Shares of Turkish Airlines, formally known as Turk Hava Yollari, rose over 4.5% in morning trading to TRY228.00 on Thursday. The airline group's earnings and revenue for Q3 2021 surpassed analysts' expectations, driven by robust travel demand during the summer season.

Impressive Financial Performance

Turkish Airlines achieved a net profit of $1.92 billion in the quarter, marking a significant 27% increase compared to the previous year. Earnings before interest, taxes, depreciation, and amortization (EBITDA) also showed strong growth, climbing 19% to $2.40 billion. Additionally, net operating profit rose 10% to $1.58 billion.

Surpassing Consensus Estimates

According to Citi analysts, Turkish Airlines outperformed consensus estimates compiled by the company. The airline was expected to report an EBITDA of $2.22 billion and revenue of $6.31 billion. However, the actual figures exceeded these expectations, with revenue reaching $6.32 billion. The net operating profit was about 4% higher than consensus, mainly due to lower fuel costs.

Increased Passenger Volume and Revenues

During the quarter, Turkish Airlines handled approximately 25.2 million passengers, reflecting a growth of 9.6% compared to the same period last year. This boost in passenger volume contributed to a 4.2% increase in revenue.

Managing Cost Pressures

While fuel costs decreased by 20% to $1.69 billion in Q3, overall expenses increased by 2.3% to $4.74 billion. The rise in expenses could be attributed to higher personnel, maintenance, ground handling, passenger services, and catering costs. Airlines continue to grapple with inflation-driven expenses, including escalating salaries, air-traffic control charges, and airport fees.

Turkish Airlines' strong financial performance in Q3 2021 demonstrates its ability to navigate challenges while capitalizing on the summer travel season. With increasing demand and careful cost management, the airline is well-positioned for continued success in the industry.

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