AEGEAN: Weak Demand Weighs on Second Quarter 2016 Results

Greece’s weak economy, the increase in competitors’ capacity and the value-added tax hike on airline tickets (from 13 percent to 23 percent and then 24 percent) negatively affected AEGEAN’s financial results, as for the first half of 2016 the carrier reported consolidated net loss after tax at 23.7 million euros compared to net earnings of 14.8 million euros in 2015.

The total number of passengers carried in the first six months of the year rose by five percent to 5.2 million but revenue stayed at 403.5 million euros, flat versus the respective period in 2015.

AEGEAN and Olympic Air carried 2.5 million passengers on domestic flights while international passenger traffic rose by 10 percent to 2.7 million passengers.

According to the airline, during the first half of year, the group recorded a positive trend in passenger traffic which fell short of the capacity invested in the international network, with the shortfall being more pronounced during the second quarter of the year.

“Weak demand during the second quarter of the year and mainly during May and June, negatively impacted our operating results and profitability, given also our decision to start operating certain seasonal international routes early in the summer season, aiming at improving our fleet utilization”, AEGEAN’s managing director, Dimitris Gerogiannis, said.

However, Gerogiannis highlighted that demand trends as well as load factors improved during the third quarter of 2016 with indications pointing to improved trends in September and October as well.

For the third consecutive year AEGEAN continued investments in network expansion, covering 145 destinations and operating a fleet of 61 aircraft against 52 on average in the first half of 2015.