Aegean announces good 1H15 financial results despite deteriorating conditions

Aegean has reported a 4% increase in revenue for the first half of 2015 (1H15) to €403.6m from €388.6m for the same period the previous year (1H14) following the carrier’s investment in new aircraft and the introduction of more capacity.
However, adding capacity by increasing frequencies on existing routes and adding new international destinations meant that although Aegean witnessed passengers carried grow by 5% from 4,333,000 in 1H14 to 4,962,000 in the first half of 2015 – with the average number of passengers on-board rising from 97 to 100 – the load factor still dropped by 2.7 percentage points from 76.1% to 73.4%.
International passenger traffic for 1H15 grew by 20% to 2,407,000 from 2,011,000 across the same period in 2014, whilst domestic passenger traffic increased by 10% from 2,321,000 to 2,555,000. Aegean has confirmed that its Athens hub was the main driver in this respect, witnessing 26% growth during 1H15 in comparison to the first half of 2014.
“In the first half of 2015 we continued with our significant investments in network expansion as well as in new fleet, which we took delivery of in June despite the unique challenges posed by the capital controls. We now operate with a fleet of 58 aircraft,” explained Dimitris Georgiannis, Aegean’s managing director. “Given our significant network expansion for a third consecutive year, we have delivered strong growth of 20% in international traffic in the first half, outpacing the overall rate of tourism air arrivals to the country for the period by a factor of 3.
“We focused our investments on our main hub in Athens as well as our regional bases in Crete, Rhodes and Larnaca. Despite competitive intensity on our main base for both domestic and international routes, as well as the uncertain and adverse business conditions prevailing in the country, we have managed to deliver healthy financial results, validating our expansion strategy.”
Nonetheless, Aegean’s net profit after tax for 1H15 stood at €14.8m compared to €16m in 1H14, as a stronger dollar, higher air navigation charges in Greece and lower fares offset the benefit of lower fuel costs and unit cost reduction stemming from economies of scale.
Georgiannis continued, “Given the imposition of the capital controls, the extended bank holiday and the political developments, we have witnessed deteriorating conditions in July. Despite the loss in net bookings occurred during the first two weeks of July, our immediate response with fare offerings and the stability which followed Greece’s agreement with its partners, have led us to recover the lost ground in terms of traffic but with a subsequent cost to our yields. We also point out that the capital controls have not caused any material operational issues to our company given the large portion of our revenue which is generated outside of Greece. Obviously the stability in our country is considered necessary for our development going forward.”

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