Serving 10,6 million passengers in the first three months of the year, the company stated that all airports were closed due to travel bans that came with the COVID-19 outbreak.
Turkey is the world's leading brand in airport operations, TAV Airports has announced financial results for the first quarter.
TAV Airports Chief Executive Officer Sani Şener said, “After a 2019 in Turkish tourism, the 2020% international passenger growth that we recorded in the first two months of 13 marked another year when records would break. However, with the spread of the COVID-19 outbreak to our main market, Europe, since the last week of February, aviation officials began to restrict flights using the airports we operate. Many airlines have lowered almost all of their planes due to canceled flights. As of the fourth week of March, due to these measures taken to prevent the spread of the epidemic, the international passenger using our airports has dropped to almost zero.
Due to these developments, our 2020 targets regarding the passenger and financial results we announced at the beginning of the year are no longer valid. In addition, the duration of the measures taken against the spread of the epidemic is currently unknown. Due to this uncertainty, we are not yet able to share our revised expectations for 2020, but we want to share our revised goals with our investors as soon as the uncertainties regarding the duration of flight restrictions disappear.
Since these flight restrictions, which caused our passenger numbers to drop to almost zero, are a very clear force majeure cause, we have reported to our aviation authorities that we are in a force majeure condition affecting our operations, and how we can compensate for the results of these unpredictable and uncontrollable developments that affect our entire number of passengers. We started the official processes for. We have stopped all our non-urgent investment expenditures as we expect our international passengers to be close to zero until June. In addition, we made significant cuts in our operating expenses to mitigate the financial effects of this period. Due to the fact that most of our terminals are almost 100 percent closed, we can save significantly on our terminal operating costs. We also planned that all of our employees and management spend one third of the month on their free leave during the period until the passenger traffic begins again. Our employees in Turkey during the period of unpaid leave, which allows our state can benefit from the help of Quick Work Allowance for a period of maximum 3 months. Different levels of state support are provided to our employees for our operations in other countries. With these measures we have taken, we have managed to achieve a significant reduction in our operating expenses that will occur during the period when passenger traffic is zero.
We entered this crisis with a strong balance sheet structure, so that I can easily say that we are a company in the global aviation industry, ready to cope with the challenges of this new era and to get out of this period even stronger. This crisis did not change our long-term vision for the aviation industry. The sector will continue to grow in the long term, especially in emerging markets. For this reason, we continue the share purchase negotiations for Almaty Airport in Kazakhstan, which we will operate for an unlimited period of time, which has defensive traffic features and has significant growth potential, and we believe that this airport will have a great contribution to our portfolio. We are very close to finalizing the Tunisian debt restructuring process, which will create significant value for our shareholders. We started to buy back TAV Airports shares in Borsa Istanbul, as we believe that excessive prices due to the market volatility created by the outbreak do not reflect the true value of our share. We can increase the allowance for this repurchase up to 200 million Turkish Liras.
We have experienced many similar crises in the past and successfully overcame them all. Although the crisis we are in is the longest and the deepest in terms of its effects, we will get out of this crisis in a stronger way. I would like to thank all our employees, shareholders and business partners for their uncompromising support in this difficult period. ”
SUMMARY FINANCIAL AND OPERATIONAL INFORMATION
* TAV Istanbul data are not included in the Turnover and EBITDA. Likewise, Istanbul Atatürk Airport is not included in the number of passengers.