Pegasus Airlines and Turkish Airlines: improved 1Q2015 margins thanks to lower fuel prices
Both of Turkey's two largest airlines reported improved results and operating margins in 1Q2015 against the same period a year earlier. Both remained loss-making at the operating level in this seasonally weak quarter, although Turkish recorded a net profit as a result of foreign exchange gains on the revaluation of debt.
As is often the case, currency movements had a significant impact on the results of both airlines. For Pegasus, unit revenue reported in its functional currency, EUR, benefited from that currency's weakening against both TRY and USD.
For Turkish Airlines, unit revenue in its functional currency, USD, was adversely affected by the strengthening of that currency against EUR and TRY, which account for the majority of its revenue. Overall, both managed to increase their margins mainly as a result of lower fuel prices.
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