Terrorist incidents in Turkey have begun to hurt ATU Duty Free revenue based on first half results, while IST operator, TAV Airports, now expects a -20% decline in O&D pax for the year.

July’s attempted coup and subsequent crackdown by President Erdogan across all areas of government, media, the judiciary and society is also set to have a major impact on traffic at IST, Turkey’s main gateway and the third largest in Europe.

TAV Airports yesterday heavily revised down its guidance. In a note, it said: “While Istanbul international passenger numbers were flat in the first half of 2016, origin and destination (O&D) passengers decreased -14%. In 2016, we expect a -20% decrease in O&D pax at Istanbul.”

O&D is essentially a marker of demand for travel to and from Turkey. While it has fallen, and will fall further, transfer traffic at IST has remained resilient.

The operator says that it expects “stable revenue” for the year but a decrease in EBITDAR of -8% to -10% and a “significant decrease in net profit”.

TAV Airports Holding Executive Board Member & CEO Sani Sener comments: “Global security concerns continue to dominate the agenda in the global aviation sector. Security concerns are affecting passenger behaviour and decreasing travel to countries like ours with intense security issues.”

ATU REVENUE SLIPS BELOW $350m  

Meanwhile in the first half of the year, ATU Duty Free [half owned by TAV Airport and half by Unifree in which Gebr. Heinemann has a major interest] saw revenue slip slightly by -1.9% to €313.6m/$347m with spend per head at IST also nudging down slightly to €15.80 from €16 in the first half of 2015. International traffic at IST during the period was flat at 19.6m

While this was a stable performance, ATU’s EBITDA was slashed in the second quarter to €9.4m from €14.2m in the same quarter a year before indicating that it is under more pressure.

That pressure will increase in the second half given the new traffic forecast from TAV, and the fact that these results were not yet affected by the high profile attack on Istanbul Ataturk Airport (IST) at the end of June. The incident left dozens of people dead and injured. The July coup aftermath [as described above] is also expected to have a longer lasting impact on tourism to Turkey due to the instability that is now present in the country.