Turkish Airlines has completed another year marked by fresh developments and achievements. In 2012, we continued to position our company within the framework of our long term strategy, growing further and creating added value for our stakeholders.
In terms of the economic climate, and from the perspective of the aviation industry, 2012 was a difficult year. Continuing economic instability in developed markets, primarily in Europe, as well as fuel price fluctuations and a relative rise were the main factors that made for a challenging year. On the other hand, large and medium sized players, surviving the shocks of the global crisis, increased their competitiveness and continued to structure their business. This had a significant effect both on margins and the competitive environment in 2012.
Considering these developments, Turkish Airlines continued strong and effective positioning in line with its long term strategic plan, created according to “Turkey’s 2023 Vision”. Many novel projects and achievements were realized. In 2012 we preserved our previously won gains, registered new achievements and presented fresh values. Turkish Airlines registered notable success at the 2012 Skytrax Awards, with nearly 20 million air travelers voting it the “Best Airline in Europe”, for the second year running, as well as “Best Airline in Southern Europe” and “Best Premium Economy Class Airline Seat”.
As Turkish Airlines we increased our sales by 26% over the previous year to TL 14.9 billion and gross operating profit by 192% to TL 1,048 million. Our net profit, which amounted to TL 18.5 million in 2011, reached TL 1,133 million in 2012.
Along with the financial data itself, the basic indicators of the aviation industry confirm our successful performance in 2012. Our passenger number in 2011 of 32,650 thousand, rose by 19.6% to 39,045 thousand people. IATA’s forecast for the 2012 increase was at around 5.3%. Turkish Airlines ranked third among AEA members on this performance. In 2012, compared to the previous year, Available Seat Kilometer (ASK) rose by 18.4% to 96,124 million.
Despite the rise in ASK, the passenger load factor continued to grow on a rise of 4.8 percentage points to 77.4% at end-2012. Utilization ratios clearly confirm our successful performance. Our fleet utilization rose by 5% to 12:12, including leased aircraft.
We reached important milestones in fleet and flight network terms, on which we had placed particular emphasis. We took important steps towards making Istanbul, historically a regional center, into a true air travel hub. In terms of fleet size, we closed the year of 2011 with 179 aircraft, which makes us all the more proud to announce that the number had risen to 202 by the end of 2012. We own one of the world’s youngest and most dynamic fleets, with an average age of 6.6 years. New generation long and medium-range aircraft have been added to our fleet. These have enabled us to provide service to still more destinations worldwide, contributing to our operational efficiency through fuel economy.
We have gained important advantages through our strong fleet structure, flight network and market variety, thanks to uninterrupted investment. We formed the basis of our flight network strategy to bolster our presence in developed markets, and to become the key player in developing regions. This said, we also strengthened our presence in developing regions, such as Africa, Asia and the Middle East. In 2011 we had a total of 185 flight destinations (150 international and 35 domestic lines), whereas in 2012 we had flew to 217 points (181 international, 36 domestic lines). We started to offer flights to 33 points in Africa, 26 in the Far East, seven in Continental America and 31 in the Middle East. Thanks to these investments and developments Turkish Airlines now flies to more countries than any other airline in the world. In addition we became the second airline by destination number where flights are offered from one center, and the 5th largest airline in terms of flight network. Putting our focus on developing markets had both economic and social consequences, as we provided those countries with a connection to world. And as a result of these investments we increased our international to international transfer passenger number by 44% to 9 million. And what’s more, by enabling these countries to become a part of the globalized world from an economic and social perspective, we reconfirmed our commitment in to social responsibility.
According to IATA data, it is forecast that international passenger number will have increased by 331 million by 2016. The main axis of this increase will pass through developing countries. I firmly believe that we will benefit greatly from this potential, thanks to our strategy regarding transfer passengers, flight network and geographical location.
As Turkish Airlines we continued our innovative business practices in 2012. The level of comfort offered in our “Business Class Cabin Concept” surpasses the First Class cabins of many rival airlines. In addition, we managed to exceed the expectations of our passengers with the sheer variety of our culinary offerings and service quality. We also transferred our refined international passenger Lounge Istanbul concept to the international arena. We plan to open our first lounge of similar concept in Moscow in 2013.
We continued our technological innovations in 2012, which included the introduction of many innovations, such as Internet access and live football broadcasts during long flights. We also presented innovative solutions in operational fields. This included the completion of the initial phase of SAP system integration, a worldwide project that increased efficiency in many areas ranging from reporting to cost control. Our subsidiaries contributed significantly to our culture of innovation with their cooperation and increasing technical expertise in 2012.
It was a fruitful year in terms of brand and positioning. Our advertising campaign built around the “Globally Yours” message, together with our sponsorship agreements registered a major impact. We also continued to make a greater contribution to society through sponsorship across many fields, including sports, the arts, and social activities, thus further positioning our brand. Today Turkish Airlines is perceived worldwide as a prestigious and welcoming brand.
Our valued stakeholders,
In realizing these investments that have led to growth and development, we managed to raise income and in particular increase profitability. This is an indication of the financial and strategic health of our Company, and of its effective positioning. According to IATA forecasts, there will be a global market structure in place that is positive and open to improvement by 2016. If we add to this our country’s determination of the last few years to register tremendous economic performance, we begin to see the opportunity ahead of us more clearly. As Turkish Airlines, we are well positioned for healthy growth, value creation and the utilization of the opportunities these present in our market. I would like to underline that we are determined to take our growth realized in 2012 still further in 2013.
None of these developments would of course be possible without the trust of our investors, the loyal courtesy of our passengers, and the remarkable warmth and dedication of our employees. I therefore take this occasion to express my sincere thanks to all our stakeholders, who contributed to Turkish Airline’s success in 2012. It is my sincere hope that 2013 proves to be another year brimful of fresh successes for our country and our company alike, and I respectively thank you all for working to make this happen.
Chairman of the Board and Chairman of the Executive Committee
Turkish Airlines, operating flights to 217 destinations in 2012, flies to more countries than any other airline in the world.