Turkish low-cost carrier Pegasus Airlines has more than doubled its first-quarter 2026 net loss to €153 million, up from a €62 million loss a year earlier, as soaring costs and the Middle East conflict cratered the airline's high-margin sun routes. The Istanbul Sabiha Gökçen-based carrier blamed the deterioration on currency swings, a jump in operating expenses, and the prolonged suspension of services to its core regional network.
Revenues rose to €642 million for the quarter, but costs jumped 11% to €750 million, leaving operating losses essentially flat at €93 million. EBITDA collapsed from €42 million a year ago to just €3 million — a near-total wipeout of the carrier's profitability metric. Financing expenses and unfavourable foreign-exchange movements were singled out as the primary drivers behind the bottom-line shock.
Iran conflict grounds the Middle East network
The carrier suspended flights to most Middle East destinations at the end of February following the outbreak of the Iran conflict, severing a network that traditionally generates outsized yields during the spring. Pegasus has now begun restoring services to Iraq, Jordan, Lebanon and the United Arab Emirates, but routes to Iran and several conflict-adjacent destinations remain dark.
On the bright side, passenger numbers climbed 9% year-on-year to 9.8 million, fuelled by a 15% surge in domestic demand as Turkish travellers shifted away from suspended international destinations. The growth in volume, however, came at the expense of yields — a textbook example of profitless prosperity in a low-cost market squeezed by external shocks.
What's next for Pegasus
Investors will be watching whether the gradual reopening of Middle East routes can lift second-quarter results, while management faces pressure to hedge fuel exposure and rein in financing costs ahead of the peak summer season. With European rivals also reporting weak Q1 numbers due to airspace closures, Pegasus is far from alone — but the doubled loss puts the carrier's near-term financial flexibility firmly in the spotlight.
Compiled from publicly available aviation news sources. Featured image: AI-generated by AviationShop. This article is original editorial content; facts have been verified across multiple public sources.
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