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April 17, 2024
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Turkish low-cost Pegasus Airlines returned to profitability in Q2 compared to last year and also produced a record-high operating margin of 33.6 percent. The airline benefited from strong demand but is warning that the exceptionally high unit revenues from 2022 are unsustainable for the third and fourth quarters.

Pegasus reported a €91 million net profit for Q2 compared to a €-40 million net loss last year. Total revenues grew to €657 million, up from €504 million. Of this, €440 million is from passenger revenues (2022: €356 million) and €206 million from ancillary revenues (€127 million). Ancillary revenues from meals, seats, baggage, and inflight entertainment grew to €26.2 per passenger, up from €19.5 in the same quarter last year.

The airline carried 5.1 million passengers on its international network of 93 destinations, generating €372 million in revenues (€281 million). 2.8 million passengers flew on the domestic network with 37 destinations, which generated €68 million in revenues, down from €75 million last year. This will likely be an effect of lower traffic in February after the devastating earthquake that hit East Turkey. However, domestic yields per passenger were still up to TL 563 versus TL 452 in Q2 last year, while international yields per passenger were down to €75 from €79. Revenues per available seat kilometer (RASK) were slightly better to €4.32 cents from €4.22 cents. ASKs were up 27 percent to 15.2 million, the load factor reached 81.3 percent.

Ancillary revenues have seen steady growth in recent years. (Pegasus)

Operating expenses in Q2 increased to €510 million from €471 million, mainly because of 68 percent higher staffing costs of €76 million partly offset by sixteen percent lower fuel costs at €187 million. Costs per available seat kilometers (CASK) excluding fuel were up by three percent to €2.31 cents.

The operating profit or EBITDA was €221 million, up from €104 million. EBITDA margin was a solid 33.6 percent versus 20.6 percent in the same quarter last year and significantly better than the 15.5 percent in Q1. The margin is the highest for any Q2 in Pegasus’ history and comes close to the overall EBITDA margin of 34.1 percent for FY22, which according to the airline is the highest in the industry.

HY1 profit

Pegasus reports a HY1 profit of €69 million versus a €-101 million loss in 2022. Total revenues grew to €1.1 billion from €774 million, of which €720 million is from passengers (€527 million) and €362 million from ancillary revenues (€220 million). 8.8 million passengers flew on the international network and 5.3 million on the domestic network at an average load factor of 82.7 percent. Half-year capacity grew 29 percent to 26.2 million kilometers.

Operating expenses were up by 24 percent to €771 million (€400 million), with staffing costs up 66 percent to €142 million and fuel by eight percent to €350 million as prices were higher in Q1. EBITDA improved to €290 million from €136 million, resulting in an EBITDA margin of 26.3 percent.

Pegasus ended June with €956 million in liquidity, including €443 million in cash reserves. Net debt stood at €2.1 billion, of which 65 percent matures within the next five years. This year, 48 percent of the fuel is hedged and 36 percent for 2024.

Pegasus will transition to an all-Airbus fleet in the coming years, which will help it to reduce fuel costs per ASK. (Pegasus)


Pegasus Airlines plans to grow full-year capacity by twenty percent year on year and reiterates an EBITDA margin at the “+30 percent territory”. The airline notes that year-on-year comparisons for Q3 and Q4 will become increasingly difficult, as unit revenues have been exceptionally strong in HY2 last year thanks to pent-up demand after the Covid crisis. More about the growth strategy of Pegasus in this story.

As announced in July, Pegasus exercised options on 36 Airbus A321neo’s that were part of a previous order. Deliveries are scheduled between 2026 and 2029. Compared to the fleet plan in Q1, the airline has moved five deliveries that were scheduled for 2024 to 2025. It will now take delivery of sixteen A321neo’s in each year. 41 deliveries are planned between 2026 and 2029.

Pegasus said earlier that it expected to receive its 100th aircraft in September, but the HY1 earnings presentation shows that the fleet already reached 101 by the end of June thanks to the delivery of three more A321neo’s. There are now 31 of them in the fleet, plus six A320neo’s, eight A320ceo’s, and sixteen Boeing 737-800s. That’s one 737 down from March. The fleet will grow to 104 aircraft by the end of this year.

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Active as a journalist since 1987, with a background in newspapers, magazines, and a regional news station, Richard has been covering commercial aviation on a freelance basis since late 2016.
Richard is contributing to AirInsight since December 2018. He also writes for Airliner World, Aviation News, Piloot & Vliegtuig, and Luchtvaartnieuws Magazine. Twitter: @rschuur_aero.

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