When Turkish Airlines launched its new mobile app in July, it said it wanted to "improve its transparent communication with its stakeholders".
Subsequently, the carrier's 19 August deadline for publishing its second-quarter earnings was just about met – seemingly around 40min before midnight in Turkey – but the results were not good.
Turkish disclosed an operating loss before investment activities of $197 million for the second quarter, after reporting a $174 million profit in the same period of 2015.
Net income fell from a positive figure of $253 million for 2015's second quarter to a negative one of $226 million for this year's corresponding period.
To make matters worse, Moody's had downgraded the airline earlier in the day. In support of their second downgrade in a month, the ratings agency noted concerns about Turkish's operating environment continuing to be weak, as well as execution risks around implementation of the airline's strategic plans.
The list-price value of aircraft for which Turkish requires financing next year is roughly $1.3 billion.
But the airline terminated the contracts of many senior finance employees, including the CFO, Coskun Kilic, last month, after an attempted military coup in its home country. Investor relations director Duygu Inceoz has also departed from her role.
On 25 July, Turkish said it had terminated the contracts of 211 employees as part of "necessary actions we are taking against the FETO structure" – referencing Fethullah Gulen, who is accused by the national government of instigating the coup. Additionally, the airline cited employees' "non-fulfilment of performance criterion".
Turkish continues to proudly advertise its award from IR Magazine for "Best Investor Relations in Turkey", despite Inceoz's departure in July.
Kilic and other ex-members of the senior finance team – some of whom served with the government-owned airline for nearly two decades – are meanwhile fighting their dismissals in court, Bloomberg reported earlier this month.
Such circumstances cannot paint the best picture for investors.
With the export credit agencies shut – Turkish has used this method of funding to aid its rapid expansion for several years – and banks likely uncomfortable with the country risk, it may fall to the government and leasing companies to fund aircraft.
On a recent AerCap earnings call, the lessor's chief executive Aengus Kelly said: "We don't see any credit issues with that airline."
But FlightGlobal also understands that Turkish is trying to restructure leases with at least one lessor for several aircraft, and that the airline has started to gauge interest from the finance community for the nine jets it will receive from Airbus and Boeing in 2017, emailing financiers to ask them to register their interest in funding the deliveries.
Turkish has ambitious development plans. But for growth, the airline will need to reassure the financial community that things are under control at the airline.
Source: Cirium Dashboard