Pegasus chairman warns airline’s financial performance not sustainable

The chairperson of Pegasus Airlines has warned the Turkish low-cost carrier’s financial performance is “not sustainable” because soaring costs are outstripping rising revenues. However, Mehmet Nane says Pegasus will continue to expand its fleet to reflect Turkey’s growing travel and tourism market and will invite Airbus and Boeing to compete for its next order for deliveries beyond 2029. Speaking at an Aviation Club UK luncheon in London on 13 June, Nane, the airline’s former CE and a recent IATA chair, said the problem of tight margins, a result of aircraft delivery delays and inflation-driven wage and other cost hikes, was one facing the entire sector. “We are losing money,” he says. “We have seen a 5% erosion in gross margin in three years. This is not sustainable.” Pegasus posted a full-year operating profit of E489m ($530m) for 2023, down around E100m on the previous year, despite revenues climbing 9% to E2.67b. The airline, which has its main base at Istanbul’s Sabiha Gokcen airport, has Airbus single-aisle deliveries scheduled until 2029. Those aircraft will take its total fleet to around 130, from 105 today, taking into account retirements.<br/>