Turkey’s sovereign wealth fund has vociferously denied claims it has been in talks to provide emergency funding to Turkish Airlines (TK, Istanbul New) by selling part of its stake in the flag carrier, the Daily Sabah and Hürriyet newspapers reported on October 4.

Reuters reported on October 2, citing four unnamed sources, that Turkish Airlines could receive capital or financing support as part of the scheme, which one of the sources allegedly called a “bailout”. But nothing had yet been finalised, it added.

In a Borsa Istanbul filing on the same date, the airline said: “The news that came out today regarding Turkish Airlines being approached about providing capital support or new financing does not reflect the truth.”

Zafer Sönmez, managing director of the Turkey Wealth Fund, warned in a news conference against “malicious” manipulations of the subject and said: “We own 49.12% of THY’s [Turkish Airlines’] shares. We have no plans to sell any shares, not even a single one. I’m saying this clearly.”

Turkish Airlines has successfully made its plans to address its cash flow and financing needs, Sönmez elaborated. He pointed to many opportunities that have arisen during the coronavirus pandemic that are overlooked in the media, such as cargo transport.

Its subsidiary Turkish Cargo “is about to be among the top five companies in the world for cargo transportation,” he claimed, so that Turkish Airlines “will be among the winning players in the aviation sector during the pandemic period.” The wealth fund will always support the airline, he added.

On August 14, Turkish Airlines posted a second-quarter loss of TRY2.23 billion lira (USD280 million). It has agreed with labour unions to cut wages by up to 50% until the end of 2021 but has so far avoided layoffs. The company’s share price has dropped by 31% since February, according to Hürriyet.

Chairman Ilker Ayci commented after the loss that the airline felt “very comfortable” with the USD1.7 billion it had in cash on hand, credit lines, and other funding capacity until the start of 2021. But it expects to burn up to USD350 million per month at least until the end of the year, by which time net debt is expected to stand at around USD14 billion.