(CONVENIENCE TRANSLATION OF THE REPORT AND FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH)

PEGASUS HAVA TAŞIMACILIĞI ANONİM ŞİRKETİ AND ITS SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 TOGETHER WITH THE INDEPENDENT AUDITOR'S REPORT

Güney Bağımsız Denetim ve SMMM A.Ş. Maslak Mah. Eski Büyükdere Cad. Orjin Maslak İş Merkezi No: 27 Daire: 57 34485 Sarıyer İstanbul - Türkiye

Tel: +90 212 315 3000 Fax: +90 212 230 8291 ey.com Ticaret Sicil No : 479920 Mersis No: 0-4350-3032-6000017

(Convenience translation of a report and consolidated financial statements originally issued in Turkish)

INDEPENDENT AUDITOR'S REPORT

To the Shareholders of Pegasus Hava Taşımacılığı Anonim Şirketi

A) Report on the Audit of the Consolidated Financial Statements

1) Opinion

We have audited the consolidated financial statements of Pegasus Hava Taşımacılığı Anonim Şirketi ("the Company") and its subsidiaries ("the Group"), which comprise the consolidated statement of financial position as at December 31, 2024, and the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2024, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with the Turkish Financial Reporting Standards ("TFRS").

2) Basis for Opinion

We conducted our audit in accordance with the Independent Auditing Standards (InAS) which are part of the Turkish Auditing Standards as issued by the Public Oversight Accounting and Auditing Standards Authority of Turkey (POA) and adopted within the framework of Capital Markets Board (CMB) regulations. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Code of Ethics for Independent Auditors (Code of Ethics) as issued by the POA and other ethical principles included in CMB legislation, and we have fulfilled our other ethical responsibilities in accordance with the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

3) Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matter	How the matter was addressed in the audit
Redelivery maintenance provision
As explained in Note 15, as of December 31, 2024, the Group has recognized a provision of TL 7.641.317 thousand for the redelivery maintenance provision costs at the delivery date of the aircraft where the aircrafts are leased without purchase option (operating lease). Regarding the aircrafts that are leased without purchase option, during the hand-over of these aircrafts, the Group is contractually committed to either comply with the conditions set forth in the contract or to compensate the lessor for the difference between the contractual hand-over conditions and the actual hand-over conditions of the airframe, engines and life-limited parts. A redelivery maintenance provision is made for this contractual obligation over the lease term, based on the present value of the estimated future cost calculated by reference to the number of hours flown and cycles operated during the year. Redelivery maintenance provision amounts are at significant levels in the consolidated financial statements and they are based on certain assumptions, such as; likely utilization rates of the aircraft, the expected cost and the time of the heavy maintenance, the condition of the aircraft and the lifespan of life-limited parts. The changes in the assumptions may affect the consolidated financial statements significantly, hence, the matter is considered a key audit matter.	The following audit procedures are applied in order to be able to test the reasonable calculation of the redelivery maintenance provision: The design of controls have been examined to ensure the appropriateness of the calculation designed by the management. The assumptions used in the calculation of the redelivery maintenance provision are evaluated with the technical maintenance supports team performing the calculation, and the data used in these assumptions are compared with the costs used in the maintenance contracts made by the Group. The actual maintenance amounts for the delivered aircraft are compared with the amounts calculated in the previous periods for these aircrafts and an assessment is made to see if there is a significant difference. Furthermore, substantive procedures are applied to the maintenance payments made by the Group for the aircrafts that are leased without purchase option. The records of the maintenance costs incurred during the year are compared with the corresponding invoices. In addition, we have evaluated the adequacy of the disclosures in Note 2.5 and Note 15 in accordance with TAS 37 "Provisions, Contingent Liabilities and Contingent Assets".

Key audit matter

How the matter was addressed in the audit

Redelivery maintenance provision

As explained in Note 15, as of December 31,
2024, the Group has recognized a provision of
TL 7.641.317 thousand for the redelivery
maintenance provision costs at the delivery
date of the aircraft where the aircrafts are
leased without purchase option (operating
lease).
Regarding the aircrafts that are leased without
purchase option, during the hand-over of these
aircrafts, the Group is contractually committed
to either comply with the conditions set forth in
the contract or to compensate the lessor for the
difference between the contractual hand-over
conditions and the actual hand-over conditions
of the airframe, engines and life-limited parts. A
redelivery maintenance provision is made for
this contractual obligation over the lease term,
based on the present value of the estimated
future cost calculated by reference to the
number of hours flown and cycles operated
during the year.
Redelivery maintenance provision amounts are
at significant levels in the consolidated financial
statements and they are based on certain
assumptions, such as; likely utilization rates of
the aircraft, the expected cost and the time of
the heavy maintenance, the condition of the
aircraft and the lifespan of life-limited parts. The
changes in the assumptions may affect the
consolidated financial statements significantly,
hence, the matter is considered a key audit
matter.

The following audit procedures are applied in order
to be able to test the reasonable calculation of the
redelivery maintenance provision:
The design of controls have been examined to
ensure the appropriateness of the calculation
designed by the management. The assumptions
used
in
the
calculation
of
the
redelivery
maintenance provision are evaluated with the
technical maintenance supports team performing
the calculation, and the data used in these
assumptions are compared with the costs used in
the maintenance contracts made by the Group.
The actual maintenance amounts for the delivered
aircraft are compared with the amounts calculated
in the previous periods for these aircrafts and an
assessment is made to see if there is a significant
difference. Furthermore, substantive procedures
are applied to the maintenance payments made by
the Group for the aircrafts that are leased without
purchase option. The records of the maintenance
costs incurred during the year are compared with
the corresponding invoices.
In addition, we have evaluated the adequacy of the
disclosures in Note 2.5 and Note 15 in accordance
with TAS 37 "Provisions, Contingent Liabilities and
Contingent Assets".

Revenue recognition – complete and accurate
recording of revenue and determination of
passenger flight liability
The Group generates its revenues from	The following procedures have been applied to
international and domestic flight operations. In	ensure the accurate and complete recording of
order to perform the aforementioned operations,	the revenue and to determine the passenger
the Group uses information systems in which large	flight liability:
volumes of data are processed. Due to the nature	- We have assessed the appropriateness of
of operations, the ticket sales processes take place	the revenue recognition policy of the Group.
before the process of revenue recognition. The
Group also earns ancillary income apart from the	- The Group's revenue recognition process
passenger transportation income and monitors this side income separately.	and the design and implementation of
	controls designed by management in the
Revenue recognition has been identified as key	process have been examined and tested.
audit matter since the amount of revenue is
significant in the accompanying consolidated	- Procedures have been implemented to
financial statements, the information systems,	evaluate the completeness and accuracy of the end-to-end data flow between invoicing,
through processing large-volume of data, affects	collection and general ledger records.
the period in which the revenue will be recorded
and revenue recognition includes risks specific to	- Substantive analytical tests have been
the sector.	applied for revenue. The data obtained from
	the accounting systems, traffic data and
The accounting policy for the recognition of	passenger flight reports were compared in
revenue of the Group is given in Note 2.4 and details of the revenue amount is presented in Note	order to test the accuracy of the revenue
21.	amount and accuracy of the data used in
	these tests.
	In addition, the conformity of the disclosures in
	the consolidated financial statements as to
	TFRS has been also evaluated.

4) Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with TFRS, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Group financial reporting process.

5) Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

In an independent audit, our responsibilities as the auditors are:

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with standards on auditing as issued by the Capital Markets Board of Turkey and InAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with standards on auditing as issued by the Capital Markets Board of Turkey and InAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

B) Report on Other Legal and Regulatory Requirements

1) Auditors' report on Risk Management System and Committee prepared in accordance with paragraph 4 of Article 398 of Turkish Commercial Code ("TCC") 6102 is submitted to the Board of Directors of the Company on March 4, 2025.
2) In accordance with paragraph 4 of Article 402 of the TCC, no significant matter has come to our attention that causes us to believe that the Company's bookkeeping activities for the period 1 January - 31 December 2024 and financial statements are not in compliance with laws and provisions of the Company's articles of association in relation to financial reporting.
3) In accordance with paragraph 4 of Article 402 of the TCC, the Board of Directors submitted to us the necessary explanations and provided required documents within the context of audit.

The name of the engagement partner who supervised and concluded this audit is Kaan Birdal.

Güney Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik Anonim Şirketi

March 4, 2025

İstanbul, Turkey

INDEX		PAGE
	CONSOLIDATED STATEMENT OF FINANCIAL POSITION	1-2
	CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
	COMPREHENSIVE INCOME	3
	CONSOLIDATED STATEMENT OF CHANGES IN EQUITY	4-5
	CONSOLIDATED STATEMENT OF CASH FLOWS	6
	NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	7-85
NOTE 1	ORGANISATION AND OPERATIONS OF THE GROUP	7-8
NOTE 2	BASIS OF PRESENTATION OF FINANCIAL STATEMENTS	8-32
NOTE 3	INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD	33-34
NOTE 4	SEGMENT REPORTING	34
NOTE 5	RELATED PARTY TRANSACTIONS	34-36
NOTE 6	TRADE RECEIVABLES AND PAYABLES	36-37
NOTE 7	OTHER RECEIVABLES AND PAYABLES	37-38
NOTE 8	INVENTORIES	38
NOTE 9	PREPAYMENTS, DEFERRED INCOME AND CONTRACT LIABILITIES	38-39
NOTE 10	PROPERTY AND EQUIPMENT	40-42
NOTE 11	INTANGIBLE ASSETS	42
NOTE 12	RIGHT OF USE ASSETS	43
NOTE 13	GOVERNMENT GRANTS AND INCENTIVES	44
NOTE 14	BORROWING COSTS	44
NOTE 15	PROVISIONS, CONTINGENT ASSETS AND LIABILITIES	44-46
NOTE 16	COMMITMENTS	46-48
NOTE 17	EMPLOYEE BENEFITS	49-51
NOTE 18	EXPENSES BY NATURE	51
NOTE 19	OTHER ASSETS AND LIABILITIES	52
NOTE 20	SHAREHOLDERS' EQUITY	52-53
NOTE 21	REVENUE AND COST OF SALES	54-55
NOTE 22	GENERAL ADMINISTRATIVE EXPENSES AND SELLING AND MARKETING EXPENSES	55-56
NOTE 23	OTHER OPERATING INCOME AND EXPENSES	56
NOTE 24	INCOME AND EXPENSES FROM INVESTING ACTIVITIES	57
NOTE 25	FINANCIAL INCOME AND EXPENSES	58
NOTE 26	ANALYSIS OF OTHER COMPREHENSIVE INCOME ITEMS	58-59
NOTE 27	TAXATION ON INCOME (INCLUDING DEFERRED TAX ASSETS AND LIABILITIES)	60-64
NOTE 28	EARNINGS PER SHARE	65
NOTE 29	EFFECTS OF EXCHANGE RATE CHANGES	65
NOTE 30	DERIVATIVE FINANCIAL INSTRUMENTS	65
NOTE 31	FINANCIAL INSTRUMENTS	65-71
NOTE 32	NATURE AND LEVEL OF RISKS DERIVING FROM FINANCIAL INSTRUMENTS	71-80
NOTE 33	FINANCIAL INSTRUMENTS (FAIR VALUE AND HEDGE ACCOUNTING DISCLOSURES)	81-84
NOTE 34	EVENTS AFTER REPORTING PERIOD	84
NOTE 35	EXPLANATIONS RELATED TO STATEMENT OF CASH FLOW	85
NOTE 36	THE INDEPENDENT AUDITOR'S FEE	85
	APPENDIX – EURO SELECTED NOTES	86

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

		Current period (Audited) TL	Prior period (Audited) TL	(*) EUR	(*) EUR
		31 December	31 December	31 December	31 December
	Notes	2024	2023	2024	2023
ASSETS
Current assets		69.511.513.150	48.001.577.327		1.891.835.243 1.473.620.823
Cash and cash equivalents	35	46.258.554.416	16.078.358.927	1.258.979.406	493.596.374
Financial assets	31	11.098.130.886	18.534.625.942	302.048.311	569.002.359
Trade receivables	6	2.699.417.383	1.668.899.597	73.467.728	51.234.258
Trade receivables from third parties	6	2.699.417.383	1.668.899.597	73.467.728	51.234.258
Other receivables	7	106.274.871	184.612.285	2.892.392	5.667.491
Other receivables from related parties	5	-	44.138	-	1.355
Other receivables from third parties		106.274.871	184.568.147	2.892.392	5.666.136
Derivative financial instruments	30	145.642.867	12.607.533	3.963.837	387.044
Inventories	8	1.525.572.961	1.075.273.755	41.520.211	33.010.286
Prepaid expenses	9	7.418.285.764	10.201.603.776	201.897.122	313.183.370
Current income tax assets	27	85.510.906	19.552.842	2.327.277	600.261
Other current assets	19	174.123.096	226.042.670	4.738.959	6.939.380
Non-Current assets		213.808.263.691	153.953.502.230		5.819.032.995 4.726.283.979
Financial assets	31	4.621.164.674	1.674.235.495	125.770.276	51.398.067
Other receivables	7	3.119.881.195	1.778.877.878	84.911.131	54.610.528
Other receivables from third parties	7	3.119.881.195	1.778.877.878	84.911.131	54.610.528
Investments accounted by using the equity method	3	775.860.767	602.491.387	21.115.937	18.496.139
Property and equipment	10	17.304.831.905	10.377.700.527	470.967.606	318.589.424
Intangible assets	11	883.542.517	643.504.105	24.046.619	19.755.206
Right of use assets	12	153.299.548.290	113.509.023.248		4.172.222.342 3.484.661.746
Prepaid expenses	9	18.118.510.039	12.718.004.262	493.115.950	390.435.418
Deferred tax assets	27	15.684.924.304	12.649.665.328	426.883.134	388.337.451
TOTAL ASSETS		283.319.776.841	201.955.079.557		7.710.868.238 6.199.904.802

(*)The functional currency of the Company is Euro. However, the presentation currency is determined as Turkish Lira. See Note 2.1 for the conversion of Euro and Turkish Lira amounts.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

	Notes	Current period (Audited) TL 31 December 2024	Prior period (Audited) TL 31 December 2023	(*) EUR 31 December 2024	(*) EUR 31 December 2023
LIABILITIES
Current liabilities		54.463.615.723	37.183.794.680	1.482.289.523	1.141.521.116

Short term borrowings	31	6.321.566.673	5.353.784.770	172.048.659	164.358.114
Short term portion of long term borrowings	31	8.017.762.712	1.944.707.759	218.212.572	59.701.410
Short term portion of long term lease liabilities	31	14.911.498.531	11.326.083.111	405.833.468	347.704.239
Trade payables	6	7.942.864.589	6.526.115.717	216.174.134	200.348.000
Trade payables to related parties	5	43.890.717	17.811.962	1.194.536	546.817
Trade payables to third parties		7.898.973.872	6.508.303.755	214.979.598	199.801.183
Employee benefit obligations	17	540.280.976	398.269.511	14.704.364	12.226.645
Other payables	7	460.006.050	260.455.138	12.519.590	7.995.823
Other payables to third parties	7	460.006.050	260.455.138	12.519.590	7.995.823
Contract liabilities	9	12.269.986.013	8.418.318.534	333.941.687	258.437.538
Derivative financial instruments	30	170.696.233	109.079.828	4.645.693	3.348.688
Deferred income	9	1.470.323.469	782.027.857	40.016.533	24.007.806
Short term provisions		2.358.630.477	2.064.952.455	64.192.823	63.392.853
Short term provisions for employee benefits	17	2.301.423.398	1.587.893.487	62.635.867	48.747.417
Other short term provisions	15	57.207.079	477.058.968	1.556.956	14.645.436
Non-Current liabilities		153.937.068.322	110.102.098.656	4.189.573.178	3.380.071.120
Long term borrowings	31	17.261.724.196	12.312.016.907	469.797.544	377.971.840
Long term lease liabilities	31	119.794.949.520	88.581.646.542	3.260.356.410	2.719.405.614
Derivative financial instruments	30	13.387.018	64.250.780	364.343	1.972.462
Deferred income	9	7.457.506.238	3.506.810.209	202.964.552	107.657.057
Long term provisions		9.409.501.350	5.637.374.218	256.090.329	173.064.147
Long term provisions for employee benefits	17	1.768.183.978	1.201.242.173	48.123.147	36.877.444
Other long term provisions	15	7.641.317.372	4.436.132.045	207.967.182	136.186.703
SHAREHOLDERS' EQUITY		74.919.092.796	54.669.186.221	2.039.005.537	1.678.312.566
Paid-in share capital	20	500.000.000	102.299.707	230.037.951	60.544.134
Share premiums on capital stock		57.986.732	455.687.025	24.595.488	194.089.305
Other comprehensive income/expense
not to be reclassified to profit or loss
Actuarial losses on defined benefit plans	26	(156.636.746)	(105.998.793)	(4.263.048)	(3.254.102)
Currency translation differences	26	34.563.644.779	27.604.819.459	6.188	-
Other comprehensive income/expense
to be reclassified to profit or loss
Currency translation differences		414.074.097	368.154.236	8.445.337	8.808.787
Hedge fund	26	(138.062.439)	(129.997.940)	(3.757.527)	(3.990.862)
Gain on financial assets measured at fair value		66.754.501	48.328.332	1.816.800	1.483.652
Restricted profit reserves		20.459.941	20.459.941	4.047.406	4.047.406
Retained earnings		26.305.434.254	5.397.932.457	1.416.584.246	626.643.772
Net income for the period		13.285.437.677	20.907.501.797	361.492.696	789.940.474
TOTAL LIABILITIES AND EQUITY		283.319.776.841	201.955.079.557	7.710.868.238	6.199.904.802

(*)The functional currency of the Company is Euro. However, the presentation currency is determined as Turkish Lira. See Note 2.1 for the conversion of Euro and Turkish Lira amounts.

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE PERIOD ENDED 31 DECEMBER 2024

		Current period	Prior period	(*)	(*)
		(Audited) TL	(Audited) TL	EUR	EUR
		1 January-	1 January-	1 January-	1 January
Profit or loss	Notes	31 December 2024	31 December 2023	31 December 2024	31 December 2023
Sales	2 1	111.822.522.278	70.531.531.601	3.125.970.722	2.670.391.155
Cost of sales (-)	2 1	(86.596.697.071)	(53.713.132.638)	(2.410.389.043)	(2.027.343.986)
Gross profit		25.225.825.207	16.818.398.963	715.581.679	643.047.169
General administrative expenses (-)	2 2	(3.315.359.966)	(1.715.182.260)	(103.601.630)	(72.531.367)
Marketing expenses (-)	2 2	(2.167.241.251)	(1.280.527.235)	(63.833.764)	(50.271.821)
Other operating income	2 3	1.374.533.380	18.938.419	38.748.565	798.175
Other operating expenses (-)	2 3	(310.536.395)	(754.278.875)	(8.705.751)	(31.813.205)
Operating profit		20.807.220.975	13.087.349.012	578.189.099	489.228.951
Income from investing activities	2 4	1.782.644.241	1.410.583.172	49.187.715	46.364.466
Expenses from investing activities (-)	2 4	(53.666.827)	(67.433.199)	(1.460.575)	(2.204.032)
Share of investments income accounted for
using the equity method	3	93.148.490	19.845.984	2.624.202	771.984
Operating profit before financial expense		22.629.346.879	14.450.344.969	628.540.441	534.161.369
Financial income	2 5	2.128.573.715	1.676.170.226	59.639.274	66.229.951
Financial expense (-)	2 5	(12.835.462.663)	(6.011.831.262)	(365.085.216)	(230.277.959)
Profit/(loss) before tax		11.922.457.931	10.114.683.933	323.094.499	370.113.361
Tax income/(expense)		1.362.979.746	10.792.817.864	38.398.197	419.827.113
Deferred tax income/(expense)	2 7	1.362.979.746	10.792.817.864	38.398.197	419.827.113
Profit for the period		13.285.437.677	20.907.501.797	361.492.696	789.940.474
Income/(loss) per share (TL) / (EUR)	2 8	39,55	204,37	1,08	7,72
Other comprehensive income
Items not to be reclassified to profit or loss
Actuarial (losses) / gains on defined benefit plans	2 6	(67.517.257)	(48.101.149)	(1.345.261)	337.949
Deferred tax effect	2 6	16.879.304	16.686.831	336.315	149.351
Currency translation differences	2 6	6.958.825.320	15.936.884.011	6.188	-
Items to be reclassified to profit or loss
Currency translation differences		45.919.861	202.708.248	(363.450)	737.747
Gain on financial assets measured at fair value		24.568.230	30.878.129	444.198	294.741
Cash flow hedge	2 6	(10.752.643)	(526.730.017)	311.114	(23.048.790)
Deferred tax effect	2 6	(3.453.917)	104.615.052	(188.829)	4.717.931
Other comprehensive income		6.964.468.898	15.716.941.105	(799.725)	(16.811.071)
Total comprehensive income		20.249.906.575	36.624.442.902	360.692.971	773.129.403

(*)The functional currency of the Company is Euro. However, the presentation currency is determined as Turkish Lira. See Note 2.1 for the conversion of Euro and Turkish Lira amounts.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

					Other comprehensive		Other comprehensive
					income items		income items
					not to be reclassified to profit or loss		to be reclassified to profit or loss				Retained earnings
				Actuarial				Gain on
			Share	gains/(losses)	Currency	Currency		financial assets
		Paid in	premiums on	on defined	translation	translation	Hedge	measured at fair	Restricted	Retained	Net profit/(loss)	Shareholders'
		share capital	capital stock	benefit plans	differences	differences	reserve	value	profit reserves	earnings	for the year	equity

As at 1 January 2023			TL 102.299.707 455.687.025		(74.584.475) 11.667.935.448 165.445.988		282.719.523	26.847.705		20.459.941 (1.702.212.691)		7.100.145.148 18.044.743.319
Transfers	TL	-	-	-	-	-	-	-	-		7.100.145.148 (7.100.145.148)	-
Net profit/(loss) for the period	TL	-	-	-	-	-	-	-	-	-		20.907.501.797 20.907.501.797
Other comprehensive income / (expense)	TL	-	-		(31.414.318) 15.936.884.011 202.708.248 (412.717.463)			21.480.627	-	-		- 15.716.941.105

As at 31 December 2023					TL 102.299.707 455.687.025 (105.998.793) 27.604.819.459 368.154.236 (129.997.940)			48.328.332	20.459.941	5.397.932.457		20.907.501.797 54.669.186.221

As at 1 January 2024					TL 102.299.707 455.687.025 (105.998.793) 27.604.819.459 368.154.236 (129.997.940)			48.328.332	20.459.941	5.397.932.457		20.907.501.797 54.669.186.221
Transfers (*)			TL 397.700.293 (397.700.293)	-	-	-	-	-			- 20.907.501.797 (20.907.501.797)	-
Net profit/(loss) for the period	TL	-	-	-	-	-	-	-	-	-		13.285.437.677 13.285.437.677
Other comprehensive income / (expense)	TL	-	-		(50.637.953) 6.958.825.320 45.919.861		(8.064.499)	18.426.169	-	-		- 6.964.468.898
As at 31 December 2024		TL 500.000.000			57.986.732 (156.636.746) 34.563.644.779 414.074.097 (138.062.439)			66.754.501		20.459.941 26.305.434.254		13.285.437.677 74.919.092.796

(*)Within the registered capital ceiling of TL 500.000.000, the Company's issued capital amounting to TL 102.299.707 was increased by TL 397.700.293 to TL 500.000.000, all of which was covered from the amounts in the " Share Premiums on Capital Stock" account, and capital increase was registered with the Trade Registry on May 30, 2024.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

				Other comprehensive			Other comprehensive
				income items			income items
				not to be reclassified			to be reclassified to
				to profit or loss			profit or loss				Retained earnings
			Share					Gain on financial	Restricted		Net
		Paid in	premiums on	Actuarial gains/(losses)	Currency translation	Currency translation	Hedge	assets measured at	profit	Retained	profit/(loss) for	Shareholders'
		share capital	capital stock	on defined benefit plans	differences	differences	reserve	fair value	reserves	earnings	the year	equity

As at 1 January 2023			EUR 60.544.134 194.089.305	(3.741.402)	-	8.071.040	14.182.139		1.346.769 4.047.406	195.884.759	430.759.013	905.183.163
Transfers	EUR	-	-	-	-	-	-	-	-		430.759.013 (430.759.013)	-
Net profit/(loss) for the period	EUR	-	-	-	-	-	-	-	-	-	789.940.474	789.940.474
Other comprehensive income / (expense)	EUR	-	-	487.300	-		737.747 (18.173.001)	136.883	-	-		- (16.811.071)

As at 31 December 2023			EUR 60.544.134 194.089.305	(3.254.102)	-	8.808.787	(3.990.862)		1.483.652 4.047.406	626.643.772		789.940.474 1.678.312.566

As at 1 January 2024			EUR 60.544.134 194.089.305	(3.254.102)	-	8.808.787	(3.990.862)		1.483.652 4.047.406	626.643.772		789.940.474 1.678.312.566
Transfers (*)			EUR 169.493.817 (169.493.817)	-	-	-	-	-	-		789.940.474 (789.940.474)	-
Net profit/(loss) for the period	EUR	-	-	-	-	-	-	-	-	-	361.492.696	361.492.696
Other comprehensive income / (expense)	EUR	-	-	(1.008.946)	6.188	(363.450)	233.335	333.148	-	-	-	(799.725)

As at 31 December 2024		EUR 230.037.951	24.595.488	(4.263.048)	6.188	8.445.337	(3.757.527)			1.816.800 4.047.406 1.416.584.246		361.492.696 2.039.005.537

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE PERIOD ENDED 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

		Current period (Audited) TL 1 January-	Prior period (Audited) TL 1 January-	(*) EUR 1 January-	(*) EUR 1 January
	Notes			31 December 2024 31 December 2023 31 December 2024 31 December 2023
A. CASH FLOWS FROM OPERATING ACTIVITIES
Income/(loss) for the period		13.285.437.677	20.907.501.797	361.492.696	789.940.474
Adjustments to reconcile the income/(loss)
Depreciation and amortization	10-11-12	12.022.188.409	7.803.177.634	338.692.016	303.533.846
Adjustments related with impairments		46.697.793	52.092.367	1.264.353	1.607.293
Provision for doubtful receivable	6	(6.882.663)	(15.340.832)	(193.900)	(596.739)
Adjustments related with financial investment impairments	24	53.580.456	67.433.199	1.458.253	2.204.032
Adjustments related with provisions		2.230.103.955	1.977.812.838	62.827.031	60.846.437
Provision for employee benefits	17	2.205.330.029	1.962.113.889	62.129.094	60.235.768
Legal provison	15	24.773.926	15.698.949	697.937	610.669
Interest and commission income	24-25	6.208.198.828	4.057.705.144	179.759.157	160.813.447
Adjustments related with fair value expense (income)		(24.568.230)	(30.878.129)	(668.652)	(947.941)

Adjustments related with fair value expense (income) of financial assets Gain on equity investments accounted for		(24.568.230)	(30.878.129)	(668.652)	(947.941)
using the equity method	3	(93.148.490)	(19.845.984)	(2.624.202)	(771.984)
Current tax expense	27	(1.362.979.746)	(10.792.817.864)	(38.398.197)	(419.827.113)

Adjustments for (income)/expense caused by sale or
changes in share of joint ventures		(64.570.387)	-	(1.757.357)	-
Other provisions related with investing
or financing activities	24-25-33	2.839.740.560	(1.103.161.744)	79.945.190	(42.297.824)
Changes in working capital
Increase in trade receivables		(782.315.051)	213.547.438	(22.039.570)	8.306.728
Increase in other receivables, prepayments
and other assets		(4.462.352.747)	(3.474.534.393)	(130.513.407)	(134.735.514)
Increase in inventories		(302.067.709)	(201.628.104)	(8.509.925)	(7.843.081)
Increase in trade payables		561.763.358	81.708.592	15.826.134	3.178.362

Increase in deferred income, other payables and other current liabilities		3.142.745.167	891.606.544	93.399.816	68.034.786
Net cash generated from operating activities		33.244.873.387	20.362.286.136	928.695.083	789.837.916
Payment for the employee benefits provisions	17	(992.375.570)	(185.171.351)	(28.393.246)	(8.437.371)
Payment for other provisions	15	(810.841)	(447.322)	(22.843)	(17.400)
		32.251.686.976	20.176.667.463	900.278.994	781.383.145

B. CASH FLOWS FROM INVESTING ACTIVITIES
Net cash changes from acquisition and sale of debt instruments
of other entities		(1.683.149.797)	(964.122.059)	(48.917.253)	(41.463.132)

Net cash changes from purchase and sale of property, equipment and intangible assets		2.568.003.128	265.752.578	69.088.390	6.250.570
Interest received from financial investment		1.411.412.149	1.041.226.034	40.376.369	40.350.767
Changes in cash advances and payables		(3.892.511.506)	(2.485.476.848)	(109.660.781)	(96.681.940)
Other cash changes (**)		8.294.301.965	(8.810.719.329)	258.320.898	(261.063.241)
		6.698.055.939	(10.953.339.624)	209.207.623	(352.606.976)
C. CASH FLOWS FROM FINANCING ACTIVITIES
Increase in borrowings		27.201.897.345	8.096.076.606	761.466.720	315.231.973
		(18.382.166.326)	(5.537.727.865)	(535.551.831)	(225.166.980)
Repayment of borrowings		(12.635.066.627)	(8.879.652.930)	(355.958.171)	(345.407.389)
Repayment of principal in lease liabilities		(8.942.479.079)	(4.784.207.729)	(259.557.392)	(194.514.307)
Interest and commission paid Interest received		1.909.251.459	631.111.330	53.805.327	26.412.945

		(10.848.563.228)	(10.474.400.588)	(335.795.347)	(423.443.758)
NET DECREASE IN CASH AND CASH EQUIVALENTS
BEFORE TRANSLATION EFFECT (A+B+C)		28.101.179.687	(1.251.072.749)	773.691.270	5.332.411
D. TRANSLATION DIFFERENCES EFFECT ON CASH AND CASH EQUIVALENTS		2.079.015.802	6.771.164.805	(8.308.238)	(41.373.350)
NET (DECREASE) / INCREASE IN CASH AND CASH EQUIVALENTS (A+B+C+D)		30.180.195.489	5.520.092.056	765.383.032	(36.040.939)
E. CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD
AT THE BEGINNING OF THE PERIOD	35	16.078.358.927	10.558.266.871	493.596.374	529.637.313

AT THE END OF THE PERIOD (A+B+C+D+E)	35	46.258.554.416	16.078.358.927	1.258.979.406	493.596.374

(*)The functional currency of the Company is Euro. However, the presentation currency is determined as Turkish Lira. See Note 2.1 for the conversion of Euro and Turkish Lira amounts.

TL 49.160.051.970 of tangible and intangible assets additions in total of TL 35.993.223.914 was financed through leases for the year ended 31 December 2024 (31 December 2023: TL 27.192.793.634 of tangible and intangible assets additions in total of TL 24.430.509.673 was financed through leases).

(**) The change in foreign exchange-protected deposits and time deposits with a maturity of more than three months, classified as financial investments, has been presented.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 1 - ORGANIZATION AND OPERATIONS OF THE GROUP

Pegasus Hava Taşımacılığı A.Ş. (the "Company" or "Pegasus") and its subsidiaries (together "the Group") is a low cost airline company. The Group operates under a low cost business model and employs low cost airline business practices which focus on providing affordable, reliable and simple service. Group management focuses on providing high-frequency services on short- and medium-haul, point-topoint routes on its domestic and international transit network primarily from its main hub, Sabiha Gökçen Airport in İstanbul. The Group also operates scheduled flights from four other domestic hubs in Ankara, Adana, Antalya and İzmir. The Group operates with 118 aircraft (31 December 2023: 109 aircraft including 6 owned, all of them leased, 81 of which have purchase option) including 6 owned, 90 of which have purchase option and 22 leased as of 31 December 2024.

The Group offers a number of services ancillary to the core air passenger services and generate revenue through the provision of these services. These ancillary services include, but not limited to, revenue related to in-flight sale of beverages and food, excess baggage fees, reservation change and cancellation fees, airport check-in fees and seat selection fees.

The Group also provides cargo services and provides various training services. These training services include crew training, type rating training (i.e., training to fly a certain aircraft type), dangerous goods training and crew resource management (CRM) training.

The shareholders and ownership of the Company as of 31 December 2024 and 31 December 2023 are as follows:

	31 December 2024	31 December 2023
Esas Holding A.Ş. ("Esas Holding")	52,81%	56,65%
Publicly held	45,37%	41,53%
Sabancı Family Members	1,82%	1,82%
Total	100,00%	100,00%

Shares of the Company have been started to be traded in İstanbul Stock Exchange since 26 April 2013, after the book building between the dates of 18-19 April 2013.

The Group's total number of full time employees as of 31 December 2024 is 8.459 (31 December 2023: 7.670). The address of its principal office is Aeropark Yenişehir Mah. Osmanlı Bulvarı No: 11/A Kurtkoy-Pendik İstanbul.

Subsidiaries

Pegasus Havacılık Teknolojileri ve Ticaret A.Ş.

The Group established Pegasus Havacılık Teknolojileri ve Ticaret A.Ş. ("PHT") in Istanbul on 13 May 2016, to manage simulator technical support and maintenance operations. The Group holds 100% ownership of PHT's outstanding shares and consolidates it as a subsidiary on a line-by-line basis.

Pegasus Airlines Innovation Lab, Inc.

Pegasus Airlines Innovation Lab, Inc. ("PIL"), is incorporated in the State of Delaware, U.S.A., effective as of 28 December 2023, to undertake operations primarily in the Silicon Valley. Notifications regarding incorporation are completed with a capital amount of USD 150.000 as of 2 January 2024. The Group holds 100% ownership of PILs outstanding shares and consolidates it as a subsidiary on a line-by-line basis.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 1 - ORGANIZATION AND OPERATIONS OF THE GROUP

Joint Ventures

Pegasus Uçuş Eğitim Merkezi A.Ş.

The Group incorporated Pegasus Uçuş Eğitim Merkezi A.Ş. ("PUEM") in October 2010 in Turkiye, a joint venture flight training company, with SIM Industries B.V., a Dutch simulator manufacturing and marketing company.

The Group owns 49,40% of the outstanding shares of PUEM and disclose as joint venture under investments accounted for using the equity method in the financial statements.

Following the sale of the simulator in January 2023, PUEM ceased its primary operations, and the liquidation process is ongoing.

Hitit Bilgisayar Hizmetleri A.Ş.

Hitit Bilgisayar Hizmetleri A.Ş. ("Hitit Bilgisayar") was established in 1994, and as of 31 December 2014 it was merged with its related company Hitit Yazılım A.Ş. The scope of operations of the entity is to develop software solutions for airlines and travel agencies as well as airports, and be engaged with the activities concerning service of the foregoing operations, services and sales thereof.

The Group owns 36,82% of the outstanding shares of Hitit Bilgisayar and disclose as joint venture under investments accounted for using the equity method in the financial statements.

Approval of Financial Statements

Board of Directors has approved the consolidated financial statements as of 31 December 2024 and delegated authority for publishing it on 4 March 2025.

NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

2.1 Basis of Presentation

Statement of Compliance with TAS

The Company and its subsidiaries registered in Turkey maintain their books of account and prepare their statutory financial statements in accordance with accounting principles in the Turkish Commercial Code and Tax Legislation.

The accompanying consolidated financial statements are prepared in accordance with the requirements of Capital Markets Board ("CMB") Communiqué Serial II, No: 14.1 "Basis of Financial Reporting in Capital Markets", which were published in the Official Gazette No:28676 on 13 June 2013. The accompanying financial statements are prepared based on the Turkish Accounting Standards Turkish Financial Reporting Standards and interpretations ("TAS/TFRS") that have been put into effect by the Public Oversight Accounting and Auditing Standards Authority ("POA") under Article 5 of the Communiqué.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

2.1 Basis of Presentation

Statement of Compliance with TAS

The consolidated financial statements have been prepared on the historical cost basis except for certain financial instruments that are measured at fair values. The accompanying consolidated financial statements are based on the statutory records, with adjustments and reclassifications for the purpose of fair presentation in accordance with Turkish Accounting Standards.

The consolidated financial statements have been prepared on a going concern basis, with the assumption that the Group will benefit from its assets and fulfill its liabilities in the subsequent year and in the natural process of its business operations.

Functional and Presentation Currency

Although there is no prominent currency affecting revenue and cost of sales, the Company's functional currency is determined as Euro because; significant portion of scheduled flight revenues, which represents the Company's primary operations, is generated from European flights, Euro represents a significant component of the financial liabilities of the Company and management reports and budget enabling the Group's management to make executive decisions are prepared in Euro. The functional currency of the Company, its subsidiary and associates, other than Hitit Bilgisayar and PIL, is Euro. Hitit Bilgisayar's and PIL's functional currency is US Dollars.

If the legal records are kept in a currency other than the functional currency, the financial statements are initially translated into the functional currency and then translated to the Group's presentation currency, Turkish Lira ("TL").

For the companies in Turkiye that maintain financial records in TL, currency translation from TL to the functional currency is made under the framework described below:

Monetary assets and liabilities have been converted to the functional currency with the Central Bank of Turkish Republic (CBRT) foreign exchange rate.
Non-monetary items have been converted into the functional currency at the exchange rates prevailing at the transaction date.
Profit or loss accounts have been converted into the functional currency using the exchange rates at the transaction date, except for depreciation expenses.
The capital is followed according to historical costs.

The translation differences resulting from the above mentioned conversions are recognized under financial income / expenses in the statement of profit or loss.

Presentation currency of the Group's financial statements is TL. Financial Statements have been translated from Euro to TL in accordance with the relevant provisions of TAS 21 ("The Effects of Changes in Foreign Exchange Rates") as follows:

Assets and liabilities are translated using the Central Bank of the Republic of Turkey ("TCMB") Euro rate prevailing at the reporting date,
Incomes are converted from Euros to TL using the monthly average exchange rates and expense items at the registered exchange rates on the relevant transaction date.

Translation gains or losses arising from the translations stated above are presented as foreign currency translation reserve under equity. Share capital amount, representing the nominal share capital of the Company, all other equity items are presented in historic TL terms where all translation gains or losses in relation to these balances are accounted under foreign currency translation reserve.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

2.1 Basis of Presentation

Financial Reporting in Hyperinflationary Economies

In accordance with the POA's announcement dated 23 November 2023, companies applying Turkish Financial Reporting Standards are required to present their financial statements for the annual reporting periods ending on or after 31 December 2023, adjusted for the effects of inflation in accordance with the relevant accounting principles in Turkish Accounting Standard 29 "Financial Reporting in Hyperinflationary Economies" (TAS 29). Since the Company's functional currency is Euro as of the reporting date, there is no need to make any adjustments within the scope of TAS 29 in its financial statements to be prepared in accordance with TFRS. However, the financial statements as of 31 December 2023 and 31 December 2024 are prepared in accordance with the Tax Law, have been subject to inflation correction in accordance with the legislation.

Euro Amounts in the Financial Statements

The Euro amounts presented on the face of consolidated financial statements refer to the original Euro (functional currency) denomined consolidated financial statements as described under the Functional and Presentation Currency section above. In other words, the amounts shown in TL, which is the presentation currency, on the balance sheet, have been converted back to Euro using the official exchange rate announced by the CBRT as of the balance sheet date, and the Euro amounts shown on the consolidated profit or loss and other comprehensive income and consolidated cash flow statements have been converted from TL to Euro using the monthly average exchange rates.

Comparative Information and Reclassification of Prior Period Financial Statements

Consolidated financial statements of Group are prepared in comparison to prior period in order to identify financial position and performance trends. In order to maintain consistency with current period consolidated financial statements, comparative information is reclassified and material changes are disclosed if necessary. Group has not made any reclassification in the prior period consolidated financial statements in order to maintain consistency with current period consolidated financial statements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

2.1 Basis of Presentation

Basis of Consolidation

The following table illustrates the condensed consolidated subsidiaries and the Group's ownership percentage in these subsidiaries as of 31 December 2024 and 31 December 2023:

		Ownership rate		Country of
				registration and
Name of the company	Principal activity	31 December 2024	31 December 2023	operation
Pegasus Havacılık	Simulator technical
Teknolojileri ve	support and
Ticaret A.Ş.	maintenance	100%	100%	Turkiye
Pegasus Airlines
Innovation Lab, Inc.	Technology – R&D	100%	100%	USA

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company and its subsidiaries. Control is achieved when the Company:

Has power over the investee;
Is exposed to variable returns from its involvement with the investee or has rights to such returns; and
Has the ability to use its power to affect its returns.

The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.

When the Company has less than a majority of the voting rights of an investee, it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing whether or not the Company's voting rights in an investee are sufficient to give it power, including:

The size of the Company's holding of voting rights relative to the size and dispersion of holdings of the other voting shareholders;
Potential voting rights held by the Company, other vote holders or other parties;
Rights arising from other contractual arrangements; and
Any additional facts and circumstances that indicate whether the Company currently has the ability to direct the relevant activities at the time decisions need to be made will be considered. This includes analyzing voting patterns at previous shareholders' meetings.

Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year, are included in the consolidated statement of profit or loss and other comprehensive income from the date the Company gains control until the date when the Company no longer controls the subsidiary.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

2.1 Basis of Presentation

Basis of Consolidation

Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with the Group's accounting policies. All intercompany assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

Changes in the Group's Ownership Interests in Existing Subsidiaries

Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group's interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to owners of the Company.

When the Group loses control of a subsidiary, a gain or loss is recognised in profit or loss and is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. All amounts previously recognised in other comprehensive income in relation to that subsidiary are accounted for as if the Group had directly disposed of the related assets or liabilities of the subsidiary (i.e. reclassified to profit or loss or transferred to another category of equity as specified/permitted by applicable TFRSs). The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under TFRS 9 Financial Instruments, when applicable, the cost on initial recognition of an investment in an associate or a joint venture.

Joint Ventures

The following table illustrates the affiliates and joint ventures then indicates the Group's ownership percentage in these joint ventures as of 31 December 2024, 31 December 2023:

		Ownership rate			Country of
Name of the company	Principal activity	31 December 2024	31 December 2023	Ownership type	registration and operation
Pegasus Uçuş Eğitim Merkezi A.Ş. ("PUEM")	Simulator training Information	49,40%	49,40%	Joint venture	Turkiye
Hitit Bilgisayar Hizmetleri A.Ş. ("Hitit Bilgisayar")	system solutions	36,82%	36,82%	Joint venture	Turkiye

A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.

(*) With the simulator sale in January 2023, PUEM stopped its main operations and the liquidation process continues.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

2.1 Basis of Presentation

Joint Ventures

The results and assets and liabilities of joint ventures are incorporated in these consolidated financial statements using the equity method of accounting. At first, investments in joint ventures are recorded on the consolidated financial statements at their initial cost under the equity method. Subsequently, adjustments are made to reflect the Group's portion of the joint venture's profit or loss and other comprehensive income. When the Group's share of losses of joint venture exceeds the Group's interest in that joint venture (which includes any long-term interests that, in substance, form part of the Group's net investment in the joint venture), the Group discontinues recognizing its share of further losses. Additional losses are recognized only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the joint venture.

2.2 Changes in Accounting Estimates

Changes in accounting estimates are applied prospectively. If the change is effective for a specific period, it impacts only that period. If they relates to future periods, they are recognized prospectively both in the current period and in the future period. Significant errors identified by the Group in the accounting estimates are applied retrospectively and prior period financial statements are restated. The Group has not made any changes in accounting estimates in the current reporting period.

2.3 The new standards, amendments and interpretations

The accounting policies adopted in preparation of the consolidated financial statements as of December 31, 2024 are consistent with those of the previous financial year, except for the adoption of new and amended TFRS and TFRIC interpretations effective as of 1 January 2024 and thereafter. The effects of these standards and interpretations on the Group's financial position and performance have been disclosed in the related paragraphs.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

2.3 The new standards, amendments and interpretations

i) The new standards, amendments and interpretations which are effective as at January 1, 2024 are as follows:

Amendments to TAS 1- Classification of Liabilities as Current and Non-Current Liabilities

In March 2020 and January 2023, POA issued amendments to TAS 1 to specify the requirements for classifying liabilities as current or non-current. According to the amendments made in January 2023 if an entity's right to defer settlement of a liability is subject to the entity complying with the required covenants at a date subsequent to the reporting period ("future covenants"), the entity has a right to defer settlement of the liability even if it does not comply with those covenants at the end of the reporting period. In addition, January 2023 amendments require an entity to provide disclosure when a liability arising from a loan agreement is classified as non-current and the entity's right to defer settlement is contingent on compliance with future covenants within twelve months. This disclosure must include information about the covenants and the related liabilities. The amendments clarify that the requirement for the right to exist at the end of the reporting period applies to covenants which the entity is required to comply with on or before the reporting date regardless of whether the lender tests for compliance at that date or at a later date. The amendments also clarified that the classification of a liability is unaffected by the likelihood that the entity will exercise its right to defer settlement of the liability for at least twelve months after the reporting period. The amendments must be applied retrospectively in accordance with TAS 8. The Group is in the process of assessing the impact of the amendments on financial position or performance of the the Group.

Amendments to TFRS 16 - Lease Liability in a Sale and Leaseback

In January 2023, POA issued amendments to TFRS 16. The amendments specify the requirements that a seller-lessee uses in measuring the lease liability arising in a sale and leaseback transaction, to ensure the seller-lessee does not recognise any amount of the gain or loss that relates to the right of use it retains. In applying requirements of TFRS 16 under "Subsequent measurement of the lease liability" heading after the commencement date in a sale and leaseback transaction, the seller lessee determines 'lease payments' or 'revised lease payments' in such a way that the seller-lessee would not recognise any amount of the gain or loss that relates to the right of use retained by the seller-lessee. The amendments do not prescribe specific measurement requirements for lease liabilities arising from a leaseback. The initial measurement of the lease liability arising from a leaseback may result in a seller-lessee determining 'lease payments' that are different from the general definition of lease payments in TFRS 16. The seller-lessee will need to develop and apply an accounting policy that results in information that is relevant and reliable in accordance with TAS 8. A seller-lessee applies the amendments retrospectively in accordance with TAS 8 to sale and leaseback transactions entered into after the date of initial application of TFRS 16. The Group is in the process of assessing the impact of the amendments on financial position or performance of the Group.

Amendments to TAS 7 and TFRS 7 - Disclosures: Supplier Finance Arrangements

The amendments issued by POA in September 2023 specify disclosure requirements to enhance the current requirements, which are intended to assist users of financial statements in understanding the effects of supplier finance arrangements on an entity's liabilities, cash flows and exposure to liquidity risk. Supplier finance arrangements are characterized by one or more finance providers offering to pay amounts an entity owes its suppliers and the entity agreeing to pay according to the terms and conditions of the arrangements at the same date as, or a date later than, suppliers are paid.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

2.3 The new standards, amendments and interpretations

i) The new standards, amendments and interpretations which are effective as at January 1, 2024 are as follows:

Amendments to TAS 7 and TFRS 7 - Disclosures: Supplier Finance Arrangements

The amendments require an entity to provide information about terms and conditions of those arrangements, quantitative information on liabilities related to those arrangements as at the beginning and end of the reporting period and the type and effect of non-cash changes in the carrying amounts of those liabilities. In the context of quantitative liquidity risk disclosures required by TFRS 7, supplier finance arrangements are also included as an example of other factors that might be relevant to disclose. The amendments did not have a significant impact on the consolidated financial position or performance of the Group.

ii) Standards issued but not yet effective and not early adopted

Standards, interpretations and amendments to existing standards that are issued but not yet effective up to the date of issuance of the consolidated financial statements are as follows. The Group will make the necessary changes if not indicated otherwise, which will be affecting the consolidated financial statements and disclosures, when the new standards and interpretations become effective.

Amendments to TFRS 10 and TAS 28 - Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

In December 2017, POA postponed the effective date of this amendment indefinitely pending the outcome of its research project on the equity method of accounting. Early application of the amendments is still permitted. The Group will assess the effects of the amendments after the new standards have been finalized.

TFRS 17 - The new Standard for insurance contracts

POA issued TFRS 17 in February 2019, a comprehensive new accounting standard for insurance contracts covering recognition and measurement, presentation and disclosure. TFRS 17 model combines a current balance sheet measurement of insurance contract liabilities with the recognition of profit over the period that services are provided. The mandatory effective date of the Standard postponed to accounting periods beginning on or after January 1, 2026 with the announcement made by the POA.

The amendments did not have a significant impact on the financial position or performance of the Group.

Amendments to TAS 21 - Lack of exchangeability

In May 2024, POA issued amendments to TAS 21. The amendments specify how an entity should assess whether a currency is exchangeable and how it should determine a spot exchange rate when exchangeability is lacking. When an entity estimates a spot exchange rate because a currency is not exchangeable into another currency, it discloses information that enables users of its financial statements to understand how the currency not being exchangeable into the other currency affects, or is expected to affect, the entity's financial performance, financial position and cash flows. The amendments will be effective for annual reporting periods beginning on or after 1 January 2025. Early adoption is permitted but will need to be disclosed. When applying the amendments, an entity cannot restate comparative information. The Group is in the process of assessing the impact of the amendments on financial position or performance of the Group.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

2.3 The new standards, amendments and interpretations

iii) The amendments which are effective immediately upon issuance

Amendments to TAS 12 - International Tax Reform – Pillar Two Model Rules

In September 2023, POA issued amendments to TAS 12, which introduce a mandatory exception in TAS 12 from recognizing and disclosing deferred tax assets and liabilities related to Pillar Two income taxes. The amendments clarify that TAS 12 applies to income taxes arising from tax laws enacted or substantively enacted to implement the Pillar Two Model Rules published by the Organization for Economic Cooperation and Development (OECD). The amendments also introduced targeted disclosure requirements for entities affected by the tax laws. The temporary exception from recognition and disclosure of information about deferred taxes and the requirement to disclose the application of the exception apply immediately and retrospectively upon issue of the amendments.

The amendments did not have a significant impact on the financial position or performance of the Group.

iv) The new amendments that are issued by the International Accounting Standards Board (IASB) but not issued by Public Oversight Authority (POA)

The following two amendments to IFRS 9 and IFRS 7 and Annual Improvements to IFRS Accounting Standards as well as IFRS 18 and IFRS 19 are issued by IASB but not yet adapted/issued by POA. Therefore, they do not constitute part of TFRS. The Group will make the necessary changes to its consolidated financial statements after the amendments and new Standard are issued and become effective under TFRS.

Amendments to IFRS 9 and IFRS 7 – Classification and measurement of financial instruments

In May 2024, IASB issued amendments to the classification and measurement of financial instruments (amendments to IFRS 9 and IFRS 7). The amendment clarifies that a financial liability is derecognised on the 'settlement date'. It also introduces an accounting policy option to derecognise financial liabilities that are settled through an electronic payment system before settlement date if certain conditions are met. The amendment also clarified how to assess the contractual cash flow characteristics of financial assets that include environmental, social and governance (ESG)-linked features and other similar contingent features as well as the treatment of non-recourse assets and contractually linked instruments. Additional disclosures in IFRS 7 for financial assets and liabilities with contractual terms that reference a contingent event (including those that are ESG-linked), and equity instruments classified at fair value through other comprehensive income are added with the amendment. The amendments did not have a significant impact on the financial position or performance of the Group.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

2.3 The new standards, amendments and interpretations

iv) The new amendments that are issued by the International Accounting Standards Board (IASB) but not issued by Public Oversight Authority (POA)

Annual Improvements to IFRS Accounting Standards – Volume 11

In July 2024, the IASB issued Annual Improvements to IFRS Accounting Standards – Volume 11, amending the followings:

IFRS 1 First-time Adoption of International Financial Reporting Standards – Hedge Accounting by a First-time Adopter: These amendments are intended to address potential confusion arising from an inconsistency between the wording in IFRS 1 and the requirements for hedge accounting in IFRS 9.
IFRS 7 Financial Instruments: Disclosures – Gain or Loss on Derecognition: The amendments update the language on unobservable inputs in the Standard and include a cross reference to IFRS 13.
IFRS 9 Financial Instruments – Lessee Derecognition of Lease Liabilities and Transaction Price: IFRS 9 has been amended to clarify that, when a lessee has determined that a lease liability has been extinguished in accordance with IFRS 9, the lessee is required to apply derecognition requirement of IFRS 9 and recognise any resulting gain or loss in profit or loss. IFRS 9 has been also amended to remove the reference to 'transaction price".
IFRS 10 Consolidated Financial Statements – Determination of a 'De Facto Agent': The amendments are intended to remove the inconsistencies between IFRS 10 paragraphs.
IAS 7 Statement of Cash Flows – Cost Method: The amendments remove the term of "cost method" following the prior deletion of the definition of 'cost method'.

The Group is in the process of assessing the impact of the amendments on financial position or performance of the Group.

Amendments to IFRS 9 and IFRS 7 - Contracts Referencing Nature-dependent Electricity

In December 2024, the Board issued Contracts Referencing Nature-dependent Electricity (Amendments to IFRS 9 and IFRS 7). The amendment clarifies the application of the "own use" requirements and permits hedge accounting if these contracts are used as hedging instruments. The amendment also adds new disclosure requirements to enable investors to understand the effect of these contracts on a company's financial performance and cash flows. The amendments are not applicable for the Group and will not have an impact on the financial position or performance of the Group.

(Convenience Translation of The Report and Financial Statements Originally Issued in Turkish)

PEGASUS HAVA TAŞIMACILIĞI A.Ş. AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

2.3 The new standards, amendments and interpretations

iv) The new amendments that are issued by the International Accounting Standards Board (IASB) but not issued by Public Oversight Authority (POA)

IFRS 18 – The new Standard for Presentation and Disclosure in Financial Statements

In April 2024, IASB issued IFRS 18 which replaces IAS 1. IFRS 18 introduces new requirements on presentation within the statement of profit or loss, including specified totals and subtotals. IFRS 18 requires an entity to classify all income and expenses within its statement of profit or loss into one of five categories: operating; investing; financing; income taxes; and discontinued operations. It also requires disclosure of management-defined performance measures and includes new requirements for aggregation and disaggregation of financial information based on the identified 'roles' of the primary financial statements and the notes. In addition, there are consequential amendments to other accounting standards, such as IAS 7, IAS 8 and IAS 34.

The Group is in the process of assessing the impact of the amendments on financial position or performance of the Group.

TFRS 19 – Subsidiaries without Public Accountability: Disclosures

In May 2024, IASB issued IFRS 19, which allows eligible entities to elect to apply reduced disclosure requirements while still applying the recognition, measurement and presentation requirements in other IFRS accounting standards. Unless otherwise specified, eligible entities that elect to apply IFRS 19 will not need to apply the disclosure requirements in other IFRS accounting standards. An entity that is a subsidiary, does not have public accountability and has a parent (either ultimate or intermediate) which prepares consolidated financial statements, available for public use, which comply with IFRS accounting standards may elect to apply IFRS 19. The amendments are not applicable for the Group and will not have an impact on the financial position or performance of the Group.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

2.4 Summary of Significant Accounting Policies

Related Parties

Related parties comprise of any person or entity related to the entity preparing the financial statements (reporting entity).

a) Any individual or any one of the close family members of such individual are considered as being related with the reporting entity: In the event the subject matter individual,

(i) is in possession of control or joint control over the reporting entity,

(ii) is entitled to a crucial influence on the reporting entity,

(iii) is a member of the key management staff of the reporting entity or one of the major shareholders of the reporting entity.

(b) In the event any of the following circumstances is present in existence, the entity is considered to be in relation with the reporting entity:

(i) If the entity and the reporting entity are members of the same group (in other words, each major partnership, associated partnership and other associated partnership is related to the others).

(ii) If the entity is an affiliate or business partnership of the other entity (or a member of the group that such other entity is also a member of).

(iii) If both entities are business partnerships of the same third party.

(iv) If one of the entities is a business partnership of any third entity and the other entity is an affiliate of the subject matter third entity.

(v) If there are benefit plans for the post-retirement stage with respect to the employees of the entity, reporting entity or any other entity related to the reporting entity. In the event the reporting entity is itself in possession of such a plan, the sponsoring employers are likewise related to the reporting entity.

(vi) If the entity is controlled by any individual identified under article (a) or under joint control.

(vii) If any individual identified under item (i) of article (a) is in possession of a substantial influence on the entity or is a member of the key management personnel of the subject matter entity (or of the major shareholder of any such entity).

Consists of the transfer of sources, services or obligations between the related party and any party related to the reporting entity of the transaction performed, regardless of whether the same is in consideration for a charge or otherwise.

Revenue from Contracts with Customers

The Group generates its revenues from international and domestic flight operations. Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of discounts and sales related taxes. These revenues are recognized as follows:

• Scheduled and charter flight revenues are recorded as revenue when the transportation service is provided. Tickets sold but not yet used are recorded as passenger flight liabilities. Passenger flight liability is followed in the balance sheet under the liabilities arising from customer contracts until the flight occurs.

• Cargo services and training services are recognized when services are provided.

• Ancillary revenue is recognized as revenue when the service is provided.

• The passenger service fee is a non-refundable fee added to the ticket price in order to perform the sales service. Since the passenger service fee is not considered as a performance obligation different from the transportation service, it is recorded as income when the transportation service is performed.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

2.4 Summary of Significant Accounting Policies

Revenue from Contracts with Customers

The Group has evaluated itself as a surrogate in terms of the airport tax paid to the relevant state institutions and collected from the passengers at the ticket price and has not included the taxes in the revenue amount. The most important factor in this evaluation is the fact that the addressee of the tax is not the Company but the passenger.

If the Group expects, at contract inception, that the period between when the Group transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less, the promised amount of consideration for the effects of a significant financing component is not adjusted. On the other hand, when the contract effectively constitutes a financing component, the fair value of the consideration is determined by discounting all future receipts using an imputed rate of interest. The difference between the fair value and the nominal amount of the consideration is recognised on an accrual basis as other operating income.

The Group also receives interest income, which is accrued on a time basis by reference to the principal outstanding and at the effective interest rate applicable.

Group recognises revenue based on the following five principles in accordance with the TFRS 15, "Revenue from Contracts with Customers Standard"; effective from 1 January 2019:

Identification of customer contracts
Identification of performance obligations
Determination of the transaction price in the contracts
Allocation of transaction price to the performance obligations
Recognition of revenue when the performance obligations are satisfied

Group evaluates each contracted obligation separately and respective obligations, committed to deliver the distinct goods or perform services, are determined as separate performance obligations. Group determines at contract inception whether the performance obligation is satisfied over time or at a point in time.

Group determines at contract inception whether the performance obligation is satisfied over time or at a point in time. When the Group transfers control of a good or service over time, and therefore satisfies a performance obligation over time, then the revenue is recognised over time by measuring the progress towards complete satisfaction of that performance obligation. When a performance obligation is satisfied by transferring promised goods or services to a customer, the Group recognises the revenue as the amount of the transaction price that is allocated to that performance obligation. The goods or services are transferred when the control of the goods or services is delivered to the customers.

Pegasus Card and Pegasus Plus Loyalty Program

Pegasus Bolbol is the loyalty program of Pegasus. The members of Pegasus Bolbol program earn and accumulate flight points for both ticket and non-ticket purchases each time they use their Pegasus Bolbol membership. If the points are earned by ticket purchases, the flight points are provided by Pegasus and recognized as a separately identifiable component of the sales transaction and measured at fair value. They are recorded as "flight liability from flight points" initially and recognized as revenue when the flight points are used. The value of flight points changes according to the ticket price during use and their fair value is adjusted according to the statistic during the current year.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

2.4 Summary of Significant Accounting Policies

Pegasus Card and Pegasus Plus Loyalty Program

If the points are earned through non-ticket purchases, the program partner funds the cost of the points through a payment to the Group. The Group defers this revenue, which it records as "flight liability from flight points" and recognizes the revenue when the points are used by the customer. Award points are valid for at least two years and expire at the last day of the second calendar year. Unused points are recognized as income based on historic usage.

Inventories

Inventories are composed of consumables, spare parts, catering stocks and other stocks and they are valued at the lower of cost or net realizable value. Spare parts are composed of large number of minor items of property, plant and equipment. For practical reasons, smaller items that are not significant are not recorded individually in the property, plant, and equipment register but are instead included in inventories.

Tangible Assets

Tangible assets are carried at historical costs less accumulated depreciation and any accumulated impairment losses.

Depreciation is recognised over their estimated useful lives, less their residual values using the straightline method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

The Group allocates the cost of an acquired aircraft to its service potential reflecting the maintenance condition of its engines and airframe. This cost, which can equate to a substantial element of the total aircraft cost, is depreciated over the shorter of the period to the next maintenance check or the remaining life of the aircraft. The costs of subsequent major airframe and engine maintenance checks are capitalised and depreciated over the shorter of the period to the next check or the remaining life of the aircraft.

All significant components and repairable spare parts are accounted separately and depreciated over their respective estimated useful lives.

Leased assets are depreciated over their expected useful lives on the same basis as owned assets.

An item of property, plant, and equipment is derecognized upon disposal or when no future economic benefits are expected from its continued use. Any gain or loss arising from the disposal or retirement of a tangible asset is determined as the difference between the sales proceeds and the carrying amount of the asset. This gain or loss is recognized in the profit or loss statement.

Intangible Assets

Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortization and any accumulated impairment losses. Amortization is recognized on a straight-line basis over their estimated useful lives. The estimated useful life and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are carried at cost less accumulated impairment losses.

Acquired trademark, brands and licenses are shown at historical cost. Trademarks, brands and licenses have a finite useful life and are carried at cost less accumulated amortization. Amortization is calculated using the straight-line method to allocate the cost of trademarks and licenses over their estimated useful lives. The acquired software has a 5 year useful life.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

2.4 Summary of Significant Accounting Policies

Provisions, Contingent Assets and Contingent Liabilities

Provisions are recognized when the Group has a present obligation as a result of a past event, and it is probable that the Group will be required to settle that obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

Impairment of Non-financial Assets

At the end of each reporting period, the Group reviews the carrying amounts of its aircraft to determine whether there is any indication that those assets have suffered an impairment loss. If such an indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purpose of assessing impairment, assets are grouped at the lowest level for which separately identifiable cash flows exist (cash-generating units). At the end of each reporting period, non-financial assets are reviewed for possible impairment reversals.

The fleet has been determined as the lowest level cash generating unit and analysed for impairment accordingly. The aircraft fleet includes both right-of-use assets under lease agreements and aircraft, components, spare engines and other parts within the tangible asset account group. For determination of recoverable amounts the higher value between value in use and sale expenses deducted net selling prices in US Dollars is used. Net selling price for the aircraft is determined according to second hand prices in international price guides.

Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization. There are no qualifying assets during the years ended 31 December 2024 and 31 December 2023. Therefore, no borrowing costs were capitalized during the years ended 31 December 2024 and 31 December 2023. All borrowing costs are recognized in the statement of profit or loss in the period in which they are incurred.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

2.4 Summary of Significant Accounting Policies

Maintenance and Repair Costs and Maintenance Reserve Contribution Receivables

Although, finance lease and operating lease definitions are removed with TFRS 16 for the lessees, the Group continues to use these definitions because they represent different risk categories. In line with the definitions introduced by TFRS 16 for the lessors; a lease agreement is defined as a financial lease, if the lease significantly transfers all risks and returns arising from the ownership of the underlying asset; otherwise, it is defined as an operating lease. However, this distinction does not affect the accounting for the relevant lease agreements. All lease agreements are accounted for in accordance with TFRS 16.

The accounting for the cost of providing major airframe and certain engine maintenance checks for owned aircraft and aircraft that is leased with purchase option (financial leases) described in the accounting policy for tangible assets.

For leased aircraft where there is no purchase option (operating leases), the Group pays monthly supplemental amount called "Maintenance Reserve Contribution" to operating lease companies with respect to heavy maintenance expenditures. This reserve contribution is calculated based on the actual flight hours or the actual number of landings of the aircraft. These reserve payments are recognised on a monthly basis in the statement of financial position, netted from the maintenance provisions recorded in accordance with IFRS 16, during the lease term. However, when the Group incurs such heavy maintenance expenditures on behalf of the operating lease company, it claims these costs back and recognise an agreed maintenance reserve contribution receivable until it is collected. All other maintenance and repair costs are expensed as incurred.

Right of use assets

The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use asssets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Unless the Group is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the recognised right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. As of the leasing start date, redelivery maintenance provisions of the aircraft are considered as an indispensable obligation within the scope of the contract, and the estimated provisions are included in the discounted cost and the right of use assets.

Right-of-use assets are subject to impairment.

Lease liabilities

At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating a lease, if the lease term reflects the Group exercising the option to terminate. The variable lease payments that do not depend on an index or a rate are recognised as expense in the period on which the event or condition that triggers the payment occurs.

(Convenience Translation of The Report and Financial Statements Originally Issued in Turkish)

PEGASUS HAVA TAŞIMACILIĞI A.Ş. AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

2.4 Summary of Significant Accounting Policies

Lease liabilities

When calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the lease liabilities are increased to reflect the accretion of interest and reduced for the lease payments made. Additionally, the carrying amount of lease liabilities is remeasured in case of modification, changes in the lease term, changes in in-substance fixed lease payments, or changes in the assessment to purchase the underlying asset.

Short-term leases and leases of low-value assets

The Group applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the low-value assets lease recognition exemption to leases of office equipment that are considered low value. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term.

Taxation and Deferred Income Taxes

Turkish Tax Legislation does not permit a parent company and its subsidiary to file a consolidated tax return. Therefore, provisions for taxes, as reflected in the accompanying consolidated financial statements, have been calculated on a separate-entity basis.

Income tax expense represents the sum of the tax currently payable and deferred tax.

Current Tax

The current tax payable is based on taxable profit for the year. Taxable profit differs from profit before tax as reported in the statement of profit or loss because of items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

Deferred Tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases which are used in the computation of taxable profit. Deferred tax assets are recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such assets and liabilities are not recognized if the difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

2.4 Summary of Significant Accounting Policies

Taxation and Deferred Income Taxes

Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date.

The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

Current and Deferred Tax for the Period

Taxes are recognised as an expense or income in profit or loss, except when they related to transactions that are recognised in equity. Otherwise, taxes are also recognized in equity with other related transactions.

Government Grants

Government grants are not recognized until there is reasonable assurance that the Group will comply with the conditions attaching to them and that the grants will be received. Government grants are recognized in profit or loss on a systematic basis over the periods in which the Group recognizes as expenses the related costs for which the grants are intended to compensate. As a financing instrument, government grants, rather than to be recognized in profit or loss to offset the expenses they are financing, are to be recognized in the balance sheet as deferred income and be recognized in profit or loss on a systematic basis over the economical life of the related assets. Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future related costs are recognized in profit or loss in the period in which they become receivable. The benefit of a government loan at a below-market rate of interest is treated as a government grant, measured as the difference between proceeds received and the fair value of the loan based on prevailing market interest rates.

Investment Incentives

The Turkish Government has an Investment Incentive Program which became effective upon the issuance of the Council of Ministers" resolution "Government Assistance for Investments" No:2009/15199 ("Incentive Program") on 14 July 2009.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

2.4 Summary of Significant Accounting Policies

Government Grants

Investment Incentives

The Incentive Program aims to provide support to companies which make investments by providing a credit against taxable income related to those investments. The amount of credit is determined based on a "contribution rate" in the Incentive Program. An entity must obtain an investment certificate related to the associated incentives.

The Group obtained incentive certificates from the Undersecretariat of Treasury for 100 aircraft. According to the incentive certificate of 16 aircraft, the Company will use 15% of the purchase value of the aircraft as the contribution rate which is the maximum amount that could be deducted against taxable income that is attributable to the operation of aircraft. The deduction will be performed by the application of 50% of the effective tax rate for the (i.e. use of 12,5% instead of 25%) taxable income attributable to the operation of these aircraft. According to the incentive certificate of 84 aircraft, the Company will use 50% of the purchase value of the aircraft as the contribution rate which is the maximum amount that could be deducted against taxable income that is attributable to the operation of aircraft. The deduction will be performed by the application of 90% of the effective tax rate for the (i.e. use of 2,5% instead of 25%) taxable income attributable to the operation of these aircraft. The Group has reflected the amount related to the above-mentioned "contribution amount" in the financial statements due to the formation of a Corporate Tax base in the foreseeable four-year period as of December 31, 2024 (Note 13).

Employee Benefits

Defined Benefits

Under Turkish law and union agreements, lump sum payments are made to employees retiring or involuntarily leaving the Group. Such payments are considered as being part of defined retirement benefit plan as per Turkish Accounting Standard No. 19 (revised) "Employee Benefits" ("TAS 19").

The retirement benefit obligation recognised in the balance sheet represents the present value of the defined benefit obligation. The calculated actuarial gains and losses are accounted under the other comprehensive income when material.

Employee Bonus Plan

The Group recognizes a liability and an expense for employee bonus, based on current year performance. The Group recognizes a provision where contractually obliged or where there is a past practice that has created a constructive obligation.

Foreign Currency Transactions

The individual financial statements of each Group entity are presented in the currency of the primary economic environment in which the entity operates (its functional currency).

Based on the nature of the Group's business, there are various transactions entered into that are in currencies other than the functional currency. In preparing the financial statements of the individual entities, transactions in currencies other than the functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

2.4 Summary of Significant Accounting Policies

Foreign Currency Transactions

At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Exchange differences are recognized either as finance income or finance costs in the period in which they arise.

Financial Assets

Recognition and Measurement

Group classifies its financial assets in three categories of financial assets measured at amortized cost, financial assets measured at fair value through other comprehensive income and financial assets measured at fair value through profit or loss. The classification of financial assets is determined considering the entity's business model for managing the financial assets and the contractual cash flow characteristics of the financial assets. The appropriate classification of financial assets is determined at the time of the purchase. The Group determines the classification of its financial assets at the time of purchase.

"Financial assets measured at amortized cost", are non-derivative assets that are held within a business model whose objective is to hold assets in order to collect contractual cash flows and the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Group's financial assets measured at amortized cost comprise "cash and cash equivalents", "trade receivables" and "financial investments". Financial assets carried at amortized cost are measured at their fair value at initial recognition and by effective interest rate method at subsequent measurements. Gains and losses on valuation of nonderivative financial assets measured at amortized cost are accounted for under the consolidated statement of income.

"Financial assets measured at fair value through other comprehensive income", are non-derivative assets that are held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Gains or losses on a financial asset measured at fair value through other comprehensive income is recognized in other comprehensive income, except for impairment gains or losses and foreign exchange gains and losses until the financial asset is derecognized or reclassified.

The valuation differences classified under other comprehensive income are recognized in retained earnings upon derecognition of financial assets.

At initial recognition, the Group may make an irrevocable election for particular investments in equity instruments, which would otherwise be measured at fair value through profit or loss, to present subsequent changes in fair value in other comprehensive income. In such cases, dividends from those investments are accounted for in the consolidated statement of income.

"Financial assets measured at fair value through profit or loss", are assets that are not measured at amortized cost or at fair value through other comprehensive income. Gains and losses on valuation of these financial assets are accounted for under the consolidated statement of income.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

2.4 Summary of Significant Accounting Policies

Financial Assets

Derecognition

The Group derecognized a financial asset when the contractual rights to the cash flows from the asset expired, or it transferred the rights to receive the contractual cash flows in a transaction in which substantially all the risks and rewards of ownership of the financial asset were transferred. Any interest in such transferred financial assets that was created or retained by the Group was recognized as a separate asset or liability.

Impairment

Impairment of the financial and contractual assets measured by using "Expected credit loss model" (ECL). The impairment model applies for amortized financial and contractual assets.

Provision for loss measured as below ;

12- Month ECL: results from default events that are possible within 12 months after reporting date. Lifetime ECL: results from all possible default events over the expected life of financial instrument.

Lifetime ECL measurement applies if the credit risk of a financial asset at the reporting date has increased significantly since 12 month ECL measurement if it has not.

The group may determine that the credit risk of a financial asset has not increased significantly if the asset has low credit risk at the reporting date. However, lifetime ECL measurement (simplified approach) always apply for trade receivables and contract assets without a significant financing.

Trade receivables

Trade receivables resulting from services provided directly to debtors are measured at amortized cost, using the effective interest rate method, short duration receivables with no stated interest rate are measured at the original invoice amount unless the effect of imputing interest is significant.

Group has preferred to apply "simplified approach" defined in TFRS 9 for the recognition of impairment losses on trade receivables, carried at amortised cost and that do not comprise of any significant finance component (those with maturity less than 12 months). In accordance with the simplified approach, Group measures the loss allowances regarding its trade receivables at an amount equal to "lifetime expected credit losses" except incurred credit losses in which trade receivables are already impaired for a specific reason.

If the amount of the impairment subsequently decreases due to an event occurring after the write-down, the release of the provision is credited to other operating income.

Unearned finance income/expense due to commercial transactions are accounted for under "Other Operating Income/Expenses" in the consolidated statement of income or loss.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

2.4 Summary of Significant Accounting Policies

Financial Assets

Cash and Cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank deposits with original maturities of more than three months and shorter than 1 year are classified under short-term financial investments.

Financial Liabilities

The Group's financial liabilities and equity instruments are classified according to the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument. The contract representing the right in the assets of the Group after deducting all debts of the Group which is an equitybased financial instrument. The accounting policies applied for certain financial liabilities and equity instruments are as follows.

Financial liabilities are classified as financial liabilities at fair value through profit or loss or other financial liabilities.

Other financial liabilities

Other financial liabilities are initially recognized at fair value as a net of transaction costs.

Other financial liabilities are subsequently measured at amortized cost using the effective interest method plus the interest expense recognized on an effective yield basis.

The effective interest method calculates the amortized cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate discounts the estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period.

In case of fulfilling the contractual obligations of other financial liabilities, cancelling the contract or expiring, the Group offsets this liability. The carrying amount of the off-balance sheet and the difference between the book value of the financial liability and the new financial liability arising are recognized in the statement of profit or loss.

Derivative Financial Instruments and Hedge Accounting

Derivative financial instruments are initially recognized at fair value on the date which a derivative contract is entered into and subsequently remeasured at fair value. Any gains or losses arising from changes in fair value on derivatives that do not qualify for hedge accounting are recognized in the statement of profit or loss. Fair values are obtained from quoted market prices in active markets, including recent market transactions, to the extent publicly available. All derivatives are carried as assets when fair value is positive and as liabilities when fair value is negative.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

2.4 Summary of Significant Accounting Policies

Derivative Financial Instruments and Hedge Accounting

The Group is exposed to foreign exchange risk through the impact of currency rate changes on translation into the Euro of its foreign currency denominated assets and liabilities and non-Euro denominated currency transactions. To monitor the risk, the Group enters into forward transactions where the Group is liable to pay a certain amount of Euro and receive a certain amount of foreign currency (mainly US Dollars) at a specified date. The change in the fair value of the derivative financial assets that qualify for hedge accounting according to TAS 39 (Financial Instruments) are recognized in other comprehensive income and the change in the fair value of the derivative financial assets that do not qualify for hedge accounting according to TAS 39 are recognized in statement of profit or loss. The Group has started applying TFRS 9 for derivative financial instruments starting from 1 October 2019.

Inherently, the Group is exposed to financial risks related to interest rate fluctuations. The most significant source of the interest rate risk is the financial lease liabilities. The policy of the Group is to transform a part of its floating rate financial liabilities into fixed rate financial liabilities by using derivative financial instruments. Derivative financial instruments procured for this purpose do not qualify for hedge accounting and the change in the fair value of these derivative financial assets are recognized immediately in profit or loss.

Fuel costs which are predominantly determined in US Dollars constitute a substantial portion of the Group's cost base. The Group enters into forward and option forward transactions with financial institutions based on acquisition of jet fuel or Brent oil on specified prices. These commodity forward transactions qualify for hedge accounting and they are accounted as cash flow hedges under equity as at 31 December 2024 and 31 December 2023.

Brent within framework of hedge transactions against cash flow risk is a substitute product of Jet Fuel, whereas the correlation between the two commodities is set forth in terms of past statistics. The correlation rate between Brent and Jet Fuel between years 2010-2024 is between the effectiveness ranges. The excessive amount over the effective rate is accounted in profit or loss in the related period when the amount has material effect in the financial statements.

At the inception of the hedge relationship, the Group documents the relationship between the hedging instrument and the hedged item, along with its risk management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an on-going basis, the Group documents whether the hedging instrument is highly effective in offsetting changes in fair values or cash flows of the hedged item attributable to the hedged risk.

Amounts previously recognized in other comprehensive income are reclassified to profit or loss in the periods when the hedged item is recognized in profit or loss, in the same line of the statement of comprehensive income as the recognized hedged item.

Hedge accounting is discontinued when the Group revokes the hedging relationship, when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. Any gain or loss recognized in other comprehensive income and accumulated in equity at that time remains in equity and is recognized when the forecast transaction is ultimately recognized in profit or loss. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is recognized immediately in profit or loss.

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques such as using the basis of recent market transactions on arm's length terms, using the fair value of similar financial instruments and using discounted cash flow analysis (Note 33).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

2.4 Summary of Significant Accounting Policies

Events After Reporting Period

Events after reporting period comprise any events between the reporting period and the date of authorization of the financial statements, even if the event after balance sheet date occurred subsequent to an announcement on the Group's profit or following any financial information that are released.

In the case of events requiring adjustments, the Group adjusts the amounts recognized in its financial statements to reflect the events. For non-adjusting events, disclosure is made in the notes to the financial statements.

Contingent Liabilities and Contingent Assets

Contingent liabilities are assessed continuously to determine the probability of outflow of the economically beneficial assets. For contingent liabilities, when an outflow of resources embodying economic benefits are probable, provision is recognized for this contingent liability in the period when the probability has changed, except for the cases where a reliable estimate cannot be made.

When the Group's contingent liabilities are probable but the amount of resources containing the economic benefits cannot be measured reliably, then the Group discloses this fact in the notes to the financial statements.

Earnings per Share

Earnings per share is calculated by dividing net profit by weighted average number of shares outstanding in the relevant period. In Turkey, companies are allowed to increase their capital by distributing free shares to shareholders from accumulated profits. In calculation of earnings per share, such free shares are considered as issued shares. Therefore, weighted average number of shares in the calculation of earnings per share is found by applying distribution of free shares retrospectively.

Cash Flow Statement

Cash flows for the period are classified and presented as operating, investing and financing activities in the cash flow statement.

Cash flows from operating activities present cash generated from the Group's airline operations.

Cash flows from investing activities present cash used in, generated from investing activities (capital investments and financial investments) of the Group.

Cash flows from financing activities present the funds used in financing operations and repayment regarding these operations.

Cash and cash equivalents are short term investments that are cash on hand, demand deposits, time deposits of with maturities not exceeding three months from purchase date and free of detoration of value with high liquidity.

Capital and Dividends

Common shares are classified as equity. Dividends distributed over common shares are accounted by deduction from retained earnings in the period decision for dividend payment is undertaken.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

2.5 Critical Accounting Estimates and Assumptions

Preparation of the financial statements requires the amounts of assets and liabilities being reported, explanations of contingent liabilities and assets and the uses of accounting estimates and assumptions which would affect revenue and expense accounts reported during the accounting period. The Group makes estimates and assumptions about the future periods. Actual results could differ from those estimations. Accounting estimates and assumptions which might cause material adjustments on the book values of assets and liabilities in future financial reporting period are given below:

Useful Lives and Residual Values of Tangible Assets, Right of Use Assets and Aircraft

The Group has allocated depreciation over tangible assets and right of use assets by taking into consideration the useful lives and residual values which were explained in Note 10. While determining estimated useful lives and residual values, the Group makes estimations and assumptions by taking past experience and business plans into consideration.

Income Taxes

The Group recognizes deferred tax assets and liabilities using substantially enacted tax rates for the effect of temporary differences between book and tax bases of assets and liabilities. Currently, there are deferred tax assets resulting from operating loss carry-forwards and deductible temporary differences, all of which could reduce taxable income in the future. Based on available evidence, both positive and negative, it is determined whether it is probable that all or a portion of the deferred tax assets will be realized. Main factor is this assessment is the expectation that there will be taxable temporary differences that will reverse during the period in which unused tax losses can be carried and the projections of the foreseeable future profits with reasonable assurance are taken into account. Based on the available evidence, the Group management has recognized the deferred tax assets as at 31 December 2024.

The Group estimates to utilize reduce corporate tax advantages arising from acquisition of aircrafts. The Company has recognized deferred tax assets for periods when sufficient profit can be generated within a foreseeable four-year period with reasonable assurance.

Redelivery Maintenance Provision

For leased aircraft where there is no purchase option (operating leases), the Group is contractually committed to either return the aircraft in a certain condition or to compensate the lessor to the level of return condition of the aircraft based on the actual condition of the airframe, engines and life-limited parts upon return. A provision is made over the lease term for this contractual obligation, based on the present value of the estimated future cost complying with the contractual commitment described above, by reference to the number of hours flown or cycles operated during the year. The provision also incorporates management expectation on the cost of the maintenance and component compensation at the time of the redelivery. The group considers the estimated maintenance costs and estimated flight times and number of flights as significant assumptions. In case of a 10% increase in maintenance costs, redelivery maintenance provision will be higher by TL 764.131.737.

Fair Value of Derivatives and Other Financial Instruments

The fair value of derivative financial instruments which are not traded in an active market is determined using valuation techniques based on market rates and expected yields. Fair value of non-derivative financial instruments is determined based on the present value of future principal and interest cash flows. These cash flows are calculated based on the discount rate prevailing at the reporting date.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 3 - INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

The details of investments accounted for using the equity method are as follows:

	31 December 2024	31 December 2023
Joint ventures
Hitit Bilgisayar	775.860.767	559.924.216
PUEM (*)	-	42.567.171
	775.860.767	602.491.387

(*)With the simulator sale in January 2023, PUEM stopped its main operations and the liquidation process continues.

Total profit from investments accounted for using the equity method is as follows:

	1 January-	1 January
	31 December 2024	31 December 2023
Hitit Bilgisayar	98.593.632	35.808.018
PUEM	(5.445.142)	(15.962.034)
Net profit	93.148.490	19.845.984

The summarized financial information of the investment accounted by using the equity method is as follows:

PUEM

	31 December 2024	31 December 2023
Current assets	15.149.714	86.234.637
Non-current assets	-	302.872
Current liabilities	(15.149.714)	(315.977)
Non-current liabilities	-	(53.169)
Net assets of joint venture	-	86.168.363
Group's ownership interest in the joint venture	49,40%	49,40%
Group's share in the net assets of the joint venture	-	42.567.171
PUEM
	1 January-	1 January
	31 December 2024	31 December 2023
Depreciation and amortisation expense	(330.041)	(2.290.202)
Interest income/(expense), net	136.056	3.608.702
Profit for the year	(5.577.412)	(32.311.809)
Other equity changes	(5.445.142)	-
Group's ownership interest	49,40%	49,40%

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 3 - INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Hitit Bilgisayar

	31 December 2024	31 December 2023
Current assets	903.513.291	741.667.453
Non-current assets	1.712.410.293	1.001.943.115
Current liabilities	(381.450.727)	(152.015.303)
Non-current liabilities	(138.932.230)	(80.609.652)
Net assets of joint venture	2.095.540.627	1.510.985.613
Group's ownership interest in the joint venture	36,82%	36,82%
Goodwill	4.282.708	3.579.313
Group's share in the net assets of the joint venture	775.860.767	559.924.216

	1 January- 31 December 2024	1 January 31 December 2023
Revenue	1.122.780.268	609.645.708
Depreciation and amortisation expense	(206.539.072)	(100.806.824)
Interest income/(expense), net	47.885.575	81.636.278
Profit for the year	266.932.285	132.715.251
Other equity changes	839.665	(35.463.708)
Group's weighted average ownership interest	36,82%	36,82%
Group's share in the net profit of the joint venture	98.593.632	35.808.018

NOTE 4 - SEGMENT REPORTING

The Group is managed as a single business unit that provides low fares airline-related services, including scheduled services, charter services, ancillary services and other services. The Group's Chief Operating Decision Maker is the Board of Directors. The resource allocation decisions are based on the entire network and the deployment of the entire aircraft fleet. The objective in making resource allocation decisions is to maximise consolidated financial results, rather than results on individual routes within the network. All other assets and liabilities have been allocated to the Group's single reportable segment.

NOTE 5 - RELATED PARTY TRANSACTIONS

The ultimate parent and controlling party of the Group is Esas Holding. The Group has a number of operating and financial relationships with its shareholders and other entities owned by its shareholders (which will be referred to as "other related parties" below). The related party receivables and payables resulting from operating activities are generally not secured and interest free.

(i) Balances with Related Parties:

a) Other receivables from related parties

	31 December 2024	31 December 2023
Balances with joint ventures:
PUEM	- -	44.138 -
	-	44.138

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 5 - RELATED PARTY TRANSACTIONS

(i) Balances with Related Parties:

b) Trade payables to related parties

	31 December 2024	31 December 2023
Balances with joint ventures:
Hitit Bilgisayar	39.628.684	17.750.663
Balances with other related parties:
Esasburda İnşaat Sanayi ve Ticaret A.Ş. ("Esasburda")	947.033	-
Alarm Sağlık Hizmetleri San. ve Tic. A.Ş. ("Alarm Sağlık")	-	61.299
Ere Avm İnşaat A.Ş. ("Ere Avm")	3.315.000	-
	43.890.717	17.811.962

(ii) Significant Transactions with Related Parties:

Transactions with Esas Holding consist of commissions paid. The Group recognizes these commissions under finance expense.

Until May 2024 , the Group leased their head office building from Esasburda, another Esas Holding subsidiary. Esasburda also charged dues, electricity, water and heating expenses for the head office, which is disclosed within "purchases of godds and services" section below.

The group received simulator training services from PUEM until January 2023 for the training of its pilots. Income is generated from labor hire and common areas used.

The Group receives software and software support services from Hitit Bilgisayar that provides information system solutions for transportation industry.

The Group receives health services from Alarm Sağlık.

The Group receives project consultancy services from Ere Avm İnşaat for the hangar project.

a) Other income from related parties

	1 January-	1 January
	31 December 2024	31 December 2023
Transactions with joint ventures:
PUEM	-	2.179.522
	-	2.179.522

b) Purchases of goods or services

	1 January-	1 January
	31 December 2024	31 December 2023
Transactions with joint ventures:
Hitit Bilgisayar	279.706.495	155.755.359
Transactions with other related parties:
Ere Avm	43.000.000	-
Esasburda	25.453.837	12.230.017
Alarm Sağlık	1.098.000	667.616
Other	393.979	-
	349.652.311	168.652.992

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 5 - RELATED PARTY TRANSACTIONS

(ii) Significant Transactions with Related Parties:

c) Lease expenses

	1 January- 1 January
	31 December 2024	31 December 2023
Esasburda (*)	10.690.698	24.350.917
	10.690.698	24.350.917

(*) Lease expenses are recorded as depreciation and interest under TFRS 16 leases standard. Amounts presented above represent issued invoices. In May 2024, the Group decided to purchase the office building which is the basis of the lease expense. The transactions in this context have been mediated by a bank for the financing of the purchase and the Company will obtain ownership of the building from the bank at the end of the three-year lease period. In this context, the discounted net present value of the payments to be made for the building is TL 757.620.000.

d) Commission expenses

	1 January- 31 December 2024	1 January
		31 December 2023
Esas Holding	-	16.504.579
	-	16.504.579

(iii) Compensation of Key Management Personnel:

Key management personnel include members of the board of directors, general managers and assistant general managers. The remuneration of key management paid during the period ended 31 December 2024 and 31 December 2023 are as follows:

	1 January-	1 January 31 December 2023
	31 December 2024
Salaries and benefits	176.198.899	89.768.053
	176.198.899	89.768.053

NOTE 6 – TRADE RECEIVABLES AND PAYABLES

Short term trade receivables

The details of short term trade receivables as of 31 December 2024 and 31 December 2023 are as follows:

	31 December 2024	31 December 2023
Trade receivables	1.525.875.736	1.057.076.364
Credit card receivables	1.198.921.535	649.502.013
Income accruals	121.627.213	73.473.828
	2.846.424.484	1.780.052.205
Allowance for credit risk adjustment under TFRS 9	(147.007.101)	(111.152.608)
	2.699.417.383	1.668.899.597

The average collection period of trade receivables is approximately 19 days (31 December 2023: 17 days).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 6 – TRADE RECEIVABLES AND PAYABLES

Short term trade receivables

The movement of provision for doubtful receivables for the years ended 31 December 2024 and 31 December 2023 are as follows:

	2024	2023
1 January	111.152.608	88.303.571
Charge for the year	8.653.189	7.022.239
Collections and written off allowances	(15.535.852)	(22.363.071)
Currency translation differences	42.737.156	38.189.869
31 December	147.007.101	111.152.608

The nature and level of risks related to trade receivables is disclosed in Note 32.

Short term trade payables

The details of short term trade payables as of 31 December 2024 and 31 December 2023 are as follows:

	31 December 2024	31 December 2023
Trade payables	4.869.502.621	3.822.071.869
Accrued direct operational costs	3.029.471.251	2.686.231.886
Trade payables to related parties (Note 5)	43.890.717	17.811.962
	7.942.864.589	6.526.115.717

The average payment period of trade payables is approximately 30 days (31 December 2023: 35 days).

NOTE 7 - OTHER RECEIVABLES AND PAYABLES

Short term other receivables

The details of short term other receivables as of 31 December 2024 and 31 December 2023 are as follows:

	31 December 2024	31 December 2023

Deposits and guarantees given	52.004.903	51.027.972
Receivables from pilots for flight training	10.457.594	18.950.846
Receivables from tax office	26.611.446	97.819.263
Receivables from other related parties (Note 5)	-	44.138
Other receivables	17.200.928	16.770.066
	106.274.871	184.612.285

Long term other receivables

The details of long term other receivables as of 31 December 2024 and 31 December 2023 are as follows:

	31 December 2024	31 December 2023
Receivables from pilot trainings	1.570.320.465	650.003.925
Deposits given	1.549.560.730	1.128.873.953
	3.119.881.195	1.778.877.878

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 7 - OTHER RECEIVABLES AND PAYABLES

Short term other payables

	31 December 2024	31 December 2023
Taxes payables	373.700.528	167.648.460
Deposits received	86.305.522	92.806.678
	460.006.050	260.455.138

NOTE 8 - INVENTORIES

The details of inventories as of 31 December 2024 and 31 December 2023 are as follows:

	31 December 2024	31 December 2023
Consumables and spare parts	1.236.877.461	852.830.504
Operational and other inventories	278.084.028	217.946.608
Catering inventories	10.611.472	4.496.643
	1.525.572.961	1.075.273.755

NOTE 9 - PREPAYMENTS, DEFERRED INCOME AND PASSENGER FLIGHT LIABILITIES

The details of prepayments as of 31 December 2024 and 31 December 2023 are as follows:

Short term prepayments

	31 December 2024	31 December 2023
Advances on aircraft purchases	4.514.154.692	7.039.814.255
Advances to suppliers	1.882.368.567	2.707.922.861
Prepaid insurance expenses	661.458.633	307.735.151
Other prepaid expenses	360.303.872	146.131.509
	7.418.285.764	10.201.603.776
Long term prepayments	31 December 2024	31 December 2023
Advances on aircraft purchases Prepaid maintenance expenses	2.102.247.620 16.007.193.652	1.871.431.881 10.797.055.265

Other prepaid expenses 9.068.767 49.517.116

18.118.510.039 12.718.004.262

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 9 - PREPAYMENTS, DEFERRED INCOME AND CONTRACT LIABILITIES

Deferred Income

Contract Liabilities

The details of passenger flight liabilities as of 31 December 2024 and 31 December 2023 are as follows:

	31 December 2024	31 December 2023
Flight liability from ticket sales	8.044.008.774	5.791.071.893
Passenger airport fees received from customers (*)	2.688.310.065	1.950.026.270
Flight liability from flight points	1.537.667.174	677.220.371
	12.269.986.013	8.418.318.534

(*) Passenger airport fees received from customers is included in the ticket price, but it is not recognized as revenue when the flight carried out. The amount represents the costs to be paid to airport operators and authorities in cash.

Ticket sales, flight and service obligations are usually realized within the following year. The movement of flight liability from flight points for the years ended 31 December 2024 and 31 December 2023 are as follows:

	2024	2023
1 January	677.220.371	322.300.710
Earned points	3.014.326.226	2.371.618.657
Used / expired points	(2.153.879.423)	(2.016.698.996)
31 December	1.537.667.174	677.220.371

Deferred Income (excluding contract liabilities)

Short term deferred income

31 December 2024	31 December 2023
1.010.942.220	587.402.628
459.381.249	194.625.229
1.470.323.469	782.027.857

Long term deferred income

	31 December 2024	31 December 2023
Deferred income (*)	7.457.506.238	3.506.810.209
	7.457.506.238	3.506.810.209

(*) Long term deferred income represent discounts received in advance from supplier contracts.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 10 - PROPERTY AND EQUIPMENT

					Components,
	Machinery	Motor	Furniture and	Leasehold	spare engine	Owned	Construction
31 December 2024	and equipment	vehicles	fixtures	improvements	and repairables	Aircraft	in progress	Total
Cost:
Opening	1.103.684.197	717.367.948	1.176.005.452	438.645.278	6.680.691.335	8.978.203.654	262.907.397	19.357.505.261
Additions	56.766.688	221.377.261	179.826.934	12.619.125	7.159.718.701	373.583.783	310.442.409	8.314.334.901
Disposals	-	(27.090.190)	-	-		- (9.662.460.039)	-	(9.689.550.229)
Transfers (*)	-	-	-	-	(1.182.804.299)	9.662.460.039	(262.411.151)	8.217.244.589
Currency translation differences	143.250.227	98.638.273	156.829.424	56.583.722	1.065.956.364	1.162.207.468	35.335.774	2.718.801.252
Closing	1.303.701.112	1.010.293.292	1.512.661.810	507.848.125	13.723.562.101	10.513.994.905	346.274.429	28.918.335.774
Accumulated depreciation:
Opening	(419.628.926)	(288.077.159)	(866.899.542)	(432.379.083)	(2.658.594.566)	(4.314.225.458)	-	(8.979.804.734)
Depreciation for the year	(78.587.709)	(71.610.228)	(101.034.061)	(3.010.895)	(738.724.299)	(468.555.484)	-	(1.461.522.676)
Disposals	-	25.176.589	-	-	-	3.843.119.693	-	3.868.296.282
Transfers (*)	-	-	-	-	2.312.840	(3.843.119.693)	-	(3.840.806.853)
Currency translation differences	(56.467.367)	(38.501.025)	(114.500.239)	(55.444.200)	(366.132.702)	(568.620.355)	-	(1.199.665.888)
Closing	(554.684.002)	(373.011.823)	(1.082.433.842)	(490.834.178)	(3.761.138.727)	(5.351.401.297)	-	(11.613.503.869)
Net book value	749.017.110	637.281.469	430.227.968	17.013.947	9.962.423.374	5.162.593.608	346.274.429	17.304.831.905

(*) Transfers at "components, spare engine and repairables" represent derecognition of components that are used as part of delivery maintenance provisions. Transfers in owned aircraft include transfers from right of use assets of aircraft whose lease liabilities have expired.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 10 - PROPERTY AND EQUIPMENT

Machinery	Motor	Furniture and	Leasehold	spare engine	Owned	Construction
and equipment	vehicles	fixtures	improvements	repairables	Aircraft	in progress	Total


455.640.098	349.627.476	632.787.660	274.988.427	4.224.535.938	-	232.154.809	6.169.734.408
75.222.669	117.870.843	112.085.498	2.624.487	1.866.369.650	-	116.339.445	2.290.512.592
-	(2.588.934)	-	(11.060.852)	-	-	-	(13.649.786)
163.682.370	-	-	-	(2.042.828.245)	7.813.742.955	(163.682.370)	5.770.914.710
409.139.060	252.458.563	431.132.294	172.093.216	2.632.613.992	1.164.460.699	78.095.513	5.139.993.337

1.103.684.197	717.367.948	1.176.005.452	438.645.278	6.680.691.335	8.978.203.654	262.907.397	19.357.505.261


(222.188.743)	(147.055.884)	(497.562.637)	(269.887.379)	(1.518.444.770)	-		- (2.655.139.413)
(44.645.402)	(40.302.164)	(42.519.179)	(4.257.361)	(353.586.011)	(99.108.372)	-	(584.418.489)
-	2.588.934	-	11.060.852	-	-	-	13.649.786
-	-	-	-	213.551.891	(3.733.004.387)		- (3.519.452.496)
(152.794.781)	(103.308.045)	(326.817.726)	(169.295.195)	(1.000.115.676)	(482.112.699)		- (2.234.444.122)
(419.628.926)	(288.077.159)	(866.899.542)	(432.379.083)	(2.658.594.566)	(4.314.225.458)		- (8.979.804.734)
684.055.271	429.290.789	309.105.910	6.266.195	4.022.096.769	4.663.978.196	262.907.397	10.377.700.527
					and

(*) Transfers at "components, spare engine and repairables" represent derecognition of components that are used as part of delivery maintenance provisions.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 10 - PROPERTY AND EQUIPMENT

The useful lives of the depreciable assets are as follows:

Aircraft	23 years
Simulator	20 years
Engine and Engine LLP's	16 years
Airframe and maintenance	7-8 years
Repairables and components	3-7 years
Machinery and equipment	7 years
Furniture and fixtures	7 years
Motor vehicles	5 years
Leasehold improvements	5 years or lease term

The Group has determined the residual value of the aircraft as 15% of market value of a new aircraft in the same model.

Depreciation and amortisation expense charged to cost of sales, general administrative expenses, and marketing expenses is summarized below:

	1 January-	1 January
	31 December 2024	31 December 2023
Current year depreciation (Note 10,12)	11.760.854.872	7.637.238.004
Current year amortization (Note 11)	261.333.537	165.939.630
	12.022.188.409	7.803.177.634
	1 January- 31 December 2024	1 January 31 December 2023
Cost of sales (Note 21)	11.492.745.149	7.505.513.888
General administrative expenses (Note 22)	423.554.608	238.130.997
Marketing expenses (Note 22)	105.888.652	59.532.749
	12.022.188.409	7.803.177.634

NOTE 11 - INTANGIBLE ASSETS

Software	31 December 2024	31 December 2023
Cost:
Opening	1.714.023.225	839.518.220
Additions	413.661.237	303.753.060
Disposals	-	(33.653.396)
Currency translation differences	233.902.679	604.405.341
Closing	2.361.587.141	1.714.023.225
Accumulated amortization:
Opening	(1.070.519.120)	(552.566.578)
Amortization for the year	(261.333.537)	(165.939.630)
Disposals	-	33.653.396
Currency translation differences	(146.191.967)	(385.666.308)
Closing	(1.478.044.624)	(1.070.519.120)
Net book value	883.542.517	643.504.105

Remaining average useful life of intangible assets as of 31 December 2024 is 1,88 years (31 December 2023: 1,89 years).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 12 – RIGHT OF USE ASSETS

31 December 2024	Field Rental	Building	Aircraft	Other	Total
Cost:
Opening	474.627.190	253.614.344	148.302.857.702	10.142.312	149.041.241.548
Additions	-	877.942.652	39.664.021.357	-	40.541.964.009
Disposals (*)	-	(276.364.734)	(6.333.939.834)	-	(6.610.304.568)
Transfers (*)	-	-	(9.662.460.039)	-	(9.662.460.039)
Currency translation differences	60.745.589	53.592.444	19.811.735.760	1.298.073	19.927.371.866
Closing	535.372.779	908.784.706	191.782.214.946	11.440.385	193.237.812.816
Accumulated depreciation:
Opening	(367.824.706)	(161.309.673)	(34.992.941.609)	(10.142.312)	(35.532.218.300)
Depreciation for the period	(108.273.618)	(31.710.833)	(10.159.347.745)	-	(10.299.332.196)
Disposals (*)	-	228.987.922	6.333.939.834	-	6.562.927.756
Transfers (*)	35.557.835	(35.557.835)	3.843.119.693	-	3.843.119.693
Currency translation differences	(49.630.877)	(14.964.179)	(4.446.868.350)	(1.298.073)	(4.512.761.479)
Closing	(490.171.366)	(14.554.598)	(39.422.098.177)	(11.440.385)	(39.938.264.526)
Net book value	45.201.413	894.230.108	152.360.116.769	-	153.299.548.290

(*) Aircraft which are sold presented as disposals and aircraft whose lease liabilities have ended are classified as transfers to property and equipment. Explanations regarding the buildings are presented under Note 5.

31 December 2023	Field Rental	Building	Aircraft	Other	Total
Cost:
Opening	283.893.559	148.455.626	82.964.106.462	6.206.993	83.402.662.640
Additions	8.477.118	8.709.616	25.056.437.504	-	25.073.624.238
Disposals (*)	-	-	(8.412.708.677)	-	(8.412.708.677)
Transfers (*)	-	-	(8.598.709.409)	-	(8.598.709.409)
Currency translation differences	182.256.513	96.449.102	57.293.731.822	3.935.319	57.576.372.756
Closing	474.627.190	253.614.344	148.302.857.702	10.142.312	149.041.241.548
Accumulated depreciation:
Opening	(163.725.209)	(74.916.774)	(24.406.278.019)	(6.206.993)	(24.651.126.995)
Depreciation for the period	(79.154.557)	(30.696.180)	(6.942.968.778)	-	(7.052.819.515)
Disposals (*)	-	-	7.035.757.421	-	7.035.757.421
Transfers (*)	-	-	4.188.646.830	-	4.188.646.830
Currency translation differences	(124.944.940)	(55.696.719)	(14.868.099.063)	(3.935.319)	(15.052.676.041)
Closing		(367.824.706) (161.309.673)	(34.992.941.609) (10.142.312)		(35.532.218.300)
Net book value	106.802.484	92.304.671	113.309.916.093	-	113.509.023.248

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 13 - GOVERNMENT GRANTS AND INCENTIVES

The Group obtained incentive certificates from the Undersecretariat of Treasury for 100 aircraft. According to the incentive certificate of 16 aircraft, the Company will use 15% of the purchase value of the aircraft as the contribution rate which is the maximum amount that could be deducted against taxable income that is attributable to the operation of aircraft. The deduction will be performed by the application of 50% of the effective tax rate for the (i.e. use of 12,5% instead of 25%) taxable income attributable to the operation of these aircraft. According to the new incentive certificate of 84 aircraft the Company will use 50% of the purchase value of the aircraft as the contribution rate which is the maximum amount that could be deducted against taxable income that is attributable to the operation of aircraft. The deduction will be performed by the application of 90% of the effective tax rate for the (i.e. use of 2,5% instead of 25%) taxable income attributable to the operation of these aircraft.

NOTE 14 - BORROWING COSTS

For the years ended 31 December 2024 and 31 December 2023, as there are no assets that necessarily take a substantial period of time to get ready for their intended use or sale, borrowing costs for the respective periods are not capitalized. All borrowing costs are recognized in the statement of profit or loss in the period in which they are incurred.

NOTE 15 - PROVISIONS, CONTINGENT ASSETS AND LIABILITIES

Short term provisions

	31 December 2024	31 December 2023
Provision for litigation claims	57.207.079	33.243.994
Redelivery provision	-	443.814.974
	57.207.079	477.058.968
Long term provisions
	31 December 2024	31 December 2023
Redelivery provision	7.641.317.372	4.436.132.045
	7.641.317.372	4.436.132.045
Redelivery Maintenance Provision
The detail of redelivery maintenance provision is as follows:
	31 December 2024	31 December 2023
Short term	-	443.814.974
Long term	7.641.317.372	4.436.132.045
	7.641.317.372	4.879.947.019
The movement of redelivery maintenance provision as of the years ended 31 December 2024 December 2023 are as follows:		and 31
	2024	2023
1 January	4.879.947.019	3.881.101.138
Charge for the year	5.418.629.146	1.642.086.431
Disposals	(3.354.489.595)	(2.795.671.903)

31 December	7.641.317.372	4.879.947.019

Currency translation differences 697.230.802 2.152.431.353

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 15 - PROVISIONS, CONTINGENT ASSETS AND LIABILITIES

Litigation

The movement of litigation provision is as follows:

	2024	2023
1 January	33.243.994	17.992.367
Charge for the year	27.490.634	16.934.587
Payments	(810.841)	(447.322)
Reversal of provision	(2.716.708)	(1.235.638)
31 December	57.207.079	33.243.994

The Group is involved in lawsuits and claims that have been filed against, the total amount of claims, excluding reserved rights for excess claims, litigation risks, and interest, is TL 187.141.480 as of 31 December 2024 (31 December 2023: TL 138.437.155). These lawsuits and fines have been evaluated by the Group's management and a litigation provision of TL 57.207.079 (31 December 2023: TL 33.243.994) has been provided against claims for which management believes it is probable it will be required to make a payment. Disputes arise from guest complaints, claims by former employees of the Group and a limited number of commercial disputes.

Tax Inspection

The Group's VAT transactions regarding loyalty card practices in year 2018 have been examined in 2020. The Company have been notified with a report stating "no subject to be examined have been found" in May 2021. However the report evaluation commission has objected this verdict and TL 1.780.660 million of tax assessment has been declared to the Company. Against this tax assessment, the Company filed a tax lawsuit on September 6, 2021, the petition of the counter party was received on October 25, 2021 and the petition was answered on November 23, 2021. The 7th Tax Court of Istanbul decided to accept our case and reject all assessments on June 29, 2022, and the defendant Revenue Administration objected to the decision in August and submitted the petition of appeal to the Tax Court. The petition of appeal was notified to Company on September 28, 2022 and this petition answered within one month. Following the rejection of the opposite party's appeal, this time an appeal was made, and the defendant's appeal was served in April 2023. This petition was also answered by the Company within the time limit. The said lawsuit continues as of Decmber 31, 2024. The Company has not recognized any provision in the financial statements in line with the opinions received from its lawyers regarding the aforementioned case.

(Convenience Translation of The Report and Financial Statements Originally Issued in Turkish)

PEGASUS HAVA TAŞIMACILIĞI A.Ş. AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 15 - PROVISIONS, CONTINGENT ASSETS AND LIABILITIES

Passenger Service Fee

T&T Havalimanı İşletmeciliği İnşaat Sanayi ve Ticaret Şirketi Limited filed three lawsuits against the Company before North Cyprus Lefkoşa Court of First Instance with claims of Euro 765.689, Euro 988.985 and Euro 475.031, respectively. All three lawsuits act on same claims and the airports act no. 5/2013 whereby the plaintiff, as the operator of the Ercan Airport under North Cyprus Airports Services and Charges Law, claims Euro 15 passenger service fee for each Turkish Army Staff member traveling on the Company flights for the period between March 2013 and August 2020. Turkish Army Staff departing from North Cyprus are subject to an exemption from this fee under the law. The plaintiff's argument is based on the assumption that the Company has not carried any Turkish Army Staff members in this period of time. The Court of First Instance merged the first two lawsuits and rendered a judgment against the Company for a total principal payment obligation of Euro 1.679.114. The Company argues the legal prohibition to produce the documentation on traveling Army personnel requested by the airport operator, and further suggests that the additional controls sought by the airport operator is the responsibility of the airport operator. A judgment has not been rendered on the third lawsuit. The Company filed objection against the judgments rendered by the Court of First Instance. Considering that the claims do not rely on specific evidence and is judged on unreasonable assumptions, further taking into account the ongoing legal process, no provision has been set recognised for these lawsuits.

NOTE 16 - COMMITMENTS

Purchase Commitments

	31 December 2024	31 December 2023
Commitments to purchase aircraft	1.071.592.413.029	329.282.325.281
	1.071.592.413.029	329.282.325.281

As of 31 December 2024, the Group holds the right to purchase 152 aircraft on firm order. In accordance with agreement the expected deliveries are 9 aircraft in 2025, 10 aircraft in 2026, 11 aircraft in 2027, 28 aircraft in 2028, 21 aircraft in 2029, 15 aircraft in 2030, 17 aircraft in 2031, 16 aircraft in 2032, 15 aircraft in 2033, 15 aircraft in 2034. The purchase commitments for these aircraft were calculated based on their list prices and actual purchase prices are typically lower than the list prices.

The Group has provided advances on aircraft purchases amounting to TL 6.616.402.312 (31 December 2023: TL 8.911.246.136). Of this amount, TL 4.514.154.692 is reclassified as short-term, and TL 2.102.247.620 is reclassified as long-term prepayments (31 December 2023: TL 7.039.814.268 is reclassified as short-term, TL 1.871.431.868 is reclassified as long-term prepayments).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 16 - COMMITMENTS

Collaterals-Pledges-Mortgages("CPM")

The details of the CPMs given by the Group as of 31 December 2024 is as follows:

31 December 2024	TL TOTAL	USD	EUR	TL	Other
A. Total amounts of CPM given on behalf of its own legal
entity
-Collateral	1.391.002.578	19.818.530	12.544.285	109.847.593	122.167.548
-Pledge	-	-	-	-	-
-Mortgage	-	-	-	-	-
B. Total amounts of CPM given on behalf of subsidiaries
that are included in full consolidation
-Collateral
-Pledge	-	-	-	-	-
	-	-	-	-	-
-Mortgage	-	-	-	-	-
C. Total amounts of CPM given in order to guarantee third parties debts for routine trade operations
-Collateral	-	-	-	-	-
-Pledge	-	-	-	-	-
-Mortgage	-	-	-	-	-
D. Total amounts of other CPM given
i. Total amount of CPM given on behalf of the Parent
-Collateral	-	-	-	-	-
-Pledge	-	-	-	-	-
-Mortgage	-	-	-	-	-
ii. Total amount of CPM given on behalf of other group companies not covered in B and C
-Collateral	-	-	-	-	-
-Pledge	-	-	-	-	-
-Mortgage	-	-	-	-	-
iii. Total amount of CPM given on behalf of third parties not covered in C
-Collateral	-	-	-	-	-
-Pledge
-Mortgage	- -	- -	- -	- -	- -
	1.391.002.578	19.818.530	12.544.285	109.847.593	122.167.548

The CPMs given by the Group are consisted of collaterals given to airports and terminals operators, aircraft leasing companies and service suppliers.

The other CPMs (in the scope of item D) given by the Group constitute 0% of the Group's equity as of 31 December 2024.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 16 - COMMITMENTS

Collaterals-Pledges-Mortgages("CPM")

The details of the CPMs given by the Group as of 31 December 2023 is as follows:

31 December 2023	TL TOTAL	USD	EUR	TL	Other
A. Total amounts of CPM given on behalf of its own legal
entity
-Collateral	1.166.226.910	20.033.224	12.074.404	96.652.641	86.521.786
-Pledge	-	-	-	-	-
-Mortgage	-	-	-	-	-
B. Total amounts of CPM given on behalf of subsidiaries
that are included in full consolidation

-Collateral	-	-	-	-	-
-Pledge	-	-	-	-	-
-Mortgage	-	-	-	-	-
C. Total amounts of CPM given in order to guarantee third parties debts for routine trade operations
-Collateral	-	-	-	-	-
-Pledge	-	-	-	-	-
-Mortgage	-	-	-	-	-
D. Total amounts of other CPM given
i. Total amount of CPM given on behalf of the Parent
-Collateral	-	-	-	-	-
-Pledge	-	-	-	-	-
-Mortgage	-	-	-	-	-
ii. Total amount of CPM given on behalf of other group companies not covered in B and C
-Collateral	-	-	-	-	-
-Pledge	-	-	-	-	-
-Mortgage	-	-	-	-	-
iii. Total amount of CPM given on behalf of third parties not covered in C
-Collateral	-	-	-	-	-
-Pledge	-	-	-	-	-
-Mortgage	-	-	-	-	-
	1.166.226.910	20.033.224	12.074.404	96.652.641	86.521.786

The CPMs given by the Group are consisted of collaterals given to airports and terminals operators, aircraft leasing companies and service suppliers.

The other CPMs (in the scope of item D) given by the Group constitute 0% of the Group's equity as of 31 December 2023.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 17 - EMPLOYEE BENEFITS

Employee benefit obligations

The details of employee benefit obligations as of 31 December 2024 and 31 December 2023 are as follows:

	31 December 2024	31 December 2023
Social security premiums payable	274.496.530	262.857.995
Accrual of employee wages	265.784.446	135.411.516
	540.280.976	398.269.511

Short term provisions for employee benefits

The details of short term provisions for employee benefits as of 31 December 2024 and 31 December 2023 are as follows:

	31 December 2024	31 December 2023
Unused vacation accrual	567.946.581	443.747.837
Employee bonus plan	1.733.476.817	1.144.145.650
	2.301.423.398	1.587.893.487

Long term provisions for employee benefits

The details of long term provisions for employee benefits as of 31 December 2024 and 31 December 2023 are as follows:

	31 December 2024	31 December 2023
Employment termination benefits	209.787.134	136.594.089
Employee bonus plan	1.558.396.844	1.064.648.084
	1.768.183.978	1.201.242.173

Unused Vacation Accrual

The movement of unused vacation accrual as of the years ended 31 December 2024 and 31 December 2023 are as follows:

	2024	2023
1 January	443.747.837	161.354.458
Charge for the year	159.193.751	298.326.356
Payment during the year	(34.995.007)	(15.932.977)
31 December	567.946.581	443.747.837

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 17 - EMPLOYEE BENEFITS

Employee Bonus Plan

The movement of employee bonus plan as of the years ended 31 December 2024 and 31 December 2023 are as follows:

	2024	2023
1 January	2.208.793.734	975.366.634
Charge for the year	1.987.423.817	1.619.795.085
Payment during the year	(904.343.890)	(386.367.985)
31 December	3.291.873.661	2.208.793.734

Employee Defined Benefits

The Group, according to Turkish Labor Law, has an obligation to pay legal defined benefits for every employee who has completed at least one year service and retired after completion of 25 years working life (for females 58 years, for males 60 years), fired from job, called up to military service or died.

The amount payable consists of one month's salary limited to a maximum of TL 46.655,43 for each period of service at 31 December 2024 (31 December 2023: TL 35.058,58).

There are no agreements for pension commitments other than the legal requirement as explained above. The liability is not funded, as there is no funding requirement.

The reserve has been calculated by estimating the present value of the future probable obligation of the Group arising from the retirement of the employees. TAS 19 "Employee Benefits" requires actuarial valuation methods to be developed to estimate the enterprise's obligation under defined benefit plans. Accordingly actuarial assumptions were used in the calculation of the total liability as these actuarial assumptions apply to each individual company's defined benefit plan and legal framework in which those companies operate.

The principal assumption is that the maximum liability for each year of service will increase parallel with inflation. Thus, the discount rate applied represents the expected real rate after adjusting for the anticipated effects of future inflation. Consequently, in the accompanying financial statements as of 31 December 2023, the provision has been calculated by estimating the present value of the future probable obligation of the Company arising from the retirement of the employees. The provisions at the respective balance sheet dates have been calculated assuming an annual inflation rate of 23% (2023: 21,37%) and a discount rate of 27,15% (2023: 25,05%), resulting in a real discount rate of approximately 3,37% (2023: 3,03%). Estimated amount of retirement pay not paid due to voluntary leaves is also taken into consideration as 8,72% (2023: 8,22%) for employees with 0-15 years of service, and 0% for those with 16 or more years of service. As the maximum liability is revised annually, the maximum amount of TL 46.655,43 effective from 1 January 2025 has been taken into consideration in calculation of provision from employee defined benefits.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 17 - EMPLOYEE BENEFITS

Employee Defined Benefits

The movement of employee defined benefits as of the years ended 31 December 2024 and 31 December 2023 are as follows:

	2024	2023
1 January	136.594.089	114.037.872
Actuarial (gain) / loss	67.517.257	48.101.149
Service cost	24.401.898	18.402.348
Interest cost	34.310.563	25.590.100
Retirement benefits paid	(53.036.673)	(69.537.380)
31 December	209.787.134	136.594.089

Service cost and interest expenses are recognized in payroll expenses. Calculated actuarial gains and losses are accounted under other comprehensive income as of 31 December 2024 and 31 December 2023.

Significant assumptions used in the calculation of employee defined benefits are the discount rate and anticipated turnover rate.

If the discount rate had been 1% lower, provision for employee defined benefits would increase by TL 38.885.552 (2023: TL 18.215.613); if the rate had been 1% higher, it would decrease by TL 39.042.796 (2023: TL 31.829.329).
If the anticipated turnover rate had been 1% higher while all other variables were held constant, provision for employee defined benefits would decrease by TL 17.346.625 (2023: TL 18.291.313); if the rate had been 1% lower, it would increase by TL 10.053.521 (2023: TL 125.221).

NOTE 18 - EXPENSES BY NATURE

The details of expenses by nature for the years periods 31 December 2024 and 31 December 2023 are as follows:

	1 January-	1 January
	31 December 2024	31 December 2023
Jet fuel expenses	31.017.765.193	22.013.338.140
Depreciation and amortisation expenses	12.022.188.409	7.803.177.634
Personnel expenses	18.256.025.180	8.349.485.665
Handling and station fees	7.757.769.428	4.784.016.591
Navigation expenses	6.352.351.257	4.064.384.650
Maintenance expenses	3.898.265.529	1.879.511.534
Landing expenses	3.579.362.694	2.364.375.779
Passenger service and catering expenses	1.323.812.263	747.436.782
Commission expenses	731.791.481	448.993.513
Short term lease expenses (*)	42.148.396	696.299.942
Advertising expenses	654.078.239	435.378.767
Other expenses	6.443.740.219	3.122.443.136
	92.079.298.288	56.708.842.133

(*) Consists of short-term operating lease expenses.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 19 - OTHER ASSETS AND LIABILITIES

Other current assets

The details of other current assets as of 31 December 2024 and 31 December 2023 are as follows:

	31 December 2024	31 December 2023
VAT receivables	165.209.325	222.494.464
Other	8.913.771	3.548.206
	174.123.096	226.042.670

NOTE 20 - SHAREHOLDERS' EQUITY, PROFIT RESERVES AND OTHER EQUITY ITEMS

The Company's shareholding structure as of 31 December 2024 and 31 December 2023 are as follows:

		31 December 2024		31 December 2023
Shareholders	(%)	TL	(%)	TL
Esas Holding	52,81	264.056.018	56,65	57.959.838
Publicly held	45,37	226.866.830	41,53	42.482.689
Emine Kamışlı	0,61	3.025.717	0,61	619.060
Ali İsmail Sabancı	0,61	3.025.717	0,61	619.060
Kazım Köseoğlu	0,30	1.512.859	0,30	309.530
Can Köseoğlu	0,30	1.512.859	0,30	309.530
TL historic capital	100,00	500.000.000	100,00	102.299.707

The Company's share capital consists of 500.000.000 shares of par value TL 1 each (31 December 2023: 102.299.707 shares).

Within the registered capital ceiling of TL 500.000.000, the Company's issued capital amounting to TL 102.299.707 was increased by TL 397.700.293 to TL 500.000.000, all of which was covered from the amounts in the " Share Premiums on Capital Stock" account, and capital increase was registered with the Trade Registry on May 30, 2024.

Dividend distribution

Listed companies distribute dividend in accordance with the Communiqué No. II-19.1 issued by the CMB which is effective from February 1, 2014.

Companies distribute dividends in accordance with their dividend payment policies settled and dividend payment decision taken in general assembly and also in conformity with relevant legislations. The communiqué does not constitute a minimum dividend rate. Companies distribute dividend in accordance with the method defined in their dividend policy or articles of associations.

Resources Available for Profit Distribution:

The Company does not have any distributable equity in statutory accounts as of balance sheet date.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 20 - SHAREHOLDERS' EQUITY, PROFIT RESERVES AND OTHER EQUITY ITEMS

Currency translation differences

For the purpose of preparation of the consolidated financial statements and disclosures, according to TAS 21, balance sheet items except shareholders' equity in financial statements are translated to TL using balance sheet date EUR exchange rates; equity items, income/expenses and cash flow are translated to TL by using the exchange rate of the transaction date (historic rate), and currency translation differences are presented under shareholders' equity.

Gain/losses from cash flow hedges

Hedge gain/losses against cash flow risk arise from the accounting of the changes in the fair values of effective derivative financial instruments designated against financial risks of future cash flows under equity. Total of deferred gain/loss arising from hedging against financial risk are accounted in profit or loss when the effect of the hedged item has effect on profit or loss.

Share premiums on capital stock

The surplus of sales price over nominal value amounted to TL 455.687.025 during the initial public offering on 18-19 April 2013 was accounted as share premium. TL 397.700.293 was transferred to the paid in share capital on 30 May 2024, within the scope of capital increase transactions, and the remaining amount in share premiums on capital stock is TL 57.986.732.

Actuarial gain/losses on defined benefit plans

The effects of the change in actuarial valuations that is calculated with respect to TAS 19 "Employee Benefits" is presented in actuarial gains/losses on defined benefit plans.

Restricted profit reserves

In the statutory accounts, profit restricted from retained earnings and not subject to distribution is presented in the restricted profit reserves.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 21 - REVENUE AND COST OF SALES

The details of revenue and cost of sales for the periods ended 31 December 2024 and 31 December 2023 are as follows:

Revenue:

	1 January-	1 January
	31 December 2024	31 December 2023
Scheduled flight and service revenue	109.817.382.342	69.298.883.405
International flight revenue	57.509.010.426	40.006.952.719
Domestic flight revenue	14.485.226.412	8.113.002.810
Service revenue	37.823.145.504	21.178.927.876
Charter flight and service revenue	1.507.884.754	971.993.169
Charter flight revenue	1.507.884.754	971.993.169
Other revenue	497.255.182	260.655.027
	111.822.522.278	70.531.531.601

The Group's revenue is disaggregated into revenue from scheduled flights, revenue from chartered flights, and other revenues in accordance with the TFRS 15 "Revenue from Contracts with Customers" standard. However, although the Group does not consider service revenues within these disaggregated revenue items as a separate performance obligation, it presents additional information due to their frequent disclosure to investors and continuous review by the authorities empowered to make decisions regarding operations.

Geographical details of revenue from the scheduled flights are as follows:

	1 January-	1 January
	31 December 2024	31 December 2023
Europe	44.058.181.531	30.128.785.018
Domestic	14.485.226.412	8.113.002.810
Other	13.450.828.895	9.878.167.701
	71.994.236.838	48.119.955.529

Geographical details of revenue from the charter flights are as follows:

	1 January-	1 January
	31 December 2024	31 December 2023
Europe	1.134.128.690	619.242.464
Middle East	365.846.332	347.142.995
Domestic	7.909.732	5.607.710
	1.507.884.754	971.993.169

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 21 - SALES AND COST OF SALES

Cost of sales:

	1 January- 1 January
	31 December 2024	31 December 2023
Jet fuel expenses	31.017.765.193	22.013.338.140
Depreciation and amortisation expenses	11.492.745.149	7.505.513.888
Personnel expenses	16.596.478.365	7.565.237.359
Handling and station fees	7.757.769.428	4.784.016.591
Navigation expenses	6.352.351.257	4.064.384.650
Maintenance expenses	3.898.265.529	1.879.511.534
Landing expenses	3.579.362.694	2.364.375.779
Passenger service and catering expenses	1.323.812.263	747.436.782
Insurance expenses	659.723.976	243.077.644
Short term lease expenses	42.148.396	696.299.942
Other expenses	3.876.274.821	1.849.940.329
	86.596.697.071	53.713.132.638

NOTE 22 - GENERAL ADMINISTRATIVE EXPENSES AND SELLING AND MARKETING EXPENSES

	1 January-	1 January
	31 December 2024	31 December 2023
Marketing expenses	2.167.241.251	1.280.527.235
General administrative expenses	3.315.359.966	1.715.182.260
	5.482.601.217	2.995.709.495

The details of general administrative expenses and marketing expenses for the periods ended 31 December 2024 and 31 December 2023 are as follows (there are no research & development expenses in the periods ended in respective dates):

General administrative expenses:

	1 January-	1 January
	31 December 2024	31 December 2023
Personnel expenses	1.309.303.702	621.313.610
Depreciation and amortisation expenses	423.554.608	238.130.997
IT expenses	779.095.017	345.805.634
Consultancy expenses	294.925.359	120.114.209
Communication expenses	96.676.528	62.776.392
Legal and notary expenses	106.449.052	73.581.034
Office utility expenses	74.751.443	33.889.446
Travel expenses	113.777.962	66.278.083
Training expenses	18.920.771	13.209.287
Other expenses	97.905.524	140.083.568
	3.315.359.966	1.715.182.260

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 22 - GENERAL ADMINISTRATIVE EXPENSES AND SELLING AND MARKETING EXPENSES

Marketing expenses:

	1 January-	1 January
	31 December 2024	31 December 2023
Commission expenses	731.791.481	448.993.513
Advertising expenses	654.078.239	435.378.767
Call center expenses	225.757.143	116.026.008
Personnel expenses	350.243.113	162.934.696
Depreciation and amortisation expenses	105.888.652	59.532.749
Other expenses	99.482.623	57.661.502
	2.167.241.251	1.280.527.235

NOTE 23 - OTHER OPERATING INCOME AND EXPENSES

The details of other operating income and expenses for the periods ended 31 December 2024 and 31 December 2023 are as follows:

Other operating income:

	1 January-	1 January
	31 December 2024	31 December 2023
Foreign exchange gain from operating activities	1.358.529.266	-
Reversal of trade receivable impairment	-	4.544.541
Reversal of doubtful provision	-	13.419.241
Other	16.004.114	974.637
	1.374.533.380	18.938.419

Other operating expenses:

	1 January-	1 January
	31 December 2024	31 December 2023
Foreign exchange loss from operating activities	-	595.115.619
Penalty expense	22.151.221	4.741.932
Cash and cash equivalents allowance expense	19.513.575	3.141.319
Trade receivables allowance expense	3.913.628	-
Doubtful receivable allowance expense	23.539.988	-
Donations	33.393.255	30.500.000
Other	208.024.728	120.780.005
	310.536.395	754.278.875

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 24 - INCOME AND EXPENSES FROM INVESTING ACTIVITIES

The details of income from investing activities for the periods ended 31 December 2024 and 31 December 2023 are as follows:

Income from investing activities:

	1 January-	1 January
	31 December 2024	31 December 2023
Interest income from eurobond	855.646.435	537.548.840
Interest income from currency protected instruments	573.169.589	708.260.535
Gain arising from aircraft sale	216.659.696	126.955.318
Dividend income from affiliate	64.570.387	-
Gain from eurobond sales (*)	50.322.332	14.076.448
Other income	22.275.802	23.742.031
	1.782.644.241	1.410.583.172

(*) The amounts represents gains arising from the sale of financial investments that are carried at fair value through other comphensive income.

Expense from investing activities:

	1 January-	1 January
	31 December 2024	31 December 2023
Loss from eurobond sales	86.371	-
Financial investments allowance expense	53.580.456	67.433.199
	53.666.827	67.433.199

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 25 - FINANCIAL INCOME AND EXPENSES

The details of financial income and expenses for the periods ended 31 December 2024 and 31 December 2023 are as follows:

Financial income:

	1 January-	1 January
	31 December 2024	31 December 2023
Foreign exchange gain	-	947.587.160
Interest income	1.986.736.419	708.316.743
Gain on derivative contracts	141.837.296	20.266.323
	2.128.573.715	1.676.170.226

	1 January-	1 January
	31 December 2024	31 December 2023
Interest expense on leases	6.092.065.856	3.889.974.798
Interest expense on bank loans	516.311.827	344.659.774
Interest expense on issued debt instruments	1.383.677.394	887.377.944
Foreign exchange loss	3.211.711.392	-
Commission and other expenses	1.631.696.194	889.818.746
	12.835.462.663	6.011.831.262

NOTE 26 - ANALYSIS OF OTHER COMPREHENSIVE INCOME ITEMS

Currency Translation Differences

Items not to be reclassified to profit or loss

	2024	2023
1 January	27.604.819.459	11.667.935.448
Currency translation differences
not to be reclassified to profit or loss	6.958.825.320	15.936.884.011
31 December	34.563.644.779	27.604.819.459
Items to be reclassified to profit or loss	2024	2023
1 January	368.154.236	165.445.988
Currency translation differences
to be reclassified to profit or loss	45.919.861	202.708.248
31 December	414.074.097	368.154.236

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 26 - ANALYSIS OF OTHER COMPREHENSIVE INCOME ITEMS

Currency Translation Differences

Items to be reclassified to profit or loss

Hedge Fund

	2024	2023
1 January	(129.997.940)	282.719.523
Gain/(loss) from the accounting of cash flow hedges
against financial risk	(10.752.643)	(526.730.017)
Deferred tax related with the accounting of cash flow
hedges against financial risk	2.688.144	114.012.554
31 December	(138.062.439)	(129.997.940)

Gain on financial assets measured at fair value

	2024	2023

1 January	48.328.332	26.847.705
Gain on financial assets measured at fair value	24.568.230	30.878.129
Deferred tax effect of gain on financial assets
measured at fair value on defined benefit plans	(6.142.061)	(9.397.502)

31 December	66.754.501	48.328.332

The cash flow hedging reserve represents the cumulative effective portion of gains or losses arising on changes in fair value of hedging instruments entered into for cash flow hedges. The cumulative gain or loss arising on changes in fair value of the hedging instruments that are recognized and accumulated under the heading of cash flow hedging reserve will be reclassified to profit or loss only when the hedged transaction affects the profit or loss, or included as a basis adjustment to the non-financial hedged item, consistent with the relevant accounting policy.

Actuarial gains/(losses) on defined benefit plans

	2024	2023
1 January	(105.998.793)	(74.584.475)
Actuarial gains / (losses) on defined benefit plans	(67.517.257)	(48.101.149)
Deferred tax effect of actuarial gains / (losses)
on defined benefit plans	16.879.304	16.686.831
31 December	(156.636.746)	(105.998.793)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 27 - TAXATION ON INCOME (INCLUDING DEFERRED TAX ASSETS AND LIABILITIES

The Group is subject to corporate tax valid in Turkey. The corporate tax rate in Turkey has been applied as 25% for corporate earnings for the 2023 and 2024 taxation periods. When calculating deferred tax on temporary differences, the company takes into account the tax rates valid on the date the temporary differences will be closed.

Tax expense components as of 31 December 2024 and 31 December 2023 are presented below:

	31 December 2024	31 December 2023
Current corporate tax provision	-
Less: Prepaid taxes and funds	(85.510.906)	- (19.552.842)

Current tax assets (*)	(85.510.906)	(19.552.842)

(*) The exceeding portion of the prepaid taxes over current corporate tax provision is reported in current tax assets.

	1 January-	1 January
	31 December 2024	31 December 2023
Tax income/(expense)
- Current tax expense	-	-
- Deferred tax income/(expense)	1.362.979.746	10.792.817.864
Total tax income/(expense)	1.362.979.746	10.792.817.864

The Group's earnings from investments tied to an incentive certificate are subject to corporate tax at discounted rates, starting from the accounting period in which the investment is partially or fully operational, until the investment contribution amount is reached. In this context, tax advantage amounting to TL 7.469.203.072 (31 December 2023: TL 4.665.178.489) that the Group will benefit from in the foreseeable future as of 31 December 2024 is reflected in the consolidated financial statements as a deferred tax asset. As a result of the recognition of the mentioned tax advantage as of 31 December 2024, deferred tax expense amounting to 2.132.048.803 TL has occurred in the consolidated profit or loss statement for the period 1 January - 31 December 2024.

Deferred tax assets are recognized when it is determined that taxable income is likely to occur in the coming years. In cases where taxable income is likely to occur, deferred tax assets are calculated over deductible temporary differences, tax losses and tax advantages vested in indefinite-lived investment incentives that allow reduced corporate tax payments. In this context, the Group bases the reflection of deferred tax assets arising from investment incentives in the consolidated financial statements on longterm plans and evaluates the recoverability of deferred tax assets related to these investment incentives as of each balance sheet date, based on business models that include taxable profit estimations.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 27 - TAXATION ON INCOME (INCLUDING DEFERRED TAX ASSETS AND LIABILITIES

In the sensitivity analysis carried out as of 31 December 2024, when the inputs in the basic macroeconomic and sectoral assumptions that make up the business plans are increased/decreased by 10%, the foreseen period of deferred tax assets regarding on the availability of investment incentives has not significantly changed.

Corporate Tax

The Group is subject to Turkish corporate taxes. Provision is made in the accompanying financial statements for the estimated charge based on the Group's results for the years and periods. Turkish tax legislation does not permit a parent company and its subsidiary to file a consolidated tax return. Therefore, provisions for taxes, as reflected in the accompanying consolidated financial statements, have been calculated on a separate-entity basis.

Corporate tax is applied on taxable corporate income, which is calculated from the statutory accounting profit by adding back non-deductible expenses, and by deducting dividends received from resident companies, other exempt income and investment incentives utilized.

The corporate tax rate in Turkey is 25% (2023: 25%).

With the temporary article 33 of the Tax Procedure Law; It has been stipulated that no inflation adjustment will be made in the accounting periods of 2023 and 2024 and the provisional tax periods of 2024, regardless of whether the conditions in Article 298/A of the TPL are met, and that the financial statements dated 31 December 2024 will be subject to correction regardless of any conditions. In this context; The financial statements dated 31 December 2024, prepared in accordance with the Tax Procedure Law, have been subject to inflation correction.

Deferred Tax

The Group recognizes deferred tax assets and liabilities based upon temporary differences arising between its financial statements as reported for TAS purposes and its statutory tax financial statements. These differences usually result in the recognition of revenue and expenses in different reporting periods for TAS and tax purposes and they are given below.

In the calculation of deferred tax assets and liabilities, the tax rates that will be valid on the date of closing the temporary differences are taken into account.

In Turkey, companies cannot declare a consolidated tax return, therefore their deferred tax balances are not netted off and are disclosed separately.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 27 - TAXATION ON INCOME (INCLUDING DEFERRED TAX ASSETS AND LIABILITIES

Deferred Tax

The consolidated deferred tax liability position as of 31 December 2024 is as follows:

	1 - 31 2024 January December
			Other
		Currency	comprehensive	Deferred tax charge
	1 January 2024	translation effect	income tax effect	for the year	December 31 2024
Difference between tax base and carrying value of
tangible assets and intangible assets	654.799.067	115.953.170	-	915.120.873	1.685.873.110
Carry forward tax losses	3.800.036.932	363.809.277	-	(3.488.248.408)	675.597.801
grants and incentives Government	4.665.178.489	671.975.780	-	2.132.048.803	7.469.203.072
Provision for employee termination benefits	69.481.457	4.843.215	16.879.304	13.455.058	104.659.034
Provision for litigation claims	8.310.999	1.230.904	-	4.759.871	14.301.774
Unused vacation and bonus plans provision	663.135.389	92.234.685	-	209.584.990	964.955.064
Deferred revenue from flight points	169.305.093	28.233.674	-	186.878.026	384.416.793
Relivery provisions for the leased aircraft	1.220.020.728	174.273.718	-	516.034.897	1.910.329.343
Change in fair value of financial assets	(16.109.439)	-	(6.142.061)	-	(22.251.500)
Change in fair value of derivative contracts	40.180.783	(1.518.475)	2.688.144	(31.740.398)	9.610.054
Other	1.375.325.830	207.817.895	-	905.086.034	2.488.229.759
Deferred liability tax	12.649.665.328	1.658.853.843	13.425.387	1.362.979.746	15.684.924.304

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 27 - TAXATION ON INCOME (INCLUDING DEFERRED TAX ASSETS AND LIABILITIES

Deferred Tax

The consolidated deferred tax liability position as of 31 December 2023 is as follows:

	1 January - 31 December 2023
			Other
		Currency	comprehensive	Deferred tax charge
	1 January 2023	translation effect	income tax effect	for the year	31 December 2023
Difference between tax base and carrying value of
tangible assets and intangible assets	(6.148.251.673)	(1.642.424.851)	-	8.445.475.591	654.799.067
Carry forward tax losses	1.096.195.927	1.118.438.756	-	1.585.402.249	3.800.036.932
Government grants and incentives	3.110.006.651	1.883.970.122	-	(328.798.284)	4.665.178.489
Provision for employee termination benefits	22.807.574	8.403.142	16.686.817	21.583.924	69.481.457
Provision for litigation claims	3.593.975	2.792.607	-	1.924.417	8.310.999
Unused vacation and bonus plans provision	227.060.038	205.681.565	-	230.393.786	663.135.389
Deferred revenue from flight points	64.379.567	54.330.617	-	50.594.909	169.305.093
Relivery provisions for the leased aircraft	775.249.952	794.571.724	-	(349.800.948)	1.220.020.728
Change in fair value of financial assets	(6.701.442)	(10.484)	(9.397.513)	-	(16.109.439)
Change in fair value of derivative contracts	(70.591.532)	(752.752)	114.012.579	(2.487.512)	40.180.783
Other	201.478.881	35.317.217	-	1.138.529.732	1.375.325.830
Deferred liability tax	(724.772.082)	2.460.317.663	121.301.883	10.792.817.864	12.649.665.328

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 27 - TAXATION ON INCOME (INCLUDING DEFERRED TAX ASSETS AND LIABILITIES

Deferred Tax

Tax effects related to other comprehensive income as of 31 December 2024 and 31 December 2023 are as follows:

	1 January - 31 December 2024
	Amount Tax		Amount
	before tax	expense	after tax
Change in foreign currency translation	7.004.745.181	-	7.004.745.181
Actuarial gains/(losses) on defined benefit plans	(67.517.257)	16.879.304	(50.637.953)
Gains/(losses) on fair value differences of financial assets	24.568.230	(6.142.058)	18.426.172
Change in cash flow hedge reserve	(10.752.643)	2.688.141	(8.064.502)
Other comprehensive income	6.951.043.511	13.425.387	6.964.468.898

	1 January - 31 December 2023
	Amount	Tax	Amount
	before tax	income	after tax

Change in foreign currency translation	16.139.592.259	-	16.139.592.259
Actuarial gains/(losses) on defined benefit plans	(48.101.149)	16.686.831	(31.414.318)
Gains/(losses) on fair value differences of financial assets	30.878.129	(9.397.513)	21.480.616
Change in cash flow hedge reserve	(526.730.017)	114.012.565	(412.717.452)
Other comprehensive income	15.595.639.222	121.301.883	15.716.941.105

Reconciliation of tax expense in consolidated statement of profit or loss for the years 31 December 2024 and 31 December 2023 is as follows:

	31 December 2024	31 December 2023
(Loss) / Profit before tax	11.922.457.931	10.114.683.933
Enacted local tax rate	25%	25%
Tax calculated at the enacted tax rate	(2.980.614.483)	(2.528.670.983)
Tax effect of disallowable expenses	(182.868.979)	(111.213.096)
Income from investment incentives	2.132.048.803	(328.798.284)
Tax-exempt revenue	505.898.307	91.611.549
Effect of inflation accounting	5.987.634.796	18.917.873.659
Effect of different tax rates applied	-	(201.455.680)
Translation effect and other	(4.099.118.698)	(5.046.529.301)
Taxation income	1.362.979.746	10.792.817.864

As of 31 December 2024 and 31 December 2023, the Group does not have any carry forward tax losses that it did not recognize deferred tax assets.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 28 - EARNINGS PER SHARE

Earnings per share disclosed in the consolidated statements of income are determined by dividing the net income by the weighted number of shares that have been outstanding during the period concerned. Weighted average number of shares for 2023 and 2024 is calculated using the actual number of shares outstanding during the period, taking into consideration the actual date of capital increase.

Number of total shares and calculation of earnings per share at 31 December 2024 and 31 December 2023 are as follows:

	1 January-	1 January
	31 December 2024	31 December 2023
Net profit	13.285.437.677	20.907.501.797
Weighted average number of shares issued in the year	335.921.464	102.299.707
Income per share	39,55	204,37

NOTE 29- EFFECTS OF EXCHANGE RATE CHANGES

Details related to effects of exchange rate changes are disclosed at foreign currency risk management in Note 32.

NOTE 30 – DERIVATIVE FINANCIAL INSTRUMENTS

Fair Value of Derivative Instruments

	31 December 2024		31 December 2023
	Asset	Liability	Asset	Liability
Short term	145.642.867	170.696.233	12.607.533	109.079.828
Long term	-	13.387.018	-	64.250.780
	145.642.867	184.083.251	12.607.533	173.330.608

Explanations related to derivative instruments are disclosed in Note 33.

NOTE 31 - FINANCIAL INSTRUMENTS

Financial Assets

Short term	31 December 2024	31 December 2023

Financial investments measured at amortized cost	6.336.522.068	7.042.103.028
Financial assets recognized at fair value through profit or loss	3.714.866.359	2.041.208.673
Time Deposit (*)	1.059.774.928	9.496.768.180
Allowance for credit risk adjustment under TFRS 9	(13.032.469)	(45.453.939)
	11.098.130.886	18.534.625.942

(*) The balance includes exchange rate protected time deposits with original maturities between three months and one year. As of December 31, 2024, there are no longer exchange rate protected time deposits.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 31 - FINANCIAL INSTRUMENTS

Financial Assets

Long term	31 December 2024	31 December 2023
Financial investments measured at amortized cost	4.774.747.774	1.741.816.637
Allowance for credit risk adjustment under TFRS 9	(153.583.100)	(67.581.142)
	4.621.164.674	1.674.235.495

Financial investments accounted at amortized cost

	31 December 2024	31 December 2023
Short term financial investments measured at amortized cost	6.336.522.068	7.042.103.028
Long term financial investments measured at amortized cost	4.774.747.774	1.741.816.637
	11.111.269.842	8.783.919.665

	31 December 2024	31 December 2023
Government Debt Securities	7.089.155.754	6.564.347.573
Corporate Debt Securities	4.022.114.088	2.219.572.092
	11.111.269.842	8.783.919.665

The Group's fixed income securities are accounted at their amortized costs using the effective interest rate. These securities are denominated in Euros, US Dollars and Pounds and pay fixed interest every year and every six months.

The weighted average coupon interest rates of existing Euro, US Dollar and Pounds financial investments that are measured at amortized cost as of 31 December 2024 and 31 December 2023 are as follows:

	Weighted average
	Coupon Interest Rate (%)	FX Type	Asset Value TL
Government Debt Securities	7,6	US Dollars	6.622.324.195
Government Debt Securities	6,7	GBP	466.831.559
Corporate Debt Securities	7,2	US Dollars	3.092.676.978
Corporate Debt Securities	6,7	Euro	929.437.110
31 December 2024			11.111.269.842
	Weighted average
	Coupon Interest Rate (%)	FX Type	Asset Value TL
Government Debt Securities	6,9	US Dollars	6.564.347.573
Corporate Debt Securities	8,5	US Dollars	2.219.572.092
31 December 2023			8.783.919.665

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 31 - FINANCIAL INSTRUMENTS

Financial Assets

Financial investments at fair value through other comprehensive income

	31 December 2024	31 December 2023
Government Debt Securities	2.646.894.946	1.882.477.151
Corporate Debt Securities	1.067.971.413	158.731.522
	3.714.866.359	2.041.208.673

The coupon interest rates of the financial investments in US Dollars that are measured by their fair value and continues as of the reporting date are as follows.

	Weighted average
	Coupon Interest Rate (%)	FX Type	Asset Value TL
Government Debt Securities	8,4	US Dollars	2.646.894.946
Corporate Debt Securities	8,1	US Dollars	1.067.971.413
31 December 2024			3.714.866.359
	Weighted average
	Coupon Interest Rate (%)	FX Type	Asset Value TL
Government Debt Securities	7,8	US Dollars	1.882.477.151
Corporate Debt Securities	9,3	US Dollars	158.731.522
31 December 2023			2.041.208.673

The financial investments at fair value through other comprehensive income is composed of bonds. These investments are denominated in US Dollars and pay fixed interest every year or every six months.

Financial Liabilities

The details of financial liabilities as of 31 December 2024 and 31 December 2023 are as follows:

Short term financial liabilities	31 December 2024	31 December 2023
Short term bank borrowings	6.321.566.673	5.353.784.770
	6.321.566.673	5.353.784.770

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 31 - FINANCIAL INSTRUMENTS

Financial Liabilities

Short term portion of long term financial liabilities	31 December 2024	31 December 2023
Short term portion of long term bank borrowings	804.094.539	1.011.358.155
Principal and interest of bonds issued	7.276.917.017	968.515.134
Discount and commissions of bonds issued	(63.248.844)	(35.165.530)
Lease liabilities	14.911.498.531	11.326.083.111
Short term portion of long term
lease liabilities	1.853.791.145	1.372.450.408
Short term portion of long term
lease liabilities with purchase option	13.057.707.386	9.953.632.703
	22.929.261.243	13.270.790.870

Long term financial liabilities	31 December 2024	31 December 2023
Long term bank borrowings	808.687.123	2.106.183.775
Issued debt instruments (*)	16.625.114.404	10.252.656.283
Discount and commissions of bonds issued	(172.077.331)	(46.823.151)
Lease liabilities	119.794.949.520	88.581.646.542
Long term lease liabilities	7.554.922.759	4.784.464.987
Long term lease liabilities with purchase option	112.240.026.761	83.797.181.555
	137.056.673.716	100.893.663.449

(*) The Group issued bonds to qualified investors abroad on April 29, 2021, which were issued under the "Rule 144A" and/or "Regulation S" format, have a nominal value of US\$ 375.000.000, at 9,25% interest rate and the maturity is 5 years with an early payment option in the third and fourth years. As of September 12, 2024, tender offer process is completed and the purchase and settlement by the Group of notes with a total nominal value of US\$ 211.086.000 are concluded. Following the settlement of the notes that are purchased, the total nominal value of the outstanding notes due 2026 will be US 163.914.000.

The Group issued bonds to qualified investors abroad on September 30, 2024, which were issued under the "Rule 144A" and/or "Regulation S" format, have a nominal value of US\$ 500.000.000, at 8,00% interest rate and the maturity is 7 years with an early payment option starting at the end of three years.

The bonds are traded on the Irish Stock Exchange (Euronext Dublin). There are some financial covenants in the Terms and Conditions of the notes. The covenants of the notes are; negative pledge, limitation in indebtedness, publication of financial information, limitations on transactions with affiliates, minimum liquidity, merger, consolidation and sale of all assets substantially, limitation on asset sales, limitation on restricted payments. As of 31 December 2024, the Group complied with all covenants.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 31 - FINANCIAL INSTRUMENTS

Financial Liabilities

Bank Borrowings

The effective interest rates, original currency and TL equivalents of the short and long term bank borrowings as of 31 December 2024 and 31 December 2023 are as follows :

	Weighted average		Original	TL
31 December 2024	interest rate (%)	Currency	amount	equivalent
Short term bank borrowings	6,09	Euro	172.048.659	6.321.566.673
				6.321.566.673
	Weighted average		Original	TL
31 December 2023	interest rate (%)	Currency	amount	equivalent
		Euro	164.358.114	5.353.784.770
Short term bank borrowings	7,04			5.353.784.770

	Weighted average		Original	TL
31 December 2024	interest rate (%)	Currency	amount	equivalent
Short term portion of long term bank borrowings	4,22	Euro	21.884.352	804.094.539
				804.094.539

	Weighted average		Original	TL
31 December 2023	interest rate (%)	Currency	amount	equivalent
Short term portion of long term bank borrowings	5,42	Euro	31.048.114	1.011.358.155
				1.011.358.155
	Weighted average		Original	TL
31 December 2024	interest rate (%)	Currency	amount	equivalent
Long term bank borrowings	4,19	Euro	22.009.344	808.687.123
				808.687.123

	Weighted average		Original	TL
31 December 2023	interest rate (%)	Currency	amount	equivalent
Long term bank borrowings	5,57	Euro	64.658.631	2.106.183.775
				2.106.183.775

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 31 - FINANCIAL INSTRUMENTS

Financial Liabilities

Lease Liabilities

The details of lease liabilities as of 31 December 2024 and 31 December 2023 are as follows:

	31 December 2024	31 December 2023
Less than 1 year	19.943.011.377	15.612.828.462
Between 1 - 5 years	74.527.413.498	51.728.967.777
Over 5 years	66.439.202.785	51.771.613.861
	160.909.627.660	119.113.410.100
Less: Future interest expenses	(26.203.179.609)	(19.205.680.447)
	134.706.448.051	99.907.729.653

Present value of minimum lease payments of lease liabilities are as follows;

	31 December 2024	31 December 2023
Less than 1 year	14.911.498.531	11.326.083.111
Between 1 - 5 years	60.958.814.055	42.463.408.399
Over 5 years	58.836.135.465	46.118.238.143
	134.706.448.051	99.907.729.653

The Group acquire certain of its handling equipment and aircraft through lease arrangements. The average lease term is 6,45 years. For the period ended 31 December 2024, the floating interest rate applicable to Euro-denominated lease liabilities, amounting to TL 94.158.908.619, is 3,40% (31 December 2023: 3,92%) and the floating rate applicable to US Dollar-denominated lease liabilities, amounting to TL 16.514.872.427, is 6,28% (31 December 2023: 6,71%).

Reconciliation of obligations arising from financing activities

The changes in the Group's liabilities arising from financing activities are given in the following table:

	119.518.239.089	5.384.202.828	(18.142.017.515)	59.547.077.230	166.307.501.632
Lease payables	99.907.729.653	-	(18.142.017.515)	52.940.735.913	134.706.448.051
Bank loans and Issued debt instruments	19.610.509.436	5.384.202.828	-	6.606.341.317	31.601.053.581
		1 January 2024 repayments, (net)	principals	changes	31 December 2024
		Utilized bank loans and	Finance lease obtained and repayment of	Non-cash

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 31 - FINANCIAL INSTRUMENTS

Financial Liabilities

Lease Liabilities

	60.999.940.527	945.699.752	(12.051.211.670)	69.623.810.480	119.518.239.089
Lease payables	51.324.179.360	-	(12.051.211.670)	60.634.761.963	99.907.729.653
Bank loans and Issued debt instruments	9.675.761.167	945.699.752	-	8.989.048.517	19.610.509.436
		Utilized bank loans and 1 January 2023 repayments, (net)	Finance lease obtained and repayment of principals	Non-cash changes	31 December 2023

NOTE 32 - NATURE AND LEVEL OF RISKS DERIVING FROM FINANCIAL INSTRUMENTS

Capital Risk Management

The Group manages its capital with the goal of ensuring that the Group will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance.

The capital structure of the Group consists of debt, which includes the financial liabilities and obligations under finance leases disclosed in Note 31, cash and cash equivalents and equity, comprising issued capital, reserves and retained earnings, respectively. The Group meets working capital requirement with the cash generated from its operations and through credit lines from Turkish and foreign banks, if needed. The Group's management reviews the cost of capital together with the risk associated with each class in the capital structure. As a part of this review, the management considers the cost of capital and the risks associated with each class of capital and obtains approval from Board of Directors in the form of a resolution.

Based on evaluations of management and Board of Directors, the Group balances its overall capital structure from time to time through capital increases as well as the issue of new debt or the redemption of existing debt. The Group's overall capital risk management strategy remains unchanged from prior periods.

The debt-capital ratio that is calculated as net debt (total borrowings less cash and cash equivalents and financial investments) divided by total capital as of 31 December 2024 and 31 December 2023 are as follows.

	31 December 2024	31 December 2023
Financial Liabilities	166.307.501.632	119.518.239.089
Less: Cash and Cash Equivalents & Financial Investments	(61.977.849.976)	(36.287.220.364)
Net Debt	104.329.651.656	83.231.018.725
Total Equity	74.919.092.796	54.669.186.221
Total Capital	179.248.744.452	137.900.204.946
Net Debt/Total Capital Ratio	0,6	0,6

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 32 - NATURE AND LEVEL OF RISKS DERIVING FROM FINANCIAL INSTRUMENTS

Financial Risk Factors

The Group's activities expose financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. The Group's overall risk management plan focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance. The Group uses derivative financial instruments to hedge certain risk exposures.

Credit Risk Management

The Group applied the simplified approach in TFRS 9 to calculate the expected credit loss provision for trade receivables. This approach allows for the expected credit loss provision for all trade receivables. In order to measure expected credit losses, the Group grouped its trade receivables considering the maturity and credit risk characteristics. The expected credit loss ratio for each class of trade receivables, which is grouped using past loan loss experiences and prospective macroeconomic indicators, is calculated and the expected credit loss provision has been calculated by multiplying the determined rate and trade receivable sums.

				More than 3
	Not	0-1 Months	1-3 Months	Months
31 December 2024	Overdue	Overdue	Overdue	Overdue	Total

Period end balance	2.461.422.122	250.545.591	11.668.086	122.788.685	2.846.424.484
Loan loss rate (%)	1,1%	0,7%	0,6%	96%
Expected credit losses	27.334.143	1.646.085	66.683	117.960.190	147.007.101


				More than 3
	Not	0-1 Months	1-3 Months	Months
31 December 2023	Overdue	Overdue	Overdue	Overdue	Total

Period end balance	1.473.077.396	195.372.196	3.080.093	108.522.520	1.780.052.205
Loan loss rate (%)	0,6%	0,7%	0,6%	93%

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 32 - NATURE AND LEVEL OF RISKS DERIVING FROM FINANCIAL INSTRUMENTS

Financial Risk Factors

Credit risk management:

			Receivables
	Trade Receivables Other Receivables
					Bank	Financial	Derivative
31 December 2024	Related Party	Other	Related Party	Other	Deposits	Investments	Instruments
Maximum exposed credit risk as of
reporting date (A+B+C+D) (*)	-	2.687.343.246	-	3.226.156.066	46.283.815.336	15.719.295.560	145.642.867
Secured portion of the maximum credit risk by guarantees, etc. (**)	-	578.249.232	-	-	-	-	-
A. Net book value of financial asset neither
are not due or nor impaired	-	2.637.326.564	-	3.226.156.066	46.283.815.336	15.719.295.560	145.642.867
B. Net book value of financial assets that are past due but
not impaired	-	50.016.682	-	-	-	-	-
-The part under guarantee with collateral etc.	-	50.016.682	-	-	-	-	-
C. Net book value of impaired assets
- Past due (gross carrying amount)	-	130.457.817	-	-	-	-	-
- Impairment(-)	-	(130.457.817)	-	-	-	-	-
- The part of net value under guarantee with collateral etc.	-	-	-	-	-	-	-
- Not Past due (gross carrying amount)	-	16.549.284	-	-	27.098.344	-	-
- Impairment(-)	-	(16.549.284)	-	-	(27.098.344)	-	-
- The part of net value under guarantee with collateral etc.	-	-	-	-	-	-	-
D. Off-balance sheet items with credit risk	-	-	-	-	-	-	-

(*) The factors that increase in credit reliability such as guarantees received are not considered in the balance.

(**) Guarantees consist of the letters of guarantee obtained from the customers.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 32 - NATURE AND LEVEL OF RISKS DERIVING FROM FINANCIAL INSTRUMENTS

Financial Risk Factors

Credit risk management:

			Receivables
	Trade Receivables Other Receivables
31 December 2023	Related Party	Other	Related Party	Other	Bank Deposits	Financial Investments	Derivative Instruments
Maximum exposed credit risk as of
reporting date (A+B+C+D) (*)	-	1.657.503.840	44.138	1.963.446.025	16.082.396.035	20.208.861.437	12.607.533
Secured portion of the maximum credit risk by guarantees, etc. (**)	-	454.299.726	-	-	-	-	-
A. Net book value of financial asset neither
are not due or nor impaired	-	1.614.550.299	44.138	1.963.446.025	16.082.396.035	20.208.861.437	12.607.533
B. Net book value of financial assets that are past due but
not impaired	-	42.953.541	-	-	-	-	-
-The part under guarantee with collateral etc.	-	42.953.541	-	-	-	-	-
C. Net book value of impaired assets
- Past due (gross carrying amount)	-	98.516.952	-	-	-	-	-
- Impairment(-)	-	(98.516.952)	-	-	-	-	-
- The part of net value under guarantee with collateral etc.	-	-	-	-	-	-	-
- Not Past due (gross carrying amount)	-	12.635.656	-	-	7.584.769	-	-
- Impairment(-)	-	(12.635.656)	-	-	(7.584.769)	-	-
- The part of net value under guarantee with collateral etc.	-	-	-	-	-	-	-
D. Off-balance sheet items with credit risk	-	-	-	-	-	-	-

(*) The factors that increase in credit reliability such as guarantees received are not considered in the balance.

(**) Guarantees consist of the letters of guarantee obtained from the customers.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 32 - NATURE AND LEVEL OF RISKS DERIVING FROM FINANCIAL INSTRUMENTS

Financial Risk Factors

Credit risk management

Aging of the past due receivables is as follows:

	Trade	Other	Bank
31 December 2024	receivables	receivables	deposits	Total

1-30 days past due	9.265.631	-	-	9.265.631
1-3 months past due	3.456.166	-	-	3.456.166
3-12 months past due	60.993	-	-	60.993
1-5 years past due	167.691.709	-	-	167.691.709
Receivables secured by guarantees	(50.016.682)	-	-	(50.016.682)
	130.457.817	-	-	130.457.817

31 December 2023	Trade receivables	Other receivables	Bank deposits	Total

1-30 days past due	1.827.845	-	-	1.827.845
1-3 months past due	4.591.751	-	-	4.591.751
3-12 months past due	2.738.775	-	-	2.738.775
1-5 years past due	132.312.123	-	-	132.312.123
Receivables secured by guarantees	(42.953.541)	-	-	(42.953.541)
	98.516.953	-	-	98.516.953

Liquidity risk management

The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

The following tables show the Group's remaining contractual maturity for its financial liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay. The table includes both interest and principal cash flows.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 32 - NATURE AND LEVEL OF RISKS DERIVING FROM FINANCIAL INSTRUMENTS

Financial Risk Factors

Liquidity risk management

31 December 2024		Contractual
	Carrying	cash-flows	Up to	3 months-	1 year-	More than
Due date on the contract	value	(I+II+III+IV)	3 months (I)	12 months (II)	5 years (III)	5 years (IV)
Non-derivative financial liabilities
Short term bank borrowings	7.934.348.335	8.144.063.424	3.942.444.455	3.330.499.752	791.265.508	79.853.709
Obligations under leases	134.706.448.051	160.909.627.660	5.361.475.425	14.581.535.953	74.527.413.498	66.439.202.784
Trade payables	7.942.864.589	7.942.864.589	7.942.864.589	-	-	-
Issued debt instruments	23.666.705.246	33.849.054.572	-	7.519.751.333	5.754.292.909	20.575.010.330
	174.250.366.221	210.845.610.245	17.246.784.469		25.431.787.038 81.072.971.915 87.094.066.823
		Contractual
	Carrying	cash-flows	Up to	3 months-	1 year-	More than
Due date on the contract	value	(I+II+III+IV)	3 months (I)	12 months (II)	5 years (III)	5 years (IV)
Derivative financial liabilities
Derivative cash inflows outflows, net	(38.440.384)	(42.479.863)	119.073.431	(147.578.593)	(13.974.701)	-

31 December 2023		Contractual
	Carrying	cash-flows	Up to	3 months-	1 year-	More than
Due date on the contract	value	(I+II+III+IV)	3 months (I)	12 months (II)	5 years (III)	5 years (IV)
Non-derivative financial liabilities
Short term bank borrowings	8.471.326.700	8.774.078.701	4.340.914.165	2.124.196.370	1.681.125.547	627.842.619
Obligations under leases	99.907.729.653	119.113.410.100	4.306.756.960	11.306.071.502	51.728.967.777	51.771.613.861
Trade payables	6.526.115.717	6.526.115.717	6.526.115.717	-	-	-
Passenger airport fees liability	11.139.182.736	13.592.321.503	-	1.022.574.635	12.569.746.868	-
	126.044.354.806	148.005.926.021	15.173.786.842		14.452.842.507 65.979.840.192 52.399.456.480
		Contractual
	Carrying	cash-flows	Up to	3 months-	1 year-	More than
Due date on the contract	value	(I+II+III+IV)	3 months (I)	12 months (II)	5 years (III)	5 years (IV)
Derivative financial liabilities
Derivative cash inflows outflows, net	(160.723.075)	(178.309.988)	(19.882.185)	(91.356.413)	(67.071.390)	-

Financial Risk Factors

Market risk

The Group's activities expose primarily to the financial risks of changes in foreign currency exchange rates, fuel price and interest rates. The Group enters into a variety of derivative financial instruments to manage exposure to foreign currency, fuel price and interest rate risk.

Foreign currency risk management

The Group has transactions in non-Euro currencies including Turkish Lira revenues, US Dollar borrowings and fuel purchases. These non-Euro denominated transactions expose the Group to foreign currency risk. Exchange rate exposures are managed within approved policy parameters utilising forward foreign exchange contracts.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 32 - NATURE AND LEVEL OF RISKS DERIVING FROM FINANCIAL INSTRUMENTS

Financial Risk Factors

Foreign currency risk management

The Group's foreign currency position of monetary and non-monetary assets/liabilities for the years ended 31 December 2024 and 31 December 2023 are as follows:

31 December 2024	TL Total	USD	TL	GBP	Other
1. Trade receivables	1.930.994.924	7.421.689	1.404.084.196	1.817.410	185.081.590
2a. Monetary financial assets	46.038.638.751	1.163.326.747	4.022.451.465	14.824.938	384.039.037
2b. Non monetary financial assets	-	-	-	-	-
3. Other	228.603.724	1.727.019	166.711.936	23.797	7.562
4. CURRENT ASSETS	48.198.237.399	1.172.475.455	5.593.247.597	16.666.145	569.128.189
5. Trade receivables	-	-	-	-	-
6a. Monetary financial assets	4.621.164.767	131.196.247	-	-	-
6b. Non monetary financial assets	-	-	-	-	-
7. Other	287.642.554	6.695.999	1.543.144	63.000	47.456.743
8. NON CURRENT ASSETS	4.908.807.321	137.892.246	1.543.144	63.000	47.456.743
9. TOTAL ASSETS	53.107.044.720	1.310.367.701	5.594.790.741	16.729.145	616.584.932

10. Trade payables	4.556.958.222	90.371.223	1.020.393.435	2.635.892	236.764.938
11. Financial liabilities	11.052.127.544	313.459.380	11.053.764	-	-
12a. Other liabilitites, monetary	3.785.868.230	10.378.007	3.369.137.300	254.401	39.927.100
12b. Other liabilities, non monetary	-	-	-	-	-
13. CURRENT LIABILITIES	19.394.953.996	414.208.610	4.400.584.499	2.890.293	276.692.038
14. Trade payables	-	-	-	-	-
15. Financial liabilities	50.483.084.146	1.433.084.260	5.127.331	-	-
16a. Other lliabilities, monetary	7.641.317.376	216.939.281	-	-	-
16b. Other liabilities, non monetary	-	-	-	-	-
17. NON CURRENT LIABILITIES	58.124.401.522	1.650.023.541	5.127.331	-	-
18. TOTAL LIABILITIES	77.519.355.518	2.064.232.151	4.405.711.830	2.890.293	276.692.038
19. Net asset / (liability) position of Off-statement of
financial position derivatives (19a-19b)	17.963.040	21.424.898	-	(16.650.000)	-
19.a Off-statement of financial position foreign currency
derivative assets	754.655.610	21.424.898	-	-	-
19b. Off-statement of financial position foreign currency
derivative liabilities	736.692.570	-	-	16.650.000	-
20. Net foreign currency asset/(liability)
position	(24.412.310.798)	(753.864.450)	1.189.078.911	13.838.852	339.892.894
21. Net foreign currency asset / (liability)
position of monetary items
(1+2a+3+5+6a+7-10-11-12a-14-15-16a)	(24.412.310.798)	(753.864.450)	1.189.078.911	13.838.852	339.892.894

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 32 - NATURE AND LEVEL OF RISKS DERIVING FROM FINANCIAL INSTRUMENTS

Financial Risk Factors

Foreign currency risk management

31 December 2023	TL Total	USD	TL	GBP	Other
1. Trade receivables	1.031.637.640	7.469.645	584.110.649	1.460.848	172.937.455
2a. Monetary financial assets	24.563.475.881	668.634.650	3.870.699.898	9.097.013	668.767.798
2b. Non monetary financial assets	-	-	-	-	-
3. Other	201.813.001	6.084.964	14.408.539	189.475	1.179.809
4. CURRENT ASSETS	25.796.926.522	682.189.259	4.469.219.086	10.747.336	842.885.062
5. Trade receivables	-	-	-	-	-
6a. Monetary financial assets	1.674.235.510	56.872.890	-	-	-
6b. Non monetary financial assets	-	-	-	-	-
7. Other	898.327.414	25.840.671	631.013	1.000	136.956.118
8. NON CURRENT ASSETS	2.572.562.924	82.713.561	631.013	1.000	136.956.118
9. TOTAL ASSETS	28.369.489.446	764.902.820	4.469.850.099	10.748.336	979.841.180
10. Trade payables	3.806.923.984	70.554.166	1.288.319.658	789.344	412.062.295
11. Financial liabilities	4.083.837.381	138.430.478	8.693.284	-	-
12a. Other liabilitites, monetary	3.054.811.062	21.299.965	2.365.708.819	133.847	57.058.154
12b. Other liabilities, non monetary	-	-	-	-	-
13. CURRENT LIABILITIES	10.945.572.427	230.284.609	3.662.721.761	923.191	469.120.449
14. Trade payables	-	-	-	-	-
15. Financial liabilities	35.836.803.936	1.216.807.510	16.181.095	-	-
16a. Other lliabilities, monetary	4.436.132.056	150.693.047	-	-	-
16b. Other liabilities, non monetary	-	-	-	-	-
17. NON CURRENT LIABILITIES	40.272.935.992	1.367.500.557	16.181.095	-	-
18. TOTAL LIABILITIES	51.218.508.419	1.597.785.166	3.678.902.856	923.191	469.120.449
19. Net asset / (liability) position of Off-statement of
financial position derivatives (19a-19b)	(43.592.362)	9.584.500	-	(8.700.000)	-
19.a Off-statement of financial position foreign currency
derivative assets	282.150.428	9.584.500	-	-	-
19b. Off-statement of financial position foreign currency
derivative liabilities	325.742.790	-	-	8.700.000	-
20. Net foreign currency asset/(liability)
position	(22.849.018.973)	(832.882.346)	790.947.243	9.825.145	510.720.731
21. Net foreign currency asset / (liability)
position of monetary items
(1+2a+3+5+6a+7-10-11-12a-14-15-16a)	(22.849.018.973)	(832.882.346)	790.947.243	9.825.145	510.720.731

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 32 - NATURE AND LEVEL OF RISKS DERIVING FROM FINANCIAL INSTRUMENTS

Financial Risk Factors

Foreign currency risk management

Foreign currency sensitivity

The Group is exposed to foreign exchange risk arising primarily with respect to the US Dollar and Turkish Lira. The following table details the Group's sensitivity to a 10% increase and decrease in US Dollar, and TL. 10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management's assessment of the possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated items and adjusts their translation at the period end for a 10% change in foreign currency rates.

Foreign currency sensitivity tables as of 31 December 2024 and 31 December 2023 are as follows:

31 December 2024	Profit/(Loss)		Shareholders' equity
	If foreign currency	If foreign currency	If foreign currency	If foreign currency
	appreciated 10%	depreciated 10%	appreciated 10%	depreciated 10%
Effect of 10% change in USD rate
USD net asset / (liability)	(2.655.359.368)	2.655.359.368	-	-
Part of hedged from USD risk	75.465.561	(75.465.561)	-	-
USD net effect	(2.579.893.807)	2.579.893.807	-	-
Effect of 10% change in TL rate
TL net asset / (liability)	118.907.891	(118.907.891)	7.505.715.524	(7.505.715.524)
Part of hedged from TL risk	-	-	-	-
TL net effect	118.907.891	(118.907.891)	7.505.715.524	(7.505.715.524)

Effect of 10% change in GBP rate
GBP net asset / liability	61.231.108	(61.231.108)	-	-
Part of hedged from GBP risk	(73.669.257)	73.669.257	-	-
GBP net effect	(12.438.149)	12.438.149	-	-
31 December 2023	Profit/(Loss)		Shareholders' equity
	If foreign currency	If foreign currency	If foreign currency	If foreign currency
	appreciated 10%	depreciated 10%	appreciated 10%	depreciated 10%
Effect of 10% change in USD rate
USD net asset / (liability)	(2.451.855.708)	2.451.855.708	-	-
Part of hedged from USD risk	28.215.043	(28.215.043)	-	-
USD net effect	(2.423.640.665)	2.423.640.665	-	-
Effect of 10% change in TL rate
TL net asset / (liability)	79.094.724	(79.094.724)	5.479.918.416	(5.479.918.416)
Part of hedged from TL risk	-	-	-	-
TL net effect	79.094.724	(79.094.724)	5.479.918.416	(5.479.918.416)
Effect of 10% change in GBP rate
GBP net asset / liability	36.787.013	(36.787.013)	-	-
Part of hedged from GBP risk GBP net effect	(32.574.279) 4.212.734	32.574.279 (4.212.734)	- -	- -

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 32 - NATURE AND LEVEL OF RISKS DERIVING FROM FINANCIAL INSTRUMENTS

Financial Risk Factors

Interest rate risk management

The Group is exposed to interest rate risk as the Group borrows funds at floating interest rates. The risk is managed by the Group by maintaining an appropriate mix between floating rate borrowings, by the use of interest rate swap contracts based on the approved policies.

Foreign currency sensitivity

The Group's distribution of interest rate-sensitive financial instruments is as follows:

	31 December 2024		31 December 2023
	Floating rate	Fixed rate	Floating rate	Fixed rate
Bank loans and Issued debt instruments	-	31.601.053.581	-	19.610.509.436
Finance leases	123.483.752.981	11.222.695.070	92.948.149.033	6.959.580.620

For floating rate liabilities, the analysis is prepared assuming the amount of liability outstanding at the balance sheet date was outstanding for the whole year.

If interest rates had been 0,5% lower/higher during the reporting period keeping all other variables constant:

The Group's profit before tax would have increased/decreased by TL 480.010.447 (2023: TL 272.025.185). This is mainly attributable to the Company's exposure to interest rates on its variable rate obligations under finance leases.

Price risk management

Fuel price risk management

The Group is exposed to commodity risk due to the significant of fuel purchases to its business. Fuel prices have been subject to wide fluctuations based on geopolitical issues, exchange rate fluctuations, supply and demand as well as market speculation. The fluctuations in fuel prices have had a significant impact on the cost of sales, and results of operations of the Group.

The Group manages its risk to fuel prices through the use of derivative financial instruments. The Group's policy since 2011 includes a primary non-discretionary program for the first 50% of anticipated fuel consumption and a supplemental discretionary program for an additional 20% of our anticipated fuel consumption up to twelve months. Both programs use swap and option arrangements on jet fuel and Brent oil. There has been no change to the Group's exposure to market risks or the manner in which it manages and measures the risk.

Fuel price sensitivity

The Group entered into fuel purchase and option forward contracts in order to manage the cash flow risks arising from fuel purchases. Due to forward fuel purchase and option forward contracts subject to hedge accounting, as a result of a 1% increase/decrease in sfuel prices, the shareholders' equity of the Group will increase/decrease by TL 178.798.367 (2023: TL 126.406.232) excluding deferred tax effect.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 33 - FINANCIAL INSTRUMENTS (FAIR VALUE AND HEDGE ACCOUNTING DISCLOSURES)

Group Management believes that the carrying values of financial instruments approximates their fair values, except for financial investments, lease liabilities and issued debt instruments. The fair value of financial investments and issued bonds is determined by considering the market value (level 1).

Fair Value of Financial Instruments

		Financial and assets
		derivative instruments	Derivative instruments
	Financial assets	which are recognized at	which are recognized
	liabilities and at	fair in value	fair in value at
31 December 2024	amortized cost	shareholders' equity	profit/loss	Carrying amount	Note
Financial assets
Cash and cash equivalents	46 258 554 416	-	-	46 258 554 416	35
Trade receivables	2 699 417 383	-	-	2 699 417 383	6
- Other	2 699 417 383	-	-	2 699 417 383	6
Other receivables	3 226 156 066	-	-	3 226 156 066
- Related party	-	-	-	-	5
- Other	3 226 156 066	-	-	3 226 156 066
Financial investments	11 087 434 559	3 714 866 359	-	15 719 295 560	31
Derivative financial assets	-	-	145 642 867	145 642 867	30
Financial liabilities
Bank borrowings	7 934 348 335	-	-	7 934 348 335	31
Issued debt instruments	23 378 226 424	-	-	23 666 705 246
Trade payables	7 942 864 589	-	-	7 942 864 589	6
- Related party	43 890 717	-	-	43 890 717	5
- Other	7 898 973 872	-	-	7 898 973 872
Other payables	460 006 050	-	-	460 006 050
Derivative financial liabilities	-	184 083 251	-	184 083 251	30

(Convenience Translation of The Report and Financial Statements Originally Issued in Turkish)

PEGASUS HAVA TAŞIMACILIĞI A.Ş. AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 33 - FINANCIAL INSTRUMENTS (FAIR VALUE AND HEDGE ACCOUNTING DISCLOSURES)

Fair Value of Financial Instruments

		Financial and assets
		derivative instruments	Derivative instruments
	Financial assets	which are recognized at	which are recognized
	liabilities and at	fair in value	fair in value at
31 December 2023	amortized cost	shareholders' equity	profit/loss	Carrying amount	Note
Financial assets
Cash and cash equivalents	16 078 358 927	-	-	16 078 358 927	35
Trade receivables	1 668 899 597	-	-	1 668 899 597	6
- Other	1 668 899 597	-	-	1 668 899 597	6
Other receivables	1 963 490 163	-	-	1 963 490 163
- Related party	44 138	-	-	44 138	5
- Other	1 963 446 025	-	-	1 963 446 025
Financial investments	18 514 030 082	2 041 208 673	-	20 208 861 437	31
Derivative financial assets	-	-	533 12 607	533 12 607	30
Financial liabilities
Bank borrowings	8 471 326 700	-	-	8 471 326 700	31
Issued debt instruments	11 296 013 203	-	-	11 139 182 736
Trade payables	526 115 717 6	-	-	526 115 717 6	6
- Related party	17 811 962	-	-	17 811 962	5
- Other	6 508 303 755	-	-	6 508 303 755
Other payables	455 260 138	-	-	455 260 138
Derivative financial liabilities	-	173 330 608	-	173 330 608	30

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 33 - FINANCIAL INSTRUMENTS (FAIR VALUE AND HEDGE ACCOUNTING DISCLOSURES)

Fair Value of Financial Instruments

The fair values of financial assets and financial liabilities are determined and grouped as follows:

Level 1: the fair value of financial assets and financial liabilities with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market prices:
Level 2: the fair value of other financial assets and financial liabilities (excluding derivative instruments) are determined in accordance with generally accepted pricing models based on discounted cash flow analysis using prices from observable current market transactions; and
Level 3: the fair value of financial assets and liabilities are determined by the input that does not reflect an actual data observed in the market while finding the fair value of an asset or liability.

Financial assets / (Financial liabilities)	Fair value as at		Fair value hierarchy	Valuation technique
	31 December 2024	31 December 2023
Fuel purchase option contracts	(184.083.251)	(173.330.608)	Level 2	Discounted cash flow method
Currency forward contracts	145.642.867	12.607.533	Level 2	Discounted cash flow method
		Currency	Fuel purchase
		forward	option
31 December 2024 contracts		contracts	Total
Fair value:
Opening		12.607.533	(173.330.608)	(160.723.075)
Fair value increase
Recognized in equity		-	(10.752.643)	(10.752.643)
Recognized in profit or loss		133.035.334	-	133.035.334
Closing		145.642.867	(184.083.251)	(38.440.384)

Assets		145.642.867	-	145.642.867
Liabilities		-	(184.083.251)	(184.083.251)
Total net assets and liabilities		145.642.867	(184.083.251)	(38.440.384)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 33 - FINANCIAL INSTRUMENTS (FAIR VALUE AND HEDGE ACCOUNTING DISCLOSURES)

Fair Value of Financial Instruments

	Currency	Fuel purchase
	forward	option
31 December 2023	contracts	contracts	Total

Fair value:
Opening	-	353.399.409	353.399.409
Fair value increase / (decrease)
Recognized in equity	-	(526.730.017)	(526.730.017)
Recognized in profit or loss	12.607.533	-	12.607.533

Closing	12.607.533	(173.330.608)	(160.723.075)

Assets	12.607.533	-	12.607.533
Liabilities	-	(173.330.608)	(173.330.608)

Total net assets and liabilities	12.607.533	(173.330.608)	(160.723.075)

The Group has forward fuel purchase option contracts, which are subject to hedge accounting, at a rate of 46,9% and 22,7% of the total fuel consumption estimated to occur in a period shorter than 1 year and more than 1 year, respectively. In line with its hedging policy, the Group can conclude contracts with maturities up to 24 months. As of 31 December 2024, the contracts last until December 2026. The total nominal value of these contracts is USD 503,7 million, and the weighted average price is in the range of USD 69-81. The ineffective portion of the hedge is not material as of 31 December 2024. In the current period, the income that is reclassified from hedging gain/(losses) fund under shareholders' equity to fuel expenses in the profit or loss statement is amounting to TL 85.907.142 (31 December 2023: TL 237.900.257 derivative income are charged to finance expenses).

NOTE 34 - EVENTS AFTER REPORTING PERIOD

In accordance with the Board of Directors decision dated January 28, 2025, the Company has decided to increase the registered capital ceiling permission of TL 500.000.000 valid for the years 2023-2027 to TL 2.500.000.000 to cover the years 2025-2029 and to make the necessary applications to amend Article 6 of the Company's Articles of Association in this direction.

PFTC, in which the Company has a 49.40% share, was de-registered from the trade registry as of 27 February 2025 as a result of the liquidation procedures.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

NOTE 35 - EXPLANATIONS RELATED TO STATEMENT OF CASH FLOW

The details of cash and cash equivalents as of 31 December 2024 and 31 December 2023 are as follows:

	31 December 2024	31 December 2023
Cash on hand	1.837.424	3.547.661
Cash at banks	46.283.815.336	16.082.396.035
- Demand deposits	856.801.424	837.756.339
- Time deposits	45.427.013.912	15.244.639.696
Allowance for credit risk adjustment under TFRS 9	(27.098.344)	(7.584.769)
	46.258.554.416	16.078.358.927

The weighted average interest rates of time deposits are as presented below:

	Weighted average
31 December 2024	interest rates	Total
USD deposits	4,51 %	31.149.715.222
EUR deposits	2,65 %	9.969.682.000
TL deposits	48,88 %	3.980.883.191
GBP deposits	0,50 %	114.484.102
IRR deposits	5,00 %	212.249.397
		45.427.013.912

	Weighted average
31 December 2023	interest rates	Total
USD deposits	4,24 %	10.443.064.645
EUR deposits	3,16 %	2.414.971.977
TL deposits	40,80 %	1.899.286.123
GBP deposits	0,26 %	311.074.021
IRR deposits	5,00 %	176.242.930
		15.244.639.696

As of 31 December 2024 and 31 December 2023 time deposits maturities are less than 90 days.

NOTE 36 – INDEPENDENT AUDITOR'S FEE

Fees related to the services received from the independent auditor/independent audit firm have been prepared in accordance with the Board Decision of the Group, Public Oversight Accounting and Auditing Standards Authority ("POA") published in the Official Gazette on 30 March 2021.The explanation of the fees for the services provided by the independent audit firms, the preparation principles of which are based on the POA letter dated 19 August 2021, is as follows:

	31 December 2024	31 December 2023
Independent auditor's fee	5.100.000	2.700.000
Tax services's fee	1.064.878	771.233
Other services's fee	125.000	100.000
	6.289.878	3.571.233

APPENDIX : EURO SELECTED NOTES

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

Revenue

	Euro	Euro
	1 January-	1 January
	31 December 2024	31 December 2023
Scheduled flight and service revenue	3.070.515.924	2.624.624.979
International flight revenue	1.605.762.118	1.507.298.333
Domestic flight revenue	405.157.820	306.947.027
Service revenue	1.059.595.986	810.379.619
Charter flight and service revenue	41.982.271	36.085.063
Charter flight revenue	41.982.271	36.085.063
Other revenue	13.472.527	9.681.113
	3.125.970.722	2.670.391.155

Expenses by Nature

	Euro
	1 January-	1 January
	31 December 2024	31 December 2023
Jet fuel expenses	872.822.637	833.729.558
Depreciation and amortisation expenses	338.692.016	303.533.846
Personnel expenses	508.735.349	302.437.046
Handling and station fees	217.317.048	181.453.212
Navigation expenses	176.975.062	150.199.973
Maintenance expenses	108.999.604	71.862.024
Landing expenses	100.188.290	89.315.711
Commission expenses	20.419.761	17.876.150
Advertising expenses	18.793.191	16.647.503
Passenger service and catering expenses	36.251.908	25.293.871
Short term lease expenses (*)	1.262.099	26.522.315
Other expenses	177.367.472	131.275.965
	2.577.824.437	2.150.147.174

(*) Consists of short-term operating lease expenses.

AI Terminal

PEGASUS HAVA TAŞIMACILIĞI A.Ş.

5947_rns_2025-03-04_3ada494e-92b3-4cd5-90b6-04684f6e9e67.pdf

(CONVENIENCE TRANSLATION OF THE REPORT AND FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH)

PEGASUS HAVA TAŞIMACILIĞI ANONİM ŞİRKETİ AND ITS SUBSIDIARIES

(Convenience translation of a report and consolidated financial statements originally issued in Turkish)

INDEPENDENT AUDITOR'S REPORT

To the Shareholders of Pegasus Hava Taşımacılığı Anonim Şirketi

A) Report on the Audit of the Consolidated Financial Statements

1) Opinion

2) Basis for Opinion

3) Key Audit Matters

4) Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

5) Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

B) Report on Other Legal and Regulatory Requirements

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF 31 DECEMBER 2024

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF 31 DECEMBER 2024

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE PERIOD ENDED 31 DECEMBER 2024

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED 31 DECEMBER 2024

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED 31 DECEMBER 2024

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE PERIOD ENDED 31 DECEMBER 2024

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

NOTE 1 - ORGANIZATION AND OPERATIONS OF THE GROUP

Subsidiaries

Pegasus Havacılık Teknolojileri ve Ticaret A.Ş.

Pegasus Airlines Innovation Lab, Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

NOTE 1 - ORGANIZATION AND OPERATIONS OF THE GROUP

Joint Ventures

Hitit Bilgisayar Hizmetleri A.Ş.

Approval of Financial Statements

NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

2.1 Basis of Presentation

Statement of Compliance with TAS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

2.1 Basis of Presentation

Statement of Compliance with TAS

Functional and Presentation Currency

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

2.1 Basis of Presentation

Financial Reporting in Hyperinflationary Economies

Euro Amounts in the Financial Statements

Comparative Information and Reclassification of Prior Period Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

2.1 Basis of Presentation

Basis of Consolidation

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

2.1 Basis of Presentation

Basis of Consolidation

Changes in the Group's Ownership Interests in Existing Subsidiaries

Joint Ventures

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

2.1 Basis of Presentation

Joint Ventures

2.2 Changes in Accounting Estimates

2.3 The new standards, amendments and interpretations

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

2.3 The new standards, amendments and interpretations

i) The new standards, amendments and interpretations which are effective as at January 1, 2024 are as follows:

Amendments to TAS 1- Classification of Liabilities as Current and Non-Current Liabilities

Amendments to TFRS 16 - Lease Liability in a Sale and Leaseback

Amendments to TAS 7 and TFRS 7 - Disclosures: Supplier Finance Arrangements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

2.3 The new standards, amendments and interpretations

i) The new standards, amendments and interpretations which are effective as at January 1, 2024 are as follows:

Amendments to TAS 7 and TFRS 7 - Disclosures: Supplier Finance Arrangements

ii) Standards issued but not yet effective and not early adopted

Amendments to TFRS 10 and TAS 28 - Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

TFRS 17 - The new Standard for insurance contracts

Amendments to TAS 21 - Lack of exchangeability

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2024

NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

2.3 The new standards, amendments and interpretations