star

Turkish Airlines almost doubled revenues and operating profits last year as a sharp return in passenger demand helped it to record profitability The Star Alliance carrier had already weathered the crisis better than most of its peers, as a strong performance from its cargo business supplemented a passenger operation which benefited from both the scale and touristic nature of its domestic market. It moved to quickly rebuild passenger capacity as borders reopened last year, flying 71.8m passengers in 2022, just 3% shy of pre-pandemic levels. This helped it last year to more than double passenger revenues, to $14.3b from $6.4b in 2021. Despite Turkish shifting back some of the passenger aircraft temporarily converted for freight operations during the crisis and falling global demand, cargo revenues only dropped to $3.7b from $4.0b in 2021. This contributed to the Istanbul carrier’s overall revenues climbing from $10.7b in 2021 to $18.4b last year – an increase of 39% on revenues generated in pre-pandemic 2019. Turkish Airlines’ operating profit jumped from $1.4b to just under $2.8b for 2022, while net profit almost trebled to $2.7b. Both figures outstrip the airline’s previous profit highs.<br/>

Croatia Airlines has turned in a full-year net loss of Kn137m ($19m) as its performance, while recovering, still lagged pre-crisis levels. The carrier transported 1.45m passengers but this figure remained one-third down on that achieved in 2019. Croatia Airlines says passenger load factor reached an average of 62% last year. It generated income of Kn1.58b for the period including Kn1.26b from passenger services. But the airline experienced significantly higher operating expenses, with fuel costs having the “greatest impact”, it states, with a negative effect of Kn207m. Among other cost effects was the one-off expense incurred with the return of an Airbus A319 to its lessor. Croatia Airlines recorded an overall full-year operating loss of Kn98.2 million. It has been implementing a post-pandemic recovery programme, drawn up in mid-2021, with strategic initiatives over a three-year period which it expects will enable the company to achieve sustainable operations. The main part of this programme is the replacement of the carrier’s fleet with more cost-efficient aircraft. Croatia Airlines has opted for 149-seat Airbus A220-300s and 127-seat A220-100s, for delivery over the course of 2024-26. It concluded long-term operating lease agreements in January this year for six aircraft – four -300s and two -100s – with an Irish-based vehicle affiliated with US lessor Air Lease. Croatia Airlines says it intends to acquire 12 aircraft with the possibility of introducing another three in 2027.<br/>

Korean Air has secured UK competition approval for its proposed merger with fellow Korean operator Asiana, based on its supporting Virgin Atlantic’s access to the London-Seoul route. The UK’s Competition and Markets Authority says that undertakings given by Korean Air are “appropriate” to remedy or mitigate a lessening of competition in the passenger and cargo sectors. Korean Air entered a legally-binding framework agreement on 24 February to facilitate entry on the route between London and Seoul – with Virgin Atlantic poised to step in. The framework includes a commitment by Virgin to operate a competitive service, with up to daily frequency, on the city-pair by the target entry date, which is either 12 months after closure of the transaction or any date in the IATA summer 2024 season. Virgin Atlantic will operate the service for at least six full consecutive IATA seasons, subject to the commercial viability of the route. Korean Air will make slots available at Seoul Incheon and London Heathrow airports in order to allow a daily service. It will also enter a unilateral codeshare for passenger flights with Virgin, allowing Virgin to put its ‘VS’ designator code on flights operated by Korean Air until it begins its own flights. This will extend to a bilateral codeshare once Virgin commences services. Korean Air is a SkyTeam alliance member, and Virgin is also joining the group. Virgin will also be able to request a unilateral codeshare, or cargo capacity agreement, on Korean Air services beyond Seoul, as well as a potential loyalty scheme tie-up. “The [UK] approval is evidence that the proposed remedies submitted by the airline have resolved competition restriction concerns,” says Korean Air. It adds that it will continue to co-operate fully with European Union, US and Japanese regulators to secure remaining competition clearance. Eleven authorities – including the UK’s – have so far approved the tie-up.<br/>

Air India has confirmed it will not be retaining the Vistara brand when it merges with its sister unit, though the national carrier intends to “keep some of the heritage” of the Indian carrier. Speaking at a virtual media roundtable, Air India chief Campbell Wilson says the airline is still awaiting regulatory approval for the merger, which was first announced in 29 November. Air India previously said it expects the deal to be completed by March 2024. Vistara is a joint venture between Air India parent Tata Group and Singapore Airlines. Under the merger deal, SIA will invest Rs20.59b in Air India, in return for a 25.1% stake. Wilson says the merger is “the beginning and catalysation of a new India aviation ecosystem”. While the Vistara brand will disappear in the coming years, HE says Air India will retain “processes and practices” of Vistara, which he says help “accelerate and transform” Air India itself. When asked if SIA currently has any input on the airline integration, Wilson says that until the merger has been given the regulatory nod, SIA’s “contribution will continue to be with Vistara”. Wilsonl, who was chief executive of SIA’s low-cost unit Scoot before taking the helm of Air India, notes: “We have modelled a lot of Air India’s transformation [plan] on systems and practices that Vistara has, and Vistara has modelled itself on a lot of systems and practices of its shareholder Singapore Airlines.” He notes that Air India also remains on track to meeting its target of capturing 30% domestic market share in five years - a goal outlined in its Vihaan.AI business transformation plan. Current regulatory data shows Air India holding less than 10% domestic share, but through its proposed merger with Vistara, Wilson says market share will rise to about 24%. <br/>