Distress in the sky causes controversy for domestic airlines
Last week news outlets published reports about Borajet, a local airlines, going bankrupt. However the company did publish an announcement that it was downgrading its operations and would dismiss most of its staff, denying allegations of bankruptcy. The airline was in close cooperation with the national flag carrier Turkish Airlines.
The airline was recently sold to SBK Holding in a $260 million deal a few months ago. The new owner hired former Turkish Airlines chairman Hamdi Topcu as the advisor and gave full control to him with the hope to renew its contract. However it did no help. The new Turkish Airlines management asked SBK to change its advisor and management, according to industry rumours. The change in the management and quitting contract with the advisor didn’t help Borajet to renew wet leasing contract with Turkish Airlines and the company had to dismiss most of its staff last week. The acquisition was a big mistake, said a manager in an aviation company. The price was overvalued for a company that has only six planes and depending on the wet lease contract with another company. Established as a regional air carrier, Borajet has six small sized jets and two of them are not active. It has no other choice to have a get a wet lease contract from another airline where all others are suffering from falling margins. Whatever the rumours say, Turkish Airlines posted a $350 million operational loss in 2016 and the downfall seems to continue further. There is not much chance for the public company to sign wet lease contracts as its own planes are resting on the ground.