Türk Hava Yollari Anonim Ortakligi (THYAO) Q1 2025 earnings summary

Executive summary

• Navigated a volatile environment with U.S. policy changes, geopolitical tensions, and production bottlenecks, leveraging a strong balance sheet and diversified revenue streams.

• Total revenues for Q1 2025 increased by 2.5% year-over-year to $4.89 billion, with passenger revenue up 2.7% and cargo revenue up 1.6%.

• Net income turned negative at -$44 million, compared to $226 million in Q1 2024, mainly due to cost pressures, inflation, and currency headwinds.

• Passenger numbers rose 2.3% year-over-year to 18.9 million, with load factor stable at 80.6%.

• Group employs 64,570 people as of March 2025, with a diversified portfolio of subsidiaries and joint ventures in aviation, cargo, maintenance, and related services.

Financial highlights

• First quarter revenue reached $4.9 billion, the highest ever for Q1, with passenger revenue up 2.7% year-over-year.

• Operating expenses increased by 7.7% year-over-year, driven by a 31.1% rise in personnel costs and 22.3% in maintenance, while fuel costs dropped 12.4%.

• EBITDA was $660 million (13.6% margin), net income at -$44 million, and profit from main operations at -$76 million.

• Cash and equivalents at quarter-end were $5.53 billion.

• Free cash flow for the quarter was $400 million, with on-hand liquidity at $7.3 billion.

Outlook and guidance

• Passenger capacity and total revenues are expected to grow 6%-8% in 2025, with EBITDAR margin targeted at 22%-24%.

• Ex-fuel unit costs projected to rise by mid-single digits; passenger numbers forecast to exceed 91 million.

• Fleet size expected to reach 515-525 aircraft by year-end 2025, with new international routes planned.

• Cargo revenue guidance remains flat, with mid-single-digit volume growth and yield decline.

• The Group expects to benefit from government incentives and tax advantages in the coming years.