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Pegasus Airlines: Financial challenges and industry outlook

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Turkish low-cost carrier Pegasus Airlines is facing financial challenges, as current chairman Mehmet Tevfik Nane highlighted at an Aviation Club UK event. Nane warned of unsustainable financial performance at Pegasus, with operating costs rising 2024% in the first quarter of 26 while revenues grew only 17%.

In the first quarter of 2024, Pegasus recorded a net loss of 103 million euros, compared to 22 million euros in the same period last year. The operating loss amounted to 36,8 million euros, compared to 6,2 million euros in the previous year. These figures illustrate the airline's current financial difficulties.

Despite the challenging cost structure, Pegasus expects the EBITDA margin to be between 2024% and 28% in 30, supported by a strong peak season. Nevertheless, the airline forecasts that the cost per available seat kilometer excluding fuel will continue to rise.

Despite the difficulties, the International Air Transport Association (IATA) has an optimistic outlook for the aviation industry as a whole. IATA expects airlines worldwide to make a net profit of $2024 billion in 30,5, compared to $27,4 billion last year.

The situation remains particularly challenging for airlines in Latin America, where results have been mixed and some airlines are struggling with financial problems. IATA warned of further challenges in this region, despite a forecast total profit margin of $600 million for 2024.

The airline industry is targeting total revenues of around $996 billion by 2024, but traffic growth is expected to slow, reflecting a return to normality after two years of strong demand.

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