Aegean Airlines: still Europe's highest FSC margin, but LCC competition & economy weigh on yield

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.