, "the strategic importance" of Sabiha Gokcen airport has been "reinforced" because it is closer to the center of Istanbul, Bellul Katas, an analyst at brokerage firm Yatirim Finansman, explained to Bloomberg.Passengers
Passenger traffic at the two airports explains why investors are betting on Pegasus. In the first five months of 2021, passenger traffic at Sabiha Gokcen Airport has increased by 2% compared to the same period a year ago. International passenger traffic has increased by 19% in the same period, according to data cited by Bloomberg. At the same time, the situation at Istanbul airport is disappointing. Passenger traffic at the new airport and the now-defunct Atatürk Airport fell by 4% over the same period with international passenger traffic up just 0.3%. This trend is encouraging for Pegasus but ominous for Turkish Airlines. The cost of facility rental paid by Turkish Airlines at the new airport is almost five times higher than the cost at the old Atatürk airport, according to a report in the Turkish newspaper Cumhuriyet on Monday. In Q1 2021, rental costs rose to $25 million from $4.2 million a year earlier, with the increase largely attributed to Turkish Airlines' relocation to the new Istanbul airport.
In January, Turkish Airlines had forecast in January that it would have revenue of $14.1 billion and carry 80 million passengers during 2021. However, the disappointing first-quarter results strongly challenged the forecasts of Turkish Airlines, which reported a loss of $210 million, almost double the average forecast of economists surveyed by Bloomberg. And international investors are in no mood to wait for Turkish Airlines' traffic and profits to recover. In May, international investors sold more of the company's stock than any other stock on the Istanbul Stock Exchange. For Ozgur Yasar Guillardar, head of emerging markets at Raiffeisen Centrobank, Turkish Airlines' problems do not stop there, as it had been forced to reduce its flights during the relocation to the new airport, which has negatively affected its second-quarter results.
At the beginning of the new year the transfer of the management of the Istanbul airport taxi terminal to the company havas havas is planned.
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Created on Dec 3rd 2021 08:08. Viewed 266 times.
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