Turkish Airlines (THY) reported Wednesday a sharp decline in second-quarter net profit as soaring jet fuel prices and higher operating costs weighed on earnings despite double-digit revenue growth and resilient passenger demand.

The national flag carrier posted a net profit of $197 million for the April-June period, according to its financial results, well below analysts' consensus estimate of about $248 million and down 71% from a year earlier.

The aviation industry has been hit by soaring jet fuel prices as the war in the Middle East rumbles on, disrupting supplies of petrochemical products down the key Strait of Hormuz.

Turkish Airlines' revenue rose 21% year-over-year to $7.2 billion, slightly exceeding market expectations of $7.1 billion, supported by higher passenger yields and robust cargo demand.

Passenger numbers remained broadly unchanged from a year earlier at 23.2 million, while passenger revenue increased 15% to $5.7 billion.

Cargo revenue surged 58% to $1.3 billion.

Available seat kilometers (ASK), a key measure of airline capacity, increased 1.2% year-over-year to 68.2 billion.

The airline reported an operating loss of $64 million for the quarter, reversing an operating profit recorded in the same period last year as higher costs outweighed revenue growth.

However, gains from its investment portfolio helped the company remain profitable at the bottom line.

EBITDAR (earnings before interest, taxes, depreciation, amortization and rent) fell 41% from a year earlier to $906 million.

The biggest drag on THY's profitability came from fuel expenses, which climbed 93% year-over-year to $2.77 billion, up from $1.44 billion in the second quarter of last year.

Global jet fuel prices are forecast to average $152 per barrel this year, nearly 70% above 2025 levels, according to the International Air Transport Association.

Fuel accounted for 32.1% of Turkish Airlines' total operating expenses during the quarter, while personnel costs represented 24.3%.

For the first six months of the year, the company's EBITDAR margin declined to 12.8%, narrowing by 740 basis points compared with the same period of 2025.

Turkish Airlines has benefited as passengers rerouted away from Gulf hubs following disruptions in the Middle East.

But Gulf airlines are restoring flights and competing more aggressively for Asia-Europe traffic, while elevated fuel prices are expected to keep pressure on costs.

THY's regional performance reflected ongoing disruptions in the Middle East.

Domestic capacity, measured by available seat kilometers, declined 2%, although passenger unit revenues increased 14%.

Capacity on Middle East routes fell 48% due to flight disruptions in the region.

In contrast, capacity on Far East routes increased 18%, highlighting a continued shift toward Asian markets.

Net profit margin narrowed to 2.7% from 11.6% a year earlier, reflecting the sharp deterioration in operating profitability despite continued growth in revenue.