Pegasus: even the best business models hit turbulence as 3Q2013 net result falls 27%

Pegasus is demonstrating strong profitability following its IPO in Apr-2013, since when its share price has doubled. It is now among Europe's more profitable airlines and one of its lowest-cost practitioners. In 3Q2013, the underlying operating result of the core operation increased by 18% compared with last year and this result has more than doubled over the first nine months of the year.

However, net profit fell in 3Q2013 as the weakening Turkish lira led to adverse foreign exchange impacts on the profit and loss statement. In addition, the operating margin declined year-on-year in the quarter as RASK growth was outpaced by CASK growth. It is not time to take any drastic evasive action, but it seems even the more financially robust airlines cannot avoid some turbulence at times.