2Q19 RESULTS SUMMARY Key Financial Data IFRS16 2Q'18 2Q'19 - PowerPoint PPT Presentation

2Q’19 RESULTS SUMMARY

Key Financial Data IFRS16 2Q'18 2Q'19 Change 1H'18 1H'19 Change (USD mn) Impact 3.177 3.181 0,1% Revenue 5.940 5.949 0,2% - 2.711 2.696 -0,6% Passenger Revenue 5.014 4.971 -0,9% - 398 393 -1,3% Cargo Revenue 784 799 1,9% - 267 10 -96,3% Net Operating Profit / Loss 270 -193 - +12 217 15 -93,1% Profit From Main Operations 258 -135 - +12 127 26 -79,5% Net Income 41 -203 - -12 4,0% 0,8% -3,2 pt Net Income Margin 0,7% -3,4% -4,1 pt - 750 561 -25,2% EBITDAR 1.278 919 -28,0% +7 23,6% 17,6% -6,0 pt EBITDAR Margin 21,5% 15,5% -6,1 pt - 2

Revenue Development (2Q’18 vs 2 Q’19) (mn USD) Cargo and Pax RASK Load Other Revenue (Ex-Currency, Factor Volume (Ex-Currency) Currency Ex-L/F) -4 -19 +35 +158 -167 2.696 2.711 Passenger (%-1) Cargo (%-1) 393 398 Other (%35) 68 92 ∑ ∑ 3.177 3.181 Total Revenue (%0) 2Q’19 2Q ’18 3

Revenue Development (1H’18 vs 1H’19) (mn USD) Cargo and Pax RASK Load Other Revenue (Ex-Currency, Volume Factor Currency (Ex-Currency) Ex-L/F) -17 +35 +90 -359 +260 4.971 5.014 Passenger (%-1) 799 784 Cargo (%2) 179 142 Other (%26) ∑ ∑ 5.940 5.949 Total Revenue (%0) 1H’19 1H’18 4

Unit Revenue Development %2,5 %3,2 RASK (U RAS (USc) Sc) 6,37 6,19 6,17 6,04 5,99 5,78 2Q'18 2Q'19 2Q'19 ex-currency 1H'18 1H'19 1H'19 ex-currency Pas asse senger RAS RASK (U (USc) Sc) %6,7 %5,7 %0,1 6,23 6,01 5,84 5,84 5,69 5,60 2Q'18 2Q'19 2Q'19 ex-currency 1H'18 1H'19 1H'19 ex-currency %6,1 %6,9 Rev Revenue Yie Yield (R/ (R/Y) ) (U (Usc) sc) %0,3 7,77 7,50 7,27 7,29 7,07 6,99 2Q'18 2Q'19 2Q'19 ex-currency 1H'18 1H'19 1H'19 ex-currency Revenue Yield (R/Y) Total Passenger Revenue / RPK 5 Passenger RASK: Total Passenger Revenue / ASK RASK: Total Passenger and Cargo Revenue / ASK* *ASK value is adjusted for cargo operations adding Cargo Available Ton Km.

Regional Yield Development in USD (2 Q’1 8 vs 2 Q’1 9) Am America Europe Eur Asia / Far Asia Far Eas East Passenger R/Y ex- Passenger R/Y ex- Passenger R/Y ex- ASK RASK RASK R/Y currency ASK RASK RASK R/Y currency ASK RASK RASK R/Y currency 8,2% 6,5% 5,6% 4,4% 4,9% 1,8% 0,2% 1,4% 0,8% -0,1% -0,4% -2,2% -4,2% -1,5% -5,7% Africa Afr Mid iddle Ea East Dom Domestic Passenger R/Y ex- Passenger R/Y ex- Passenger R/Y ex- ASK RASK RASK R/Y currency ASK RASK RASK R/Y currency ASK RASK RASK R/Y currency 11,8% 9,7% 4,0% 7,6% 14,8% 2,8% 5,2% -1,3% -1,5% -2,1% -4,5% -6,9% -7,4% -7,7% -9,3% Revenue Yield (R/Y) Total Passenger Revenue / RPK 6 Passenger RASK: Total Passenger Revenue / ASK RASK: Total Passenger and Cargo Revenue / ASK* *ASK value is adjusted for cargo operations adding Cargo Available Ton Km.

Regional Yield Development in USD (1H ’1 8 vs 1H ’1 9) Am America Europe Eur Asia / Far Asia Far Eas East Passenger R/Y ex- Passenger R/Y ex- Passenger R/Y ex- ASK RASK RASK R/Y currency ASK RASK RASK R/Y currency ASK RASK RASK R/Y currency 7,6% 5,7% 4,8% 4,9% 3,8% 1,8% 0,1% 1,2% 0,4% 0,1% -0,3% -4,4% -6,5% -7,8% -6,2% Africa Afr Mid iddle Ea East Domestic Dom Passenger R/Y ex- Passenger R/Y ex- Passenger R/Y ex- ASK RASK RASK R/Y currency ASK RASK RASK R/Y currency ASK RASK RASK R/Y currency 16,9% 4,2% 10,1% 3,2% 7,6% 6,6% 4,7% -1,1% -1,2% -2,0% -2,5% -5,9% -8,5% -9,8% -8,7% Revenue Yield (R/Y) Total Passenger Revenue / RPK 7 Passenger RASK: Total Passenger Revenue / ASK RASK: Total Passenger and Cargo Revenue / ASK* *ASK value is adjusted for cargo operations adding Cargo Available Ton Km.

Profit From Main Operations Bridge (2 Q’1 8 vs 2 Q’1 9) (mn USD) Ex-Fuel Unit Cost Utilization Load Other* Fuel (Ex-Currency, Factor RASK Ex-Utilization, -3 +20 (Ex-Currency, Ex-L/F) -30 Ex-L/F) +55 Currency +84 -472 +144 Revenue Effect: -167 mn USD +217 Cost Effect: +311 mn USD +15 2Q’18 2Q’19 Profit from Main Operations(%-93) *Includes other operating income, other operating expense and FX gains/losses from operational activities. 8

Profit From Main Operations Bridge (1H ’1 8 vs 1H ’1 9) (mn USD) Ex-Fuel Unit Load Utilization Fuel Cost Factor RASK (Ex-Currency, Other* (Ex-Currency, Ex-Utilization, -15 Ex-L/F) +40 -38 Ex-L/F) +70 +128 Currency +306 -884 Revenue Effect: -359 mn USD Cost Effect: +665 mn USD +258 -135 1H’18 Profit from Main Operations 1H’19 *Includes other operating income, other operating expense and FX gains/losses from operational activities. 9

Operational Expense Breakdown 2Q'18 2Q'19 Change 1H'18 1H'19 Change (mn USD) 920 981 6,6% Fuel 1.724 1.836 6,5% 441 526 19,3% Personnel 893 1.041 16,6% 406 461 13,5% Aircraft Ownership 825 895 8,5% 274 303 10,6% Airports & Air Navigation 522 548 5,0% 262 265 1,1% Sales & Marketing 527 575 9,1% 191 202 5,8% Ground Handling 366 391 6,8% 135 157 16,3% Passenger Services & Catering 280 298 6,4% 197 192 -2,5% Maintenance 367 384 4,6% Other 1 84 86 2,4% 166 174 4,8% 2.910 3.173 9,0% TOTAL 5.670 6.142 8,3% ASK Growth: -0,6% ASK Growth: 0,7% 1 Includes General Administration and Other Cost of Sales. 10

Fuel Expense Breakdown Price Volume (mn USD) +33 Hedging* -55 981 +83 920 Fuel Expense (%6,6) 2Q’18 2Q’19 Price Volume +76 -97 Hedging* 1,836 +133 1,724 Fuel Expense (%6,5) 1H’18 1H’19 11 *Hedge gain in 2019 decreased significantly compared to 2018.

CASK Breakdown 2Q'18 2Q'19 Change 1H'18 1H'19 Change (USc) 1,98 2,13 7,3% Fuel 1,96 2,07 5,7% 0,95 1,14 20,0% Personnel 1,01 1,17 15,7% 0,87 1,00 14,3% Aircraft Ownership 0,94 1,01 7,7% 0,59 0,66 11,3% Airports & Air Navigation 0,59 0,62 4,2% 0,56 0,57 1,8% Sales & Marketing 0,60 0,65 8,3% Ground Handling 0,41 0,44 6,4% 0,42 0,44 6,1% 0,29 0,34 17,0% Passenger Services & Catering 0,32 0,34 5,7% 0,42 0,42 -1,9% Maintenance 0,42 0,43 3,9% 0,18 0,19 3,0% Other 0,19 0,20 4,1% 6,27 6,88 9,7% TOTAL 6,43 6,92 7,5% Ex-Fuel CASK: 10,8% Ex-Fuel CASK: 8,3% Ex-Fuel CASK (incl. ATK)*: 4,6% Ex-Fuel CASK (incl. ATK)*: 7,0% *ASK value is adjusted for cargo operations adding Available Cargo Ton Km. Note: ASK value is adjusted to indicate effect of cargo because cargo expenses has reasonable share in our total expenses. 12

Selected KPI’s 2Q'18 2Q'19 Change 1H'18 1H'19 Change 695 718 3,3% Fuel Price (Usd/ton) 682 698 2,4% 3,29 3,30 0,2% Fuel Consumption (lt) per 100 ASK2 3,30 3,29 -0,3% 1.127 1.243 10,3% Aircraft Ownership Cost per BH 1.190 1.251 5,2% 547 518 -5,4% Maintenance Cost per BH 529 537 1,4% 1.513 1.653 9,2% Handling Cost per Landing 1.529 1.664 8,8% 1.250 1.363 9,0% Airports & Air Navigation Cost per km Flown 1.246 1.277 2,5% 7,11 8,54 20,1% Passenger Services & Catering Cost per Pax 7,83 8,48 8,3% Sales & Marketing Cost / Total Revenue 8,2% 8,3% 0,1 pt 8,9% 9,7% 0,8 pt 13

EBITDAR Calculation IFRS16 2Q'18 2Q'19 Change EBITDAR (mn USD) 1H'18 1H'19 Change Impact 3.177 3.181 0,1% Sales Revenue 5.940 5.949 0,2% - 2.506 2.753 9,9% Cost of Sales (-) 4.853 5.257 8,3% - 671 428 -36,2% GROSS PROFIT / (LOSS) 1.087 692 -36,3% - 69 73 5,8% General Administrative Expenses (-) 140 145 3,6% - 335 345 3,0% Marketing and Sales Expenses (-) 677 740 9,3% - 267 10 -96,3% NET OPERATING PROFIT / (LOSS) 270 -193 - +12 40 45 12,5% Other Operating Income 65 100 53,8% - 90 40 -55,6% Other Operating Expense (-) 77 42 -45,5% - 217 15 -93,1% Profit / (Loss) from Main Operations 258 -135 - +12 43 54 25,6% Adjustments 62 52 -16,1% Share of Investments' Profit / Loss Accounted 29 23 -20,7% 32 8 -75,0% - by Using The Equity Method 14 31 121,4% Income From Government Incentives 30 44 46,7% - 260 69 -73,5% EBIT 320 -83 - +12 267 376 40,8% Depreciation 536 736 37,3% +155 527 445 -15,6% EBITDA 856 653 -23,7% +167 Adjusted Operating Lease Expenses 1 192 74 -61,3% 355 189 -46,6% -160 Adjusted Short term Lease Expenses 31 42 33,3% 67 77 14,8% - (Wet-lease) 2 750 561 -25,2% EBITDAR 1.278 919 -28,0% +7 23,6% 17,6% -5,97 EBITDAR MARGIN 21,5% 15,5% -6,06 - Notes: - For 1H’19 Turkish Technic’s contribution to EBITDAR through consolidation is 150 mn USD, compared to 112 mn in 1H’18. - For 1H’19 adjustments for heavy maintenance of operational lease expenses is 188 mn USD compared to 170 mn USD in 1H’18. 1 Adjusted for A/C heavy maintenance 14 2 Adjusted for A/C rent and heavy maintenance portion (Aprox. 55%)

2Q’19 RESULTS

Aviation Sector & Economy Turkish Market Growth (mn passengers) Domestic (*) International ’13 - ’21F CAGR 4,4% 5,0% 108,5 104,8 101,1 97,2 84,0 83,5 80,3 73,3 71,2 56,4 54,8 53,8 53,0 53,0 51,2 48,5 42,7 38,1 2013 2014 2015 2016 2017 2018 2019F 2020F 2021F Source: General Directorate of State Airports Authority (DHMI) – April 2019 (*)Adjusted for double count on Domestic Pax Annual RPK Growth (%) 26,7% 23,2% 22,9% 16,2% 11,6% 8,9% 7,9% 7,3% 7,4% 6,3% 5,7% 5,3% 5,2% 8,0% 6,3% 6,5% 2011 2012 2013 2014 2015 2016 2017 2018 World RPK Growth THY RPK Growth Source: IATA 16