Aegean poised to overtake Olympic and show true potential of Greece

Map: Airport locations in GreeceOne of the hoped for benefits of hosting the 2004 Olympics in Athens was that the viewing millions would be reminded of the joys and attractions of Greece as a potential vacation destination. From an aviation perspective the new Athens International Airport (AIA) which opened in March 2001 has much to commend it, but the national airline, Olympic, continues to lurch from one crisis to another, rather like its counterpart in nearby Italy.

Athens dominates Greek airport traffic

Logo: Athens International AirportsAthens airport processed just over 15 million passengers in 2006 ranking it 88th in the world. The next busiest airport is Heraklion on the island of Crete, with just over five million passengers in 2006.

Chart: Greek Airport Passenger Traffic 2006
Source: AeroStat 2006

Athens airport alone accounts for nearly 40% of the 38.7 million passengers that used Greek airports in 2006. Greece’s airports saw traffic grow by, on average, 6.3% in 2006, with all of the Top 10 airports showing positive growth. Chania, where traffic grew by 16.3%, was the fastest growing among the leading airports, while AIA saw traffic grow by 5.6%.

Excluding Athens, the UK and Germany are responsible for nearly 50% of all international traffic to Greece. The UK generates 26% of traffic with Heraklion, Corfu and Zakinthos the favourite destinations, while Germany accounts for 20% of traffic with Heraklion, Thessaloniki and Rhodes the preferred destinations. The seasonality profile for Athens is similar to many Mediterranean airports, with traffic peaking in July and August when holidaymakers from more Northern parts of Europe head for guaranteed summer sun.

Chart: Athens airport monthly passenger
Source: AIA

LCC traffic still small at AIA

Despite growing by 30% in 2006, LCCs account for just 9.5% of international scheduled traffic at AIA. easyJet is the leading LCC with just 2.6% of traffic and routes to London, Berlin, Milan and, since this May, Paris. A total of 13 LCCs served 21 airports in 2006 according to the airport’s own analysis. Olympic is the largest carrier with 35% of all traffic, followed by Aegean with 22%. Foreign airlines account for 42% of all traffic but well over 50% of international traffic. Load factors improved in 2006 to 68% for domestic flights and 71% for international flights. The busiest routes are to London, Larnaca, Paris and Milan.

Olympic and Aegean share domestic market

The Greek domestic market is a virtual duopoly between Olympic and Aegean. According to OAG Max Online, Olympic has 51% of domestic capacity (to Aegean’s 46%) but 62% of flights (to Aegean’s 36%), reflecting the use of smaller aircraft by Olympic, which operates a fleet of ATR 42s and 72s. The top domestic routes are from Athens to Thessaloniki, Heraklion, Rhodes and Chania.

Olympic: a gold medal for surviving this long?

Logo: OlympicsGiven the number of times the airline has been bailed out by financial support from the government (something the EU seems to regularly investigate but rarely do much about) and the number of (unsuccessful) attempts to privatise or at least part-privatise the airline, it is something of an achievement that the airline is still operating.For the last five years the airline has carried just under six million passengers, with average load factors in the mid-60s.

Aegean: a profitable Greek airline

Aegean was formed back in 1999 after the domestic market was deregulated. In just seven years the airline has managed to gain an almost 50% share of the domestic market and is now expanding internationally thanks to its tie-up with Lufthansa. A potted history of the airline’s development is shown below:

Chart: Aegean graph showing investor trends
Source: Aegean investor relations presentation (June 2007)
Map: Athens routes
Aegean’s domestic route network is focused on Athens from where it operates 14 routes. Source: Aegean Airlines

In the first six months of 2007 Aegean has reported overall traffic growth of 19%, split between 12% growth in domestic traffic (to 1.56 million) and 35% growth in international traffic (to 0.78 million). International traffic now represents one-third of the airline’s total and was assisted by new routes to Frankfurt and Munich, which are operated as a code-share with Lufthansa.

Recent developments

Despite easyJet’s founder having strong links with the region, the airline has not yet been tempted to set up a base in Athens despite a potentially weak competitor. The airline does operate a few routes to Athens and also serves Thessaloniki from Dortmund during the summer season. The major low-cost operators to Greece are charter/scheduled hybrid carriers such as Thomsonfly, First Choice and MyTravel from the UK and TUIfly, Air Berlin and Condor from Germany.

Logo: AegeanRecent additional LCC routes from Athens include Vueling to Barcelona and Madrid (which started at the end of June), Air Berlin to Munich (since 21 May), SkyEurope to Prague and Vienna (since end of March), Germanwings to Stuttgart (since end of March), and Norwegian to Warsaw (started last September). Ryanair currently has no services to Greece, though Aer Lingus started thrice weekly flights from Dublin to Athens in June this year.


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