Concern is growing for Turkish Airlinesas it faces slower global economic growth and rising costs.
"As one of the major cyclical stocks on the Istanbul Stock Exchange, Turkish Airlines is vulnerable to slowdown in economic activity," said Alper Ozdemir, an analyst at Oyak Securities. "We expect a 2 per cent contraction for the Turkish economy this year, meaning that local consumers would not be as comfortable as last year in terms of spending."
The airline's shares have been buffeted since political unrest broke out in parts of the Middle East and North Africa region, falling 36 per cent in the past year.
Oil prices have also risen, with Brent for March delivery up 12.6 per cent in the same period, directly impacting fuel costs for the company amid supply problems related to the uprising in Libya last year and heightened sanctions against Iran.
The cost of jet fuel took 34 per cent of the airline's revenue in the first nine months of last year.
Despite the turbulence, the airline went on a spending spree last year - and it is not over yet.
The company, which bought 29 aircraft last year, expects its capital expenditures to rise to 4.3 billion Turkish lire to make way for an additional 37 Boeing and Airbus planes.
But the timing of the company's aggressive expansion plan has been criticised.
"Adding more aircraft to the portfolio will naturally support revenue growth along with increasing number of destinations," Mr Ozdemir said. "However, at what expense the company is generating this top-line growth is the basic question."
The airline, which reported a loss of 449 million lire for last year, is expected to see two more years in negative territory on the back of high gearing due to the carrier purchases. Net debt, at 4.2 times its earnings, is weighing down the company's balance sheet.
The airline is not expected to "generate free cash-flow for two more years", Mr Ozdemir said. The company is also in talks with a union over a 6.5 per cent wage demand that if approved could "put pressure on the shares, being the second largest cost item following fuel", the analyst said.
