Turkish Airlines Takes a “Measured Capacity Expansion” as it Confronts Headwinds

Turkish Airlines has experienced a challenging 2025, shaped by aircraft delivery delays, capacity constraints from grounded aircraft, and regional conflicts. Yet, the airline is quite happy with the financial results, but recent tensions in the Gulf region are causing uncertainties for 2026. Turkish Airlines grew revenues by 6.3 percent to $24.1 billion, with passenger revenues from 92 million passengers carried up by 7.4 percent to $19.8 billion. Q4 and the Christmas period were notably strong, with revenues up 12.7 percent year-over-year to $5.1 billion. Full-year cargo revenues dropped three percent to $3.4 billion, but were up again by 3.4 percent in Q4. While non-fuel costs were down in Q4 thanks to lower personnel costs, they were up for the full year, so the net income dropped by 15.1 percent to $2.9 billion. EBITDAR was down by just 0.6 percent to $5.7 billion. CFO Murat Seker is happy that at 23.7 percent, the operating margin stayed above 23 percent and ahead of the sector’s benchmark. Capacity Turkish Airlines grew capacity by 7.5 percent, confirming its position as the busiest airline in Europe. But it “maintained a measured capacity expansion throughout the year and continued to deploy aircraft selectively”, Seker explained. In Q4, capacity was up by 11 percent, which should be maintained at 10 to 11 percent in the first two quarters of 2026. Europe will see around a seven percent increase, but the Far East (notably China, as visa requirements were removed) will see around 15 percent. The Americas will see four percent higher ASKs. Domestic Turkey was not so strong last year at three percent capacity growth, but Seker guides a four to five percent increase for 2026. Inflation remains high, and high interest rates also affect demand, but Seker is positive that the load factor was up five percent and yields by nine percent. This confirms that domestic demand is resilient. That Turkish was able to grow its capacity is, in a way, a miracle. The parent airline and subsidiary AJet had 39 aircraft on ground for maintenance of the Pratt & Whitney Geared Turbofan engines, and this will grow to 50 aircraft this year. “As we have been repeatedly saying, Pratt & Whitney is putting in hard work to solve the problem for good, but turnaround times are still long, induction periods are long in the overhaul of these engines”, Seker says. Deliveries Turkish recently received updated delivery schedules from Airbus and Boeing for this year. The airline group counts on 85 deliveries and will phase out 32 aircraft, bringing the fleet to 560 to 570 aircraft compared to the current 531. Turkish Airlines will take 26 deliveries and phase out four. AJet is on an aggressive fleet renewal path and grew capacity by 24 percent in Q4 year-over-year. The target is 16 percent higher ASKs this year, resulting in 15 to 16 percent more passengers compared to the 23.4 million last year. It ended 2025 with 81 active aircraft and expects 58 new Airbus A320neo family and Boeing MAX 8s while phasing out 26 older ones. This brings AJet’s fleet to 70 percent new generation aircraft. Having placed huge orders with Airbus in 2023 and with Boeing in 2025, as well as securing various leases, Turkish Airlines’ fleet is on track to get to 800 aircraft by 2033 as laid out in its long-term strategy. The fleet should get to 610 next year and 630 in 2028. Uncertainties Turkey has been a target of some Iranian missiles since February 28 and could get more involved in the hostilities in the Middle East and Gulf region. It’s anybody’s guess how long this will last, but Seker said it brings many uncertainties to Turkish Airlines. With some 100 daily flights, the Middle East accounts for just six percent of its capacity and revenues, but all flights to Kuwait, Qatar, Bahrain, Iraq, Iran, Syria, and Lebanon have been suspended. Only Saudi Arabia and Oman are seeing flights. Like Lufthansa, Turkish is also seeing strong short-term demand from Asia, both inbound and outbound, mostly of stranded people who want to return. If this translates into a long-term effect remains to be seen. Air freight is seeing higher yields, a direct result of reduced sea traffic in the Gulf region. Murat Seker quantifies the effect of higher oil prices at a loss of some $90 to $120 million if this situation continues for about a month. Before the ME crisis, Turkish guided a six to nine percent increase in EBITDAR to around $6.0 billion, but that was based on lower oil prices. The cons and advantages are yet to be seen, said Seker.

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