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PEGASUS HAVA TAŞIMACILIĞI A.Ş.

Quarterly Report May 8, 2025

5947_rns_2025-05-08_1492d412-1d9b-4799-be9f-4e3f7aa54c02.pdf

Quarterly Report

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

PEGASUS HAVA TAŞIMACILIĞI ANONİM ŞİRKETİ AND ITS SUBSIDIARIES

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTH PERIOD ENDED 31 MARCH 2025

INDEX PAGE
INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION 1-2
INTERIM CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
3-4
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 5
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS 6
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 7-44
NOTE 1 ORGANIZATION AND OPERATIONS OF THE GROUP 7
NOTE 2 BASIS OF PRESENTATION OF FINANCIAL STATEMENTS 7-13
NOTE 3 INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD 14
NOTE 4 SEGMENT REPORTING 15
NOTE 5 RELATED PARTY TRANSACTIONS 15-16
NOTE 6 TRADE RECEIVABLES AND PAYABLES OTHER RECEIVABLES 16-17
NOTE 7 PREPAYMENTS, DEFERRED INCOME AND PASSENGER FLIGHT LIABILITIES 18
NOTE 8 PROPERTY AND EQUIPMENT 19-20
NOTE 9 INTANGIBLE ASSETS 21
NOTE 10 RIGHT OF USE ASSETS 21-22
NOTE 11 PROVISIONS, CONTINGENT ASSETS AND LIABILITIES 22-23
NOTE 12 COMMITMENTS 23-25
NOTE 13 EXPENSES BY NATURE 26
NOTE 14 SHAREHOLDERS' EQUITY 26
NOTE 15 REVENUE AND COST OF SALES 27
NOTE 16 GENERAL ADMINISTRATIVE EXPENSES AND SELLING AND MARKETING EXPENSES 28
NOTE 17 OTHER OPERATING INCOME AND EXPENSES 29
NOTE 18 INCOME AND EXPENSES FROM INVESTING ACTIVITIES 29
NOTE 19 FINANCIAL INCOME AND EXPENSES 30
NOTE 20 EARNINGS PER SHARE 30
NOTE 21 DERIVATIVE FINANCIAL INSTRUMENTS 31
NOTE 22 FINANCIAL INSTRUMENTS 31-35
NOTE 23 NATURE AND LEVEL OF RISKS DERIVING FROM FINANCIAL INSTRUMENTS 35-38
NOTE 24 FINANCIAL INSTRUMENTS (FAIR VALUE AND HEDGE ACCOUNTING DISCLOSURES) 39-42
NOTE 25 EVENTS AFTER REPORTING PERIOD 42
NOTE 26 INCOME TAX EXPENSE 43
NOTE 27 EXPLANATIONS RELATED TO STATEMENT OF CASH FLOW 44
APPENDIX – EURO SELECTED NOTES 45

INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF 31 MARCH 2025

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

Current period Prior period (*) (*)
(Not Reviewed) TL (Audited) TL EUR EUR
31 March 31 December 31 March 31 December
Notes 2025 2024 2025 2024
ASSETS
Current assets 66.736.617.455 69.511.513.150 1.639.643.787 1.891.835.243
Cash and cash equivalents 27 31.241.160.946 46.258.554.416 767.560.260 1.258.979.406
Financial assets 22 19.530.115.393 11.098.130.886 479.833.015 302.048.311
Trade receivables 6 2.902.919.503 2.699.417.383 71.321.474 73.467.728
Trade receivables from third parties 2.902.919.503 2.699.417.383 71.321.474 73.467.728
Other receivables 6 349.683.821 106.274.871 8.591.339 2.892.392
Other receivables from third parties 349.683.821 106.274.871 8.591.339 2.892.392
Derivative financial instruments 21 - 145.642.867 - 3.963.837
Inventories 1.694.589.417 1.525.572.961 41.634.160 41.520.211
Prepaid expenses 7 10.805.758.005 7.418.285.764 265.485.346 201.897.122
Current income tax assets 120.208.300 85.510.906 2.953.383 2.327.277
Other current assets 92.182.070 174.123.096 2.264.810 4.738.959
Non-Current assets 243.130.009.988 213.808.263.691 5.973.427.701 5.819.032.995
Financial assets 22 7.616.438.361 4.621.164.674 187.127.342 125.770.276
Other receivables 6 3.372.148.426 3.119.881.195 82.849.902 84.911.131
Other receivables from third parties 3.372.148.426 3.119.881.195 82.849.902 84.911.131
Investments accounted by using the equity method 3 855.465.947 775.860.767 21.017.838 21.115.937
Property and equipment 8 20.432.095.953 17.304.831.905 501.989.905 470.967.606
Intangible assets 9 1.197.567.323 883.542.517 29.422.885 24.046.619
Right of use assets 10 168.132.368.189 153.299.548.290 4.130.823.578 4.172.222.342
Prepaid expenses 7 23.213.007.156 18.118.510.039 570.317.532 493.115.950
Deferred tax assets 26 18.310.918.633 15.684.924.304 449.878.719 426.883.134
TOTAL ASSETS 309.866.627.443 283.319.776.841 7.613.071.488 7.710.868.238

(*)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.

INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF 31 MARCH 2025

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

Notes Current period
(Not Reviewed) TL
31 March
2025
Prior period
(Audited) TL
31 December
2024
(*)
EUR
31 March
2025
(*)
EUR
31 December
2024
LIABILITIES
Current liabilities 62.705.349.052 54.463.615.723 1.540.600.047 1.482.289.523
22 3.318.914.940 6.321.566.673 81.542.015 172.048.659
Short term borrowings 22 8.706.107.064 8.017.762.712 213.899.279 218.212.572
Short term portion of long term borrowings
Short term portion of long term lease liabilities
22 16.459.063.302 14.911.498.531 404.380.712 405.833.468
6 10.039.349.368 7.942.864.589 246.655.546 216.174.134
Trade payables 5 68.551.931 43.890.717 1.684.244 1.194.536
Trade payables to related parties 9.970.797.437 7.898.973.872 244.971.302 214.979.598
Trade payables to third parties 1.455.929.511 540.280.976 35.770.554 14.704.364
Employee benefit obligations 633.518.520 460.006.050
Other payables 6 15.564.839 12.519.590
Other payables to third parties 633.518.520 460.006.050 15.564.839 12.519.590
Contract liabilities 7 17.740.930.697 12.269.986.013 435.874.755 333.941.687
Derivative financial instruments 21 179.130.039 170.696.233 4.401.024 4.645.693
Deferred income 7 1.396.137.926 1.470.323.469 34.301.542 40.016.533
Short term provisions 2.776.267.685 2.358.630.477 68.209.781 64.192.823
Short term provisions for employee benefits 2.613.307.046 2.301.423.398 64.206.021 62.635.867
Other short term provisions 162.960.639 57.207.079 4.003.760 1.556.956
Non-Current liabilities 166.751.380.481 153.937.068.322 4.096.894.260 4.189.573.178
Long term borrowings 22 18.568.424.084 17.261.724.196 456.205.339 469.797.544
Long term lease liabilities 22 129.281.573.143 119.794.949.520 3.176.303.149 3.260.356.410
Derivative financial instruments 7 43.854.873 13.387.018 1.077.465 364.343
Deferred income 8.889.641.618 7.457.506.238 218.408.517 202.964.552
Long term provisions 9.967.886.763 9.409.501.350 244.899.790 256.090.329
Long term provisions for employee benefits 1.981.878.324 1.768.183.978 48.692.526 48.123.147
Other long term provisions 7.986.008.439 7.641.317.372 196.207.264 207.967.182
SHAREHOLDERS' EQUITY 80.409.897.910 74.919.092.796 1.975.577.181 2.039.005.537
Paid-in share capital 14 500.000.000 500.000.000 230.037.951 230.037.951
Share premiums on capital stock 57.986.732 57.986.732 24.595.488 24.595.488
Other comprehensive income/expense
not to be reclassified to profit or loss
Actuarial losses on defined benefit plans (175.241.623) (156.636.746) (4.305.490) (4.263.048)
Currency translation differences 42.703.433.499 34.563.644.779 1.770 6.188
Other comprehensive income/expense
to be reclassified to profit or loss
Currency translation differences 485.978.278 414.074.097 8.411.102 8.445.337
Hedge fund (167.238.653) (138.062.439) (4.108.866) (3.757.527)
Gain on financial assets measured at fair value 28.268.487 66.754.501 694.525 1.816.800
Restricted profit reserves 20.459.941 20.459.941 4.047.406 4.047.406
Retained earnings 39.590.871.931 26.305.434.254 1.778.076.942 1.416.584.246
Net income for the period (2.634.620.682) 13.285.437.677 (61.873.647) 361.492.696
TOTAL LIABILITIES AND EQUITY 309.866.627.443 283.319.776.841 7.613.071.488 7.710.868.238

(*)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.

INTERIM CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE PERIOD ENDED 31 MARCH 2025

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

Current period Prior period (*) (*)
(Not Reviewed) (Not Reviewed) EUR EUR
Profit or loss Notes 1 January-
31 March 2025
1 January-
31 March 2024
1 January-
31 March 2025
1 January
31 March 2024
Sales 1 5 23.587.573.014 17.390.800.996 621.659.742 518.722.226
Cost of sales (-) 1 5 (24.433.763.109) (17.952.561.068) (635.772.723) (532.082.958)
Gross profit (846.190.095) (561.760.072) (14.112.981) (13.360.732)
General administrative expenses (-) 1 6 (893.331.409) (572.186.285) (23.965.902) (17.610.318)
Marketing expenses (-) 1 6 (656.460.879) (451.408.923) (16.693.419) (13.562.378)
Other operating income 1 7 11.990.294 314.342.294 294.588 9.375.562
Other operating expenses (-) 1 7 (1.521.844.286) (54.673.031) (39.808.554) (1.687.884)
Operating profit (3.905.836.375) (1.325.686.017) (94.286.268) (36.845.750)
Income from investing activities 1 8 1.136.084.573 740.724.907 28.186.410 21.242.655
Expenses from investing activities (-) 1 8 (71.816.019) (169.947.660) (1.764.439) (4.887.978)
Share of investments income accounted for
using the equity method 3 22.612.522 14.639.828 594.197 436.647
Operating profit before financial expense (2.818.955.299) (740.268.942) (67.270.100) (20.054.426)
Financial income 1 9 2.593.006.783 352.049.203 67.963.006 10.500.394
Financial expense (-) 1 9 (2.649.790.841) (3.238.424.067) (68.902.507) (97.150.959)
Profit/(loss) before tax (2.875.739.357) (3.626.643.806) (68.209.601) (106.704.991)
Tax income/(expense) 241.118.675 125.669.472 6.335.954 3.748.214
Deferred tax income/(expense) 2 6 241.118.675 125.669.472 6.335.954 3.748.214
Profit for the period (2.634.620.682) (3.500.974.334) (61.873.647) (102.956.777)
Income/(loss) per share (TL) / (EUR) 2 0 (5,27) (34,22) (0,12) (1,01)
Other comprehensive income
Items not to be reclassified to profit or loss
Actuarial (losses) / gains on defined benefit plans (24.806.487) 9.762.138 (56.589) 558.317
Deferred tax effect 6.201.621 (2.440.534) 14.147 (139.579)
Currency translation differences 8.139.788.720 3.643.187.760 (4.418) -
Items to be reclassified to profit or loss
Currency translation differences 71.904.181 48.339.778 (34.235) 597.053
Gain on financial assets measured at fair value (51.314.682) (2.651.155) (1.496.367) (202.842)
Cash flow hedge (38.901.661) 440.806.561 (468.453) 13.006.733
Deferred tax effect 22.554.104 (109.538.875) 491.206 (3.200.974)
Other comprehensive income 8.125.425.796 4.027.465.673 (1.554.709) 10.618.708
Total comprehensive income 5.490.805.114 526.491.339 (63.428.356) (92.338.069)

(*)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.

INTERIM CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE PERIOD ENDED 31 MARCH 2025

(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
gains/(losses) Currency Currency financial assets
Paid in Share premiums on on defined translation translation Hedge measured at fair Restricted Net profit/(loss) for the
share capital capital stock benefit plans differences differences reserve value profit reserves Retained earnings year Shareholders' equity
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 - - - - - - - - 20.907.501.797 (20.907.501.797) -
Net profit/(loss) for the period TL - - - - - - - - - (3.500.974.334) (3.500.974.334)
Other comprehensive income / (expense) TL - - 7.321.604 3.643.187.760 48.339.778 330.604.905 (1.988.374) - - - 4.027.465.673
As at 31 March 2024 TL 102.299.707 455.687.025 (98.677.189) 31.248.007.219 416.494.014 200.606.965 46.339.958 20.459.941 26.305.434.254 (3.500.974.334) 55.195.677.560
As at 1 January 2025 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
Transfers TL - - - - - - - - 13.285.437.677 (13.285.437.677) -
Net profit/(loss) for the period TL - - - - - - - - - (2.634.620.682) (2.634.620.682)
Other comprehensive income / (expense) TL - - (18.604.877) 8.139.788.720 71.904.181 (29.176.214) (38.486.014) - - - 8.125.425.796
As at 31 March 2025 TL 500.000.000 57.986.732 (175.241.623) 42.703.433.499 485.978.278 (167.238.653) 28.268.487 20.459.941 39.590.871.931 (2.634.620.682) 80.409.897.910

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.

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED 31 MARCH 2025

(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 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 - - - - - 3.990.862 - - 789.940.474 (793.931.336) -
Net profit/(loss) for the period EUR - - - - - - - - - (102.956.777) (102.956.777)
Other comprehensive income / (expense) EUR - - 418.738 - 597.053 5.764.187 (152.132) - - 3.990.862 10.618.708
As at 31 March 2024 EUR 60.544.134 194.089.305 (2.835.364) - 9.405.840 5.764.187 1.331.520 4.047.406 1.416.584.246 (102.956.777) 1.585.974.497
As at 1 January 2025 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
Transfers EUR - - - - - - - - 361.492.696 (361.492.696) -
Net profit/(loss) for the period EUR - - - - - - - - - (61.873.647) (61.873.647)
Other comprehensive income / (expense) EUR - - (42.442) (4.418) (34.235) (351.339) (1.122.275) - - - (1.554.709)
As at 31 March 2025 EUR 230.037.951 24.595.488 (4.305.490) 1.770 8.411.102 (4.108.866) 694.525 4.047.406 1.778.076.942 (61.873.647) 1.975.577.181

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE PERIOD ENDED 31 MARCH 2025

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

Current period
(Not Reviewed) TL (Not Reviewed) TL
1 January-
Prior period
1 January-
(*)
EUR
1 January-
(*)
EUR
1 January
Notes 31 March 2025 31 March 2024 31 March 2025 31 March 2024
A. CASH FLOWS FROM OPERATING ACTIVITIES
Income/(loss) for the period (2.634.620.682) (3.500.974.334) (61.873.647) (102.956.777)
Adjustments to reconcile the income/(loss)
Depreciation and amortization 8-9-10 3.699.989.707 2.767.509.190 97.225.841 82.543.630
Adjustments related with impairments 58.654.000 166.616.775 1.418.576 4.788.631
Provision for doubtful receivable (13.162.019) (3.330.885) (345.863) (99.347)
Adjustments related with financial investment impairments 71.816.019 169.947.660 1.764.439 4.887.978
Adjustments related with provisions 618.594.092 93.177.515 16.255.000 2.705.135
Provision for employee benefits 512.809.303 67.728.444 13.475.258 1.946.091
Legal provison 105.784.789 4.469.077 2.779.742 133.295
Interest and commission income 1.072.207.190 1.362.039.070 28.909.566 41.741.985
Adjustments related with fair value expense (income) 51.314.682 2.651.156 1.260.744 76.178
Adjustments related with fair value expense (income) of financial assets
Gain on equity investments accounted for
51.314.682 2.651.156 1.260.744 76.178
using the equity method 3 (22.612.522) (14.639.828) (594.197) (436.647)
Current tax expense (241.118.675) (125.669.472) (6.335.954) (3.748.214)
Other provisions related with investing
or financing activities
(1.383.411.321) 759.835.943 (35.970.649) 23.684.705
Changes in working capital
Increase in trade receivables 94.839.047 (1.081.197.140) 2.492.117 (32.247.747)
Increase in other receivables, prepayments
and other assets (3.174.449.911) (2.852.161.410) (83.416.059) (90.654.009)
Increase in inventories (4.336.400) (170.728.194) (113.949) (5.092.133)
Increase in trade payables 1.159.989.051 536.307.357 30.481.412 15.995.884
Increase in deferred income, other payables and other current liabilities 4.774.491.323 7.230.320.315 125.128.754 221.182.764
Net cash generated from operating activities 4.069.529.581 5.173.086.943 114.867.555 157.583.385
Payment for the employee benefits provisions (12.037.796) (25.193.349) (318.012) (752.789)
Payment for other provisions (31.229) (240.217) (821) (7.165)
4.057.460.556 5.147.653.377 114.548.722 156.823.431
B. CASH FLOWS FROM INVESTING ACTIVITIES
Net cash changes from acquisition and sale of debt instruments
of other entities (3.092.648.420) 2.021.471.701 (80.351.719) 55.413.333
Net cash changes from purchase and
sale of property, equipment and intangible assets
462.696.488
287.477.746
1.524.069.908 13.418.950
8.302.271
43.121.685
15.860.686
Interest received from financial investment 523.619.528
Changes in cash advances and payables (4.984.353.813) (1.469.195.292)
4.473.687.609
(130.975.497) (43.820.166)
146.932.472
Other cash changes (**) (6.695.795.136) 7.073.653.454 (161.703.350) 217.508.010
C. CASH FLOWS FROM FINANCING ACTIVITIES (14.022.623.135) (351.309.345)
Increase in borrowings 900.583.623 3.122.247.783 22.849.967 93.184.210
Repayment of borrowings (3.569.131.945) (498.263.350) (116.720.982) (14.500.000)
Repayment of principal in lease liabilities (3.788.171.444) (2.822.024.849) (99.543.021) (84.169.612)
Interest and commission paid (2.099.862.904) (1.596.063.628) (58.499.627) (51.042.810)
Interest received 118.213.925 682.999.686 3.106.346 10.363.418
(8.438.368.745) (1.111.104.358) (248.807.317) (46.164.794)
NET DECREASE IN CASH AND CASH EQUIVALENTS
BEFORE TRANSLATION EFFECT (A+B+C) (18.403.531.324) 11.110.202.473 (485.567.940) 328.166.647
D. TRANSLATION DIFFERENCES EFFECT ON CASH AND CASH EQUIVALENTS 3.386.137.854 1.119.211.479 (5.851.206) (8.375.030)
NET (DECREASE) / INCREASE IN CASH AND CASH EQUIVALENTS (A+B+C+D) (15.017.393.470) 12.229.413.952 (491.419.146) 319.791.617
E. CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD
AT THE BEGINNING OF THE PERIOD 27 46.258.554.416 16.078.358.927 1.258.979.406 493.596.374
AT THE END OF THE PERIOD (A+B+C+D+E) 27 31.241.160.946 28.307.772.879 767.560.260 813.387.991

(*)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.

(**) 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 INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2025

(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.

The shareholders and ownership of the Company as of 31 March 2025 and 31 December 2024 are as follows:

31 March 2025 31 December 2024
Esas Holding A.Ş. ("Esas Holding") 52,81% 52,81%
Publicly held 45,37% 45,37%
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 March 2025 is 9.020 (31 December 2024: 8.459). The address of its principal office is Aeropark Yenişehir Mah. Osmanlı Bulvarı No: 11/A Kurtkoy-Pendik İstanbul.

Approval of Financial Statements

The interim condensed consolidated financial statements of the Company and its subsidiaries for the three month ended 31 March 2025 were authorised for issue in accordance with a resolution of the Board of Directors on 8 May 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 condensed 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.

The interim condensed consolidated financial statements for the three month ended 31 March 2025 have been prepared in accordance with TAS 34 Interim Financial Reporting. The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual consolidated financial statements as at 31 December 2024.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2025

(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 interim condensed consolidated financial statements have been prepared on the historical cost basis except for certain financial instruments that are measured at fair values. The accompanying interim condensed 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 interim condensed 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 INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2025

(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 2024, 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 2024 and 31 March 2025 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 interim condensed consolidated financial statements refer to the original Euro (functional currency) denomined interim condensed 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

Condensed 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 condensed 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 condensed consolidated financial statements.

Basis of Consolidation

The following table illustrates the condensed consolidated subsidiaries and the Group's ownership percentage in these subsidiaries as of 31 March 2025 and 31 December 2024:

Ownership rate Country of
Name of the company Principal activity 31 March
2025
31 December 2024 registration and
operation
Pegasus Havacılık
Teknolojileri ve
Ticaret A.Ş.
Simulator technical
support and
maintenance
100% 100% Turkiye
Pegasus Airlines
Innovation Lab, Inc.
Technology

R&D
100% 100% USA

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2025

(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 affiliates and joint ventures then indicates the Group's ownership percentage in these joint ventures as of 31 March 2025, 31 December 2024:

Ownership rate Country of
Name of the company Principal
activity
31 March 2025 31 December 2024 Ownership
type
registration and
operation
Pegasus Uçuş Eğitim
Merkezi A.Ş. ("PUEM")
Simulator
training
Information
- 49,40% Joint
venture
Turkiye
Hitit Bilgisayar Hizmetleri
A.Ş. ("Hitit Bilgisayar")
system
solutions
36,82% 36,82% Joint
venture
Turkiye

(*) The liquidation process of PUEM, in which the Company held a 49.40% stake, was completed and the entity was deregistered from the trade registry as of February 27, 2025.

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 interim condensed consolidated financial statements as of March 31, 2025 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 2025 and thereafter. The effects of these standards and interpretations on the Group's financial position and performance have been disclosed in the related paragraphs.

i) The new standards, amendments and interpretations which are effective as at January 1, 2025 are as follows:

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. 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 INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2025

(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

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 interim condensed consolidated financial statements are as follows. The Group will make the necessary changes if not indicated otherwise, which will be affecting the interim condensed 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.

iii) 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 condensed 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 INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2025

(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 an d 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.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2025

(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 condensed 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.

2.4 Seasonality on Operations

Due to seasonality of air passenger transportation, it's expected to incur higher revenues in the second half of the year compared to the first half. Besides, as a result of higher sales with the effect of summer season and growth in operations of the Company, trade receivables and passenger flight liabilities increased as of 31 March 2025 compared to last year-end.

2.5 Going Concern

The Group has prepared its financial statements in accordance with the going concern principle.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2025

(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 March 2025 31 December 2024
Joint ventures
Hitit Bilgisayar 855.465.947 775.860.767
855.465.947 775.860.767

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

1 January- 1 January
31 March 2025 31 March 2024
Hitit Bilgisayar 22.612.522 14.639.828
Net profit 22.612.522 14.639.828

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

Hitit Bilgisayar

31 March 2025 31 December 2024
Current assets 1.116.220.807 903.513.291
Non-current assets 2.000.632.701 1.712.410.293
Current liabilities (601.525.794) (381.450.727)
Non-current liabilities (204.425.686) (138.932.230)
Net assets of joint venture 2.310.902.028 2.095.540.627
Group's ownership interest in the joint venture 36,82% 36,82%
Goodwill 4.591.820 4.282.708
Group's share in the net assets of the joint venture 855.465.947 775.860.767
1 January-
31 March 2025
1 January
31 March 2024
Revenue 343.318.807 215.769.969
Depreciation and amortisation expense (72.130.143) (40.553.043)
Interest income/(expense), net 4.927.828 (28.728.525)
Profit for the year 61.413.693 39.760.532
Group's weighted average ownership interest 36,82% 36,82%
Group's share in the net profit of the joint venture 22.612.522 14.639.828

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2025

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

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 condensed 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) Trade payables to related parties

31 March 2025 31 December 2024
Balances with joint ventures:
Hitit Bilgisayar 53.272.208 39.628.684
Balances with other related parties:
Esasburda İnşaat
Sanayi ve Ticaret A.Ş. ("Esasburda")
300.689 947.033
Ere Avm İnşaat
A.Ş. ("Ere Avm")
14.979.034 3.315.000
68.551.931 43.890.717

(ii) Significant Transactions with Related Parties:

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 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.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2025

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

NOTE 5 - RELATED PARTY TRANSACTIONS

a) Purchases of goods or services

1 January-
31 March 2025
1 January
31 March 2024
Transactions with joint ventures:
Hitit Bilgisayar 92.086.329 65.286.951
Transactions with other related parties:
Ere Avm 18.000.000 200.000
Esasburda 3.524.309 2.982.452
Other - 8.927
113.610.638 68.478.330
b)
Lease expenses
1 January- 1 January
31 March 2025 31 March 2024
Esasburda (*) - 8.014.416
- 8.014.416

(*) 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.

(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 March 2025 and 31 March 2024 are as follows:

1 January-
31 March 2025
1 January
31 March 2024
Salaries and benefits 21.214.444 14.991.924
21.214.444 14.991.924

NOTE 6 – TRADE RECEIVABLES AND PAYABLES AND OTHER RECEIVABLES

Short term trade receivables

The details of short term trade receivables as of 31 March 2025 and 31 December 2024 are as follows:

31 March 2025 31 December 2024
Trade receivables 1.421.784.378 1.525.875.736
Credit card receivables 1.553.559.471 1.198.921.535
Income accruals 82.645.875 121.627.213
3.057.989.724 2.846.424.484
Allowance for credit risk adjustment under TFRS 9 (155.070.221) (147.007.101)
2.902.919.503 2.699.417.383

The average collection period of trade receivables is approximately 23 days (31 December 2024: 19 days).

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2025

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

NOTE 6 – TRADE RECEIVABLES AND PAYABLES AND OTHER RECEIVABLES

Short term trade payables

The details of short term trade payables as of 31 March 2025 and 31 December 2024 are as follows:

31 March 2025 31 December 2024
Trade payables 2.980.188.384 4.869.502.621
Accrued direct operational costs 6.990.609.053 3.029.471.251
Trade payables to related parties (Note 5) 68.551.931 43.890.717
10.039.349.368 7.942.864.589

The average payment period of trade payables is approximately 33 days (31 December 2024: 30 days).

Short term other receivables

The details of short term other receivables as of 31 March 2025 and 31 December 2024 are as follows:

31 March 2025 31 December 2024
Deposits and guarantees given (*) 296.018.823 52.004.903
Receivables from pilots for flight training 10.086.805 10.457.594
Receivables from tax office 35.365.592 26.611.446
Other receivables 8.212.601 17.200.928
349.683.821 106.274.871

(*) The amount of TL 244.204.420 in deposits given, consists of guarantees given from the banks regarding the valuation of derivative transactions.

Long term other receivables

The details of long term other receivables as of 31 March 2025 and 31 December 2024 are as follows:

31 March 2025 31 December 2024
Receivables from pilot trainings 1.742.803.584 1.570.320.465
Deposits given 1.629.344.842 1.549.560.730
3.372.148.426 3.119.881.195
Short term other payables 31 March 2025 31 December 2024
Taxes payables 422.951.460 373.700.528
Deposits received 210.567.060 86.305.522
633.518.520 460.006.050

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2025

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

NOTE 7 - PREPAYMENTS, DEFERRED INCOME AND PASSENGER FLIGHT LIABILITIES

The details of prepayments as of 31 March 2025 and 31 December 2024 are as follows:

Short term prepayments

31 March 2025 31 December 2024
Advances on aircraft purchases 6.216.762.881 4.514.154.692
Advances to suppliers 3.678.057.540 1.882.368.567
Prepaid insurance expenses 560.037.162 661.458.633
Other prepaid expenses 350.900.422 360.303.872
10.805.758.005 7.418.285.764
Long term prepayments
31 March 2025 31 December 2024
Advances on aircraft purchases 4.259.162.530 2.102.247.620
Prepaid maintenance expenses 18.942.704.486 16.007.193.652
Other prepaid expenses 11.140.140 9.068.767
23.213.007.156 18.118.510.039

Deferred Income

Contract Liabilities

The details of passenger flight liabilities as of 31 March 2025 and 31 December 2024 are as follows:

31 March 2025 31 December 2024
Flight liability from ticket sales 12.659.971.704 8.044.008.774
Passenger airport fees received from customers (*) 3.372.691.017 2.688.310.065
Flight liability from flight points 1.708.267.976 1.537.667.174
17.740.930.697 12.269.986.013

(*) 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.

Deferred Income (excluding contract liabilities)

Short term deferred income

31 March 2025 31 December 2024
Advances received from customers 920.687.930 1.010.942.220
Other deferred income 475.449.996 459.381.249
1.396.137.926 1.470.323.469
Long term deferred income
31 March 2025 31 December 2024

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

Deferred income (*) 8.889.641.618 7.457.506.238

8.889.641.618 7.457.506.238

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2025

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

NOTE 8 - PROPERTY AND EQUIPMENT

Components,
Machinery Motor Furniture
and
Leasehold spare engine Owned Construction
31
March
2025
and
equipment
vehicles fixtures improvements and
repairables
Aircraft in
progress
Total
Cost:
Opening 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
Additions 10.039.559 49.847.410 48.916.048 - 1.548.790.477 - 74.015.396 1.731.608.890
Disposals - - - - - (2.818.105.627) - (2.818.105.627)
Transfers
(*)
- - - - (46.025.104) 2.818.105.627 (35.176.230) 2.736.904.293
Currency
translation
differences
141.170.233 112.324.044 166.388.838 54.719.979 1.584.343.989 1.132.869.366 40.011.387 3.231.827.836
Closing 1.454.910.904 1.172.464.746 1.727.966.696 562.568.104 16.810.671.463 11.646.864.271 425.124.982 33.800.571.166
Accumulated
depreciation:
Opening (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)
Depreciation
for
the
year
(21.935.907) (25.539.588) (28.759.531) (787.250) (262.665.304) (131.199.576) - (470.887.156)
Disposals - - - - - 1.037.237.945 - 1.037.237.945
Transfers
(*)
- - - - - (1.037.237.945) - (1.037.237.945)
Currency
translation
differences
(61.291.846) (41.967.493) (118.630.703) (52.941.491) (423.522.834) (585.729.821) - (1.284.084.188)
Closing (637.911.755) (440.518.904) (1.229.824.076) (544.562.919) (4.447.326.865) (6.068.330.694) - (13.368.475.213)
Net
book
value
816.999.149 731.945.842 498.142.620 18.005.185 12.363.344.598 5.578.533.577 425.124.982 20.432.095.953

(*) 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 INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2025

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

NOTE 8 - PROPERTY AND EQUIPMENT

Machinery Motor Furniture
and
Leasehold spare engine Owned Construction
31
March
2024
and
equipment
vehicles fixtures improvements and
repairables
Aircraft in
progress
Total
Cost:
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
Opening
Additions 6.417.045 2.151.419 92.404.510 - 1.430.823.394 - 6.421.860 1.538.218.228
Transfers
(*)
- - - - (279.800.933) - - (279.800.933)
Currency
translation
differences
75.747.622 49.157.350 83.963.730 30.007.987 500.788.368 614.204.287 18.229.761 1.372.099.105
Closing 1.185.848.864 768.676.717 1.352.373.692 468.653.265 8.332.502.164 9.592.407.941 287.559.018 21.988.021.661
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
(17.922.385) (15.295.096) (22.550.368) (1.142.222) (147.336.692) (108.683.579) - (312.930.342)
Currency
translation
differences
(29.388.335) (20.288.931) (60.162.304) (29.622.731) (187.476.631) (299.270.043) - (626.208.975)
Closing (466.939.646) (323.661.186) (949.612.214) (463.144.036) (2.993.407.889) (4.722.179.080) - (9.918.944.051)
Net
book
value
718.909.218 445.015.531 402.761.478 5.509.229 5.339.094.275 4.870.228.861 287.559.018 12.069.077.610

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

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2025

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

NOTE 9 - INTANGIBLE ASSETS

Software 31 March 2025 31 March 2024
Cost:
Opening 2.361.587.141 1.714.023.225
Additions 288.449.008 96.589.971
Currency translation differences 274.515.884 120.928.898
Closing 2.924.552.033 1.931.542.094
Accumulated amortization:
Opening (1.478.044.624) (1.070.519.120)
Amortization for the year (83.851.869) (59.396.236)
Disposals - -
Currency translation differences (165.088.217) (75.492.618)
Closing (1.726.984.710) (1.205.407.974)
Net book value 1.197.567.323 726.134.120

NOTE 10 – RIGHT OF USE ASSETS

31 March 2025 Field Rental Building Aircraft Other Total
Cost:
Opening 535.372.779 908.784.706 191.782.214.946 11.440.385 193.237.812.816
Additions - - 3.367.245.325 - 3.367.245.325
Transfers (*) - - (2.818.105.627) - (2.818.105.627)
Currency translation differences 57.685.725 97.920.378 20.702.471.515 1.232.686 20.859.310.304
Closing 593.058.504 1.006.705.084 213.033.826.159 12.673.071 214.646.262.818
Accumulated depreciation:
Opening (490.171.366) (14.554.598) (39.422.098.177) (11.440.385) (39.938.264.526)
Depreciation for the period (12.245.636) (5.882.828) (3.127.122.218) - (3.145.250.682)
Transfers (*) - - 1.037.237.945 - 1.037.237.945
Currency translation differences (53.666.858) (1.977.314) (4.410.740.508) (1.232.686) (4.467.617.366)
Closing (556.083.860) (22.414.740) (45.922.722.958) (12.673.071) (46.513.894.629)
Net book value 36.974.644 984.290.344 167.111.103.201 - 168.132.368.189

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

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2025

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

NOTE 10 – RIGHT OF USE ASSETS

31 March 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 - - 3.251.650.623 - 3.251.650.623
Disposals (*) - - (9.052.588.758) - (9.052.588.758)
Currency translation differences 32.469.530 17.349.909 9.924.620.350 693.841 9.975.133.630
Closing 507.096.720 270.964.253 152.426.539.917 10.836.153 153.215.437.043
Accumulated depreciation:
Opening (367.824.706) (161.309.673) (34.992.941.609) (10.142.312) (35.532.218.300)
Depreciation for the period 3.733.752 (40.033.676) (2.358.882.688) - (2.395.182.612)
Disposals (*) - - 6.620.723.722 - 6.620.723.722
Currency translation differences (25.021.181) (12.557.057) (2.128.223.544) (693.841) (2.166.495.623)
Closing (389.112.135) (213.900.406) (32.859.324.119) (10.836.153) (33.473.172.813)
Net book value 117.984.585 57.063.847 119.567.215.798 - 119.742.264.230

(*) 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.

NOTE 11 - PROVISIONS, CONTINGENT ASSETS AND LIABILITIES

Litigation

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 208.748.721 as of 31 March 2025 (31 December 2024: TL 187.141.480). These lawsuits and fines have been evaluated by the Group's management and a litigation provision of TL 162.960.639 (31 December 2024: TL 57.207.079) 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 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 March 31, 2025. The Company has not recognized any provision in the financial statements in line with the opinions received from its lawyers regarding the aforementioned case.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2025

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

NOTE 11 - 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. No decision has yet been issued regarding the third lawsuit. The Company is of the opinion that it is legally impossible to obtain the requested documents related to the transported passengers from the relevant public authorities, and that the responsibility for implementing the requested additional inspections lies with the operating plaintiff. A legal appeal process has been initiated against the unfavorable first-instance court decision. In prior reporting periods, no provisions were recognized in relation to these cases, as the claims were not supported by concrete evidence and were based on unreasonable assumptions. Following the Company's appeal, upon the approval of the first-instance court's decision as of April 18, 2025, the Company has recognized a provision corresponding to the claimed amounts for all three lawsuits as of the end of the interim period ended March 31, 2025. It is anticipated that the payment related to the first two consolidated lawsuit files, including accrued interest, will be made within the subsequent three-month period.

NOTE 12 - COMMITMENTS

Purchase Commitments

31 March 2025 31 December 2024
Commitments to purchase aircraft 1.142.574.007.532 1.071.592.413.029
1.142.574.007.532 1.071.592.413.029

As of 31 March 2025, the Group holds the right to purchase 151 aircraft on firm order. In accordance with agreement the expected deliveries are 8 aircraft in 2025, 8 aircraft in 2026, 13 aircraft in 2027, 23 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 10.475.925.411 (31 December 2024: TL 6.616.402.312). Of this amount, TL 6.216.762.881 is reclassified as short-term, and TL 4.259.162.530 is reclassified as long-term prepayments (31 December 2024: TL 4.514.154.692 is reclassified as short-term, TL 2.102.247.620 is reclassified as long-term prepayments).

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2025

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

NOTE 12 - COMMITMENTS

Collaterals-Pledges-Mortgages("CPM")

The details of the CPMs given by the Group as of 31 March 2025 is as follows:

31 March 2025 TL TOTAL USD EUR TL Other
A. Total amounts of CPM given on behalf of its own legal
entity
-Collateral 1.564.321.155 22.155.935 13.833.284 30.419.352 134.128.682
-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 - - - - -
1.564.321.155 22.155.935 13.833.284 30.419.352 134.128.682

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 March 2025.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2025

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

NOTE 12 - 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 INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2025

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

NOTE 13 - EXPENSES BY NATURE

The details of expenses by nature for the years periods 31 March 2025 and 31 March 2024 are as follows:

1 January- 1 January
31 March 2025 31 March 2024
Jet fuel expenses 7.461.417.009 6.713.495.423
Depreciation and amortisation expenses 3.699.989.707 2.767.509.190
Personnel expenses 5.753.785.760 3.342.824.668
Handling and station fees 2.132.435.700 1.507.414.849
Navigation expenses 1.809.123.494 1.249.583.411
Maintenance expenses 1.105.916.500 823.217.739
Landing expenses 1.033.541.741 717.585.966
Passenger service and catering expenses 431.346.489 259.686.934
Commission expenses 172.903.782 162.680.021
Short term lease expenses (*) - 34.947.996
Advertising expenses 256.133.528 122.005.624
Other expenses 2.260.577.897 1.275.204.455
26.117.171.607 18.976.156.276

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

NOTE 14 - SHAREHOLDERS' EQUITY, PROFIT RESERVES AND OTHER EQUITY ITEMS

The Company's shareholding structure as of 31 March 2025 and 31 December 2024 are as follows:

31 March 2025 31 December 2024
Shareholders (%) TL (%) TL
Esas Holding 52,81 264.056.018 52,81 264.056.018
Publicly held 45,37 226.866.830 45,37 226.866.830
Emine Kamışlı 0,61 3.025.717 0,61 3.025.717
Ali İsmail
Sabancı
0,61 3.025.717 0,61 3.025.717
Kazım Köseoğlu 0,30 1.512.859 0,30 1.512.859
Can Köseoğlu 0,30 1.512.859 0,30 1.512.859
TL historic capital 100,00 500.000.000 100,00 500.000.000

The Company's share capital consists of 500.000.000 shares of par value TL 1 each (31 December 2024: 500.000.000 shares).

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2025

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

NOTE 15 - REVENUE AND COST OF SALES

The details of revenue and cost of sales for the periods ended 31 March 2025 and 31 March 2024 are as follows:

Revenue:

1 January- 1 January
31 March 2025 31 March 2024
Scheduled flight and service revenue 23.331.998.266 17.174.058.811
International flight revenue 10.139.858.820 8.261.852.333
Domestic flight revenue 3.220.260.641 2.268.393.390
Service revenue 9.971.878.805 6.643.813.088
Charter flight and service revenue 131.094.969 137.959.757
Charter flight revenue 131.094.969 137.959.757
Other revenue 124.479.779 78.782.428
23.587.573.014 17.390.800.996

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 March 2025 31 March 2024
Europe 6.598.008.672 5.445.874.656
Domestic 3.220.260.641 2.268.393.390
Other 3.541.850.148 2.815.977.677
13.360.119.461 10.530.245.723

Cost of sales:

1 January-
31 March 2025
1 January
31 March 2024
Jet fuel expenses 7.461.417.009 6.713.495.423
Personnel expenses 5.283.335.681 3.044.265.853
Depreciation and amortisation expenses 3.532.969.444 2.651.202.882
Handling and station fees 2.132.435.700 1.507.414.849
Navigation expenses 1.809.123.494 1.249.583.411
Maintenance expenses 1.105.916.500 823.217.739
Landing expenses 1.033.541.741 717.585.966
Passenger service and catering expenses 431.346.489 259.686.934
Insurance expenses 186.149.030 155.029.439
Short term lease expenses - 34.947.996
Other expenses 1.457.528.021 796.130.576
24.433.763.109 17.952.561.068

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2025

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

NOTE 16 - GENERAL ADMINISTRATIVE EXPENSES AND SELLING AND MARKETING EXPENSES

1 January-
31 March 2025
1 January
31 March 2024
General administrative expenses 893.331.409 572.186.285
Marketing expenses 656.460.879 451.408.923
1.549.792.288 1.023.595.208

The details of general administrative expenses and marketing expenses for the periods ended 31 March 2025 and 31 March 2024 are as follows (there are no research & development expenses in the periods ended in respective dates):

General administrative expenses:

1 January-
31 March 2025
1 January
31 March 2024
Personnel expenses 374.531.310 235.064.026
IT expenses 221.004.632 139.360.769
Depreciation and amortisation expenses 133.616.210 93.045.046
Consultancy expenses 48.752.775 26.987.199
Office utility expenses 23.952.503 17.926.675
Legal and notary expenses 20.830.107 14.209.898
Communication expenses 19.942.230 13.026.612
Travel expenses 19.590.887 15.243.658
Training expenses 3.245.571 1.149.097
Other expenses 27.865.184 16.173.305
893.331.409 572.186.285

Marketing expenses:

1 January- 1 January
31 March 2024
31 March 2025
Advertising expenses 256.133.528 122.005.624
Commission expenses 172.903.782 162.680.021
Personnel expenses 95.918.769 63.494.789
Call center expenses 70.536.438 56.694.561
Depreciation and amortisation expenses 33.404.053 23.261.262
Other expenses 27.564.309 23.272.666
656.460.879 451.408.923

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2025

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

NOTE 17 - OTHER OPERATING INCOME AND EXPENSES

The details of other operating income and expenses for the periods ended 31 March 2025 and 31 March 2024 are as follows:

Other operating income:

1 January-
31 March 2025
1 January
31 March 2024
Foreign exchange gain from operating activities - 314.342.294
Reversal of doubtful cash and cash equivalents 9.624.565 -
Reversal of trade receivable impairment 2.365.729 -
11.990.294 314.342.294

Other operating expenses:

1 January-
31 March 2025
1 January
31 March 2024
Foreign exchange loss from operating activities 1.376.427.997 -
Legal provision and penalty expense 127.904.769 4.741.932
Doubtful receivable allowance expense 2.022.143 14.696.390
Trade receivables allowance expense - 7.465.406
Cash and cash equivalents allowance expense - 5.033.531
Other 15.489.377 22.735.772
1.521.844.286 54.673.031

NOTE 18 - INCOME AND EXPENSES FROM INVESTING ACTIVITIES

The details of income from investing activities for the periods ended 31 March 2025 and 31 March 2024 are as follows:

Income from investing activities:

1 January- 1 January
31 March 2025 31 March 2024
Interest income from time and currency protected deposits 572.881.938 191.958.246
Gain arising from aircraft sale 280.560.296 268.428.713
Interest income from eurobond 276.170.501 277.485.583
Gain from eurobond sales (*) 6.263.328 -
Other income 208.510 2.852.365
1.136.084.573 740.724.907

(*) 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 March 2025 31 March 2024
Financial investments allowance expense 71.816.019 169.947.660
71.816.019 169.947.660

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2025

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

NOTE 19 - FINANCIAL INCOME AND EXPENSES

The details of financial income and expenses for the periods ended 31 March 2025 and 31 March 2024 are as follows:

Financial income:

1 January- 1 January
31 March 2025 31 March 2024
Foreign exchange gain 2.009.397.795 -
Interest income 583.608.988 350.199.477
Gain on derivative contracts - 1.849.726
2.593.006.783 352.049.203

Financial expenses:

1 January- 1 January
31 March 2025 31 March 2024
Interest expense on leases 1.514.005.058 1.436.668.775
Interest expense on issued debt instruments 527.955.145 276.139.680
Commission and other expenses 390.664.098 287.517.322
Losses from derivative contracts 144.922.224 -
Interest expense on bank loans 72.244.316 181.356.599
Foreign exchange loss - 1.056.741.691
2.649.790.841 3.238.424.067

NOTE 20 - EARNINGS PER SHARE

Earnings per share disclosed in the condensed 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 2024 and 2025 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 March 2025 and 31 March 2024 are as follows:

1 January- 1 January
31 March 2025 31 March 2024
Net profit (2.634.620.682) (3.500.974.334)
Weighted average number of shares issued in the year 500.000.000 102.299.707
Income per share (5,27) (34,22)

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2025

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

NOTE 21 – DERIVATIVE FINANCIAL INSTRUMENTS

Fair Value of Derivative Instruments

31 March 2025 31 December 2024
Asset Liability Asset Liability
Short term - 179.130.039 145.642.867 170.696.233
Long term - 43.854.873 - 13.387.018
- 222.984.912 145.642.867 184.083.251

Explanations related to derivative instruments are disclosed in Note 24.

NOTE 22 - FINANCIAL INSTRUMENTS

Financial Assets

Short term 31 March 2025 31 December 2024
Financial investments measured at amortized cost 7.218.182.142 6.336.522.068
Financial assets recognized at fair value through profit or loss 4.013.575.068 3.714.866.359
Time Deposit (*) 8.328.193.938 1.059.774.928
Allowance for credit risk adjustment under TFRS 9 (29.835.755) (13.032.469)
19.530.115.393 11.098.130.886

(*) The balance includes time deposits and currency protected time deposits with original maturities between three months and one year. As of March 31, 2025, there are no outstanding exchange rate protected time deposits.

Long term 31 March 2025 31 December 2024
Financial investments measured at amortized cost 7.825.034.176 4.774.747.774
Allowance for credit risk adjustment under TFRS 9 (208.595.815) (153.583.100)
7.616.438.361 4.621.164.674
Financial investments accounted at amortized cost
31 March 2025 31 December 2024
Short term financial investments measured at amortized cost 7.218.182.142 6.336.522.068
Long term financial investments measured at amortized cost 7.825.034.176 4.774.747.774
15.043.216.318 11.111.269.842
31 March 2025 31 December 2024
Government Debt Securities 6.223.663.866 7.089.155.754
Corporate Debt Securities 8.819.552.452 4.022.114.088
15.043.216.318 11.111.269.842

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.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2025

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

NOTE 22 - FINANCIAL INSTRUMENTS

The weighted average coupon interest rates of existing Euro, US Dollar and Pounds financial investments that are measured at amortized cost as of 31 March 2025 and 31 December 2024 are as follows:

Weighted average
Coupon Interest Rate (%) FX Type Asset Value TL
Government Debt Securities 7,5 US Dollars 4.882.548.326
Government Debt Securities 6,7 GBP 1.341.115.540
Corporate Debt Securities 6,3 US Dollars 7.560.946.481
Corporate Debt Securities 5,9 Euro 1.037.264.151
Corporate Debt Securities 6,6 GBP 221.341.820
31 March 2025 15.043.216.318
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

Financial investments at fair value through other comprehensive income

31 March 2025 31 December 2024
Government Debt Securities 3.430.369.058 2.646.894.946
Corporate Debt Securities 583.206.010 1.067.971.413
4.013.575.068 3.714.866.359

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 8,0 US Dollars 3.430.369.058
Corporate Debt Securities 8,0 US Dollars 583.206.010
31 March 2025 4.013.575.068
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

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 March 2025 and 31 December 2024 are as follows:

Short term financial liabilities 31 March 2025 31 December 2024
Short term bank borrowings 3.318.914.940 6.321.566.673
3.318.914.940 6.321.566.673

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2025

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

NOTE 22 - FINANCIAL INSTRUMENTS

Financial Liabilities

Short term portion of long term financial liabilities 31 March 2025 31 December 2024
Short term portion of long term bank borrowings 900.214.809 804.094.539
Principal and interest of bonds issued 7.849.608.708 7.276.917.017
Discount and commissions of bonds issued (43.716.453) (63.248.844)
Lease liabilities 16.459.063.302 14.911.498.531
Short term portion of long term
lease liabilities 2.234.718.536 1.853.791.145
Short term portion of long term
lease liabilities with purchase option 14.224.344.766 13.057.707.386
25.165.170.366 22.929.261.243
Long term financial liabilities 31 March 2025 31 December 2024
Long term bank borrowings 1.197.408.994 808.687.123
Issued debt instruments (*) 17.561.413.521 16.625.114.404
Discount and commissions of bonds issued (190.398.431) (172.077.331)
Lease liabilities 129.281.573.143 119.794.949.520
Long term lease liabilities 8.102.725.305 7.554.922.759
Long term lease liabilities with purchase option 121.178.847.838 112.240.026.761
147.849.997.227 137.056.673.716

(*) 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 11, 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 March 2025, the Group complied with all covenants.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2025

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

NOTE 22 - 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 March 2025 and 31 December 2024 are as follows :

Weighted average Original TL
31 March 2025 interest rate (%) Currency amount equivalent
Short term bank borrowings 4,74 Euro 81.542.015 3.318.914.940
Short term portion of long term bank borrowings 4,20 Euro 22.117.267 900.214.809
Long term bank borrowings 3,88 Euro 29.418.995 1.197.408.994
5.416.538.743
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
Short term portion of long term bank borrowings 4,22 Euro 21.884.352 804.094.539
Long term bank borrowings 4,19 Euro 22.009.344 808.687.123
7.934.348.335

Lease Liabilities

The details of lease liabilities as of 31 March 2025 and 31 December 2024 are as follows:

31 March 2025 31 December 2024
Less than 1 year 21.004.008.219 19.943.011.377
Between 1 - 5 years 81.337.404.715 74.527.413.498
Over 5 years 70.400.197.523 66.439.202.785
172.741.610.457 160.909.627.660
Less: Future interest expenses (27.000.974.012) (26.203.179.609)
145.740.636.445 134.706.448.051

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2025

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

NOTE 22 - FINANCIAL INSTRUMENTS

Financial Liabilities

Lease Liabilities

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

31 March 2025 31 December 2024
Less than 1 year 16.459.063.302 14.911.498.531
Between 1 - 5 years 66.497.640.416 60.958.814.055
Over 5 years 62.783.932.727 58.836.135.465
145.740.636.445 134.706.448.051

The Group acquire certain of its handling equipment and aircraft through lease arrangements. The average lease term is 6,00 years. For the period ended 31 March 2025, the floating interest rate applicable to Eurodenominated lease liabilities, amounting to TL 101.852.675.741, is 3,20% (31 December 2024: 3,40%) and the floating rate applicable to US Dollar-denominated lease liabilities, amounting to TL 14.259.388.732, is 6,05% (31 December 2024: 6,28%).

NOTE 23 - NATURE AND LEVEL OF RISKS DERIVING FROM FINANCIAL INSTRUMENTS

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 INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2025

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

NOTE 23 - 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 March 2025 and 31 December 2024 are as follows:

31 March 2025 TL Total USD TL GBP Other
1. Trade receivables 1.923.186.854 8.576.309 1.229.025.166 1.278.275 307.897.142
2a. Monetary financial assets 44.483.323.389 775.444.180 10.541.014.463 31.187.098 3.135.379.212
2b. Non monetary financial assets - - - - -
3. Other 309.189.581 7.225.754 25.596.983 214.453 243.150
4. CURRENT ASSETS 46.715.699.824 791.246.243 11.795.636.612 32.679.826 3.443.519.504
5. Trade receivables - - - - -
6a. Monetary financial assets 7.616.438.371 201.676.615 - - -
6b. Non monetary financial assets - - - - -
7. Other 369.758.933 4.944.059 1.898.791 63.000 178.070.621
8. NON CURRENT ASSETS 7.986.197.304 206.620.674 1.898.791 63.000 178.070.621
9. TOTAL ASSETS 54.701.897.128 997.866.917 11.797.535.403 32.742.826 3.621.590.125
10. Trade payables 4.828.038.453 80.861.491 1.579.390.313 508.161 170.069.039
11. Financial liabilities 12.221.940.927 323.315.477 11.737.949 - -
12a. Other liabilitites, monetary 5.324.013.980 13.614.582 4.262.267.340 187.525 538.433.256
12b. Other liabilities, non monetary - - - - -
13. CURRENT LIABILITIES 22.373.993.360 417.791.550 5.853.395.602 695.686 708.502.295
14. Trade payables - - - - -
15. Financial liabilities 54.049.328.210 1.431.127.925 1.923.446 - -
16a. Other lliabilities, monetary 7.986.008.454 211.462.507 - - -
16b. Other liabilities, non monetary - - - - -
17. NON CURRENT LIABILITIES 62.035.336.664 1.642.590.432 1.923.446 - -
18. TOTAL LIABILITIES 84.409.330.024 2.060.381.982 5.855.319.048 695.686 708.502.295
19. Net asset / (liability) position of Off-statement of
financial position derivatives (19a-19b) - - - - -
19.a Off-statement of financial position foreign currency
derivative assets - - - - -
19b. Off-statement of financial position foreign currency
derivative liabilities - - - - -
20. Net foreign currency asset/(liability)
position (29.707.432.896) (1.062.515.065) 5.942.216.355 32.047.140 2.913.087.830
21. Net foreign currency asset / (liability)
position of monetary items
(1+2a+3+5+6a+7-10-11-12a-14-15-16a) (29.707.432.896) (1.062.515.065) 5.942.216.355 32.047.140 2.913.087.830

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2025

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

NOTE 23 - NATURE AND LEVEL OF RISKS DERIVING FROM FINANCIAL INSTRUMENTS

Financial Risk Factors

Foreign currency risk management

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 INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2025

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

NOTE 23 - 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 March 2025 and 31 December 2024 are as follows:

31 March 2025 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) (4.012.651.894) 4.012.651.894 - -
Part of hedged from USD risk - - - -
USD net effect (4.012.651.894) 4.012.651.894 - -
Effect of 10% change in TL rate
TL net asset / (liability) 594.221.636 (594.221.636) 8.057.713.656 (8.057.713.656)
Part of hedged from TL risk - - - -
TL net effect 594.221.636 (594.221.636) 8.057.713.656 (8.057.713.656)
Effect of 10% change in GBP rate
GBP net asset / liability 156.378.186 (156.378.186) - -
Part of hedged from GBP risk - - - -
GBP net effect 156.378.186 (156.378.186) - -
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 - -

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2025

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

NOTE 24 - 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
and
liabilities
at
fair
value
in
fair
value
in
at
31
March
2025
amortized
cost
shareholders'
equity
profit/loss Carrying
amount
Note
Financial
assets
Cash
and
cash
equivalents
31
241
160
946
- - 31
241
160
946
27
Trade
receivables
2
902
919
503
- - 2
902
919
503
6
- Other 2
902
919
503
- - 2
902
919
503
6
Other
receivables
3
721
832
247
- - 3
721
832
247
- Other 3
721
832
247
- - 3
721
832
247
Financial
investments
8
328
193
938
4
013
575
068
- 27
146
553
754
22
Financial
liabilities
Bank
borrowings
5
416
538
743
- - 5
416
538
743
22
Issued
debt
instruments
25
065
588
625
- - 25
176
907
345
Trade
payables
10
039
349
368
- - 10
039
349
368
6
- Related
party
68
551
931
- - 68
551
931
5
- Other 9
970
797
437
- - 9
970
797
437
Other
payables
633
518
520
- - 633
518
520
Derivative
financial
liabilities
- 222
984
912
- 222
984
912
21

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2025

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

NOTE 24 - 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
and
liabilities
at
fair
value
in
fair
value
in
at
31
December
2024
amortized
cost
shareholders'
equity
profit/loss Carrying
amount
Note
Financial
assets
Cash
and
cash
equivalents
258
554
46
416
- - 258
554
46
416
27
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
- Other 3
226
156
066
- - 3
226
156
066
Financial
investments
11
087
434
559
3
714
866
359
- 15
719
295
560
22
Derivative
financial
assets
- - 145
642
867
145
642
867
21
Financial
liabilities
Bank
borrowings
335
7
934
348
- - 335
7
934
348
22
Issued
debt
instruments
23
378
226
424
- - 705
23
666
246
Trade
payables
942
864
589
7
- - 942
864
589
7
6
- Related
party
43
890
717
- - 43
890
717
5
- Other 7
898
973
872
- - 7
898
973
872
Other
payables
050
460
006
- - 050
460
006
Derivative
financial
liabilities
- 251
184
083
- 251
184
083
21

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2025

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

NOTE 24 - 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 Valuation
technique
31 March 2025 31 December 2024
Fuel purchase option
contracts
(222.984.912) (184.083.251) Level 2 Discounted cash
flow method
Currency forward
contracts
- 145.642.867 Level 2 Discounted cash
flow method
Currency Fuel purchase
forward option
31 March 2025 contracts contracts Total
Fair value:
Opening 145.642.867 (184.083.251) (38.440.384)
Fair value increase
Recognized in equity - (38.901.661) (38.901.661)
Recognized in profit or loss (145.642.867) - (145.642.867)
Closing - (222.984.912) (222.984.912)
Assets
Liabilities -
-
-
(222.984.912)
-
(222.984.912)
Total net assets and liabilities - (222.984.912) (222.984.912)

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2025

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

NOTE 24 - FINANCIAL INSTRUMENTS (FAIR VALUE AND HEDGE ACCOUNTING DISCLOSURES)

Fair Value of Financial Instruments

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 / (decrease)
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)

The Group has forward fuel purchase option contracts, which are subject to hedge accounting, at a rate of 50,2% and 24,6% 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 March 2025, the contracts last until March 2027. The total nominal value of these contracts is USD 530,8 million, and the weighted average price is in the range of USD 65- 80. The ineffective portion of the hedge is not material as of 31 March 2025. 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 23.966.299 (31 March 2024: TL 20.306.300 derivative income are charged to finance expenses).

NOTE 25 - EVENTS AFTER REPORTING PERIOD

Not available.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2025

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

NOTE 26 – INCOME TAX EXPENSE

The Group is subject to corporate tax applicable in Turkiye. The corporate tax rate in Turkiye is applied as 25% for the 2024 taxation period. It continues to be applied as 25% for the 2025 taxation period. While calculating deferred tax on temporary differences, the Company takes into account the tax rates applicable at the date of closing of the temporary differences.

The tax expense components of 31 March 2025 and 31 March 2024 are presented below:

1 January-
31 March 2025
1 January
31 March 2024
Tax income/(expense)
- Deferred tax income/(expense) 241.118.675 125.669.472
Total tax income/(expense) 241.118.675 125.669.472

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 10.198.449.875 (31 December 2024: TL 7.469.203.072) that the Group will benefit from in the foreseeable future as of 31 March 2025 is reflected in the interim condensed consolidated financial statements as a deferred tax asset. As a result of the recognition of the mentioned tax advantage as of 31 March 2025, deferred tax income amounting to TL 1.799.329.574 has recognised in the interim condensed consolidated profit or loss statement for the period 1 January - 31 March 2025.

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 interim condensed consolidated financial statements on long-term plans and evaluates the recoverability of deferred tax assets related to these investment incentives as of each reporting date. This evaluation is conducted based on business models that include estimations of taxable profits.

In the sensitivity analysis carried out as of 31 March 2025, when the inputs in the basic macroeconomic and sectoral assumptions that make up the business plans are increased/decreased by 10%, the duration of the foreseen period for recognizing deferred tax assets related to investment incentives remains unchanged.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2025

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

NOTE 27 - EXPLANATIONS RELATED TO STATEMENT OF CASH FLOW

The details of cash and cash equivalents as of 31 March 2025 and 31 December 2024 are as follows:

31 March 2025 31 December 2024
Cash on hand 5.549.500 1.837.424
Cash at banks 31.253.085.225 46.283.815.336
- Demand deposits 1.163.459.938 856.801.424
- Time deposits 30.089.625.287 45.427.013.912
Allowance for credit risk adjustment under TFRS 9 (17.473.779) (27.098.344)
31.241.160.946 46.258.554.416

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

Weighted average
31 March 2025 interest rates Total
USD deposits 4,49 % 22.807.375.011
EUR deposits 2,83 % 3.663.798.621
TL deposits 43,29 % 2.968.926.303
GBP deposits 1,95 % 477.914.922
IRR deposits 5,00 % 171.610.430
30.089.625.287
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

As of 31 March 2025 and 31 December 2024 time deposits maturities are less than 90 days.

APPENDIX : EURO SELECTED NOTES

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

Revenue

Euro
1 January-
31 March 2025
Euro
1 January
31 March 2024
Scheduled flight and service revenue 615.064.932 512.357.890
International flight revenue 267.732.280 246.576.186
Domestic flight revenue 85.088.538 67.865.413
Service revenue 262.244.114 197.916.291
Charter flight and service revenue 3.400.602 4.057.588
Charter flight revenue 3.400.602 4.057.588
Other revenue 3.194.208 2.306.748
621.659.742 518.722.226

Expenses by Nature

Euro Euro
1 January
31 March 2024
1 January-
31 March 2025
Jet fuel expenses 195.634.186 199.923.732
Personnel expenses 148.075.747 98.412.643
Depreciation and amortisation expenses 97.225.841 82.543.630
Handling and station fees 55.414.432 44.662.225
Navigation expenses 46.004.330 36.550.948
Maintenance expenses 28.478.459 24.319.811
Landing expenses 26.876.878 21.266.461
Passenger service and catering expenses 11.186.054 7.674.721
Advertising expenses 6.642.584 3.699.576
Commission expenses 3.999.369 4.860.028
Short term lease expenses (*) - 1.063.180
Other expenses 60.405.241 38.278.699
679.943.121 563.255.654

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

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