WOOD Flash – Pegasus Airlines: 4Q23 – decent end to another very good year
Growing its profitable international business while keeping costs under control, 2023 was another very good year for Pegasus. Although the fares started to normalise in 2023, from the extremely high levels reached in 2022, the low unit costs helped Pegasus maintain its EBITDA margin north of 30% for the second year running. A crucial contributor is the international segment, in which Pegasus flew 50% higher capacity in 2023 vs. 2019. This is an outstanding result, considering the broader context of European aviation, which is expected to reach pre-pandemic capacity only in 2024E, according to IATA estimates. Management sees a balanced supply-demand environment ahead, and expects stable passenger yields and another year of industry-leading margins in 2024E. Although the Bloomberg consensus 2024E EBITDA appears quite stretched, the 2023 results confirm that Pegasus belongs among some of the best-run, fastest-growing and most profitable airlines globally these days, in our view.Pegasus Hava Tasimaciligi is a low-cost airline group based in Turkey. Co. provides reasonably-priced transportation opportunities on point-to-point basis in short and medium range flight lines on its domestic and international network. Co. primarily provides transportation opportunities from its main hub in Istanbul Sabiha Gokcen International Airport, but also offers scheduled flights from other domestic hubs, primarily in Adana, Antalya and Izmir. Co.'s fleet is composed of 49 airplanes in total. Co.'s flight network consists of 76 locations (45 abroad and 31 domestic flight locations in 30 countries). Co. also provides cargo services and provides various training services.
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