Aegean Airlines' wider 1Q operating loss reflects intensifying competition, especially from Ryanair

After strong results in 2013 and 2014, Aegean Airlines has started 2015 by reporting a wider loss in the seasonally weak 1Q. Capacity grew sharply, led by international routes from Aegean's Athens base, but revenue failed to keep pace. Unit costs came down, helped by lower fuel prices and greater network efficiencies, but they were not enough to offset falling unit revenue.

Aegean's weak unit revenue highlights strong competition and capacity increases in its markets, especially from ultra-LCC Ryanair. Although Greece has seen strong growth in tourism since 2012, uncertainties surrounding the macro environment in Greece add to Aegean's challenges.

As the airline's Managing Director Dimitris Gerogiannis observed, "We continue to believe that network synergies and tourism development in our country can offer further potential to our company provided a return to stability is achieved in the very near term for our country".