Borsa Istanbul gong rings for Pegasus Airlines

ISTANBUL - Hürriyet Daily News

Turkish Minister of Transportation Binali Yıldırım rings the gong at the ceremony. DHA photo

The Borsa Istanbul gong rang for Pegasus Airlines, Turkey’s second-biggest airline, on April 26.

“There would be no Pegasus today unless we had decided to liberalize the civil aviation industry in 2003. We could talk about neither Pegasus nor others without our decision,” said Binali Yıldırım, Turkish Minister of Transportation at the gong ceremony. Yıldırım recalled the latest airplane purchases by both Pegasus and Turkish Airlines. “These airlines have really taken off lately. There is less air pressure in high skies, causing dizziness. I advise them to be careful. They shouldn’t waste people’s money,” said Yıldırım.

Pegasus completed its IPO on April 22, selling a 34.5 percent stake toward the middle of its price range. During the offering, managed by İş Investment and Barclays, the listing was priced at 18.4 Turkish Liras per share. The deal values Pegasus at 1.88 billion liras ($1.04 bln). The shares were trading at 18.9 liras on the morning of April 26. “They are taking advantage of the rapid growth in the Turkish middle class who have realized that air travel is no longer a luxury, it is now a commodity,” said Julian Macedo, head of CEEMENA Equity Capital Markets at Barclays to Reuters. The spread of investors was very wide, with around half coming from the United Kingdom, 35 percent from the United States and 15 percent from continental Europe, the source said. Pegasus actually planned an IPO in 2011 but the company postponed it due to poor market conditions.

Turkey’s low cost-carrier Pegasus was founded in 1990 and bought by Esas Holding in 2005. The discount carrier has grown six fold since 2005. Pegasus now flies to nearly 70 destinations in 26 countries. The carrier bought 75 planes from Airbus in December 2012, in line with a goal of tripling its fleet to tap into the rapidly developing market for cheap flights in both Turkey and the neighboring region. Pegasus has the option of boosting the order by an additional 25 planes. This would bring the value of the deal up to $10.3 bln for 100 aircrafts. The Airbus order from Pegasus was the largest ever deal of its kind in Turkey’s aviation history.

“We will use IPO money to enlarge our flight network and to buy new planes,” said Ali Sabancı, Chairman of Pegasus.