Greek Vacations Make Aegean One of Europe's Most Profitable Airlines This Summer

Europeans, in fact travelers from all over the world, are taking Greek vacations. That was overwhelmingly clear in the Aegean Airlines summer results.

The Athens-based carrier generated an impressive 28.8 percent operating margin in the third quarter, more than 3 points higher than in 2019. And Aegean's results were second only to European budget giant Ryanair, which posted a 35 percent margin during the a red-hot summer travel months of July, August, and September. The Greek airline reported a €121 million ($123 million) net profit in the period.

Why was Aegean on fire? Greek beaches, obviously. Since the pandemic recovery began in 2020, leisure travelers have shown an overwhelming preference for outdoor destinations, be they beaches or mountains. This has turned some airports in otherwise sleepy locales before the crisis into travel boomtowns during the recovery. In Greece, airports serving beach spots, like Chania, Corfu, and Santorini, saw 30-percent plus increases in seats during the first nine months of the year compared to 2019, according to Diio by Cirium schedules.

And travelers are filling many of those additional seats. The number of international visitors arriving in Greece by plane was up 4 percent to 3.1 million in September compared to 2019, according to data from the Greek Tourism Confederation. International arrivée numbers were flat at 18.5 million for the first nine months of 2022 — an impressive result given numbers were down by more than half in January.

"Vacation and flying to Southern parts of Europe is on a very, very high preference for the population," Fraport CEO Stefan Schulte said Tuesday. His comment was in response to questions over the airport operators outlook, and he should have a good idea — Fraport manages 14 airports in Greece, including many in beach spots as well as the country's busiest, Athens.

Schulte said, based on current data, Fraport expects a year-over-year increase in passenger numbers across their facilities next year despite the marcoeconomic concerns. Of Fraport's airport portfolio, which includes the major Frankfurt hub, only those in Greece handled more passengers in the third quarter than they did in 2019; traffic was up 9 percent to 16.7 million passengers.

"We are pleased to have successfully navigated multiple challenges, delivering strong profitability and indeed one of the best set of results for our industry," Aegean CEO Dimitris Gerogiannis said in a statement. While the airline did not provide a fourth quarter or winter forecast, he did say they were "confident" in the outlook "despite the geopolitical and economic headwinds."

In September, Gerogiannis described what the airline was seeing in the market as "a lot closer to normality."

Aegean is scheduled to operate 20 percent more capacity in the fourth quarter than it did three years ago, according to Diio. In the third quarter, Aegean reported flying just 97 percent of its 2019 capacity.

As at most airlines in the third quarter, Aegean generated revenue than in 2019 despite less capacity. Revenues increased 11 percent year-over-three-years to €571 million. Revenues for every seat kilometer flown were up nearly 18 percent, while the cost for flying those same seats excluding fuel were up 6 percent.

Aegean is not expected to produce such buoyant margins in the fourth quarter due to the seasonality of its traffic, which peaks during the summer.