Aegean Airlines: lower fuel helps maintain 9M operating profit in spite of weak RASK and Ryanair

After three successive quarters of reporting falling operating results, Aegean achieved a EUR10 million improvement in its 3Q2015 operating profit. Its result for the seasonally strong peak summer quarter helped to offset the reduction in profit suffered in 1H2015, bringing its 9M2015 operating result to the same level as last year.

However, Aegean is having to work harder by growing revenue to get the same profit. Moreover, even achieving the same profit has required a considerable helping hand from lower fuel prices. In 3Q2015, Aegean did manage to bring down its ex fuel unit cost, but total unit cost only managed to keep pace with the reduction in unit revenue thanks to savings from fuel.

Aegean's key challenge remains the very soft pricing environment in Greece, the result of economic weakness and strong competition from ultra LCC Ryanair, the country's second biggest airline. In 2014, Aegean was the highest margin full service airline in Europe and should remain close to the top of this category in 2015. However, it cannot let up in the battle to remain competitive with the likes of Ryanair.