Strategically based out of Istanbul’s Sabiha Gökçen International Airport (SAW), Pegasus Airlines has emerged as one of largest low-cost carriers in Europe, with a network stretching from northwest Europe all the way to Middle East and Central Asia.
Güliz Öztürk made headlines in 2022 when she became the first female CEO of a Turkish airline. While her tenure in the top post at Pegasus Airlines is relatively recent, Öztürk has held C-suite positions at the airline since its early days, when the business model pivoted from charter to that of a low-cost carrier.
AeroTime spoke with Öztürk during the 2024 CAPA Airline Leader Summit in Belgrade, Serbia, an event which gathered C-level executives from across the industry from November 21 to 22, 2024.
“I joined Pegasus airlines in 2005. It was then a small airline in the charter business with only 14 aircraft,” Öztürk told AeroTime. “I was part of a team which joined to transform [Pegasus] into a scheduled carrier with a low-cost [LCC] business model. We have hit so many milestones in these 19 years! I have witnessed the growth of the company, the IPO…”
Öztürk became Sales Director of Pegasus Airlines in 2008 and assumed the role of Chief Commercial Officer (CCO) in 2010, with responsibility over revenue management, network planning, customer experience, sales, and cargo operations.
On being a role model for female corporate leadership
After 12 years in the role of CCO, a period in which she oversaw the transformation of Pegasus Airlines into the largest privately-owned airline in Turkey and second largest overall, Öztürk was appointed to the role of CEO in March 2022.
Apart from the successes achieved during her time as Pegasus Airlines’ CCO, Öztürk has been hailed as an example of female leadership in an industry that has a relatively small percentage of women in senior executive positions.
“I was not focused on being a female C-suite person. There’s awareness of this fact, actually, because there are very few of us in the airline business globally, about 15-16% in these roles,” she said. “But when I was appointed CEO of the company and became the first Turkish female airline CEO, it was not just a matter of being proud about it, it also placed a huge responsibility on my shoulders, as I became an example to my female colleagues.”
Öztürk said that she has always concentrated on the positive side of any issues she faced, rather than the negatives.
“Unfortunately, this sector is male-dominated, that’s for sure,” she added. “All of us should work more on that, so that we provide equal opportunities.”
While not brushing aside her status as a role model for aspiring female business leaders, Öztürk prefers to highlight her track record in leadership positions.
“My ambition was always to expand my roles and my responsibilities. I wasn’t like, ‘I will be a CEO within the company in the future…’ Of course, that’s a great achievement. However, I [have] always looked [at] whether I’m doing what I am doing at my best capacity, doing my best, plus how I can do something different, or what more can I learn?
“I went to Columbia Business School for its Advanced Management Program in 2018 when I was Chief Commercial Officer,” she added. “This type of appetite for learning and growing helped me throughout my career.”
The key to Pegasus Airlines’ growth
But what was the vision that led Pegasus Airlines to become one of the most successful airlines in Europe?
“We have been successfully executing our business model for years, carrying more than 31 million passengers in the first 10 months of 2024, which represents a 17% growth on a yearly basis [Pegasus Airlines carried 37.48 million passengers in the whole of 2024, as per figures reported by the airline after this interview was conducted – ed. note]. So, we are growing, but we are also healthy and growing successfully and profitably. That’s also important, although we have seen lots of crises like COVID.”
Having a good foundational strategy is key, Öztürk said.
“The strategy at first was based on the fact that the LCC business model at that time, in 2005, was not executed in our country but was known in Europe and the US,” she said. “So, when the company was taken over by ESAS Holding, our main shareholder, our strategy was that because we had a vast population and flying was so expensive, from east to west, for example, it takes about 20 to 24 hours by bus, it had a huge potential, both domestically, but also part of the population flying out. Plus, it attracts lots of tourists.”
Öztürk pointed out how, at the time, the Turkish market was ripe for the low-cost flying revolution to take place.
“We said that flying is the right of everyone. If we make it cheaper, then Turkish people will start flying, maybe for the first time, and if they already fly, they will fly more. And Pegasus did this. That was the strategy behind it.”
“This was needed to improve and develop aviation in the country, and we have seen that, because this had been done in Europe too,” she continued. “We attracted the attention and the preference and choice of the travelers, so we started like that.”
Unlike its competitor, Turkish Airlines, Pegasus Airlines flies to Istanbul’s second airport, Sabiha Gökçen, on the Asian side of the Bosphorus.
“That was also the right decision to make because we were not one of the other airlines at the main airport, we were the fifth airline offering scheduled services at that time in our country,” Öztürk said. “Now we are the second biggest. So, we deliberately chose SAW because the catchment area was around 10 million at that time, and that strategy paid back.”
The low-cost airline playbook is well known, but Pegasus Airlines seems to be executing it extremely well. So, what are, to use Silicon Valley parlance, the “unfair advantages” that have allowed the airline to be so successful?
“Strategy is very important. You should set the right strategies because this is a business in which you invest 10 to 15 years ahead. For example, when you place an order today, you receive the first aircraft five or six years later. You must have a vision and a strong strategy,” Öztürk said. “But execution is also very important because you make those medium-term, long-term plans, but in the day-to-day operations, everything may change.
“So, I can count two or three factors which actually make us successful. The first one is selecting the business model. But even more than that, applying all the principles of this business model professionally and without giving up is the most critical factor.”
“Then, having a great team,” Öztürk continued. “Pegasus has a strong team at the management and at the operations level because businesses are people, that’s what I believe. You may have lots of money, you may invest in different types of businesses, but if you do not have the right people to execute what you’re trying to do, the team doesn’t continue. Turnover at the management level at Pegasus is small, we almost don’t have it. That is also important.”
“The third one is investing in the right fleet at the right time, at the right number and right flexibility,” she added. “New generation fleet investments bring you efficiency. So that’s important.”
Öztürk also explained how Pegasus Airlines has not shied away from investing in technologies that help it optimize its operations
“We do network planning and revenue management also very successfully. We have AI machine learning, working with our engineers, with our people.”
In fact, to this day, Pegasus remains a shareholder in Hitit, an independent and publicly listed software company that makes the reservation system used by Pegasus. This system is also commercialized to other operators.
But something that is in Pegasus’ DNA is cost management, Öztürk explained.
“If you ask at Pegasus what is the most important KPI, everybody will say CASK,” she said. “Cost management, efficiency measures and continuously improving on that is the strongest muscle of Pegasus. Everybody knows that in this business model. You must get your CASK low so that you can offer the lowest prices to customers. Otherwise, it doesn’t work. Our CASK was the lowest in the airline industry globally last year and the year before.”
Fleet management is one of the key areas in which Pegasus focuses its efficiency-enhancing efforts.
“We have new generation aircraft that consume about 15-17% less fuel compared to older generation aircraft. Our fleet age is 4.5 years. It’s a very young fleet. We receive 12 to 15 new generation aircraft every year and that, of course, also helps,” Öztürk explained. “Our utilization is also very high. In 2024, it has been 13 hours per day. And this is an achievement. The ground times are efficiently managed. This helps with the CASK – an effective and efficient fleet, and all operational efficiency measures, of course, like high utilization and direct distribution. We work with the agencies, but we sell, like, 60% of our tickets on our digital channels.”
Redefining the low-cost airline playbook
Interestingly, Pegasus does offer some services that are usually not associated with low-cost carriers, such as connecting flights and a loyalty program. Does this run counter to the idea of keeping costs and complexity to a minimum?
“What we are doing is look at the feasibility and if it brings complexity or not. But Istanbul is so advantageously located, that this brings us a competitive advantage and incremental traffic,” Öztürk said. “When we defined our LCC model, we included transfer traffic from the first day, because we knew that this would bring us a competitive advantage.”
She continued: “We are not trying to be the best connecting airline or something like that. We just check the connecting times, and we design the connecting times according to our operations. And also, think that we have 13 hours of utilization. So, we are not doing it and giving up on utilization. It’s not like we lose utilization because we are carrying transit traffic, we don’t do that. We just go for the utilization, and then connecting traffic comes as a second thing.”
Pegasus also has the advantage of being able to operate flights around the clock, as any traveler passing through Sabiha Gökçen airport in the early hours of the morning can attest.
“We have night flights and this helps, of course. Also, our ground times are optimized, so that we can offer many connections domestically and to Europe, to the Middle East and to other destinations,” Öztürk said. “If you look at the parameters, this does not bring complexity financially to the airline, because we can offer the lowest CASK. Our profitability margins are strong. Our utilization rate is high. So, it was the wise way to do it and to include this in the definition of LCC.”
She also explained how the airline’s loyalty program is a net positive asset for the carrier.
“And we have the BolBol program which is also itself a business. We don’t have a plastic card, for example. From the first day, 15 years ago, it worked just with telephone numbers. We see that if our customer is a mobile member, then they use our app, our digital channels and they buy more and they fly more.”
Ancillaries do play a major role in Pegasus’ business model. The airline sells some 25 different ancillary services which, all together, account for around 30% of its revenue. Is there scope for further growth on this front?
“The strategy we have behind the ancillaries is some new and more of the same. Of course, there will be some new products we will add going forward, but more will come from the penetration of the current products,” Öztürk said. “And of course, adding more international destinations to the network will grow the ancillaries too, as will personalized offerings and dynamic pricing, offering the right price at the right time to the right customers on the right channel.
“We’re doing this right now, but a more dynamic management will be possible by adding AI with this dynamic pricing model, which I think by the second half of next year will be the growth engine behind the ancillaries,” she added.
Öztürk is also planning to add new destinations to what is already a rather dense network.
“We want to fly to North Africa, for example, Algeria, and we want to include the Baltics in our network. We want to fly to Lisbon from Istanbul because we already fly there from Ankara and Izmir. We want to add some more destinations in France, Italy, Spain. There are other destinations we may fly to. But these all depend on the international air service agreements.”
In many ways, this massive international expansion has mimicked that of its close competitor, Turkish Airlines, although, as Öztürk was keen to point out, there are some differences.
“We are flying head-to-head, but, of course, when we look at a destination to fly, we do not do it automatically. We have a team to work on which airport to fly to. What’s the cost of it? So, for example, we fly to Bergamo. We don’t fly to Malpensa. We fly to London in the summer with six or seven flights daily. But we are flying to London-Stansted (STN). So, we look at the cost and then we get into contact with the airports. We fly to different airports but, generally speaking, we fly to the same destinations.”
Reaching maximum capacity at Sabiha Gökçen airport
A real bottleneck for further growth could be the very pressing capacity constraints at its Sabiha Gökçen base.
“Last year, in December, we had the second runway opened at SAW. The two runways are in parallel right now,” Öztürk said. “We have right now 42 moments per hour with the first runway. Now in theory, when you have a parallel second runway, this may double up. Even if it doesn’t double up, capacity goes up by 80% or 90%.
“However, we need the second terminal to execute this growth, because the current terminal this year will probably get 40 million passengers, which is at the very maximum of its capacity.”
Öztürk went on to explain how there are plans afoot to overcome this issue in the not-so-distant future.
“Of course, there are some projects going on to increase some capacity within the current terminal. But to execute the maximum capacity a second runway will bring, we need definitely a second terminal, and we need it as fast as possible. There is a project that, if it starts right now, by 2025, I believe [at the] latest by the second half of 2027 or 2028, we will be having a second terminal. It may be built in two to three years.”
In any case, Pegasus is already making plans to ramp up its capacity. On December 2024, the airline placed an order for 100 Boeing 737 MAX 10 aircraft plus options for another 100. This follows an order, placed earlier in 2024, to take its Airbus fleet to the 170 aircraft mark. The airline also confirmed plans to keep its remaining B737-800 aircraft for the time being. These had been previously slotted for retirement.
Öztürk also commented on the decision to return to the dual fleet strategy:
“Right after the COVID, demand was strong, and both internationally and domestically, so we decided to keep our Boeing, nine of them within the fleet, so that we foster and utilize that growth. The first plan is to keep them until the end of 2028, but we will see, it depends on growth: capacity growth, demand growth… We have 118 aircraft by the end of 2024, and we aim to complete aircraft deliveries of 150 aircraft under Airbus order at the end of 2029, because we have aircraft delivery under Airbus order. We have like 80-90% of our fleet on financial lease. But this is managed dynamically, because you don’t know what you can expect in the coming years. We’re talking about five or six years ahead, so we’ll see.”
Indeed, shortly after this interview was conducted, Pegasus Airlines announced in December 2024 that it was placing an order for up to 200 Boeing 737 MAX 10 aircraft (100 firm orders plus 100 options).
AeroTime reached out to Pegasus Airlines for additional comment on this, obtaining the following response.
“This order is a key part of our long-term growth plan, ensuring a modern, efficient fleet. Starting in 2028 and continuing until 2039, the delivery of Boeing 737-10 aircraft will also play a crucial role in achieving our sustainability goals, including our 2050 Net Zero Climate Transition Roadmap. The new aircraft will be deployed on both existing routes and newly opened destinations, supporting Pegasus’ growth strategy by expanding into new markets and enhancing the service on current routes, with a focus on Europe, the Middle East, Central Asia, and Africa.”
On growth outside of Istanbul
Even if its Istanbul base may be approaching congestion point, Pegasus Airlines has other avenues for growth, namely at other Turkish airports.
“Until 2022 it was more opportunistic growth. But right after COVID, we defined our strategy with those secondary bases” Öztürk said. “Take Antalya, for example. Before COVID, we were running eight or nine aircraft out of Antalya. In 2024, it was 19 and in 2025 we will grow with the addition of more aircraft to our fleet.”
Öztürk mentioned plans to boost the carrier’s operations out of Antalya (AYT), Izmir (ADB) and Ankara (ESB).
“We plan to grow. Antalya is our second hub in the country, and we want to keep it that way. Izmir is running about five to six aircraft and Ankara three aircraft. So, as long as we have cash generating routes out of Izmir, Ankara, and Antalya, we want to use them as secondary hubs. As long as we have capacity in Istanbul, the main hub remains Sabiha Gökçen, but those secondary hubs will be staying with us.”
What seems clear is that, propelled by a buoyant Turkish air travel market, privileged geographical location and ruthless cost discipline, Pegasus Airlines will continue to expand its footprint in the European airline scene.
