Aegean Airlines Group losses narrow thanks to cuts at Olympic, but parent company losses grow in 1Q

In 1Q2014, the Aegean Airlines Group, which now includes Olympic Air, reported a reduction in its losses when compared with proforma figures for the same period last year. The acquisition of Olympic has provided only temporary respite from the strong competitive forces in the Greek market: the group's RASK fell in the quarter after growing in FY2013. Happily, CASK cuts more than offset this and hence the narrower losses.

On closer inspection, it can be seen that the parent company, Aegean Airlines, saw its losses widen as cost growth outpaced strong revenue growth. The improvement, on a proforma basis, in the consolidated group result is down to significant cuts in capacity and costs at Olympic. Nevertheless, since the group is now managed on an integrated basis, a reduction in the combined losses for the first full quarter after the acquisition is a positive sign.

With unit revenues likely to remain under pressure, the group will be looking to acquisition synergies and other cost measures within Aegean itself to ensure that profitability does not deteriorate as the year progresses.