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Turkish airlines need $2.5bn to weather travel meltdown

Turkish airlines are seeking government support to secure 20bn Turkish lira ($2.5bn) worth of credit to withstand travel meltdown over the coronavirus pandemic, BTA quoted Bloomberg as saying.
Airline executives met with Turkish Transport Minister Adil Karaismailoglu in Ankara on Wednesday, two sources familiar with the matter reported, who wished to remain anonymous.

The minister has taken the request positively and will discuss it with other cabinet members, including Minister of Treasury and Finance Lutfi Elwan. Details such as loan term, service price and grace period will be discussed at a later stage.

The Turkish Ministry of Transport refused to confirm the meeting to Bloomberg.

Restrictions on domestic and international flights and the reluctance of passengers to use air transport have had a negative impact on the sector, Turkey's national carrier Turkish Airlines, airport operator TAV (TAV) and low-cost airline Pegasus reported losses in the first nine months of the year. Turkish Airlines slashed wages and put foreign pilots on forced unpaid leave to cut costs, yet analysts expect the airline to record a record loss of 7.31bn Turkish pounds this year, a Bloomberg study shows.

Airlines need about $2 billion in funding by the end of next year to overcome the consequences of the pandemic, Pegasus CEO Mehmet Nane said in an interview with Bloomberg in September.

The Istanbul Exchange Transportation Index, on which the two airlines have a combined weight of almost 85 percent, dropped 13 percent this year, while the benchmark index rose 16 percent.

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