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Reporting a strong increase in its 2014 profits, the Aegean Airlines Group has confirmed its position as Europe's most profitable legacy airline (by operating margin). Double digit capacity growth, increasing competition from LCCs (Ryanair in particular) and the fragile Greek economic backdrop led to a reversal of the unit revenue increase that Aegean enjoyed in 2013. However, it managed to offset lower RASK with even lower CASK.
In 2014, Aegean completed its first full year following the acquisition of Olympic Air. The Olympic acquisition brought Aegean a domestic PSO network, the flexibility to deploy turboprops on thinner domestic routes and more options in adapting capacity and frequency to optimise connectivity between domestic and international routes.
With Olympic's 2013 revenue around one quarter that of its parent in 2013, this was a significant acquisition for Aegean. It seems to have absorbed it without breaking its stride.
MAA is still adding some capacity by improving aircraft utilisation levels. But passenger numbers will likely remain flat as the focus on yields results in a reduction in load factor.
Meanwhile MAAX has cut capacity across its scheduled network as part of a restructuring aimed at restoring profitability. MAAX was highly unprofitable in 2014 while MAA was the only profitable airline in Malaysia. MAA was also the only profitable airline among the eight carriers in the AirAsia/AirAsia X portfolio.
This is the second in a two-part series of reports on the Malaysian market and the outlook for 2015. The first report focused on flag carrierMalaysia Airlines (MAS), including its upcoming restructuring, and the recent reduction in overall passenger numbers in Malaysia. The report will focus on AirAsia and AirAsia X.
See related report: Malaysia aviation outlook Part 1: growth slows but competition is still intense as MAS restructures
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