Aegean Expands European Network With Cypriot Base

Aegean Airlines is to significantly expand its network this summer with the most notable growth being from the Mediterranean island of Cyprus where it will open a regional base to boost links to Greece and launch a new connection between Larnaca and London, a popular business and leisure market. The Greek carrier started serving Cyprus seven years ago but will significantly ramp-up its schedules to the island between June and September with direct flights to six destinations in Greece - Heraklion, Rhodes, Chania, Kos, Mykonos and Santorini. It already serves Larnaca four-times daily from Athens, has up to eleven flights per week from Thessaloniki and three from Heraklion in Crete.

However, it is its new Larnaca – London Heathrow link that is most interesting and represents a key step away from its home Greek market. The carrier is to launch a daily service from the end of this month using a two-class Airbus A320 seating 168 passengers, after purchasing slots from Olympic Air. Details of the transaction have not been made public, but it is understood that Aegean has agreed to reduce its domestic network in return for securing the lucrative slots. Over 1.4 million O&D passengers travelled on scheduled services between Cyprus and the UK last year, with over two thirds of these flying from one of London’s airports.

Source: Flightbase (August 14-20, 2011)

The table above shows the depth of competition on the route from full-service airlines to low-cost carriers and does not take into account the massive demand for inclusive tour services provided by tour operators such as Thomas Cook and TUI Travel. Monarch Airlines currently dominates the market between the two countries in terms of capacity with a 32 per cent share, followed by easyJet (25 per cent) and Cyprus Airways (17 per cent).

Alongside the notable expansion from Cyprus, Aegean will also introduce new routes this summer from Athens to Bologna and Moscow Domodedovo and will increase frequencies from the Greek capital to Barcelona, Brussels, London Heathrow, Madrid, Paris CDG and Rome. It will also strengthen its base at Thessaloniki with new routes to Moscow Domodedovo, and Paris CDG increasing its network to 18 domestic and international destinations. These network changes will bring its total network to 24 domestic and 35 international routes.

The Star Alliance member has recently revealed its full year results for 2010 with revenue falling by five per cent to €591 million and net losses increasing to €23.3 million, due, according to the airline, to weakening yields and to it being burdened by an €8 million charge related to extraordinary social contribution. During the calendar year it carried just over three million passengers in the international market, a nine per cent increase over 2009, but domestic travel fell by 16 per cent to 3.1 million due to “weak demand conditions”. Looking ahead, Dimitris Gerogiannis, Managing Director, Aegan Airlines highlighted that “the acute recession of the Greek economy” and the “significant rise in the price of fuel", will continue to affect the company’s results during the current year, but he is confident its long-term strategy of investing in its network development ahead of an “expected rebound of tourist traffic flows” to Greece, will ensure it returns to profitability.