Monday, August 23, 2010

Aegean dumps Belgrade

Aegean terminates loss making routes
The Greek Aegean Airlines will terminate its flights from Athens to Belgrade on October 30 as part of a series of cost cutting measures, after the airline reported losses for the first time in its history and passenger numbers remained unchanged. The airline’s management has made the decision to cull less popular services, one of which is Belgrade. “The negative economic environment had a profound impact on our first half financial performance. We proceed with the necessary adjustments on our network and costs, with immediate effect, so as to protect the company during the crisis”, Dimitris Gerogiannis, Aegean’s Managing Director said. “Among the restructuring measures undertaken, the company has already proceeded during the first half of 2010 with the reduction of its fleet by three aircraft. As a result of the fleet reduction and given efforts to improve the efficiency of its network within a particularly weak economic environment, the company will exit, with immediate effect, two domestic (Athens – Ioannina and Athens - Kavala) and three international routes (Athens - Tirana, Athens – Belgrade and Athens - Vienna) which are particularly loss making”, he said.

The director of Belgrade Nikola Tesla Airport said that Aegean’s exit and AirBaltic recent temporary service withdrawal won’t have a major impact on the airport’s results. Belgrade has seen major growth over the summer, with a projected passenger increase of 18% this August.

Aegean Airlines commenced flights to Belgrade on January 1, 2010 after Olympic Air handed the service over to them. Aegean’s announcement is a major coup for Jat, which will have no competition on the route for the first time in almost ten years. Aegean and Olympic will merge operations by the end of the year.

6 comments:

  1. technically Olympic didn't hand the route to Aegean it was forced to do so by the Greek government. I guess Olympic can return now to Belgrade after almost a year of absence

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  2. I think OA will come back to BEG too. JAT's 3 p/w to ATH is pathetic.

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  3. ^ Aegean flew daily or 6X per week and failed so JU’s 3X doesn’t seem so pathetic.

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  4. ^Jat's three times per week were in direct competition to the 6 Weekly services to Belgrade. So now that there is no competition it would make sense to make the flights at least 6-7 weekly.

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  5. ^
    *IF* Olympic Air and Aegean are allowed to merge (it is under EU competition review at the moment), then I can see the merged entity code sharing with Jat on this route.

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  6. @ AirKoryo

    But do they have the capacity in their fleet to make flights daily? And what aircraft are being used - would it make more sense to go from 3 AT7s to 3 733s rather than daily prop?

    @ ANONYMOUS

    This is an important point not raised in the article. You'd be sure they'd never let LH and Air Berlin merge where such a high level of domestic flights were secured and competition diminished drastically - will this be a similar problem in Greece?

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