Olympic Air

Greek carriers fight an ominous jumble of recession, euro-woes and market fragmentation

Greece’s airlines are operating in an unsympathetic environment shaped by four consecutive years of economic recession and austerity measures, worries about a possible exit from the eurozone and a fragmented market with the largest carrier holding a mere 33% capacity share. The situation is untenable and revives the discussion if the European Commission (EC) in Jan-2011 took the right decision in blocking the proposed merger between Aegean Airlines and Olympic Air.

Both of Greece’s major carriers are loss making and Olympic, which had high hopes to become Greece’s new national carrier after it bought some of the assets of the state-owned and de facto-bankrupt flag carrier Olympic Airlines, was forced to refocus its strategy towards regional operations to survive. Olympic’s passenger numbers fell 23% in 2011 to 3.4 million from 4.4 million in 2010.

Aegean’s 3Q2011 results impacted by 40% fuel expense increase

Greece’s largest passenger carrier, Aegean Airlines, has continued to improve despite the economic crisis in Greece and other European countries, and has recorded a significant increase in international passenger traffic in 3Q2011. A rise in operating expenses, namely fuel, has negatively affected the carrier which posted a net loss of in the nine months to September.

Aegean’s expanded international network led revenue gains for the carrier with new destinations and increased frequencies in important markets across Europe. Aegean’s international network now accounts for more than half of the airline’s available seats. Meanwhile there is a weakening domestic market with capacity decreased in the face of reduced consumer demand.

Europe's fringe carriers look for partners to overcome financial crisis; Cyprus Airways latest

Airlines on Europe's southern and eastern periphery are becoming more precariously positioned, but are looking for for partners to help overcome the growing financial crisis. Cyprus Airways is the latest such carrier, and reported a widening in first half losses in the six months to 30-Jun-2011, as lower top-line revenue fell and higher fuel costs squeezed the airline in the period. Cyprus Airways is also turning to implementing a raft of measures aimed at stemming operating losses.

Athens Airport rides out the economic storm

The Greek economy is the subject of international attention as attempts are made to restore the stability that might prevent ‘contagion’ of the debt crisis and its spreading to Portugal, Ireland, even Spain and Italy, potentially threatening the Euro itself. At the same time, the airport assets of Hochtief, a partial owner of Athens Airport, are up for sale. In the circumstances one might expect that Athens Airport would be seeing a slowdown in traffic, apart from EU and IMF entourages. But what is the true story? CAPA asked Athens Airport’s management to comment.

EU commission denies Aegean/Olympic merger

In an announcement that disappointed both parties, Aegean Airlines and Marfin Investment Group (Olympic Air), the European Commission denied their request to merge.