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Good afternoon, ladies and gentlemen. Welcome to the Turkish Airlines Fourth Quarter 2022 Conference Call and Webcast. [Operator Instructions] And with that, I'll now hand you over to our speakers. First of all, Associate Professor Murat Seker, he's the member of the Board and the Executive Committee as well as being the Chief Financial Officer; and Mr. Mehmet Fatih Korkmaz. He is the Head of Investor Relations. Speakers, the floor is yours.
Thank you very much, and good afternoon, everyone. Welcome to the Turkish Airlines Fourth Quarter and Full Year 2022 Earnings Conference Call. As you know, on February 6, we experienced one of the most strategic disasters in our history. In these difficult days, we deeply shared the grief of Turkiye. As a national flag carrier airline, we dedicate ourselves to heal the wounds. And with this responsibility, continuing to conduct our operations uninterruptedly.
In the aftermath of the earthquake, we immediately activated our crisis center and utilize all available resources to support rescue efforts in the affected regions. Until now, we carried over 400,000 rescue and relief teams to the earthquake area and allocated 430,000 people with over 2,400 flights. We delivered almost 16,000 tons of aid materials, supplies, medicine and equipment to the region. Many staff from Turkish Airlines family voluntarily participated in the aid and rescue operations in the region.
The devotion and awareness of our co-workers in these difficult days have alleviated our pain to some extent. Now allow me to continue with the presentation of our year-end results. The results we announced yesterday underpinned our industry-leading position with $2.7 billion of full year net profit with 15% profit margin.
Fourth quarter also marked our sixth profitable consecutive quarter. Our staff worked hard to serve our customers flawlessly in a time when the industry struggled to keep up with a sudden surge in demand. With their efforts, Turkish Airlines was among the few global carriers that exceeded the 2019 capacity level last year. We showed our appreciation with a profit sharing payout. And I would like to take a moment to thank all our staff again for such a remarkable performance. In the coming months, our Chairman will share our 2033 strategy for Turkish Airlines on [indiscernible] and Turkish Cargo.
We expect to enhance our competitive advantages, increase our efficiency and improve our product quality in this new strategy. 2022 posed several challenges in an evolving basis. When we started the year, global travel restrictions related to Omicron were still on top of the headlines. Later on, increased geopolitical conflicts and escalated fuel prices replaced fading impact of COVID-19. This period was followed by industry-wide operational difficulties.
While staff shortages effectively kept our peers' capacity, we carried out our operations in Istanbul smoothly. As we differentiated ourselves from the industry with operational reliability and high-quality service, our passengers showed appreciation through the leading airline rating programs. In 2022, Turkish Airlines was named as the best airline in Europe by Skytrax and received a world-class rating along with the 5-star Global Airline award from Apex.
Additionally, last year, we became the world's biggest network carrier in terms of available seat capacity on international flights. Our full year capacity realized more than 7% above 2019, which resulted in Turkish airlines becoming one of the busiest network carrier in European aerospace. 2022 was a successful for the whole Turkish aviation sector as well. The industry completed its recovery by exceeding the pre-pandemic passenger numbers in December well ahead of its global peers.
Istanbul airport was the busiest airport in Europe, welcoming more than 64 million passengers during the year. Antalya Airport was also among the top airports in Europe, ranking 10th in terms of passenger numbers in 2022. Our cost base remains to be lower than many network carriers in the region as we expand our operations efficiently.
During the pandemic, we continue to invest in fleet and workforce. With this effort, we were able to capitalize on growing passenger demand and capture market share. A substantial increase in passenger traffic, alongside relatively resilient cargo demand materially improved our financial performance compared to the pre-pandemic level. The highest annual revenue of $18.4 billion was recorded in 2022, surpassing the 2019 level by around 40%. With the increase in the revenues, along with the strict cost discipline, we were able to alleviate the negative impact of the escalated fuel prices.
As a result, we have realized around $2.8 billion of profit from main operations and $5.4 billion of EBITDAR with 29% EBITDA margin. $6 billion of operating cash flow generation during 2022 created a significant resource for financing future growth. Turkish Cargo maintained its status as the fifth biggest cargo carrier in 2022 and recorded around $3.7 billion of revenue. Increased utilization of better capacity strongly contributed to cargoes profitability.
To sustain our growth in cargo business, we will create a logistic ecosystem, introduce new products on niche segments and deepen our network with dedicated freighter routes. Our new cargo terminal, Smartest in Istanbul Airport will facilitate these initiatives and act as a lever to increase efficiency. We expect industries supply-demand imbalance to continue in 2023. If there are no adverse demand shocks, the lack of sufficient aircraft and workforce availability in the sector will constrain growth in a robust demand environment.
Currently, the trajectory of our passenger revenue growth continues to be positive. As a result, in 2023, we expect to increase passenger capacity between 15% to 20% compared to last year. Yet, we will continue to monitor our booking curve, global travel appetite, macroeconomic environment and adjust our projections if necessary.
In closing, I would like to extend my heartfelt condolences to our -- to those who lost their lives and wish a speedy recovery to those affected by the earthquake. Now I will pass the word to Fatih to continue with the presentation.
Thank you, Murat, and good afternoon, everyone. I also would like to express my deepest condolences for our students and with a quick recovery to everyone affected by this devastating earthquakes. Back to our results. I want to start with last year's capacity development to provide further details.
In the fourth quarter, we continued to increase our passenger capacity parallel to the robust demand environment. Capacity and load factors surpassed the same period of 2019 by 8% and 1.2 percentage points, respectively, mainly attributable to our international operations. As a proportion of the pre-pandemic levels, our international passenger capacity remains substantially above European and global averages. Extended summer season, the World Cup and removal of flight restrictions in Asia drove greater demand towards Turkish Airlines.
The growing popularity of Turkiye as a global touristic destination was also a catalyst for our local traffic. The number of direct international passengers to Turkiye carried by Turkish airlines was more than 20% above the pre-pandemic level. As a result, our international passengers increased by 9% in the fourth quarter compared to the same period in 2019.
From a regional perspective, in the fourth quarter, Americas continued to be top performer in terms of increased capacity, passenger numbers and business class load factors. The World Cup and recommence of [indiscernible] to Saudi Arabia supported traffic into the Middle East from all over the world, lifting our load factors by 4.8 percentage points.
In Africa, our unit revenues climbed by more than 25% due to increased demand from West African routes. [indiscernible] lifted restrictions resulted in gaining market shares throughout the Far East, especially in Japan, as we launched our second Tokyo route to Narita Airport. The end of China's 0 Covid policy and start of our collaboration with Indigo provide further potential to our growth in 2023.
Since the beginning of this year, our passenger sales have remained strong, which is still significantly higher than in 2019. Following to devastating earthquakes occurred in the southern part of Turkiye, we haven't seen a significant impact that effects into our forward bookings.
On a global basis, similar to the previous quarters, structural shifts in the booking curve remains in place with fewer peaks for weekends and holidays. This allows better revenue management and more efficient use of our capacity, leading to higher yields and profitability. Turkish Cargo operates flight in 102 routes in addition to our passenger network of 342 destinations.
With the support of increasing cargo operations, last year, we carried 1.7 million tonnes of cargo, which is around 9% higher than that of 2019. According to the data published by IATA, Turkish cargo quadrupled its market share in the last 10 years and ranks fifth among the top air cargo carriers. Our cargo unit revenues in 2022 doubled compared to 2019, resulting in more than 120% increase in cargo revenues, which reached $3.7 billion.
As we expanded our passenger operations, the percentage contribution of cargo revenues to our total revenue base normalized from the peak level attained during the pandemic. Yet, our profitability was not adversely affected due to the strong passenger demand. We observed that the global cargo demand continues to be under pressure. Tighter financial conditions and softening demand, along with easing supply chain bottlenecks resulted in declines in global cargo prices. Increased availability of vessels, coupled with limited inventory stocking are also freeing up additional [ sea freight ] capacity.
In the last 2 quarters, these developments affected air cargo unit revenues to a lesser extent than maritime cargo due to its relative pricing power. In the upcoming quarters, we might see further decline in yields across the cargo industry due to increased availability of [ capacity ] in Asia and growing container ship deliveries in 2023. However, the current profitability and depth of our passenger operations will mitigate the relative weakness in cargo yields.
Let us now head to the financial highlights. As you can see, our cash position increased by around $2 billion in 2022 to almost $4.7 billion. Strong operational cash inflow helped reduce net debt to $8.7 billion in 2022, promised peak level at the end of 2022 -- 2020. Our net debt-to-EBITDA multiple decreased to its lowest level by lower level of 1.8x by the end of last year. Increasing passenger yields and volume led to 42% higher passenger revenues in the fourth quarter compared to the same period in 2019.
Together with the contribution of resilient cargo operations in this quarter, total revenues exceeded the 2019 level by about 45%. Year-end net income was realized around $2.7 billion and marked record highs. Strong operational performance translated into $5.4 billion of EBITDA, up more than 70% versus 2019. Our fuel expenses increased by around $0.5 billion in the fourth quarter compared to 2019 due to higher prices and consumption. Our increased pass-through ability continues as demand remains to be robust.
In the fourth quarter, we were able to reflect almost 60% of our food expenses surcharges in 2022, approximately $180 million of [ hedge gain ] allowed us to mitigate a portion of negative impact of average fuel price levels. Our hedge ratio for 2023 is around 8% with a breakeven price of $76. As you recall, we post hedging in the beginning of last year due to relatively high [indiscernible] level.
Since January, we started to add new hedging positions by carefully monitoring the fuel prices and market dynamics. Looking at the unit expense breakdown. Compared to 2019, we recorded around 23% increase during the fourth quarter, mainly due to higher fuel expenses. On the other hand, we were able to manage the ex-fuel CASK effectively, which was up slightly.
Annual [ personnel unit ] cost was lower than the pre-pandemic level even after bonus payout, owing to increased productivity and depreciation of Turkish lira against the hard currencies. In the fourth quarter, ground handling and catering unit costs increased mainly due to personal bonus payments to the respective subsidiaries. Despite higher capacity compared to 2019, decreasing the number of lendings contributed to the decrease in the airport expenses.
We continue investing in analogy to lower its cost base and at higher utilization. With 17 new generation aircraft additions, number of aircraft increased to 64 last year. Parallel to our aim of building an international low-cost carrier percentage of international capacity jumped to 64% in 2022 [indiscernible] 2% in the previous year. Following the international capacity and number of passengers increased by 60% and 70% year-over-year, respectively.
In the coming quarters, AnadoluJet will continue to grow its network in Europe, Middle East and Central Asia with additional 15 new generation aircrafts. Additionally, we will launch new products to expand our customer base and increase [ air sale ] revenues. Now let me briefly talk about our 2023 expectations. Thanks to our flexible operating structure, the adjusted capacity efficiently and profitably throughout last year.
Favorable traffic results and current forward bookings review some confidence about the demand strength for the near term. Remembering the low base due to the snowstorms last year, we aim to increase our passenger [ capacity ] in the first quarter by 20% to 30% year-over-year. For the entire year, our capacity is expected to be between 10% to 20% higher than the last year if we can get our aircrafts on time. Currently, we don't see any significant change on the demand pattern for the upcoming summer season.
On the cost side, our ex-fuel unit cost target is slightly higher than 2022, with a low single digit. Gross CapEx this year is expected to be between around 5% to 5.5% it USD 5 billion, including aircraft and other fixed investments. We see sustainability as 1 of 2 main pillars of our growth strategy. Our modern fleet and careful design sustainability initiatives are the keys to decrease our environmental impact.
Recently, we joined an Global Compact, the world's largest corporate sustainability initiative to concentrate our efforts further. Working with a zero-waste policy in sustainability, we have committed to a number of projects such as bureau fuel usage and carbon offset programs to combat climate change. To that end, last year, we started to use sustainable aviation fuels on our 11 routes in Europe and signed global SAF declaration, which aims to complete the decarbonized sustainable aviation fuel.
Our colleagues from different countries and cultures are the base of our success. We implement policies to give them equal opportunity across our organization. Towards that goal, last year, we participated IATAs 25by2025 initiative. With this initiative, we aim to increase the representation of women in executive roles and technical fields by 25% until 2025.
As a result of our efforts, we were recognized as the most sustainable [indiscernible] airline in 2022 by World Finance. Moreover, we recently ranked first among the global airlines in terms of our 2022 sustainability performance related by [ Refinitiv] and improved our CDP climate change score to be higher than the sector average.
With this, we conclude our presentation, and we can now continue with the Q&A session.
[Operator Instructions]
Thank you, [ Rob]. Our analysts are wondering about the effects of the devastating earthquakes that we experienced as a country. Could you provide any color on the size of the cost?
Sure. Well, considering the overall size of our operation, both international and domestic, -- the specific operation and capacity we paired to the earthquake region was considerably small. It was less than 1% of our overall capacity. And considering the international revenue from international operations make more than 90% of our total revenue. The opportunity cost of this operation was also small.
And furthermore, February is usually the lowest capacity offered month of the year, which corresponds to around overall capacity we provide in February is -- makes about 6% of our whole annual ASK level. So overall, the total impact on the revenue side was small. But on the top of this, we donated around $100 million to -- to offer and $75 million, roughly speaking, $1 million is planned to be spent on 1,000 house residence project and about, again, another roughly $70 million to $75 million. We have incurred costs for evacuation and cargo flights operation.
Another question regarding increasing competition, do you feel pressure? And also, are aircraft delays take some pressure off a limiting factor for capacity deployment.
Well, I mean we definitely are seeing the industries coming back, but global capacity in 2022 was roughly 25% below 2019 levels. So the gradual increase is seen as we are seeing more of the countries opening, especially last [ week ] China opening its borders and the removing to covet restrictions, provided surplus in demand, but we don't see the high pressure as kind of we are seeing in a more advantageous position as Turkish Airlines for number one, as we also expressed in the presentation, our competitive cost structure and the vast network is our 2 key pillars that are going to allow us to benefit from this higher and stronger demand environment. And there is also the aircraft delays.
Currently, for this year, we are not expecting to have a major change in the aircraft deliveries. There are some -- there were some incidences, both on the Airbus and Boeing side. But on the Airbus side, they were most balanced. Some of the deliveries that we were supposed to get by the end of last year are going to be received by the early this year. And some of those that we were planning to get by the -- towards the end of this year are going to be deferred to next year.
So it's not going to have a significant impact -- the most recent news regarding to the 787s is still -- there is not too much clarity on it yet, but we are in close coordination with Boeing to see how much it would have an impact on us. But as we have always have a balanced fleet between Boeing and Airbus, we were planning to get 5 A350 this year and 7 787. So we have ways to [ maneuver ] these potential delays in aircraft deliveries. So overall, we don't expect a significant change in our ASK planning of this year.
Murat, which factors led to better-than-expected financial results last year?
The most important piece was, of course, the stronger passenger demand than we were anticipating. Even though the first quarter of the year was weak because of the 2 earthquakes and then the Russian Ukrainian crisis. What we saw is through the summer months as more and more countries remove the COVID restrictions, the appetite to travel abroad for leisure travelers was quite strong, and there was an extraordinary demand to Turkey from Europe, Middle East and Central Asia.
So we saw the big benefits of it, strong passenger demand, which then due to capacity limitations all around Europe, we were also able to see higher yields and [ cargo ] kept growing yields and provided a significant contribution to the bottom line. The yields, like, for example, to be a little bit more concrete, the yields on the passenger side were about 20% higher than 2019 levels. Cargo unit revenues were almost double the levels of 2019. And ex-fuel unit cost was around 2% below 2019 levels. So our cost cautiousness also was quite intact throughout 2022.
Murat, do you have any one-off items in the fourth quarter and 2022? And should we expect any additional items?
The -- for the last quarter, the biggest one-off item was the bonus that we decided to pay at the end of the year, which was around $150 million. It was, as we also saw today and yesterday with the financial results, we had a record profit, and our hard-working co-workers had a significant contribution in this success.
So we decided, as the Board decided to compensate them with this success. And that was the biggest one-off payments for the fourth quarter. And with that bonus payment, overall, we paid about $250 million bonus for 2022. For this year, Earthquake-related expenses, as I mentioned in the earlier question, were the biggest one-off item, which we expect the overall to be around $200 million to $250 million. And personal bonuses, we will continue to pay bonuses if the -- our budgets are going to be able to met. And there was also -- there will be some amount that we will be receiving from Boeing as a result of the agreement to be reached due to delays in 787 deliveries.
[ Murat, ] could you also comment on the current operating environment and forward bookings?
Sure. The strong demand environment that we saw towards the end of last year actually kept continuing towards the first 2 months of this year, especially in Americas. And we were able to see some normalization after the opening up of China in the Far East region, which materially supported the forward bookings. And we have not yet seen any significant negative impact caused by the earthquakes.
And -- in contrast to historical position on the opposite side, in contrast to historical trends, we did not experience a sharp decline in the revenue yields as we were moving from Christmas season to New Year in January. -- cargo yields are in decline as we're seeing global trade is slowing down a little bit. However, we keep our capacity -- we are going to keep this similar amount of capacity, and we don't expect a huge deterioration in our cargo performance.
Murat, what are your CapEx expectations for 2023?
This year, in '23, we expect to increase ASK by above somewhere between 10% to 20% on the top of last year with the additional roughly 33 aircraft that will be delivered this year and higher utilization as well. Far East and Middle East regions will be the main drivers of this capacity increase. And for example, for the first quarter, the capacity we're putting is going to be about 20% higher than the first quarter of 2022.
While we keep increasing the capacity, we are expecting only a mild decline in the yields roughly around 1% as the amount of capacity that will be addressed this year is so huge. So we expect some decline in the yields. And yes, so overall, this 10% to 20% ASK is going to be mostly constant rate on Middle East and then Far East regions and then domestic as well.
Murat, how these expectations will translate into top line and profitability?
We expect a high single-digit increase in revenue year-over-year. And our EBITDA margin in 2022 was quite high. It was probably the record EBITDA margin level. And we expect that to normalize and come down to somewhere between 22% to 24% levels.
We are heading into cost questions, what Ex-fuel CASK should we expect? And how are you coping with the inflationary pressures on your costs?
Well, ex-fuel CASK this year is going to be higher than 2022, but it's not going to be a significant jump. We expect that to be about like a low single-digit increase in ex-fuel [ CASK. ] We are not seeing a huge inflationary pressure building up on our ex-fuel cost based because of the increasing economics of scale, the capacity, as I said, between 10% to 20% increase. Yes, we are definitely very carefully controlling our OpEx and CapEx plans in order to sustain our competitive cost base. As I stated previously, the nominal cost increase we experienced in maintenance, catering, handling expenses were mainly due to the bonuses that we paid in 2022.
Regarding hedging and fuel expense, we have 2 questions. First, expected fuel unit costs for 2023 and assumptions. And the second is fuel hedging ratio and breaking price.
I'll start with a quick one. The -- our hedging ratio for last year was about 36%. And for this year, we expect to -- with our current position is around 8% for 2023. The breakeven price is about $76 -- and to your -- to the first question, this year, we expect to have about a 10% to 15% decline in fuel cost. As you remember that last year, the brand level went above -- significantly above $100 and pushed jet price to around 400 levels. And this year, our expectation, projections for the [indiscernible] is around somewhere around $84 to $86.
So it's going to bring down fuel cost significantly. And on our current hedge ratio, which is a result of a specific strategy we are pursuing. And as you might recall, we passed hedging in February of last year because of the high volatility and difficulty having price formations. We didn't execute any trades in the remaining part of 2022 However, after seeing the prices coming to a more stable region and the volatility reducing, we started to add new positions, again by the beginning of this year.
Murat, on the first part of our presentation, we mentioned our record high operational cash flow. What was the main reasons for this cash accumulation. And what is your expectations for 2020?
Well, last year, the ramping up of our capacity quickly allowed us to benefit significantly from the passenger demand. And the resilience we saw in our cargo operation was another contributor. These 2 factors led to about $6 billion of operational cash that we attained and around $2 billion increase in our total cash level. For this year, we expect to accumulate some more cash considering our current trajectory for demand. And the year-end expectation of our cash level is going to be around just like this year around -- or [ sorry ] slightly above this year of $4.7 billion is what we expect by the end of 2023.
How will you utilize this excess cash? And what is the targeted minimum cash level?
In short term, -- in short term, in our portfolio management strategy, our liquidity threshold is 7% of the total revenue, which currently, it is around like 25% levels. And in the medium term, we are planning to invest our surplus into new businesses like for our aircraft deliveries that we are planning to place in the coming months and invest in the growth of AnadoluJet and Turkish cargo brands, enhance our technological infrastructure to increase operational efficiency and invest in initiatives to support the third-party sales of our subsidiaries. So we will definitely manage our liquidity carefully considering the demand environment, our current leverage targets and our CapEx needs.
On leverage targets, what is our targeted capital structure?
The current capital structure, which excluding the pandemic years, which then it was definitely deteriorated and we were heavily invested. It was around as we are -- we have been since like 2013 and '14, growing our fleet significantly. Debt to capital was around a 60% debt and 40% equity. And this year -- last year, it was around like a 55% to 57%, and we expect that to continue in the near term as we are going to be adding a large number of aircraft purchase order for our -- in compliant with our 10-year growth strategy. And together with that, we will keep investing in our new MRO facilities and [indiscernible] fleet capacity. So we expect our debt to capitalization ratio to be around 55% levels in the coming midterms.
Are you planning to pay dividends in the following period?
We always want to pay dividend, and we are definitely very much looking into the year that we can pay dividend. However, as I have shared in the previous calls, we are currently unable to pay dividend because of the accumulated losses in our statutory accounts according to the Turkish tax codes and these losses according to the Turkish tax system, which are mainly resulting from the FX translation differences. We are targeting to reserve the losses on local books in the following years and be able to pay dividends.
One question is about our recent decision to launch a Buy-Back -- share Buy-Back program. What is the main reason behind this initiative?
As you know, our share price has been experiencing a significant volatility since the beginning of February, in particular, not just, of course, Turkish Airline stock, but the Borsa Istanbul in general, had a huge volatility following the earthquake. And after 2 days of operation, it was shut down for some period. So seeing that [ unhealthy ] price formation, we used our share buyback program to reduce the volatility in our stock and help to create a basis for more fair price formation.
And as we are not targeting any price level, there is no specific execution timetable or preset date for our buybacks. We are just monitoring the market. And when we see increase in volatility that is creating a huge disruption, and we can act on this again.
We have multiple questions about our CapEx plan and aircraft deliveries? And what is our expectation for 2023.
For next year, we expect to -- our gross CapEx, we expect that to be around $5 billion to $5.5 billion -- as we are going to be getting a significant amount of deliveries in the coming years. More than half of this amount, more than half of the $5 billion is going to go for the new aircraft and about $2 billion for heavy maintenance, spare engines and other CapEx.
With this, what is the expected net debt level by the year-end?
This year, of course, in 2022, sorry, it declined to 1.8x level, net debt-to-EBITDA ratio. And our net debt was around like $8.7 billion, but we expect that to increase to around $10 million to $10 billion to $11 billion in 2023. And then debt-to-EBITDA multiple, we expect that to be around 2 to 2.5x.
Murat, you touched the subject at the beginning of the call, but our NSR and investors and some media presentations is asking about aircraft deliveries given the OEMs facing some difficulties in their supply chain. Can you further elaborate on the project.
Yes. Well, one trend, one issue that is gaining more attention is -- especially in 787 availability and some engine availabilities. While on one hand, this puts pressure on passenger capacity, on the other hand, it could force capacity discipline to the market elevating revenue yields. So without any addition to our current fleet, we can increase our capacity by about 10% in 2023 compared to 2022. Our aircraft utilization in 2019 was about 125 hours and which declined to almost 10.45 hours in 2022.
And we are expecting to bring it up this year with no concern with no concern about the pilot shortages as we are recruiting significant amount of pilots this year and higher -- which will facilitate higher utilization of our aircraft. So if we get unexpected delays in aircraft deliveries, which currently, other than this most recent 787 problem, we don't expect any significant disruption and some changes we are being able to recover from operating lease agreements. In 2023, we will be getting about 10 operating leases because of the lack of new aircraft. So overall, for the capacity increase, the issues with the OEMs are not going to be a significant bottleneck for our planning of 2023.
[indiscernible] what will be our year-end figure and net additions to our fleet in a normal scenario.
So if all we have planned at the beginning of the year, continues without a big change deviation we finished 2022 with 394 aircraft, and we are planning to add about 36 deliveries in 2023. And there were about 3 exits. So overall, the fleet is going to grow by about 33 aircraft and 12 of these are widebodies, 5 A350s and 7 787s, and the remaining are all new generation -- most new generation narrow-bodies.
Also, can you provide an update on the fleet expansion plans? And are you considering a bulk aircraft order?
I saw another question here asking about when we are announcing the strategy. As I said, I'll answer these 2 questions together. As I said at the beginning, with our Chairman in the short term, we are -- we finish our strategy preparation and writing down the document at the moment. And soon, we'll be announcing the 2033 strategy for the next 10 years. It will be in 2 stages for the next 5 years and in the following 5 years.
So based on this strategy, together with Turkish Airlines and Anadolu brands, we will be placing a large order book. But putting it aside with our current fleet development and with our current order book, -- on the top of the 33 deliveries this year for 24 to 2028 for that 5-year period, we currently have about 100 firm orders on the pipeline with both Boeing and Airbus.
We are heading into [indiscernible] and subsidiary questions. And are there any developments you may share with us regarding AnadoluJet? And also one of our investors is asking about public -- potential public offering of age and maybe Turkey cargo.
Well, they are definitely -- both of the projects are undergoing. We have the teams set up internally to work on both projects. We are not in a rush in either one, but AnadoluJet might be a little earlier, depending, of course, on the fleet and the [indiscernible] capacity increase. But in any case, both of the projects are undergoing. We have taken the preliminary steps to prepare both of our operations for -- to serve as a separate entity.
And AnadoluJet started its international operations almost more than 2 years ago and is increasing its fleet. It's reached a size of about 62 aircraft. This year, it will reach to 80 aircraft. And of course, separating it as a full-blown low-cost carrier is at a straightforward task. It requires a new reservation system, which we have tendered recently. And its PSS is going to be ready by -- in about a year's time.
So we are taking the necessary steps to prepare an AnadoluJet prepare it for carving out, but we don't have a specific date. It's going to take about more than a year, it seems like that how -- when AnadoluJet can serve its customers under its own roof. Cargo is less complicated. And yet with the cargo operation, we are still working on the right strategy to carve it out. And there are pros and costs in either strategies. It's a little early for me to share some more details about it. But as soon as we have a more clear path to carving out cargo, we definitely will share with our investors with our investors.
And also, can you comment on the comment on our cargo operations and our expectations?
So cargo in last quarter of 2022, it was about a total cargo revenue about 25% lower compared to the year before, while total cargo capacity was just 7% lower. So it shows that the yields are coming down, but we have been expecting this to happen for quite some time. In our all investor calls, earlier investor calls, we were expecting yield erosion in cargo business is the pandemic increased the yield significantly, and we are seeing the normalization phase -- but it is not a decline.
We call it a normalization as we keep -- we will be keeping increasing our cover capacity this year. We are planning to add about 3 to 4 freighters to fleet this year. Some of them, about 2 of these could be wet leases, but there continues to be a strong demand to our cargo operation, utilizing the best capacity of [indiscernible], our cargo terminal in the Istanbul Airport and the West our passenger network, which allows us to carry cargo to a very large range of destinations with the [indiscernible] cargo capacities.
So in 2023, -- we might be having a lower cargo revenue than the amount attained in 2022. But we are not too pessimistic. The yield erosion is just a normalization with the capacity increase we will introduce, we might even be able to sustain those 22 numbers.
But we have one question regarding the recent -- regarding our recent announcement about TSI, TC corner, our subsidiaries. What was the main motive behind merging these companies.
These 3 separate subsidiaries, we know that they are very valuable and contributed, but they have been kind of put -- they have been managed on the sideline and not have been able to receive strong attention, and we have not been able to get their full potential.
There is a huge potential to work on all these together on one side, the seat [ production ] and the interior galley [ production ] and an [ IP production, ] these actually all 3 pieces can serve together and provide us an edge to have an efficient and good quality aircraft and also provide us an opportunity with the with using scales and working together using the engineering departments together using the sales team together, they can have a more profitable growth strategy.
That's the reason why we wanted to combine all these 3 subsidiaries under one roof and where they can provide some spillovers and create synergies and provide better interior cabin interior, we see it as actually a whole system acting together, and then we are planning to market all these 3 items together. And maybe I should also add, under this new company, Turkish airlines, together with Turkish Technique -- we own about 85% of the company. So we are the majority shareholder, and we will have the flexibility to lead its growth.
If you have additional questions from our participants. One about to what extent will growth in the Indian market financial impact Turkish Airlines in 2023.
To what extent will growth in Indian market, I think this means Air India's order book, if I understand correct...
Collaboration with Indigo.
Right. So our collaboration with Indigo, we are quite prospective on it. At the moment, it's a small operation. We are providing on narrow-body and one wide-body aircraft operation. The operation started in February from Delhi and Mumbai, but we expect it to grow more strongly as with Indigo, we have established a good relationship. And yes, in the -- throughout last year, actually, after Indian market was opened towards the beginning of the first quarter, we started to generate a smart profit margin and especially during the last quarter of 2022, we generated an amount of revenue well above our budget and due to the high yields in this market, the huge ASIC market in India. And in the Indian market, our competitors restarted to increase frequencies. So we are expecting higher competition, but this comes with a higher demand environment, and we expect to benefit from that market environment.
One of our investors asked about our profit -- net profit margin and its sustainability. But if you allow me, let me ask for that, generally, we only guide for EBITDAR or EBITDA, we do not provide estimates or expectations about net income. As Murat mentioned, right now, our expectation regarding 2023 for EBITDA between 22% to 24%. And we have a couple of regional questions of [indiscernible]. Are there any regions you can highlight that are performing better or worse than average, please?
Well, I mean, overall, actually, our recovery as we -- our recovery was led with the Covid restrictions removal, the sooner the restriction were removed, we started operation as we kept our staff in the region, and we kept our aircraft ready to fly. Compared to fourth quarter of '19 in the fourth quarter of 2022, in Americas, for example, the increase in revenue the increase in revenue yields in Americas was about 30% in Europe, Far East, Africa was again on the vicinity of 25% to 30%. In Middle East, it was the lagging region with about 16%.
So there wasn't a specific particular region that was driving the whole profit. It was quite well distributed, yet being the long haul and being the most open Americas was the biggest contributor. For example, if the business class load factors were around 80% in the summer seasons of 2022.
We have 2 questions regarding Turkish tourism that I can combine. First one is about our push for American [indiscernible] to Turkey. And the otherwise is that impact of the earthquakes on our [indiscernible].
So the first question, our Chairman and our sales team had visit -- they travel to Miami region, to meet with the agencies to meet with the travel agencies and to attract tourists from their Turkish service sector, big components of Turkish service sector, like TV shows, representatives were there, and there was several big gatherings. And in the coming months, they will have their planning to have several more visits to Los Angeles, probably in May or June. And then to Chicago, we had at the late 2022.
We had -- we traveled to New York with our Chairman, again, met with the agencies, met with the regional mayors there to attract tourists to Turkey. We are working together with the Ministry of Culture and Tourism. And there is a body of organization, Turkish tourism support agency, TGA. -- and that provides marketing material for us and to attract more American tourists to Turkey. So that strategy is continuing, and it will be -- we'll be investing on that throughout 2023.
Regarding to the earthquake, we have not seen a significant -- actually at all, we have not seen a deterioration in the forward bookings regarding to the before and after the earthquake, there was, of course, as expected, drop significant drops in domestic travel -- but as the earthquake happened through the month of February, it was not a big disruption in our projections on the international to domestic or international to international air traffic, we did not see any significant change after the earthquake.
I think that would be all right. I would like to thank our participants for their questions, and we are hoping to see you in our upcoming announcements.
Right. Thank you, speakers. Thank you very much. Our speakers from Turkish Airlines. And ladies and gentlemen, I believe that is the end of the webcast, and we want to thank you for your participation. You may now disconnect.