12/2025 TFRS Financial Statements

(CONVENIENCE TRANSLATION OF

THE REPORT AND FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH)

CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 TOGETHER WITH

THE INDEPENDENT AUDITOR'S REPORT

DRT Bağımsız Denetim ve

Serbest Muhasebeci Mali Müşavirlik A.Ş. Maslak No1 Plaza

Eski Büyükdere Caddesi Maslak Mahallesi No:1 Maslak, Sarıyer 34485 İstanbul, Türkiye

Tel: +90 (212) 366 60 00

Fax: +90 (212) 366 60 10

Mersis No :0291001097600016

Ticari Sicil No: 304099

To the General Assembly of Pegasus Hava Taşımacılığı Anonim Şirketi

1. Report on the Audit of the Consolidated Financial Statements
   1. Opinion

      We have audited the consolidated financial statements of Pegasus Hava Taşımacılığı A.Ş. ("the Company") and its subsidiaries ("the Group"), which comprise the consolidated statement of financial position as at 31 December 2025, and the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

      In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at 31 December 2025, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with Turkish Financial Reporting Standards (TFRS).

   2. Basis for Opinion

      We conducted our audit in accordance with the Standards on Independent Auditing ("SIA") which is a part of Turkish Auditing Standards accepted by regulations of the Capital Markets Board and published by the Public Oversight Accounting and Auditing Standards Authority ("POA"). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Code of Ethics for Independent Auditors (including Independence Standards) ("Code of Ethics") published by the POA, as applicable to audits of consolidated financial statements of public interest entities, together with the ethical requirements included in the regulations of the Capital Markets Board and other regulations that are relevant to audits of the consolidated financial statements of public interest entities. We have also fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

   3. Key Audit Matters

      Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters

      Deloitte, Deloitte Touche Tohmatsu Limited ("DTTL"), onun küresel üye firma ağı ve ilgili kuruluşlarından bir veya daha fazlasını ifade eder. DTTL üye firmalarının her biri yasal olarak ayrı ve bağımsız kuruluşlardır. DTTL müşterilere hizmet sunmamaktadır. Daha fazla bilgi almak için https://www.deloitte.com/about adresini ziyaret ediniz.

      © 2026. Daha fazla bilgi için Deloitte Türkiye (Deloitte Touche Tohmatsu Limited üye şirketi) ile iletişime geçiniz.

      
      
      

      Key Audit Matter

      How the matter was addressed in the audit

      Redelivery Maintenance Provision As explained in Note 15, as of 31 December 2025, the Group has recognized a provision of TL 8.954.579.039 in respect of redelivery maintenance obligations for aircraft acquired under lease agreements without a purchase option (operating leases). The Group is required to return aircraft at the end of the lease term in accordance with the technical and operational conditions specified in the lease agreements. In this context, the Group may need to compensate lessors for differences between the actual condition of the airframe, engines, and life-limited parts at redelivery and the conditions contractually agreed. The redelivery maintenance provision is calculated over the lease term based on the present value of estimated future maintenance costs, considering flight hours and cycles during the lease period. The balance of the redelivery maintenance provision is significant in the consolidated financial statements. Its calculation involves management judgment and key assumptions, including aircraft utilization rates, the timing and cost of heavy maintenance events, the current condition of the aircraft, and the remaining useful lives of life-limited parts. Changes in these assumptions could have a material impact on the consolidated financial statements. Accordingly, redelivery maintenance provisions have been identified as a key audit matter.

      To assess whether the redelivery maintenance provisions have been reasonably calculated, the following audit procedures were performed: In addition, the adequacy of disclosures related to redelivery maintenance provisions, as presented in Notes 2.4 and 15, was assessed in accordance with the requirements of TFRS 37 Provisions, Contingent Liabilities and Contingent Assets.

      • The design of management controls over the redelivery maintenance provision calculation process were evaluated, and the implementation of these controls was tested.

      • Key assumptions used in the calculation of the redelivery maintenance provision were assessed through discussions with the technical maintenance support team responsible for the calculations. Cost data underlying these assumptions were compared with the costs specified in the Group's maintenance contracts.

      • Actual maintenance costs incurred for delivered aircraft were compared with the redelivery maintenance provisions calculated for these aircraft in prior periods, and any significant deviations were analysed.

      • Maintenance expenditures incurred for aircraft acquired through leases without a purchase option during the period were tested based on flight hours as part of substantive procedures.

      • Accounting records for maintenance expenses incurred during the period were compared with supporting invoices to assess the accuracy and completeness of the records.

   4. Other Matters

      The consolidated financial statements of Group for the year ended 31 December 2024 were audited by another audit firm who expressed an unmodified opinion on those statements on 4 March 2025.

   5. Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

      Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with TFRS, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

      In preparing the consolidated financial statements, management is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

      Those charged with governance are responsible for overseeing the Group's financial reporting process.

   6. Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

      Responsibilities of independent auditors in an independent audit are as follows:

      Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the regulations of the Capital Markets Board and SIA will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

      As part of an audit in accordance with the regulations of the Capital Markets Board and SIA, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

      • Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. (The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.)

      • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.

        
        
        
        1. Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

           • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

           • Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern.

           • Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

           • Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the group as a basis for forming an opinion on the group financial statements. We are responsible for the direction, supervision and review of the audit work performed for purposes of the group audit. We remain solely responsible for our audit opinion.

        We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

        We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.

        6) Auditor's Responsibilities for the Audit of the Consolidated Financial Statements (cont'd)

        From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

2. Report on Other Legal and Regulatory Requirements

In accordance with paragraph four of the Article 398 of the Turkish Commercial Code No. 6102 ("TCC"), the auditor's report on the system and the committee of early detection of risk has been submitted to the Board of Directors of the Company on 4 March 2026.

In accordance with paragraph four of the Article 402 of TCC, nothing has come to our attention that may cause us to believe that the Group's set of accounts and financial statements prepared for the period 1 January-31 December 2025 does not comply with TCC and the provisions of the Company's articles of association in relation to financial reporting.

In accordance with paragraph four of the Article 402 of TCC, the Board of Directors provided us all the required information and documentation with respect to our audit.

The engagement partner on the audit resulting in this independent auditor's report is Cem Tovil.

DRT BAĞIMSIZ DENETİM VE SERBEST MUHASEBECİ MALİ MÜŞAVİRLİK A.Ş.

Member of DELOITTE TOUCHE TOHMATSU LIMITED

Cem Tovil Partner

İstanbul, 4 March 2026

NOTE 1 ORGANISATION AND OPERATIONS OF THE GROUP 7-8

NOTE 2 BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS 8-30

NOTE 3 INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD ............................................ 31

NOTE 4 SEGMENT REPORTING ....................................................................................................................... 32

NOTE 5 RELATED PARTY TRANSACTIONS 32-33

NOTE 6 TRADE RECEIVABLES AND PAYABLES 33-34

NOTE 7 OTHER RECEIVABLES AND PAYABLES ......................................................................................... 34

NOTE 8 INVENTORIES ....................................................................................................................................... 35

NOTE 9 PREPAYMENTS, DEFERRED INCOME AND CONTRACT LIABILITIES 35-36

NOTE 10 PROPERTY AND EQUIPMENT 37-39

NOTE 11 INTANGIBLE ASSETS .......................................................................................................................... 39

NOTE 12 RIGHT OF USE ASSETS ....................................................................................................................... 40

NOTE 13 GOVERNMENT GRANTS AND INCENTIVES ................................................................................... 41

NOTE 14 BORROWING COSTS............................................................................................................................ 41

NOTE 15 PROVISIONS, CONTINGENT ASSETS AND LIABILITIES 41-43

NOTE 16 COMMITMENTS. 43-45

NOTE 17 EMPLOYEE BENEFITS 46-48

NOTE 18 EXPENSES BY NATURE ...................................................................................................................... 48

NOTE 19 OTHER ASSETS AND LIABILITIES.................................................................................................... 49

NOTE 20 SHAREHOLDERS' EQUITY 49-50

NOTE 21 REVENUE AND COST OF SALES 51-52

NOTE 22 GENERAL ADMINISTRATIVE EXPENSES AND SELLING AND MARKETING EXPENSES 52-53

NOTE 23 OTHER OPERATING INCOME AND EXPENSES .............................................................................. 53

NOTE 24 INCOME AND EXPENSES FROM INVESTING ACTIVITIES........................................................... 54

NOTE 25 FINANCIAL INCOME AND EXPENSES ............................................................................................. 54

NOTE 26 ANALYSIS OF OTHER COMPREHENSIVE INCOME ITEMS 55-56

NOTE 27 TAXATION ON INCOME (INCLUDING DEFERRED TAX ASSETS AND LIABILITIES) 56-60

NOTE 28 EARNINGS PER SHARE ....................................................................................................................... 61

NOTE 29 EFFECTS OF EXCHANGE RATE CHANGES ..................................................................................... 61

NOTE 30 DERIVATIVE FINANCIAL INSTRUMENTS ...................................................................................... 61

NOTE 31 FINANCIAL INSTRUMENTS 61-66

NOTE 32 NATURE AND LEVEL OF RISKS DERIVING FROM FINANCIAL INSTRUMENTS 66-75

NOTE 33 FINANCIAL INSTRUMENTS (FAIR VALUE AND HEDGE ACCOUNTING DISCLOSURES) 76-79

NOTE 34 EVENTS AFTER REPORTING PERIOD .............................................................................................. 79

NOTE 35 EXPLANATIONS RELATED TO STATEMENT OF CASH FLOW.................................................... 80

NOTE 36 THE INDEPENDENT AUDITOR'S FEE ............................................................................................... 80

(*) The functional currency of the Company is Euro. However, the presentation currency is determined as Turkish Lira. See Note 2.1 for the conversion of Euro and Turkish Lira amounts.

The accompanying notes form an integral part of these consolidated financial statements.

1

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

(*) The functional currency of the Company is Euro. However, the presentation currency is determined as Turkish Lira. See Note 2.1 for the conversion of Euro and Turkish Lira amounts.

The accompanying notes form an integral part of these consolidated financial statements.

2

(*) The functional currency of the Company is Euro. However, the presentation currency is determined as Turkish Lira. See Note 2.1 for the conversion of Euro and Turkish Lira amounts.

The accompanying notes form an integral part of these consolidated financial statements.

3

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

Within the registered capital ceiling of TL 500.000.000, the Company's issued capital amounting to TL 102.299.707 was increased by TL 397.700.293 to TL 500.000.000, all of which was covered from the amounts in the " Share Premiums on Capital Stock" account, and capital increase was registered with the Trade Registry on May 30, 2024.

The accompanying notes form an integral part of these consolidated financial statements.

4

(Amounts are expressed in full TL and full Euros unless otherwise stated.)

The accompanying notes form an integral part of these consolidated financial statements.

5

(*)The functional currency of the Company is Euro. However, the presentation currency is determined as Turkish Lira. See Note 2.1 for the conversion of Euro and Turkish Lira amounts.

(**) The change in time deposits with a maturity of more than three months, classified as financial investments, has been presented.

TL 34.266.200.580 of tangible and intangible assets additions in total of TL 22.500.068.038 was financed through leases for the year ended 31 December 2025 (31 December 2024: TL 49.160.051.970 of tangible and intangible assets additions in total of TL 35.993.223.914 was financed through leases)

The accompanying notes form an integral part of these consolidated financial statements.

Pegasus Hava Taşımacılığı A.Ş. (the "Company" or "Pegasus") and its subsidiaries (together "the Group") is a low cost airline company. The Group operates under a low cost business model and employs low cost airline business practices which focus on providing affordable, reliable and simple service. Group management focuses on providing high-frequency services on short- and medium-haul, point-to-point routes on its domestic and international transit network primarily from its main hub, Sabiha Gökçen Airport in İstanbul. The Group also operates scheduled flights from four other domestic hubs in Ankara, Adana, Antalya and İzmir. The Group operates with 127 aircraft (31 December 2024: 118 aircraft including 6 owned, all of them leased, 90 of which have purchase option) including 4 owned, 99 of which have purchase option and 24 leased as of 31 December 2025.

The Group offers a number of services ancillary to the core air passenger services and generate revenue through the provision of these services. These ancillary services include, but not limited to, revenue related to in-flight sale of beverages and food, excess baggage fees, reservation change and cancellation fees, airport check-in fees and seat selection fees.

The Group also provides cargo services and provides various training services. These training services include crew training, type rating training (i.e., training to fly a certain aircraft type), dangerous goods training and crew resource management (CRM) training.

The shareholders and ownership of the Company as of 31 December 2025 and 31 December 2024 are as follows:

Shares of the Company have been started to be traded in İstanbul Stock Exchange since 26 April 2013, after

the book building between the dates of 18-19 April 2013.

The Group's total number of full time employees as of 31 December 2025 is 9.260 (31 December 2024: 8.459). The address of its principal office is Aeropark Yenişehir Mah. Osmanlı Bulvarı No: 11/A Kurtkoy-Pendik İstanbul.

Pegasus Havacılık Teknolojileri ve Ticaret A.Ş.

The Group established Pegasus Havacılık Teknolojileri ve Ticaret A.Ş. ("PHT") in Istanbul on 13 May 2016, to manage simulator technical support and maintenance operations. The Group holds 100% ownership of PHT's outstanding shares and consolidates it as a subsidiary on a line-by-line basis.

Pegasus Airlines Innovation Lab, Inc.

Pegasus Airlines Innovation Lab, Inc. ("PIL"), is incorporated in the State of Delaware, U.S.A., effective as of 28 December 2023, to undertake operations primarily in the Silicon Valley. Notifications regarding incorporation are completed with a capital amount of USD 150.000 as of 2 January 2024. The Group holds 100% ownership of PILs outstanding shares and consolidates it as a subsidiary on a line-by-line basis.

Pegasus Airlines Ventures LP

Pegasus Airlines Ventures LP ("PAV"), in which the Group holds a 100% ownership stake, was incorporated in the United States as of August 20, 2025, to evaluate investment opportunities in innovative technology and software solution ventures focused on the practical application of artificial intelligence in air transportation, with a capital amount of USD 1.000.000.

Pegasus Europe B.V.

The Group has completed the incorporation process of a new subsidiary in the Netherlands in order to carry out the acquisition of shares in Smartwings Group, as disclosed in the material event dated December 8, 2025. The establishment procedures of its wholly owned subsidiary, Pegasus Europe, ("PEU") were completed as of December 10, 2025, and the registration procedures were finalized as of December 11, 2025.

Pegasus Uçuş Eğitim Merkezi A.Ş.

The Group incorporated Pegasus Uçuş Eğitim Merkezi A.Ş. ("PUEM") in October 2010 in Türkiye, a joint venture flight training company, with SIM Industries B.V., a Dutch simulator manufacturing and marketing company.

The liquidation process of PUEM, in which the Company held a 49.40% stake, was completed and the entity was deregistered from the trade registry as of February 27, 2025.

Hitit Bilgisayar Hizmetleri A.Ş.

Hitit Bilgisayar Hizmetleri A.Ş. ("Hitit Bilgisayar") was established in 1994, and as of 31 December 2014 it was merged with its related company Hitit Yazılım A.Ş. The scope of operations of the entity is to develop software solutions for airlines and travel agencies as well as airports, and be engaged with the activities concerning service of the foregoing operations, services and sales thereof.

The Group owns 36,20% of the outstanding shares of Hitit Bilgisayar and disclose as joint venture under investments accounted for using the equity method in the financial statements.

Board of Directors has approved the consolidated financial statements as of 31 December 2025 and delegated authority for publishing it on 4 March 2026.

The Company and its subsidiaries registered in Türkiye maintain their books of account and prepare their

statutory financial statements in accordance with accounting principles in the Turkish Commercial Code and Tax Legislation.

The accompanying consolidated financial statements are prepared in accordance with the requirements of Capital Markets Board ("CMB") Communiqué Serial II, No: 14.1 "Basis of Financial Reporting in Capital Markets", which were published in the Official Gazette No:28676 on 13 June 2013. The accompanying financial statements are prepared based on the Turkish Financial Reporting Standards and interpretations ("TFRS") that have been put into effect by the Public Oversight Accounting and Auditing Standards Authority ("POA") under Article 5 of the Communiqué.

In addition, the financial statements have been presented in accordance with the formats specified in the 'Announcement on TFRS Taxonomy' published by the Public Oversight Accounting and Auditing Standards Authority (POA) on July 3, 2024, and in the Financial Statement Templates and Implementation Guide issued by the Capital Markets Board of Türkiye (CMB).

The consolidated financial statements have been prepared on the historical cost basis except for certain financial instruments that are measured at fair values. The accompanying consolidated financial statements are based on the statutory records, with adjustments and reclassifications for the purpose of fair presentation in accordance with Turkish Accounting Standards.

The consolidated financial statements have been prepared on a going concern basis, with the assumption that the Group will benefit from its assets and fulfill its liabilities in the subsequent year and in the natural process of its business operations.

Although there is no prominent currency affecting revenue and cost of sales, the Company's functional currency is determined as Euro because; significant portion of scheduled flight revenues, which represents the Company's primary operations, is generated from European flights, Euro represents a significant component of the financial liabilities of the Company and management reports and budget enabling the Group's management to make executive decisions are prepared in Euro. The functional currency of the Company, its subsidiary and associates, other than Hitit Bilgisayar PIL and PAV, is Euro. Hitit Bilgisayar's, PIL's and PAV's functional currency is US Dollars.

If the legal records are kept in a currency other than the functional currency, the financial statements are initially translated into the functional currency and then translated to the Group's presentation currency, Turkish Lira ("TL").

For the companies in Türkiye that maintain financial records in TL, currency translation from TL to the functional currency is made under the framework described below:

• Monetary assets and liabilities have been converted to the functional currency with the Central Bank of Turkish Republic (CBRT) foreign exchange rate.

• Non-monetary items have been converted into the functional currency at the exchange rates prevailing at the transaction date.

• Profit or loss accounts have been converted into the functional currency using the exchange rates at the transaction date, except for depreciation expenses.

• The capital is followed according to historical costs.

  The translation differences resulting from the above mentioned conversions are recognized under financial income / expenses in the statement of profit or loss.

  Presentation currency of the Group's financial statements is TL. Financial Statements have been translated from Euro to TL in accordance with the relevant provisions of TAS 21 ("The Effects of Changes in Foreign Exchange Rates") as follows:

  • Assets and liabilities are translated using the Central Bank of the Republic of Türkiye ("TCMB")

    Euro rate prevailing at the reporting date,

  • Incomes are converted from Euros to TL using the monthly average exchange rates and expense items at the registered exchange rates on the relevant transaction date.

Translation gains or losses arising from the translations stated above are presented as foreign currency translation reserve under equity. Share capital amount, representing the nominal share capital of the Company, all other equity items are presented in historic TL terms where all translation gains or losses in relation to these balances are accounted under foreign currency translation reserve.

In accordance with the POA's announcement dated 23 November 2023, companies applying Turkish Financial Reporting Standards are required to present their financial statements for the annual reporting periods ending on or after 31 December 2023, adjusted for the effects of inflation in accordance with the relevant accounting principles in Turkish Accounting Standard 29 "Financial Reporting in Hyperinflationary Economies" (TAS 29). Since the Company's functional currency is Euro as of the reporting date, there is no need to make any adjustments within the scope of TAS 29 in its financial statements to be prepared in accordance with TFRS. However, the financial statements as of 31 December 2024 are prepared in accordance with the Tax Law and have been subject to inflation correction in accordance with the legislation. As of 31 December 2025, inflation accounting has not been applied.

The Euro amounts presented on the face of consolidated financial statements refer to the original Euro (functional currency) denomined consolidated financial statements as described under the Functional and Presentation Currency section above. In other words, the amounts shown in TL, which is the presentation currency, on the balance sheet, have been converted back to Euro using the official exchange rate announced by the CBRT as of the balance sheet date, and the Euro amounts shown on the consolidated profit or loss and other comprehensive income and consolidated cash flow statements have been converted from TL to Euro using the monthly average exchange rates.

Consolidated financial statements of Group are prepared in comparison to prior period in order to identify financial position and performance trends. In order to maintain consistency with current period consolidated financial statements, comparative information is reclassified and significant changes are disclosed if necessary. In the current period, the Group has made several reclassifications in the prior period consolidated financial statements in order to maintain consistency with current year consolidated financial statements. There is no effect of these reclassifications in the prior period equity and statement of profit or loss. The nature, amount and reasons for each of the reclassifications are described below:

• In the statement of financial position as of 31 December 2024, the amount of TL 156.817.887 presented under long-term other receivables related to pilot training receivables has been reclassified to short-term other receivables related to pilot training receivables.

• In the statement of financial position as of 31 December 2024, the amount of TL 258.119.203 carried under long-term other receivables as maintenance reserve prepayments has been offset against maintenance reserve provisions under long-term liabilities.

• In the statement of financial position as of 31 December 2024, the amount of TL 876.282.561 presented under other long-term provisions related to maintenance reserve provisions has been reclassified to maintenance reserve provisions under other short-term provisions.

• In the statement of financial position as of 31 December 2024, the amount of TL 1.738.438.396 presented under long-term prepaid expenses related to prepaid engine maintenance expenses has been reclassified to long-term maintenance reserve prepayments.

• In the statement of profit or loss and other comprehensive income as of 31 December 2024, the amount of TL 305.222.317 presented under personnel expenses within general administrative expenses and TL 14.877.391 presented under personnel expenses within marketing expenses has been reclassified and presented under personnel expenses within cost of sales.

• In the statement of cash flows as of 31 December 2024, the amount of TL 3.211.711.392 presented under cash flows from operating activities has been reclassified and presented under translation differences effect on cash and cash equivalents.

The following table illustrates the subsidiaries and the Group's ownership percentage in these subsidiaries as of 31 December 2025 and 31 December 2024:

Ownership rate Country of

Name of the company Principal activity

Pegasus Havacılık

Teknolojileri ve Ticaret A.Ş. Pegasus Airlines Innovation Lab, Inc.

Pegasus Airlines Ventures LP

Pegasus Europe B.V.

Simulator technical support and maintenance

Technology - R&D

Technology Investment Management Acquisition and

Management of Foreign

Equity Investments

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company and its subsidiaries. Control is achieved when the Company:

• Has power over the investee;

• Is exposed to variable returns from its involvement with the investee or has rights to such returns; and

• Has the ability to use its power to affect its returns.

  The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.

  When the Company has less than a majority of the voting rights of an investee, it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing whether or not the Company's voting rights in an investee are sufficient to give it power, including:

• The size of the Company's holding of voting rights relative to the size and dispersion of holdings of

  the other voting shareholders;

• Potential voting rights held by the Company, other vote holders or other parties;

• Rights arising from other contractual arrangements; and

• Any additional facts and circumstances that indicate whether the Company currently has the ability to direct the relevant activities at the time decisions need to be made will be considered. This includes analyzing voting patterns at previous shareholders' meetings.

Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year, are included in the consolidated statement of profit or loss and other comprehensive income from the date the Company gains control until the date when the Company no longer controls the subsidiary.

Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with the Group's accounting policies. All intercompany assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

Changes in the Group's Ownership Interests in Existing Subsidiaries

Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group's interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to owners of the Company.

When the Group loses control of a subsidiary, a gain or loss is recognised in profit or loss and is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. All amounts previously recognised in other comprehensive income in relation to that subsidiary are accounted for as if the Group had directly disposed of the related assets or liabilities of the subsidiary (i.e. reclassified to profit or loss or transferred to another category of equity as specified/permitted by applicable TFRSs). The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under TFRS 9 Financial Instruments, when applicable, the cost on initial recognition of an investment in an associate or a joint venture.

The following table illustrates the affiliates and joint ventures then indicates the Group's ownership percentage in these joint ventures as of 31 December 2025, 31 December 2024:

Ownership rate Country of

Principal

31 December

31 December

Ownership registration and

Name of the company

Pegasus Uçuş Eğitim

activity

Simulator

2025

2024

type

Joint

operation

Merkezi A.Ş. ("PUEM") (*)

Hitit Bilgisayar Hizmetleri

A.Ş. ("Hitit Bilgisayar")

training - 49,40%

Information system

solutions 36,20% 36,82%

venture Türkiye

Joint

venture Türkiye

(*) The liquidation process of PUEM, in which the Company held a 49.40% stake, was completed and the entity was deregistered from the trade registry as of February 27, 2025.

If the points are earned through non-ticket purchases, the program partner funds the cost of the points through a payment to the Group. The Group defers this revenue, which it records as "flight liability from flight points" and recognizes the revenue when the points are used by the customer. Award points are valid for at least two years and expire at the last day of the second calendar year. Unused points are recognized as income based on historic usage.

Inventory cost is calculated using the weighted average cost method. Inventories are composed of consumables, spare parts, catering stocks and other stocks and they are valued at the lower of cost or net realizable value. Spare parts are composed of large number of minor items of property, plant and equipment. For practical reasons, smaller items that are not significant are not recorded individually in the property, plant, and equipment register but are instead included in inventories.

Tangible assets are carried at historical costs less accumulated depreciation and any accumulated impairment losses.

Depreciation is recognised over their estimated useful lives, less their residual values using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

The Group allocates the cost of an acquired aircraft to its service potential reflecting the maintenance condition of its engines and airframe. This cost, which can equate to a substantial element of the total aircraft cost, is depreciated over the shorter of the period to the next maintenance check or the remaining life of the aircraft. The costs of subsequent major airframe and engine maintenance checks are capitalised and depreciated over the shorter of the period to the next check or the remaining life of the aircraft.

All significant components and repairable spare parts are accounted separately and depreciated over their respective estimated useful lives.

Leased assets are depreciated over their expected useful lives on the same basis as owned assets.

An item of property, plant, and equipment is derecognized upon disposal or when no future economic benefits are expected from its continued use. Any gain or loss arising from the disposal or retirement of a tangible asset is determined as the difference between the sales proceeds and the carrying amount of the asset. This gain or loss is recognized in the profit or loss statement.

Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortization and any accumulated impairment losses. Amortization is recognized on a straight-line basis over their estimated useful lives. The estimated useful life and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are carried at cost less accumulated impairment losses.

Acquired trademark, brands and licenses are shown at historical cost. Trademarks, brands and licenses have a finite useful life and are carried at cost less accumulated amortization. Amortization is calculated using the straight-line method to allocate the cost of trademarks and licenses over their estimated useful lives. The acquired software has a 5 year useful life.

Provisions are recognized when the Group has a present obligation as a result of a past event, and it is probable that the Group will be required to settle that obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

At the end of each reporting period, the Group reviews the carrying amounts of its aircraft to determine whether there is any indication that those assets have suffered an impairment loss. If such an indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purpose of assessing impairment, assets are grouped at the lowest level for which separately identifiable cash flows exist (cash-generating units). At the end of each reporting period, nonfinancial assets are reviewed for possible impairment reversals.

The fleet has been determined as the lowest level cash generating unit and analysed for impairment accordingly. The aircraft fleet includes both right-of-use assets under lease agreements and aircraft, components, spare engines and other parts within the tangible asset account group. For determination of recoverable amounts the higher value between value in use and sale expenses deducted net selling prices in US Dollars is used. Net selling price for the aircraft is determined according to second hand prices in international price guides.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization. There are no qualifying assets during the years ended 31 December 2025 and 31 December 2024. Therefore, no borrowing costs were capitalized during the years ended 31 December 2025 and 31 December 2024. All borrowing costs are recognized in the statement of profit or loss in the period in which they are incurred.

As of the leasing start date, redelivery maintenance provisions of the aircraft are considered an unavoidable obligation within the scope of the contract; therefore, the estimated provision amount, measured at its discounted value, is included in the cost of the right-of-use asset. Unless the Group is reasonably certain to obtain ownership of the underlying asset at the end of the lease term, the Group depreciates the right-of-use asset from the commencement date of the lease to the end of the useful life of the underlying asset.

Right-of-use assets are subject to impairment testing.

Variable lease payments that do not depend on an index or a rate are recognised as an expense in the period in which the event or condition that triggers those payments occurs.

When calculating the present value of lease payments, the Group uses the interest rate implicit in the lease, if that rate can be readily determined; if not, the Group uses the Group's revised incremental borrowing rate for the remaining lease term as at the date of reassessment.

After the commencement date, the Group measures lease liabilities as follows:

1. the carrying amount is increased to reflect interest on the lease liability, and

2. the carrying amount is reduced to reflect lease payments made.

In addition, lease liabilities are remeasured when there is a change in the lease term, a change in in-substance fixed lease payments, or a change in the assessment of an option to purchase the underlying asset.

The Group applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the low-value assets lease recognition exemption to leases of office equipment that are considered low value. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term.

Turkish Tax Legislation does not permit a parent company and its subsidiary to file a consolidated tax return. Therefore, provisions for taxes, as reflected in the accompanying consolidated financial statements, have been calculated on a separate-entity basis. Income tax expense represents the sum of the tax currently payable and deferred tax.

Current Tax

The current tax payable is based on taxable profit for the year. Taxable profit differs from profit before tax as reported in the statement of profit or loss because of items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

Deferred Tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases which are used in the computation of taxable profit. Deferred tax assets are recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such assets and liabilities are not recognized if the difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date.

The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

Current and Deferred Tax for the Period

Taxes are recognised as an expense or income in profit or loss, except when they related to transactions that are recognised in equity. Otherwise, taxes are also recognized in equity with other related transactions.

Government grants are not recognized until there is reasonable assurance that the Group will comply with the conditions attaching to them and that the grants will be received. Government grants are recognized in profit or loss on a systematic basis over the periods in which the Group recognizes as expenses the related costs for which the grants are intended to compensate. As a financing instrument, government grants, rather than to be recognized in profit or loss to offset the expenses they are financing, are to be recognized in the balance sheet as deferred income and be recognized in profit or loss on a systematic basis over the economical life of the related assets.

Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future related costs are recognized in profit or loss in the period in which they become receivable. The benefit of a government loan at a below-market rate of interest is treated as a government grant, measured as the difference between proceeds received and the fair value of the loan based on prevailing market interest rates.

Investment Incentives

The Turkish Government has an Investment Incentive Program which became effective upon the issuance of the Council of Ministers‟ resolution "Government Assistance for Investments" No:2009/15199 ("Incentive Program") on 14 July 2009.

The Incentive Program aims to provide support to companies which make investments by providing a credit against taxable income related to those investments. The amount of credit is determined based on a "contribution rate" in the Incentive Program. An entity must obtain an investment certificate related to the associated incentives.

The Group obtained incentive certificates from the Undersecretariat of Treasury for 105 aircraft. According to the incentive certificate of 12 aircraft, the Company will use 15% of the purchase value of the aircraft as the contribution rate which is the maximum amount that could be deducted against taxable income that is attributable to the operation of aircraft. The deduction will be performed by the application of 50% of the effective tax rate for the (i.e. use of 12,5% instead of 25%) taxable income attributable to the operation of these aircraft. According to the incentive certificate of 93 aircraft, the Company will use 50% of the purchase value of the aircraft as the contribution rate which is the maximum amount that could be deducted against taxable income that is attributable to the operation of aircraft. The deduction will be performed by the application of 90% of the effective tax rate for the (i.e. use of 2,5% instead of 25%) taxable income attributable to the operation of these aircraft. The Group has reflected the amount related to the abovementioned "contribution amount" in the financial statements due to the formation of a Corporate Tax base in the foreseeable five-year period as of December 31, 2024 (Note 13).

Defined Benefits

Under Turkish law and union agreements, lump sum payments are made to employees retiring or involuntarily leaving the Group. Such payments are considered as being part of defined retirement benefit plan as per Turkish Accounting Standard No. 19 (revised) "Employee Benefits" ("TAS 19").

The retirement benefit obligation recognised in the balance sheet represents the present value of the defined benefit obligation. The calculated actuarial gains and losses are accounted under the other comprehensive income when material.