Pegasus Airlines: time for Turkey's leading LCC to reassert its CASK cutting credentials

Pegasus Airlines is Turkey's self-styled 'network low-cost carrier'. It operates many of the features of the classic LCC business model: low fares, single cabin class, modern fleet, focus on internet distribution and a short/medium-haul network. But it also offers network feed (27% of international passengers in 2013) and product features that, until recently at least, have been less typically associated with LCCs in Europe. These include belly cargo, assigned seating and the use of both GDS and travel agents.

In spite of these 'deviations' from the purist LCC model, Pegasus has the second lowest unit costs among European airlines, bracketing it with Ryanair and Wizz Air in the ultra-LCC category.

In 2013, Pegasus increased its core operating profit by 40%, although currency movements hit the net result and a trend of rising CASK in recent years will need to be controlled. Although partly driven by exchange rate movements, and offset by a rising RASK trend, CASK increases do not sit well with any version of the LCC model.