THY: Exposure to local
and global politics — April 2019
Turkey has gone through difficult times since the 2016 attempted coup against President Recep Tayyip Erdoğan and the subsequent clamp-down, arrest and sacking of those deemed responsible. THY was itself thrown a little off course: it lost the architect of its development as a global carrier, Temel Kotil, who was transferred to run Turkish Aerospace Industries; it sacked its CFO Coskun Kilic among some 200 other staff; it saw traffic growth plunge from the 15%-20% annual growth in passenger numbers of the previous ten years to a mere 6% in 2016 in which year it registered its first loss for a decade.
Then there was a constitutional referendum in 2017 which resulted in a material change from Mustafa Kemal Atatürk’s secular parliamentary democracy into an executive Presidential system, confirming Erdoğan’s grip on the political environment. This severely unnerved international investors and political neighbours — particularly in the EU which at one time had been building towards the idea of Turkey joining the bloc.……