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Turkish Airlines increases visibility and lowers costs

New cash management structure switches from phone and fax to real-time electronic reporting

The challenge

Turkish Airlines flies 20 million people a year to 138 cities in 69 countries. After a period of sustained business growth, cash flow visibility at its head-office treasury department was severely restricted. A total of 250 accounts were held with 91 banks in 69 countries, and manual processes were used to transfer cash between 107 Turkish Airlines offices. Cash reporting relied heavily on telephone communication and faxed spreadsheets.

Following its listing on the stock market and a company-wide cost control drive, Turkish Airlines put its global cash management business out to tender. The aim was to improve payment efficiency, reduce transaction charges and increase visibility through real-time electronic reporting.

The solution

Citi began a phased implementation of a regional cross-border target balancing structure to sweep the vast majority of the firm's balances into Citi's London Branch.

Phase one focused on sweeping euro balances, the dominant currency of Turkish Airlines' sales. In phase two, additional currencies, including US dollars, were introduced to the structure. Phase three involved the rationalization of any currency balances that could not be included for legal or other reasons.

To eliminate the need for manual payments, Turkish Airlines began using CitiDirect Online Banking. It also became the first Turkish customer to install Citi's transaction flow analysis tool, TreasuryVision, which provides real-time balance information in customized formats for accounts across the world.

At the client's specific request, the new structure was supported by a 24/7 customer service team based in Istanbul. The team then coordinated with staff across Citi's global branch network.

The result

Turkish Airlines now has a streamlined account structure, reduced banking costs and enhanced cash flow visibility. It has also eliminated manual payments.

As the first Turkish multinational to implement a regional, cross-border target balancing structure, the airline found that even those currency balances that remained outside the structure achieved improved investment rates.