Ev. Vassilakis: In 2022, Aegean will turn a profit

By Fotis Fotinos

Aegean will turn a profit this year for the first time since the onset of the pandemic, according to what was reported at today’s General Assembly. Shareholders, the President of the company, Eutychis Vassilakis and the Managing Director, Dimitris Geroyannis.

The two top executives of the company noted that both occupancy and pre-bookings show great momentum that fluctuates at pre-pandemic levels, resulting in a significant increase in revenue per flight.

The main points of D. Gerogiannis’ speech

-April was the first month in which Aegean exceeded receipts for future voyages compared to April 2019

-In May, the company exceeded 1 million passengers

-In June, it carried 1.3 million passengers

– Occupancies are approaching pre-pandemic levels

-Passenger traffic is at 90%+ compared to pre-pandemic levels

-There is an improvement in revenue per flight

-During the summer season, frequencies to some destinations increase and new ones are added

-Uncertainties exist, such as the very large increase in oil, the rise of the dollar against the euro and inflation that creates intense volatility

-However, international bookings are showing strong momentum and it looks like it will last throughout the summer season

-Target 2022 is Aegean’s first profitable year after the start of the pandemic

-Energy and fuel costs have skyrocketed, in such an environment alertness and adaptability are high priorities

The main points of the speech of Ev. Vasilaki

-Aegean’s operating losses in 2021, as a percentage of revenue, were significantly lower than other listed airlines. This shows that the company faces crises with competence and resilience

-From April onwards ticket pre-sales / receipts are higher than the corresponding figures of 2019. This shows that we will achieve a significant increase in revenue per flight

-Fuel costs are 120% higher than they were in 2019

– With relative certainty we can say that the year will close with profits

The speech of D. Gerogiannis

The pandemic continued to affect our industry and Aegean in 2021. The business environment fluctuated strongly, with the four quarters of the year showing large variations.

We started 2021, due to the new wave of the pandemic already prevailing in the last quarter of 2020, with a very low flight work, less than 40% in flights compared to pre-pandemic levels.

From June onwards with the gradual lifting of restrictions and the normalization of conditions, we have gradually restored our flying work, with passenger traffic showing the first signs of recovery, but far from pre-pandemic levels.

In the summer season of 2021, despite intense competition, as our main competitors significantly increased the seats offered to the country, we managed to recover approximately 65% ​​of passenger traffic compared to 2019, offering 78% of its flight activity (in number of flights), also in relation to 2019.

The third quarter of 2021 is also the first quarter since the start of the pandemic that Aegean recorded organic profitability. It is typical that 70% of the total sales for the year took place from June 2021 to October of the same year.

The new Omicron variant, which led to the re-introduction of new restrictive measures, again affected activity and demand in the last quarter of the year.

As detailed in the annual financial statements available to you, in 2021:

– The total turnover showed an increase of 62% compared to 2020 and amounted to €674.8 million, but only reached 52% of the total turnover of 2019.
– Losses before taxes on an organic comparable basis amounted to €72.5 million, significantly reduced from Losses before taxes amounting to €296.8 million in the previous year.
– Taking into account the extraordinary non-organic income (i.e. the total non-recurring income of €63.2 million, – the amount of the state aid reduced by the fair value of the warrants given to the Greek State and the impairment provision related to the restructuring of aircraft fleet) Losses before Taxes amounted to €9.3 million in 2021, while the Group showed a net profit after taxes of €5.1 million.
– Cash, cash equivalents and other financial investments amounted to €474.4 million.

Throughout the year we worked with the same intensive pace to ensure the conditions for recovery at all levels of activity.

In 2021, Aegean, in addition to effectively utilizing the network and the fleet when conditions allowed, strengthened its capital adequacy and was particularly competitive in its cost management.

In addition, we accelerated investment in new aircraft, adjusting immediate deliveries for the next two years, in the context of exploiting the significant advantages of the new aircraft as soon as possible.

In 2021 we also agreed to the restructuring of the helicopter fleet, introducing a new type of aircraft to our fleet (ATR-72) with highly competitive lease and maintenance terms.

For the past two years we have worked systematically and creatively to prepare the next day for the company and for our passengers. We upgraded our services and evolved the travel experience, offering new services taking into account the needs of our passengers.

We invested in technology, adding WiFi to our flights, upgraded the business lounge in Thessaloniki and created the new lounge in the extraSchengen area of ​​Athens airport, with modern aesthetics and strong elements of Greekness in their design.

The solid foundations, the adaptability and resilience we have shown in the management of this crisis as well, the performance and the adequacy of financial liquidity as well as the professionalism and capabilities of the Group’s employees prove the resilience and enable dynamic growth for the Group.

After two years of challenges, in 2022 we have the possibility to start our activity early for the summer season.

Passenger traffic in Europe appears particularly increased, a dynamic that is also noted in our country. In particular, our country shows high rates of recovery both in terms of consumer demand and interest from airlines.

The significant progress made in previous years in the improvement of the tourist product and in the management of the pandemic crisis, established our country in one of the most important international brands. Therefore, in combination with people’s desire to travel, the demand for Greece is particularly high.

In Aegean, the positive trends started to be noted from April 2022, which was also the first month in which we exceeded in receipts (ie sales for future trips) the corresponding month of 2019.

Then in May we carried more than 1 million passengers, while June also continued with the same momentum carrying 1.3 million passengers.

Occupancies today are approaching pre-pandemic levels, passenger traffic is around 10% lower than in 2019, pre-bookings are continuing to perform well, and revenue per flight is also improving.

For the summer season, we continue the gradual restoration of capacity by adding new destinations and increased connection frequencies to the internal and external network, supporting every effort to diversify and spread the tourist product in more areas while also investing in extending the tourist season.

On the other hand, however, the rise in the price of oil and the significant strengthening of the dollar against the euro have a significant impact on our costs.

In addition, inflation, high energy costs and any impact on consumer confidence are contributing to the overall environment of heightened volatility.

However, international bookings show high demand for travel abroad, a positive trend that is expected to last throughout this summer season. This is also proven by the occupancy rates in Europe, which appear particularly high.

Our goal is for 2022 to be a year with new services and more options for our passengers, but also the first profitable use after the pandemic.

Undoubtedly, however, in an environment where geopolitical balances have been disrupted, energy and fuel costs have soared, and inflationary pressures are affecting household disposable income, vigilance, flexibility and adaptability remain priorities.