Posted on: 25 August 2011 by Ross McSweeny
Aegean Airlines has reported that, based on first half 2011 revenue of €295.2 million (10% higher compared to the same period last year), its half-year result after taxes improved to a loss of €19.8 million against €32.6 million losses in the respective period last year.
Aegean noted that 2010 first half results were hit by €6.7 million in social contribution tax charges.
Despite the crisis, which has forced it to reduce frequencies in the domestic network, the airline has followed a strategy of expanding its international network and thus enhancing its presence with additional destinations and frequencies to important markets like UK, France, Italy, Spain, Russia and Israel with the aim of also benefiting in the mid-term from the Greek tourism prospects.
The substantial cost efficiencies achieved from having a one-type fleet of Airbus A320 family aircraft as well as other productivity initiatives could not fully offset the negative impact of weakening purchasing power of Greek consumers as well as the sharp rise in fuel cost. More specifically, the fuel cost reached €81.8 million, an increased of €24.4 million or 43% year-on-year.
Operating cashflow improved significantly versus last year. Thus, despite investing in airport slots at London Heathrow and Paris CDG, cash and cash equivalent increased to €205 million as of the end of June 2011.
“Despite the difficult economic environment, we have invested in new markets, in view of enhancing the company’s position internationally and taking advantage of opportunities related to the strengthening of Greek tourism,” remarked Dimitris Gerogiannis, Aegean’s managing director. “Initial commercial results are very positive. However, we need to translate our positive commercial performance into profits in the following years.
“The environment continues to be particularly challenging, with the recession in Greece and higher fuel costs leading to losses for the full year of 2011, despite productivity improvements achieved. Our priorities remain the provision of innovation and quality to our customers, increase cost efficiencies as well as retain the financial and operational flexibility for rapid adjustments within an uncertain business environment,” Gerogiannis concluded.