financial and operaitional data
TRANSCRIPT
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Destinations
OPERATIONAL DATA> January July 2009
FINANCIAL DATA> January June 2009
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This presentation is confidential and does not constitute or formpart of, and should not be construed as, an offer or invitation tosubscribe for, underwrite or otherwise acquire, any securitiesof Turkish Airlines A.O (the Company) or any member of itsgroup nor should it or any part of it form the basis of, or be reliedon in connection with, any contract to purchase or subscribefor any securities of the Company or any member of its groupnor shall it or any part of it form the basis of or be relied on inconnection with any contract, investment decision or commitment
whatsoever. This presentation has been made to you solely foryour information and background and is subject to amendment.This presentation (or any part of it) may not be reproduced orredistributed, passed on, or the contents otherwise divulged,directly or indirectly, to any other person (excluding the relevantpersons professional advisers) or published in whole or inpart for any purpose without the prior written consent of theCompany.
This presentation includes forward-looking statements.These forward-looking statements include all matters thatare not historical facts, statements regarding the Companysintentions, beliefs or current expectations concerning, amongother things, the Companys results of operations, financial
condition, liquidity, prospects, growth, strategies and theindustry in which the Company operates. By their nature,forward-looking statements involve risks and uncertainties,including, without limitation, the risks and uncertainties set forthin the Companys Offering Memorandum, because they relateto events and depend on circumstances that may or may notoccur in the future. The Company cautions you that forward-looking statements are not guarantees of future performanceand that its actual results of operations, financial condition
and liquidity and the development of the industry in which theCompany operates may differ materially from those made inor suggested by the forward-looking statements containedin this presentation. In addition, even if the Companysresults of operations, financial condition and liquidity and thedevelopment of the industry in which the Company operatesare consistent with the forward-looking statements containedin this presentation, those results or developments may notbe indicative of results or developments in future periods.
The Company does not undertake any obligation to review orconfirm analyst expectations or estimates or to release publiclyany revisions to any forward-looking statements to reflect eventsthat occur or circumstances that arise after the date of thispresentation.
Disclaimer
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Dr. Temel KOTIL,CEO, Turkish Airlines
> Started his Turkish Airlines career in March 2003 as ExecutiveVice President (Technical) and was appointed as CEO in April 2005
> Ph.D. in Mechanical Engineering University of Michigan, USA
> M.Sc. in Mechanical Engineering University of Michigan, USA
> M.Sc. in Aerospace Engineering University of Michigan, USA
> B.Sc. in Aerospace Engineering, Istanbul Technical University, Istanbul
> Board Members of IATA, Turkish Airlines Inc, Turkish AirlinesTechnical Inc. and Sun Express Inc.
Speakers
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Speakers
COSKUN KILICFO, Turkish Airlines
> CFO as of March 2006
> M. Sc. in Finance, Urbana Champaign Illinois University, USA
> M.A. Economics, Ankara University
> Certified Public Accountant
> Board Member of Sun Express
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THY vs AEA
THY vs AEA (Total) THY vs AEA (Europe)
% Changed PAX ASK RPK % Changed PAX ASK RPK
15,6
4,1
15,5
-1,7
11,1
-8,2
11,9
4,2
11,6
3,0
21,9
-4,4
19,0
5,1
13,8
1,2
14,8
-6,4
30,0
20,0
10,0
0
-10,0
16.5
5.7
17.5
0.6
13.4
-8,2
7.7
6.6
11.0
3.4
17.8
-5.2
14.6
7.0
15.8
2.0
13.3
-7.0
40.0
20.0
0.0
-20.0
2007 2008 January - July 09
TK AEA TK AEA TK AEA
2007 2008 January - July 09
TK AEA TK AEA TK AEA
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THY vs AEA (Middle East) THY vs AEA (Far East)
60.0
40.0
20.0
0.0
30.7
10.0
54.8
11.5
28.8
5,7
12.9
4.4
55.2
9.4
40.3
10,7
28.7
9.5
61.1
8.3
27.5
3,1
26.3
4.2
5.0
1.0
16.3
-7.6
14.4
0.7
4.9
3.5
28.3
-4.7
28.5
3.1
1.9
0.4
12.7
-7.7
50.0
30.0
10.0
-10.0
Middle East, Far East and Arica routes are expected to grow higher than average duringthe years 2009-2010, where THY has been successul in growing aster than AEA....
THY vs AEA
% Changed PAX ASK RPK % Changed PAX ASK RPK
2007 2008 January - July 09
TK AEA TK AEA TK AEA
2007 2008 January - July 09
TK AEA TK AEA TK AEA
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Destinations
Company Overview
36 DOMESTIC LINES
.
.
KARS
ARI
MU
VAN
BATMAN
MARDNURFA
G.ANTEP
HATAY
ADANA
K. MARA
KAYSER
NEVEHR
SNOP
SAMSUN
MERZFON
ANKARA
ESKEHR
BURSA
STANBUL
STANBUL
ORLU
ZMR
ANAKKALE
UAK
DENZL
BODRUM
DALAMANANTALYA
KONYA
ADIYAMAN
ERZURUM
TRABZON
SVAS
MALATYA
ERZNCAN
ELAZI
DYARBAKIR
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ALMATY
ASKHABAT
ASTANA
BANGKOK
BEIJING
BISKEK
DUSANBE
HONG KONG
JAKARTA
KARACHI
MUMBAI
NEW DELHI
OSAKA
SHANGAI
SEOUL
SINGAPORE
TASHKENT
TOKYO
AMMAN
ABU DHABI
ALEPPO
BAGDAT
BAHREYN
BEIRUT
DAMASCUS
DUBAI
DOHA
JEDDAT
KUWAIT
MASHHAD
MEDINAH
MUSCAT
RIYADSANAA
TEHRAN
TEBRIZ
TEL AVIV
AMERICAS (3)
CHICAGO
NEW YORK
SAO PAOLO
CANADA (1)
TORONTO
NORTH AFRCA (7)
ALGERS
BENGAZI
CARIO
CASABLANCA
KHARTOUM
TRIPOLI
TUNUS
MID - AFRICA (4)
ADISABABA
DAKAR
LAGOS
NAIROBI
SOUTH AFRICA (2)
CAPETOWN
JOHENSBURG
FAR EAST (18)
MIDDLE EAST (19)
AMSTERDAM
ATHENS
BAKU
BARCELONA
BASEL
BELGRAD
BERLIN
BIRMINGHAM
BRUSSELS
BUCHAREST
BUDAPEST
CHISINAOU
COLOGNECOPENHAGEN
DUBLIN
DONETSK
DUSSELDORF
DNEPREPETROVSK
FRANKFURT
GENEVA
GOTEBORG
HAMBURG
HANNOVER
HELSINKI
KAZAN
KIEV
LEFKOSE
LISBON
LONDONLJUBLIANA
LYON
LVOV
MANCHESTER
MADRID
MILAN
MINSK
MOSCOW
MUNICH
NICE
NURNBERG
ODESSA
OSLO
PARIS
PRAG
RIGAROME
ROSTOV
PRISTINA
UFA
SARAJEVO
SIMFEROPOL
SKOPJE
SOFIA
STOCKHOLM
STRASBOURG
ST PETERSBURG
STUTTGART
TBILISI
TIRANA
VIENNA
ZAGREBWARSAW
ZURICH
VENICE
YEKATERINBURG
EUROPE (65)
119 INTERNATIONAL LINES
Destinations
Company Overview
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Airline Sector in Turkey
Passenger Traic
THY Passenger TrafficJan - Jul 2008 vs 2009
Landing up by 11%
ASK (million) up by 20%
RPK (million) up by 12%
Passenger # (000) up by 10%
L/F % down by 4.5 points
THY PassengerTrafc Total
2005 2006 2007 2008Jan - Jul
2008
Jan - Jul
2009
08 vs 09
Landings 127,137 152,536 168,899 189,328 106.104 118.071 11.3%
ASK (million) 29,805 36,934 41,619 46,343 25.598 30.645 19.7%
RPK (million) 21,317 25,383 30,251 34,265 18.949 21.292 12.4%
Passenger # (000) 14,134 16,946 19,636 22,597 12.528 13.738 9.7%
L/F % 71,5 68.7 72.7 73.9 74.0 69.5 -4.5%
THY PassengerTrafc Intl
2005 2006 2007 2008Jan - Jul
2008Jan - Jul
200908 vs 09
Landings 61,689 73,626 81,737 96,735 53.564 63.687 18.9%
ASK (million) 24,348 29,811 33,502 37,855 20.770 25.655 23.5%
RPK (million) 17,301 20,170 24,327 27,848 15.333 17.515 14.2%
Passenger # (000) 6,937 8,041 9,652 11,534 6.308 7.217 14.4%
L/F % 71.1 67.7 72,6 73.6 73.8 68.2 -5.6pt
THY PassengerTraffic Domestic
2005 2006 2007 2008Jan - Jul
2008Jan - Jul
200908 vs 09
Landings 65,448 78,910 87.162 92,593 52.540 54.384 3.5%
ASK (million) 5,457 7,123 8,117 8,488 4.828 4.990 3.4%
RPK (million) 4,016 5,213 5,924 6,417 3.616 3.777 4.5%
Passenger # (000) 7,197 8,906 9,984 11,063 6.220 6.521 4.9%
L/F % 73.6 73.2 73.0 75.6 74.9 75.7 0.8pt
Signicant Growth inOperational Data
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Company Overview
Passenger Traic
Capacity - Trafic Development Load Factor %
ASK RPK L/F %50
45
40
35
30
25
20
15
10
5
0
80
70
60
50
40
2002 2003 2004 2005 2006 2007 2008 Jan - Jul
2008
Jan - Jul
2009
24
68.9
67.0 70.2 71.5
68.772.7 73.9 74.0
69.5
17
24
1
6
26
19
30
21
37 2
5
42
30
46
34
26
19
31
21
In 2009, capacity on domesticroutes increased by 3.4% , trafficincreased by 4.5%, load factorincreased by 0.8 pt to 75.7.Anadolu Jets L/F was 81.2%.
On international routes; capacityincreased by 23.5%, trafficincreased by 14.2%, while loadfactor decreased by 5.6 pt to68.2%.AnadoluJets L/F was69.8%
Total capacity increased by19.7% while traffic increased by12.4%. Load factor was 69.5%(-4.5pt).
Million %
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Financial Highlights
Revenues
Able to Sustain Revenue Growth While Increasing Capacity
Total Revenues ( Mn )DOMESTIC INTERNATIONAL OTHER
Source: Financial statements released under Turkish CMB standards converted to Euro using average exchange rates.
3,500
3,000
2,500
2,000
1,500
1,000
500
-
2002 2003 2004 2005 2006 2007 2008 1H08 1H09
332
1,120
362
1,815
294
864
323
1,481
308
938
335
1,581
401
1,208
251
1,860
471
1,468
308
2,247
598
1,814
321
2,734
665
2,167
396
3,228
300
893
192
1,386
274
934
178
1,386
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Financial Highlights
Revenues
Change In R/Y ()
Source: Financial statements released under Turkish CMB standarts, converted to Euro using average exchange rates
Change In Rask ()
8% 10%
-12%-13%
23%
-16%
9%
14%
-6%
5%
9%
4%
-16%
7%
22%
5%
8%
5%
DOMESTIC INTERNATIONAL TOTAL DOMESTIC INTERNATIONAL TOTAL
30%
20%
10%
0%
-10%
-20%
30%
20%
10%
0%
-10%
-20%
2002
2004 2005 2006 2007 2008 1H 2009 2004 2005 2006 2007 2008 1H 2009
-11% -11%
11%12% 12%
-13%
19%
0%
6% 7%
-9%
-9%
20%
2%5%
6%
-7%
-9%
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Financial Highlights
Revenues
Revenues Split (1H 09)
Passenger Revenues Split by Geography
Source: Financial statements released under Turkish CMB standarts,
converted to Euro using average exchange rates
Domestic
22.71%
PaxRevenue
87.2%
Other
5.7%
Cargo
6.4%
Charter
0.7%
Breakdown o Passenger Revenue Constant Over the Years
Intl77.29%
Europe
39.01%
Far East
16.16%
M.East
12.87%
America
3.69%
Africa
5.56%
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Company Overview
Passenger Breakdown
Intl Traf ic Breakdown by Geography(Jan-July 2009)
Market Shares (Jan- July 2009)
International
Domestic
Africa
6.14%Middle East
15.06%
America2.22%
Far East
11.34%
ForeignCarriers
32%
Other TurkishCarriers
9%
Other TurkishCarriers
33%
THY
59%
THY
67%
Europe
65.25%
Stable Market Share in International Trac
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Company Overview
Transit Passengers
THY carried total of 2.670.621transit passengers in Jan-Jul09, with an increase of 26%compared to the same period of2008.
Total transit passengersaccounted for 19% of thepassenger traffic.
Intl to intl transit passengersshare in total transit passengersis 43%. During Jan-Jul09, inttto intl passengers increased by%44 reaching to 1,147,149.
Intl to Intl Transit Passengers (2000 - 2009)
2,500,000
2,000,000
1,500,000
1,000,000
500,00
02000 2001 2002 2003 2004 2005 2006 2007 2008 2009E Jan - Jul
2008Jan - Jul
2009
4%30%
-8%20%
2% 34%
42%
41%
30%
44%
379,626
393,242
511,233470,259
564,833 574,464
771,651
1.099,199
1.553,425
2,019,453
798.8
09
1.1
47.1
49
Signicant increase in Intl to Intl Transit Passengers
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Company Overview
Fleet Development
Fleet as o July 2009As of July 2009, total seat capacity reachedto 23.171, with an average age of 6,1 years.
During 2009, annual lease paymentsexpected to be approximately around$522 million in 2009.
According to the Fleet Plan for 2009-2023,decision was made to purchase 25 firm ofwhich 7 /A330 and 7/B777-300ER orderedas of June 2009, 10 optional total of35 Wide Body Long-Haul aircraft withdouble aisle and 50 firm, 20 optional total of70 Narrow Body Medium-Haul aircraft.
Type Total Owned FinancialLeaseOperational
Lease
B737-800 51 - 38 13B737-700 4 - - 4B737-400 6 - - 6A320-200 22 - 12 10
A321-200 20 - 14 6A319-100 4 - - 4
A330-200 7 - 5 2
A340 9 7 - 2
A310 0 - - 0
B777-3ER 3 - - 3
A310 Cargo 4 3 - 1
Total 130 10 69 51
% 8% 52% %39
Seat capacity increased by25.9% in Jan-Jul 09 compared
to the same period o 2008
Fleet Additions Seat Capacity After Additions & Exits
Type 2010 2010
B737-300 ER 5 Seat Capacity 25.750
A330-300 3
Total 8
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Company Overview
Fleet Development
Since 2004, seat capacity has in-creased by 91% in 2009.
Aircraft utilization has been rising dueto better fleet composition and a moredynamic scheduling process. Howeverfor Jan-Jul09, due to rapid capacityincrease, the utilization has decreased.
Strong capacity growthand better fight utilization
Seat Capacity
20032002 20062004 20072005 2008 Jul 08 Jul 09
23,000
18,000
13,000
8,000
3,00010.6
72
12.
109
17.
931
18.
407
10.8
58
14.
419
22.
238
17.
594
23.
171
26%
Average Daily Flight Utilization (hrs)Hours
20032002 20062004 20072005 2008Jan -Jul08
Jan -Jul09
11,0
10,0
9,0
8,09.
47
10.
12
10.
31
11.
47
10.
07
10.
21
11.
40
11.
13
11.
06
-6%
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Company Overview
Operating Eficiency
Number o Personnel
Passengers per Employees
Employees per Aircrat
THY enjoys high personnelefficiency compared to itscompetitors.
Personnel cost of THY per ASK wasonly 1.2 cents for 1H09
114 employees per aircraft and927 passengers per employee for
the Jan-Jul09.
Personnel eciency is thekey driven while
increasing feet size
12,000
7,000
2,00010,
984
10,
956
12,
807
14,
000
10,
239
11,
121
14,
072
12,
951
14,
823
6%
1,200
700
200945
1,
094
1,
323
895
1,
018
1,
271
1,
606
1,
517
927
4%
20032002 20062004 20072005 2008 Jul 08 Jul 09
20032002 20062004 20072005 2008 Jan -Jul 08
Jan -Jul 08
Jan -Jul 09
Jan -Jul 09
160
120
80
40
0
20032002 20062004 20072005 2008
166
150
124
132
158
134
111
127
114
-14%
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Financial Highlights
Operating Expenses
Operating Expenses ( Euro Mn )
( Mn ) 1H08 % in Total 1H09 % in Total 09/08 %
Personnel 295 23% 316 24% 7%
Fuel 447 34% 288 22% -36%
Rents 55 4% 103 8% 89%
Maintenance 60 5% 81 6% 34%
Insurance 6 0% 11 1% 74%Depreciation 98 7% 92 7% -5%
Landing 93 7% 120 9% 29%
Ground handling 66 5% 83 6% 26%
Passenger Catering 63 5% 75 6% 18%
Sales and Marketing 96 7% 117 9% 22%
General Administration 8 1% 12 1% 47%
Others 19 1% 15 1% -20%
TOTAL 1.306 1.313 1%
Op.Cost per ASK ( ) 6,14 5,18 -16%*
Total Expenses stayed almost the same due to decrease in Fuel Expense
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Financial Highlights
Operating Expenses
Operating Costs per ASK ( Cent 1H 09)
14.112.3 10.5
9.3 8.98.7 7.9 7.9 7.8 6.6 6.0 5.2
SAS LH OS AA AF DL UA IB AY BA SQ TK
20
10
0
Change in CASK (1H 09)
30%
20%
10%
0%
-10%
-20%
DOMESTIC INTERNATIONAL TOTAL
-5%
0%
1%
16%
-7%
1%
11%
-13%-16%
-14% *
10%
6%
-6%
-4%
-9%
-8%
14%
11%
20062004 20072005 2008 1H 09
* The difference is due to monthly exchange and period-end exchange rate
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Historical Highlights
Openg Expenses
% in Total Operating Expenses (2002 1H09)
Portion o Fuel Expenses Decreased Signicantly
20032002 20062004 20072005 2008 1H 08 1H 09
40%
35%
30%
25%
20%
15%
10%
20%
16%
15%
Personel Expense Fuel Expense
23% 23%24%
27%28%
24%21%
34% 34%
23%24%
22%20%
24%
20%
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Historical Highlights
Openg Expenses
Cost Per ASK (2002-1H 09)
20032002 20062004 20072005 2008 1H 08 1H 09
10.00
8.00
6.00
4.00
2.00
0
CASK Personel / ASK Fuel / ASK
6.53
5.36
5.67 6.05 5.95
5.71
6.25 6.14
5.18
1.251.391.34
1.371.221.451.321.221.31
0.95 0.85 1.11 1.47 1.66 1.59 2.11 2.10 1.14
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Financical Highlights
EbitdarEBITDAR Margin % Comparison (1H 2009)
Cost cutting policies had a positiveimpact on operating expenses.
35.0
29.0
23.0
17.0
11.0
5.0
-1.0
( Euro Mn) 2004 2005 2006 2007 2008 1H '08 1H '09 09/'08 %
Revenue 1.581 1.86 2.247 2.734 3.228 1.386 1.386 0%
EBIT 81 56 48 285 334 79 73 -8%
EBIT Margin (%) 5,1 3,0 2,1 10,42 10,34 5,7 5,27 -0,43 pt
EBITDA 251 235 235 490 541 177 165 -7%
EBITDA Margin (%) 15,9 12,6 10,5 17,92 16,77 12,77 11,9 -0,87 pt
EBITDAR 315 320 366 678 723 232 268 16%
EBITDAR Margin (%) 19,9 17,2 16,3 24,81 22,41 16,74 19,34 2,6 pt
Net Income 61 56 101 149 598 131 48 -64%
TKRY LHSQ AFOS SAS
29.9
19.3
8.75.2
2.5 2.1 1.5
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THY
Fuel
Fleet expansion will reduce uelcost as well as eet age
Source: Company annual reports & websites.
Per ASK Fuel Cost ( Cent) 1H 2009
4
2
0
DL
Average Specifc Fuel Consumption
2.3
4.20
4.00
3.80
3.60
3.40
3.20
3.00
Although THY does not hedge, itsfuel expense per ASK is lower onthe average compared to its peergroup.
Due to fleet expansion, the fleetaverage age will be lower which
in return will increase THYs fuelefficiency.
SAS
2.3
SQ
1.9
BA
1.9
AF
1.8
AY
1.8
OS
1.7
LH
1.7
UA
1.5
TK
1.2
200420012000 2002 20052003 2006 2007 2008Jan -
Jul 09
4.04
3.89
3.823.76 3.77
3.84
3.673.60
3.57
3.47
THY Fleet 2008 3.6 Litres/100 ASK
11,63% reduction since 2000
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THY
Fuel
Young eet helps to keepuel consumption down and
improves uel efciency
During 1H09, fuel consumptionincreased by 14%, despite a 17%increase in kilometers flown.
In 1H09, fuel expenses decreasedby 36%. As a result of this, fuelshare in total operating costs ofTHY dropped from 34% in 1H08 to22% in 1H09.
Turkish Airlines Fuel SavingProgram started in April 2008 with
the collaboration of IATA GreenTeam.
Fuel Consumption/Fuel Expense
14%000 Tons
Mn. Euro
Fuel ExpenseFuel Consumption
1H08 1H09
-36%
Fuel Savings (ton) 165.364
Monetary Savings $142.910.850
CO2 Emission Reduction (ton) 519.243
May 2008-July 2009
As a result of the implementation of fuel saving initiatives; we have realized the below figures:THY FUEL SAVING PROGRAM
618
703
447
288
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THY
Cuency bekown
Income by Currency (1H 2009)
Expenses by Currency (1H 2009) THYs income is diversified amongthe major currencies.
Due to its currency basket THY isvery flexible on fx position.
Although USD income is lowerthan USD expenses THY is able to
cover its USD expenses from Euroincome due to strong Euro againstUSD.
Diversied revenue & expense base and agility in pricing currency
Other
33%
TRY
33%
USD
12%
Other
7%
Euro
38%
USD
47%
TRY17%
Euro
13%
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Company Overview
Hghlghs
Blessed by its prime location Turkey only 3hrs flight from 50 different countries
Increased focus on transit flights since 2002
Increased focus on Business Class passengers since 2006
Market leader in Turkey with a strong brand recognition
Member of Star Alliance
Substantial cost advantage over rivals Labor costsonly 1.2 per ASK (Austrian: 2.16 , Lufthansa :3.03 , SAS: 5.5 , Iberia: 2.1 )
Profitable with room for further cost reductions
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THY
top Peomng CompnesRANK COMPANY
SCOREDATE
08 REVENUE$ mn
TOTALSCORE
LIQUIDITYFINANCIAL
HEALTEARNINGS
PERF.FUELMGT.
ASSETMGT.
1 Singapore Airlines Ltd Dec 08 11.825 75 81 87 28 46 33
2 Deutsche Lufthansa AG Dec 08 35.807 65 86 56 22 51 31
3 Malaysian Airlines System Berhad Dec 08 4.352 63 73 65 35 29 50
4 Trk Hava Yollar A.O. Dec 08 3.982 62 62 84 33 31 46
5 Qantas Airways Ltd Dec 08 14.562 59 85 36 47 30 36
6 Lan Airlines SA Dec 08 4.534 55 36 66 65 28 99
7 Air New Zeland Ltd Dec 08 3.203 51 70 52 21 18 41
8 Aer Lingus Group PLc Dec 08 1.893 51 64 52 1 11 22
9 Iberia Lineas Aereas De Espana SA Dec 08 7.281 49 83 38 2 21 19
10 Finnair OYJ Dec 08 3.157 43 71 33 2 17 3011 Hawaiian Holdings Inc. Dec 08 1.211 42 37 44 64 15 69
12 Air France-KLM Mar 09 31.823 35 63 26 1 32 25
13 All Nippon Airways Co Ltd Ana Mar 09 14.102 35 50 37 33 36 37
14 Alaska Air Group Inc Dec 08 3.620 35 64 31 6 11 31
15 Japan Airlines Corp Mar 09 19.758 29 59 29 10 30 23
16 Continantal Airlines Inc Dec 08 15.241 28 45 35 21 28 44
17 British Airways PLC Mar 09 12.196 28 61 21 1 15 13
18 Cathay Pasifc Airways Ltd Dec 08 11.185 24 67 22 1 9 419 TAM SA Dec 08 4.107 22 33 39 1 8 48
20 Austrian Airlines Dec 08 3.292 20 53 15 18 7 12
21 Sas Ab.Stockholm Dec 08 6.743 19 45 37 1 12 15
22 Delta Air Lines Dec 08 22.697 18 44 20 20 11 1
23 Thai Airways International Dec 08 5.775 16 31 15 28 9 20
24 AMR Corp. Dec 08 23.766 15 46 15 7 16 17
25 Air Canada Dec 08 9.000 14 30 22 7 12 21
26 Asiana Airline Inc. Dec 08 3.609 7 10 15 26 9 28
27 Korean Air Lines Co.Ltd Dec 08 8.357 6 24 13 1 4 10
28 Air China Ltd Dec 08 7.760 5 29 2 7 4 25
29 China Southern Airlines Co Ltd Dec 08 8.104 2 25 1 8 5 17
30 US Airways Group Inc. Dec 08 12.118 1 22 15 1 12 31
31 UAL Corp Dec 08 20.194 1 28 6 1 1 1
32 China Eastern Airlies Corp. Ltd. Dec 08 6.130 1 30 1 12 1 1
Source:Aviation Week
THY ranked
No.2 in the
fnancial ftness*category
* Representing a measure of anairlines overall financial strengthbased on assessments of sol-vency, current ratio, fixed-chargecoverage, mix of debt and equitycapital, operating income marginand debt service cover.
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Destinations
THANK YOU
Mr.Cokun KILI / CFO
Ms.Suna ELEB / IR Manager
Tel: +90 212-463-6363/3630
E-mail: [email protected]
Turkish Airlines Inc.
Investor Relations Department
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THY
Cgo tnspoon
Leading cargo carrier in total export and import cargo in Turkey.
Operates 21 destinations with its 4 A310-300 freighters besides155 destinations with 130 passenger aircraft.
During the 1H09 posted revenue was 88.5 million Euro, carried
cargo was 101,784 tons.
While Association of Eurepean Airlines member companies
decreased by an average of 13%, Turkish Cargo grew by 15%
during the 1H09.
Turkish Cargo
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THY
Cgo tnspoon
Cargo Revenue ( Mn)
Cargo revenue has increased by12% in 2008 compared to 2007.
However, for the first half 2009, ithas decreased by 6% compared tothe same period of 2008.
Plans to Enlarge Freighter Fleet Aiming Higher Cargo Revenues
136144
160175 179
201
95
89
250
200
150
100
50
0
2003 2004 2005 2006 2007 2008 1H 2008 1H 2009
Mn
6%
Source: Company
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THY
Cgo tnspoon
THY-Cargo
Domestic and International break-down is consistent over the years.
As of January - July 2009 THY hascarried total of 121.605 Tons cargo,indicating 8% increase comparedto same period of 2008.
250,000
200,000
150,000
100,000
50,000
0
20032002 2004 2005 2006 2007 2008 Jan-Jul08
Jan-Jul09
Tons
Source: Company
8%
96,
467
93,
828
103,
729
113,
163
125,
033
144,
033
161,
24
9
90,
496
100,
902
28,438 31,811 37,75728,994 34,840 22,02431,122 39,019 20,703
INTERNATIONAL DOMESTIC
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THY
Cgo tnspoon
Turkish Cargo Market vs THY
Source: Company
Tons
2003 20062004 20072005 2008 1H 08 1H 09
450,000
300,000
150,000
0
80%
60%
40%
20%
0%
TURKISH MARKET THY THY MARKET SHARE
2
76,
283
1
22,
822
324,5
88
134,8
51
331,1
16
144,9
74
348,7
22
159,8
73
382,5
72
183,0
52
402,0
97
199,0
06
199,6
49
94,8
91
182,2
44
101,7
84
44% 42%44%
46% 48%
49% 48%
56%
THY increased its market share in
Turkish cargo market from 48% to56% during 1H2009.
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34
THY
Newok Mppng
WEEKLY FREQUENCY
DESTINATIONS
5.500
4.500
3.500
2.500
1.500
FORECASTED
091320812707
10106103
90 100 110 120 130 140 150 160 170
04730266
05
83 0365
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35
THY
asses & Lles
Assets (in Mn) 2003 2004 2005 2006 2007 2008 1H 08 1H 09 09/08
Cash and Equivalents 378 200 304 197 281 236 633 510 -19%
Net Trade Receivables 68 87 121 135 179 163 238 240 1%
Other Current Assets 57 84 95 241 410 806 206 607 194%
Total Current Assets 502 371 520 573 870 1205 1.077 1.357 26%
Due from Related Parties (Long Term) 30 0 0 8 13 11 9 146 1561%
Net Fixed Assets 1130 995 1657 1671 1891 2359 1.967 2.312 18%
Other Long Term Assets 26 248 224 143 104 101 103 84 -18%
Total Long Term Assets 1,186 1,243 1,882 1,822 2,008 2,471 2.078 2.541 22%
Total Assets 1,689 1,614 2,402 2,395 2,878 3,677 3.155 3.899 24%
Liabilities (in Mn) 2003 2004 2005 2006 2007 2008 1H 08 1H 09 09/08
Short Term Lease Obligations 140 111 229 118 134 196 141 198 40%
Accounts Payable 104 108 161 172 213 203 227 236 4%
Passenger Flight Liabilities 64 101 0 151 222 206 0 368 -
Other Current Liabilities 112 78 365 136 125 149 443 194 -56%Total Current Liabilities 420 399 755 577 694 754 811 996 23%
Long Term Lease Obligations 688 524 540 780 933 1307 1.027 1.265 23%
Retirement Pay Provision 45 55 72 63 77 67 0 68
Other Long Term Liabilities 31 29 249 106 94 154 196 179 -9%Total Long Term Liabilities 764 608 861 949 1104 1528 1.224 1.511 24%
Capital 963 1048 110 95 102 82 91 408 349%
Share Premium 0 0 1180 1010 1018 781 897 925 3%
Reserves 71 77 5 4 36 0 10 -
Foreign Currency Translation Differences 2 2 -
Accumulated Loss /Income -530 -518 -509 -240 -75 530 132 47 -64%
Total Shareholders Equity 505 608 786 869 1081 1395 1.121 1.392 24%
Total Liabilities & Shareholders Equity 1,689 1,614 2,402 2,395 2,878 3,677 3.155 3.899 24%
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THY
income Semen
Income Statement (in Euro mn) 2003 2004 2005 2006 2007 2008 1H'08 1H'0909/08
%
Operating Revenues 1.481 1.581 1.860 2.246 2.734 3228 1.386 1.386 0%
Operating Expenses -1.289 -1.501 -1.804 -2.196 -2.449 -2,894 -1.306 -1.313 1%
Operating Proft 193 81 56 50 285 334 79 73 -9%
Income From Other Operations 53 34 255 486 127 30 91 27 -71%
Loss From Other Operations -6 -9 -166 -376 -6 -54 -2 -52 2479%
Income Before Financial Income/(Expense)
240 105 145 159 407 310 168 47 -72%
Income/Loss due From Asset Valuation 9 2 -6 -1 -77%
Financial Income/(Loss) 154 21 -36 -54 174 753 115 90 -21%
Monetary Gain/(Loss) -223 -64 - - -380 -376 -113 -39 -65%
Income Before Taxation 170 62 109 105 209 688 165 97 -41%
Taxation -43 -2 -26 -4 -59 -90 -34 -50 45%
Net Income 127 61 83 101 149 598 131 48 -64%
In converting the TRY reported results to EURO, the period average EURO exchange rates were used
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THY
Susy & afles
THY Technic A.S. (Consolidated)
THY Do & Co Catering A.S. (Equity Pick-up)
TGS Ground Handling Inc. (Equity Pick-up)
JP`B&H Airlines`d.o.o.Sarajevo (Equity Pick-up)
Sun Express A.S. (Equity Pick-up)
THY Academy (to be Established)
THY Flight Training Inc.
Subsidiaries
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THY
Susy & afles
> THY Technic A.S. (Consolidated)
Owned 100% by THY
During the 1H09 posted revenues and net income was 162 mn
and 19 mn respectively.
Provides maintenance services to more than 10 international airlines
including Lufthansa, KLM,BA and Alitalia as well as domestic airlines
Main goal is to become one of the biggest MRO Center in the region.
HABOM (Maintenance Repair & Overhaul Center) Project will be
launched by THY Technic
Under HABOM, the plan is to increase the airframe maintenance
capacity to approximately 400 aircraft per annum.
Expect over 500 mn$ revenue by 2016 from HABOM Project.
Turkish Technic
THY will be developing its technical service and maintenance business through the HABOM Project
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THY
Susy & afles
> THY Do & Co Catering A.S. (Equity Pick-up)
Owned 50% - %50 by THY and Do & Co Restaurants & Catering A.G.
Since 2007, operating nine gourmet kitchens all over Turkey: Istanbul(Atatrk and Sabiha Gkcen), Ankara, Antalya, Izmir, Bodrum, Trabzon,Dalaman and Adana. Over 60 national and international airlines arecatered from these locations.
During the 1H09 posted revenues and net income was 52.3 mn
and 2 mn respectively.
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THY
Susy & afles
TGS Ground Handling Inc. (Equity Pick-up)
Registered on August 28th, 2008 to Commerce Registrary.
JP`B&H Airlines`d.o.o.Sarajevo (Equity Pick-up)
Owned 49% by THY
Founded in 1994 as Bosnia Herzegovinas national airline under thename Air Bosna
During the 1H09 posted revenues and loss was 3.7 mn and 2 mn ,respectively
QuickTime and a
decompressor
areneeded toseethispicture.
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THY
Susy & afles
Sun Express A.S. (Equity Pick-up)
Founded in October 1989 as a subsidiary company of Lufthansa andTurkish Airlines.
Owned 50% - 50% by THY and Lufthansa, respectively.
Market leader in charter flights between Germany and Turkey.
Fleet consisted of 19 aircraft; 16 B737& 3 B757 aircraft with total seatcapacity of 3,696 as of June 2009.
Carried 2,382,804 passengers in 1H 09, by achieving load factor of 76.8%.
As of June 2009, number of personnel:1,213
During the 1H09 posted revenues and net loss was179mn and 1,4 mn respectively.
SUN EXPRESS
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THY
tnng
THY ACADEMY( To be Established)
One of the most outstanding training centers in theaviation industry. Has been applying ISO 9001 Quality ManagementSystem since 1998. Gives training services about 10.000 people eachyear with its trainers, specialized in their areas.
Addresses the training needs of cargo andpassenger agents, universities and other airlinesbesides Turkish Airlines.
Gives training at the areas which are given below:
Technic: including Airbus, Boeing and RJ70/100 trainings
Reservation
Ticketing
Cargo Operations
Passenger Services
Ground Handling
Computer
Personal Development and Quality
THY ACADEMY
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THY
Flgh tnng
THY Flight Training Inc. (to be Established)
Turkeys sole flight training center, certified by TypeRating Training Organization (TRTO) offers training inline with the standards of JAR-FCL.
THY not only address airlines within co-
partnerships, but also other airlines.
Turkish Airlines Flight Training Center offers:-Cockpit Crew Training-Cabin Crew Training-Simulators:
4 full flight simulators for RJ-100, B737-400,B737-800 and A320s aircraft
A340 Business class, B737 EconomyClass Cabin Service Trainer(CST)B737/A310/A340 Cabin EmergencyEvacuation Trainer(CEET)
- Ground Training- Turkish Flight Academy
THY Flight Training Inc. (to be Established)
2 new simulators ( A320-A330/340) will be in service as o 2010.
Founded on November 2004 as a result of a needfor new flight personnel for THY.
Started training with 16 pilot candidates on May2006.
Giving 210 hours flight training and 1200 hoursground training.
Currently 52 students are being trained and areexpected to graduate in Fall 2009.
Turkish Flight Academy
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THY
Sey & Quly
Saety:As it is very well known and appreciated Safety is the key conceptto be adopted for existence. THY is determined to operate with thehighest operational standards. Accepting and implementing the
standards dictated by the aviation authorities and manufacturers asthe baseline, THY strives to attain safer operation conditions in respectto continuous development process and appreciates it as a must.Within the frame of this efforts, adoption of Safety Management Systemapproach, implementation of Flight Data Monitoring (FDM) system,trainings provided in risk assessed flight subjects and publicationsto flourish a widespread safety culture can be mentioned. The Flight
Safety Department that has direct access to the Accountable Manageris in charge of the management and oversight of the systems safety.In addition to its audits, it also implements the Flight Data MonitoringSystem, makes informal Line Observations and investigates theoccurences and reports (mandatory/voluntary) to promote safety.
In this context, it must be emphasized that THY is qualified as an
IOSA Operator after the IATA Operational Safety Audit as of April 07,2006. The expiry date of renewed IOSA operatorship is October 2009.In addition to the IOSA audit, due to its vast operation network, THY isin active contact with numerous Civil Aviation Authorities and subjectto their audits. These audits, as well as providing the opportunityto the auditors to evaluate the current situation, input the requiredfeedback for THYs safer operation from thereupon.
Quality:Turkish Airlines adopted TS-EN ISO 9001:2000 Quality ManagementSystem (QMS) in 2006. Quality Assurance Directorate which isalso connected directly to Accountable Manager is in chargeof the implementation and oversight of the quality system. Thedepartments within this directorate are; Flight Operations, GroundOperations, Technic, Cabin, Flight Training, Quality Managementand Improvement. Each department implements scheduledand unscheduled operational audits annually to acquire thecondition information. The QMS is in a development stageprogressing into Integrated Management System. TS-EN ISO14001:2004 Environmental Management System and OHSAS18001- Occupational Health and Safety System are planned to beintegrated by mid of 2009.
In addition to above, having all requirements fulfilled and systems inplace with regards to Turkish Civil Aviation Law, Turkish Airlines hasthe AOC (Air Operator Certificate) approved by Turkish Civil Aviation
Administration (CAA).