Aegean reports 1Q loss on fuel costs, Greek economic crisis

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Published: May 30, 2012

Aegean Airlines A320. Courtesy, A3

Aegean Airlines (A3) has reported first-quarter net income of €104.6 million ($ 131 million), slightly worse than for the same period last year. First-quarter net loss after taxes deepened to €25 million from €16.3 million in the year-ago quarter. Comparable first-quarter 2011 results include proceeds of €5 million from the sale of assets.

A drop in demand caused by global economic uncertainty—exacerbated by the worsening situation in Greece and compounded by high fuel prices—have all contributed to the decline in profits, according to the airline.

A3 managing director Dimitris Gerogiannis said demand for domestic and international air travel continued to suffer in the first-quarter as a result of deteriorating economic conditions. “From the beginning of the second quarter of 2012, we are implementing a new round of cost reduction initiatives,” he said, adding, “Nevertheless, the outlook remains weak with declining tourism demand for the summer season given the negative publicity for Greece.”

First-quarter passenger numbers fell 7% to just over one million when compared to the year-ago period, despite a 13% decrease in the number of flights operated. International passenger traffic was up 3% for the period, but the domestic market saw a significant 15% decline.

Despite the downturn, the average number of passengers per flight was up to 103 from 96 in the year-ago period. However, lower average fares mean the company was not able to cover rising costs resulting from higher oil prices, according to A3. Nevertheless, the company said its balance sheet remains healthy with €158 million of cash and cash equivalents.

Gerogiannis said A3 would operate 139 scheduled and charter routes this summer out of Athens and seven regional Greek airports. However, he stressed the airline would remain “flexible to make adjustments depending on market conditions.”

A3 carried 6.5 million passengers in 2011 and has been a Star Alliance member since June 2010.

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