Turkish Airlines CEO sets target of 23% revenue growth this year

Istanbul: Flag-carrier Turkish Airlines targets revenues of $4.5 billion this year, up 23 per cent on last year, and expects cost-cutting to offset a rise in fuel costs, CEO Temel Kotil said on Friday.

The target compares with a consensus estimate of 5.26 billion lira, or $4.05 billion at current exchange rates, according to Reuters data.

The airline, which is launching a new low-cost brand for domestic flights this month, expects its aggressive cost-cutting to make up for the rising price of oil.

"Our operating costs, in the last four years we've almost kept them constant, and this year also through cost-cutting we're going to subsidise almost all the increase from fuel," he said in an interview. "2008 could be as good as 2007 for us or maybe even better in terms of financial performance," he said.

Turkish Airlines, whose free float is almost 70-per cent owned by foreign investors, expects to carry 23.5 million passengers this year, up from 19.6 million in 2007.

A new member of the Star Alliance grouping, it posted late on Thursday a better-than-expected 63 per cent rise in 2007 net profit to 292 million lira. The stock rose as much as 9.6 per cent after the interview, extending gains of 5.6 per cent made in the first session on the back of the results.

The airline also plans to start hedging against oil prices this year, Kotil said, noting that the company's budgeted oil price for this year, of $95 a barrel, had already been surpassed.

The airline, which is still part-owned by the government, plans to buy new planes this year and will receive 21 previously ordered Airbuses and Boeings. He declined to give details on the planes it would buy.

Kotil said the airline's load factor - which measures the amount of available capacity filled on flights -- is targeted at 75 per cent this year but would likely be 78 per cent or higher. The figure was 72.7 per cent last year, he said.

"Right now its 75 per cent so this means most likely we're going to complete the year, as the average, most likely at 78 per cent or even higher," he said.