Türk Hava Yollari Anonim Ortakligi

Q3 total revenue increased 5% year over year to nearly $7 billion. Passenger revenue rose 6%, cargo revenue declined 7% to around $850 million, EBITDAR was almost $2.1 billion with a 29.6% margin, and net income was close to $1.4 billion. Total passenger capacity was up around 8%, more than 27 million passengers were carried, and load factor reached 85.6%. For 2025, management lowered revenue growth guidance to 5% to 6% from 6% to 8%, kept EBITDAR margin guidance at 22% to 24%, and said fourth-quarter EBITDAR should be closer to last year with a 22% margin. They also said year-end fleet is expected at 525 to 530 aircraft, net debt/EBITDA could end 2025 at 1.6x to 1.8x, and 2026 capacity growth is expected around 9% with EBITDAR margin still guided at 22% to 24%.

The CEO emphasized Turkish Airlines’ ability to stay agile amid weaker North America demand, stronger European competition, supply chain constraints, and geopolitical tensions. He highlighted strategic moves including the Boeing 787 and 737 MAX fleet orders, the Air Europa minority investment, and continued network expansion into markets such as Seville, Port Sudan, Aleppo, and Misrata. His tone was confident and long-term oriented, stressing that the company remains focused on its 2035 all-new-generation-fleet goal and 6% annual capacity growth target over the coming decade.

The CFO said capacity was expanded selectively because of aircraft delivery delays, GTF groundings, and regional conflicts, while direct sales via TKCONNECT supported cost savings of $48 million in the first 9 months. He pointed to higher third-quarter costs from personnel inflation adjustments, airport and air traffic fees, and maintenance costs tied to the GTF issue, but noted free cash flow of around $350 million in Q3 and 12-month community free cash flow of $1.6 billion. Liquidity rose to almost $7.9 billion, net debt increased by $700 million sequentially, and leverage was 1.4x versus a prior target range of 1.1x to 1.3x. He also said 2025 fuel cost should be around 10% lower year over year, hedging is around 50% for 2025 and 23% for 2026, and ex-fuel CASK should improve to below 4% growth for the year.

Analysts focused on Q3 drivers, GTF groundings, booking trends, pricing in weaker regions, tourism to Turkiye, premium cabin strength, cargo outlook, fuel hedging, and leverage. Management said Far East and Africa were the strongest demand regions, North America weakness was being offset by shifting capacity to Asia, and premium demand held up better than economy with record premium load factors. On GTFs, Murat Seker said 40 of 100 GTF-powered neo aircraft are currently parked and that the issue may keep affecting operations into 2026. He also said AJet remains strong operationally, with more than 17 million passengers in 9M and no IPO plan at present.