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Economy

Despite Denying Refunds, Aegean Airlines Still Cash Light

July 24, 2020

ATHENS – Even taking cash from customers whose flights were canceled during the COVID-19 pandemic and refusing to refund the ticket costs in violation of European Union laws hasn't kept Aegean Airlines from having a tough time.

“The last five months have been the most difficult and painful in the history of the company,” Chief Executive Officer Dimitris Gerogiannis told Aegean’s general meeting of shareholders, said Kathimerini.

He said the return to a full flying schedule is “neither smooth nor predictable,” adding that the airline flew at a money-losing 40 percent capacity in June and so far in July and doesn't expect to go past 50 percent in August, normally a robust month.

While domestic flights are doing better than international routes with travelers still afraid to fly as the Coronavirus lingers around the world – Americans and Russians are barred from Greece so far – the company hopes to get through the winter better.

Constant changes in flight restrictions and demand fluctuations in an environment that changes every 15 days call for increased flexibility from Aegean, asaid Gerogiannis.

“This is the most demanding year for global air transport as well as for Aegean,”  Eftychios Vassilakis, the carrier’s Chairman said as the company hasn't explained why it won't give refunds, despite the EU now taking legal action against countries who have allowed their state carriers to stiff customers.

“Certainly, 2020 will not be pleasant but we have shown that we have the ability to adjust and the strength to meet the challenge,” he told shareholders.

He said due to the terms of booking, tickets are reserved very close to flight dates, which leaves the company very little room for flexibility even as it violated the law over denying refunds, offering only vouchers for future flights over a limited period. There was no report how much money Aegean has kept from customers.

He said there were provisions concerning losses of 26-28 million euros ($30.15-$32.47 million) per month for the second quarter of the year and that the company is losing about 40 million euros ($46.39 million) while seeking state aid.

At the end of June, Aegean had cash reserves of 400 million euros ($463.88 million,) not including a 120-million euro ($139.16 million) credit line from Greece's four main banks and a 150-million euro loan ($173.95 million) from the COVID-19 fund.

While that  played with the shareholders, the European Commission on July 2 launched infringement procedures against Greece and nine other countries for failing to enforce EU passenger rights law requiring airlines to issue cash refunds for passenger flights during the Coronavirus crisis.

But, as usually happens, the EU didn't take the next step, giving the offending countries 10 days to comply – up to July 12 – or face fines, with no reports that any were issues or that any country or airline had complied.

The EU said passenger rights were still in place during the COVID-19 crisis but reportedly did nothing to enforce them after simultaneously threatening a suit while telling the airlines that vouchers were acceptable, but with longer time periods.

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