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Economy

Aegean Airlines Needs State Support, Chairman Says

ATHENS – AEGEAN faced the most difficult quarter in its 20-year history, the Greek airline's chairman Eftihis Vasilakis said during a video conference with investors and underlined the need for state support.

Vasilakis said that 2020 began with an 11 pct increase in passenger traffic in January, followed by a 7.0 pct rise in February, following a very successful year in 2019, but then the coronavirus pandemic in March led to a 56 pct decline in passenger traffic and a 30 pct cut in flights. Plane capacity rate fell from 82 pct in the early part of the year to 57 pct in March, while revenue fell by 15 pct in the first three months of 2020, reflecting a 59 pct drop in March. In the same month, the airline suffered losses of around 43-44 million euros.

Vasilakis said the second quarter of the year was crucial since flight activity will remain limited. Passenger traffic recorded a 90 pct drop in flights and a 98 pct drop in passenger traffic in the March-April period and he noted that the monthly cost for the airline was reduced to 26-28 million euros for the second quarter of 2020. He forecast, however, that the third quarter will be slightly better, with an expected improvement in cash flow. Vasilakis said AEGEAN was expected to resume 25 pct of its flight schedule by early July, reaching 50 pct by September.

"2020 will undoubtedly be the worst year in our history and a challenge for our ability to adapt and survive," he said, adding: "There was no sector related with airlines that was not affected, more or less. The only positive thing from this crisis is that the brand of Greece emerges stronger".

Vasilakis said that the airline should receive state support, a practice followed by other European governments, and noted that in any other case the company will lose in terms of competitiveness. "We do not ask the state to take all the burden of the crisis, but to help our effort," he said, and dismissed any scenarios of placing the airline under state control. He stressed that support measures could include borrowing with state guarantees, or supporting and subsidising workers to preserve jobs.

 

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