THY's profit exceeded expectations despite fuel pressure

MEHMET ÖZDEMİR

Turkish Airlines A.O. announced its financial results for the third quarter of 2026. The company's revenue amounted to $8.3 billion in the relevant period, slightly above the market expectation of $8.2 billion. Turkish Airlines' total revenues increased by 19 percent annually in dollar terms.

The company's revenue in the first nine months of 2026 increased by 20 percent on an annual basis, reaching 21.4 billion dollars. Unlike global airlines struggling with high energy costs in the shadow of the US-Iran war, strong passenger and cargo revenues played a decisive role in the company's revenue increase. The increase in income from the investment portfolio also supported the company's income structure.

Turkish Airlines served 73 million passengers in the first nine months of 2026, an increase of 5 percent compared to 69.4 million passengers in the same period last year. The company's occupancy rate increased by 2.1 points on an annual basis in the same period, reaching 85 percent. Turkish Airlines' passenger revenues increased by 15 percent on an annual basis in the third quarter, reaching 6.8 billion dollars. The offered seat kilometers (AKK) increased by 3 percent in the same period. When examined on a regional basis, AKK in the Middle East lines decreased by 22 percent due to the impact of the war. The 18 percent AKK growth recorded in Far Eastern lines compensated for the weakness in the Middle East.

Turkish Airlines' cargo revenues increased by 46 percent on an annual basis in the third quarter, reaching 1.2 billion dollars, due to the impact of limited global capacity supply due to geopolitical tensions. The company's cargo revenues reached 3.5 billion dollars in the first nine months of 2026, an increase of 45 percent compared to the same period last year.

The company's earnings before interest, depreciation, tax and rent (EBITDA) increased by 2 percent on an annual basis in the third quarter, reaching 2.1 billion dollars. EBITDA decreased by 11.2 percent to 3.8 billion dollars in the first nine months of 2026, from 4.3 billion dollars in the same period last year. Rising fuel costs due to the US-Iran war put pressure on the company's margins. EBITDA margin narrowed by 420 basis points from 29.6 percent in the third quarter of last year to 25.4 percent. Fuel expenses, which have a 33 percent share in operational expenses, increased by 59 percent on an annual basis in the third quarter, reaching 2.6 billion dollars. The company's personnel expenses increased by 16 percent.

Turkish Airlines' net profit reached $1.3 billion in the third quarter, exceeding analyst expectations of $1.1 billion. The company's net profit decreased by 6.4 percent on an annual basis in the relevant quarter. Deferred tax income of 6.2 billion TL recorded in this quarter and investment income reaching 1.5 billion dollars with an increase of 74 percent on an annual basis in the first nine months of 2026 supported the net profit.