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Aegean eyes Cyprus hub, Paphos new route
Aegean reports a strong set of 9-month 2014 results, driven by successful network expansion and Olympic Air synergies. Consolidated revenue increased by 10% to €736m, pre-tax earnings improved to €105.4m from €75.9m while net earnings rose by 31% to €78.6m from €60m in 2013 .
ΑEGEAN and Olympic Air carried 7.9m in the 9-month period to September 2014, an increase of 14% compared to 2013 with load factor at 79%. Traffic in the domestic network increased by 16% with the market showing good elasticity to lower fares. International traffic rose by 12%, with traffic out of Athens registering a higher growth rate of 18% on the back of AEGEAN’s network expansion and a strong rebound for the city’s incoming tourism.
Operating cash flow improved to €124m, resulting to cash & short term investments rising to €264m at the end of September, despite the share capital return which took place in July 2014 as well as pre-delivery payments to Airbus in relation to the recently announced aircraft order.
Mr. Dimitris Gerogiannis, Managing Director, commented: “We have managed to deliver improved commercial and financial results, driven by synergies from Olympic Air integration, network optimization targeting improved connectivity as well higher tourist flows. Our expansion strategy has yielded positive results in a period of intensifying competition and despite traffic weakness demonstrated from the Russian market.
We will continue to invest in growing our fleet and capacity for 2015, adding destinations and penetrating new source markets for Greek tourism. Our key priorities involve continuous investments in growing our network, achieving scale economies as well as focusing on new service offerings to our passengers within a fast changing competitive environment that does offer however significant opportunities to grow further.”
Aegean eyes Cyprus hub, Paphos new route
With interest to invest in the troubled national carrier Cyprus Airways dwindling by the day, Aegean Airlines has decided to speed up its plans for a regional hub on the island.
A pending ruling from the European Commission is expected to determine whether the nearly 100 mln euros in aid provided to the ailing airline was legal and if not, the company would not be able to pay it back, effectively making it bankrupt.
Aegean, which together with Ryanair were the only two airlines that remained in a long bidding process for CAIR’s privatisation, has started placing advertisements in the local press looking to hire pilots, cabin crew and ground staff to be based in Cyprus.
Furthermore, the Greek carrier’s Vice President, Eftychios Vasilakis, said during a press briefing in Heraklion, Crete last week that Aegean was looking to go “on its own”, comments that were quickly welcomed by the Paphos Regional Board of Tourism.
“Cyprus (Airways) is in a process where the government, I think, has realised it can no longer support because of cost and conditions set by the European Union,” Vasilakis said, in announcing the airline’s new flight plans and marking the first anniversary of the merger with Olympic.
“It is a company that has practically run out of money and the ability to continue independently. And the state is moving along the same lines of what happened five years ago with Olympic, that is they are asking for interest for parts of its operations. As you know, in the final process it is just Ryanair and us. The main component is the brand.”
Vasilakis added that “Aegean is interested in the development out of Cyprus. You can see the maps. We believe that Cyprus is an extension of Greece, as practically we are of the same nation, but the activities from there interest us a lot.”
“If we are to do it independently or through a collaboration, time will show. What is a fact is that we intend to grow from Cyprus, this is important for us and we are looking to see which is the best way to do this.”
Both Aegean and Ryanair had submitted non-cash bids for the 6-aircraft Cyprus Airways, that has been reducing its route network and selling all available assets due to an excessive payroll that refuses to come down because of strong union influence over the island’s political parties. Both wanted to get their hands on CAIR’s licenses to operate to non-EU destinations that are not covered by the “open skies” policy and primarily to Russia and the Middle East.
Ryanair already uses Paphos as a hub and said that if allowed to take over
Cyprus Airways, it would triple the passenger turnover to and from the island.
Aegean announced 16 new destinations for 2015 and six regional hubs, including Larnaca.
The Paphos Regional Board of Tourism hailed Aegean’s decision to launch a new route between Athens and Paphos in April next year to be operated four times a week.
“This will be a boost for our jobs market and will contribute to more tourist arrivals to Paphos and the island in general,” the PRBT said.
“Paphos will also benefit from feeder traffic arriving via Athens airport from other destinations in the airline’s network. We welcome Aegean as this is a critical period for our region’s economy.”
ΑEGEAN & Olympic Air carried 8.8 million passengers in 2013. The group’s fleet comprises of 50 aircraft. AEGEAN has recently announced its decision to take delivery of 7 brand new A320 aircraft in 2015-2016.
The 2015 network will offer 15m available seats, 2m more than 2014, with flights to 134 destinations (34 domestic and 100 international) to 42 countries.
Since June 30, 2010 AEGEAN is a member of STAR ALLIANCE, the strongest airline alliance worldwide. The Company has been honored with the Skytrax World Airline award, as the best European regional airline in 2014. AEGEAN won this award for the 4th year in a row and for the 5th time since 2009.
