Aegean suffers €32.6 million first half loss

Aegean Airlines.

Aegean Airlines reported a net loss of €32.6 million ($42 million) for the 2010 first half, citing the deteriorating Greek economy, a €6.6 million extraordinary social contribution charge and “overcapacity prevailing in certain markets.”

This compares with a €13.4 million profit in the year-ago period (ATW Daily News, Sept. 1, 2009). Revenue declined 3% to €267.4 million as a result of the “significant” pressures on average revenue per flight due to the economic crisis, particularly as far as Greek-originated traffic is concerned.

Aegean transported 2.9 million passengers in the first half comprising 1.5 million domestic boardings, down 11%, and 1.4 million international boardings, up 18%. Load factor increased 4.2 points to 64.8%.

Aegean MD Dimitris Gerogiannis said the carrier will “proceed with the necessary adjustments on our network and costs, with immediate effect, so as to protect the company during the crisis. At the same time, our efforts concentrate on fully exploiting and completing our past strategic choices, such as our entry into the Star Alliance and the agreement with Marfin Investment Group/Olympic Air.” Shareholders of Aegean and OA in February agreed to merge the two airlines; the European Commission last month opened an investigation into the deal, citing competition concerns (ATW Daily News, Aug. 3).

Aegean reduced its fleet by three aircraft in the first half: It returned two RJ Avros to their owners in July and will return two ATR 72s in September. It will cut two domestic routes, from Athens to Ioannina and Kavala, and three international routes from ATH to Tirana, Belgrade and Vienna, which the company said “are particularly loss-making.”

Gerogiannis said, “We must focus on destinations where we maintain a competitive advantage either due to our new Airbus A320 fleet or due to our entry into the Star Alliance. A possible imminent approval of our agreement with OA could allow us to ably present on the summer of 2011 an expanding profile which is necessary for both our company and our country.”