For TAV, the first quarter of 2026 opens like a terminal gate: more people are passing through, but the cash register is not filling at the same speed. In Antalya, the new terminal is ready for the summer season; in Ankara, the new concession period has begun; in Tbilisi, the term has been extended. These are not presentation ornaments. They are runways, gates, commercial space, passenger bridges, and concession contracts. But the truth of this company is not read from terminal crowds. It is read from which line that crowd leaves money on.
In the first quarter of 2026, TAV served 18.97 million passengers. International passengers were 10.41 million, domestic passengers 8.56 million; total traffic grew 7% year on year. Ankara international passengers rose 23%. North Macedonia grew 33%. To say there are no passengers would be a lazy mistake.
But in the same quarter, euro revenue fell from EUR378.5 million to EUR360.6 million. EBITDA fell from EUR90.1 million to EUR77.6 million. Net loss attributable to the parent was EUR58.6 million. Free cash flow deteriorated from -EUR43.3 million to -EUR125.1 million. In other words, the problem is not that people are not passing through the gate. The problem is what follows each passenger through that gate: interest, rent, tax, depreciation, and construction mobilization.
| Metric | 2026Q1 / 2025Q1 change |
|---|---|
| Total passengers | +7% |
| Revenue in EUR | -5% |
| EBITDA | -14% |
| Free cash flow | EUR81.8m additional decline |
TAV’s economic machine looks simple, but it is not plain. The company takes long-term airport concessions, assumes upfront rent or investment obligations, builds the terminal and the service chain, then collects money from passenger fees, commercial square meters, duty free concessions, food and beverage, ground handling, lounges, security, and technology. Behind one ticket there is more than one cash register.
That is why TAV is not merely a “tourism stock.” If tourism is good, passengers come. But in the airport business, a good passenger count does not forgive a bad contract, does not erase expensive debt, and does not make prepaid concession rent disappear. TAV’s best feature is also its most dangerous one: its assets are real, its contracts are long, but that reality has been bought with debt and a rent calendar.
In the first quarter of 2026, revenue in TL terms rose 28% to TL18.40 billion; but operating profit declined from TL2.16 billion to TL1.86 billion. Operating profit before financing income fell from TL1.38 billion to TL333 million. The parent share recorded a TL2.99 billion loss. The KAP financial report does not tie the net loss to a single item: financing expenses were TL2.81 billion, the loss share from investments accounted for under the equity method was TL1.99 billion, and current tax expense was TL1.14 billion.
Part of this loss is not “bad business,” but the investment cycle landing in the accounts. Management says that after the Ankara investment was completed, previously capitalized interest expenses began to be expensed. Assets tracked under the equity method, such as Antalya and ATU, also posted losses in Q1. TAV Antalya Yatırım’s loss share was TL928.6 million, TAV Antalya’s was TL606.7 million, and ATU’s was TL370.2 million. These lines are like the plumbing under the terminal: the passenger does not see them, but the shareholder gets wet.
The cash flow statement speaks more clearly. Cash flow from operating activities was -TL5.07 billion. Beginning-period cash was TL24.00 billion, while end-period cash fell to TL10.73 billion. The annual report attributes the deterioration in free cash flow mainly to the upfront payment and construction mobilization under the Tbilisi concession extension. That explanation is reasonable. But being reasonable does not make it light. TAV’s story begins after the ribbon is cut on the new terminal.
| Item | 2026Q1 | Read-through |
|---|---|---|
| Cash and cash equivalents | TRY10.73bn | Sharp fall from TRY24.00bn at year-end 2025 |
| Operating cash flow | -TRY5.07bn | Cash did not confirm a clean earnings recovery |
| Total financial borrowings | TRY102.67bn | Bank loans, bonds, lease liabilities and other financial debt |
| Net debt | EUR1.824bn | About 2.9x midpoint 2026E EBITDA |
| Tunisia debt reclassified short-term | TRY12.49bn | Financial covenant breach; no acceleration notice |
The harshest line on the balance sheet is debt. As of 31 March 2026, total financial borrowings were TL102.67 billion. Of this, TL15.06 billion was short-term borrowing, TL8.95 billion was the short-term portion of long-term borrowings, and TL78.66 billion was long-term borrowing. In the annual report’s definition, net debt was EUR1.824bn. Since the midpoint of management’s 2026 EBITDA guidance is EUR620m, this means roughly 2.9x net debt/EBITDA. This is not crisis leverage. But it is leverage that makes mistakes expensive.
Tunisia must be watched separately here. Because TAV Tunisia’s post-pandemic passenger recovery has been slower than expected, its financial covenant obligations were breached as of 31 March 2026. For that reason, TL12.49 billion was classified under short-term liabilities; the company says it has not received a recall notice from lenders. This line does not make TAV “distressed.” But it does stop cheapness from being a free gift.
The favorable side of the company should not be underestimated either. The new terminal in Antalya opened on 12 April 2025. Terminal 2 for international flights gained 132 thousand square meters of new space; the domestic terminal expanded by 103%; the number of passenger bridges rose from 20 to 34, total boarding gates from 48 to 77, and aircraft parking capacity from 138 to 202. Total commercial space increased 165% to 33.3 thousand square meters, and capacity reached 65 million passengers a year. This is not report makeup. It is the physical ground of the spend-per-passenger thesis.
Ankara is important in the same way. The new concession extends to May 2050. The company states that the new concession generates higher revenue than the old one due to higher tariffs and the end of the guaranteed passenger/IFRIC12 structure. Ankara international passengers rose 23% in Q1; AJet and Pegasus focusing on international transfer traffic supports this growth. If Ankara shows its full-year effect in 2026, the interest pain visible in Q1 becomes more understandable.
Almaty is a dirtier test. International passengers are rising 10%, but management says changes in jet fuel supply policy are pressuring volumes and margins, and it sees 2026 as a transition year for Almaty. This sentence must be read carefully: there is traffic, but margin is not guaranteed. In the airport business, volume alone is not enough; fuel, currency, geopolitical routes, and service mix can also block the road to EBITDA.
| Period | EBITDA |
|---|---|
| 2025 actual | EUR560m |
| 2026 low | EUR590m |
| 2026 midpoint | EUR620m |
| 2026 high | EUR650m |
Valuation becomes interesting here. According to market data from 18 May 2026, the share price is TL252.75 and market capitalization is TL91.82 billion. Comparing Q1 TL revenue with euro revenue in the annual report implies an exchange rate of roughly TL51.01/EUR. That makes the market value approximately EUR1.80bn. Adding EUR1.824bn of net debt gives a rough enterprise value of EUR3.62bn.
But TAV’s balance sheet also contains investments accounted for under the equity method: TL30.0 billion as of 31 March 2026, or roughly EUR588m at the same exchange rate. These include Antalya, TGS, ATU, and other partnerships. Since consolidated EBITDA does not directly carry all of these assets, it is fairer to deduct this book value from enterprise value when reading operational valuation. On that basis, adjusted operational enterprise value is about EUR3.04bn. The midpoint of 2026 EBITDA guidance is EUR620m: the adjusted multiple is 4.9x.
If a 25% haircut is applied to equity-method investments, the multiple becomes 5.1x; with a 50% haircut, it becomes 5.4x. For a multi-country airport platform like TAV, with long concessions and newly opened capacity, that is a low price. The reason it is low is clear: Q1 burned cash, net profit is dirty, debt is large, and there is a Tunisia covenant breach. But these risks are not outside the price. They are inside it.
| Step | Value | Read-through |
|---|---|---|
| Market value | TRY91.82bn / about EUR1.80bn | TRY252.75 share price and report-implied TRY/EUR of 51.01 |
| Net debt | EUR1.824bn | Activity report page 14 |
| Gross enterprise value | EUR3.624bn | Market value plus net debt |
| Equity-accounted investments | TRY30.0bn / about EUR588m | Book value of Antalya, TGS, ATU and other JVs/associates |
| Adjusted operating EV | EUR3.036bn | Gross enterprise value less equity-accounted investments |
| Adjusted EV / 2026E EBITDA | 4.9x | 2026 EBITDA midpoint of EUR620m |
The second simple test is book value. Equity attributable to the parent is TL77.12 billion, total equity TL77.81 billion. A TL91.82 billion market value means roughly 1.19x P/BV against parent equity. This ratio alone is not proof of “cheapness”; in airport concessions, book value does not speak as loudly as contract quality. But when read together with 4.9-5.4x adjusted 2026E EBITDA, it shows that the market is not giving TAV a growth multiple, but a proof discount.
The anti-thesis is clean and strong: perhaps the discount is deserved. Perhaps TAV’s terminal is beautiful, but the harvest year keeps being postponed to the next one. Perhaps Antalya’s commercial space and Ankara’s tariff work well in the summer, but Tbilisi, Almaty phase two, concession rents, floating-rate project loans, and the tax line absorb the cash. Perhaps TAV’s best assets work first for states, banks, and joint ventures; what remains for the listed shareholder comes later and thinner.
For that reason, TAVHL is not a stock to own because “planes are taking off.” This stock suits the investor who has the patience to look at the cash flow statement after the summer season. In Q2-Q3, EBITDA momentum, free cash flow, net debt/EBITDA, and the Antalya-Ankara contribution must all improve in the same direction. If the 2026 guidance of 116-123 million passengers, EUR1.88-1.98bn revenue, EUR590-650m EBITDA, and capex below EUR330m is maintained, today’s price looks stingy. If that expectation breaks, the low multiple will not protect the investor.
My judgment: TAVHL is cheap. Its cheapness does not come from a clean income statement; on the contrary, it is cheap because the income statement is dirty. The market is imposing a justified penalty while waiting for the new terminal and concessions to turn into cash. But when the company’s 2026 EBITDA guidance and equity-method assets are considered, the penalty looks too harsh.
The place where this report will be proven wrong is clear: if free cash flow does not recover after the summer season, if net debt/EBITDA moves toward 3.5x, if a new covenant breach appears outside Tunisia, or if management softens its language on the Antalya-Ankara contribution, the thesis breaks. Until then, owning TAVHL is not owning an airport; it is owning the ability to turn the finished terminal’s tenor into cash.