Scaling New Heights

Eftichios Vassilakis, Chairman of AEGEAN Airlines, says a massive investment in new, more efficient aircraft will boost competitiveness and help fuel future growth, while reducing AEGEAN’s environmental footprint will allow it to further improve in-flight services to passengers.


GIG: In the first half of 2018, AEGEAN placed a $6 billion order (at list prices) with Airbus for up to 58 aircraft to renew its fleet and add capacity for future expansion. Can you tell us more about how this is proceeding and what effect it will have on AEGEAN’s competitiveness going forward?

Vassilakis: As the first A320neo aircraft is about to be delivered, we feel optimistic and proud for the new growth cycle that officially begun with the signing ceremony of AEGEAN’s agreement with Airbus for the order of up to 58 (46+12) new A320neo and A321neo aircraft worth a total of more than $6 billion (at list prices) – the largest private investment in Greece.

The new A320neo aircraft family with the new generation of engines offers savings in fuel consumption, significantly reduced emissions and noise, as well as a longer range and up to two extra hours of flight that enable AEGEAN to add more destinations. This is also an opportunity for us at AEGEAN to develop new in-flight services using new, efficient technology and connectivity that will better respond to our customers’ demanding and ever-changing needs, renewing our commitment to them.

GIG: Can you tell us more about your expansion strategy and whether you plan to add more international and domestic routes for AEGEAN and its subsidiary Olympic Air? If so, where and when?

Vassilakis: We remain committed to our goals of ongoing, consistent growth and expansion of our network. Today we fly to 151 destinations (31 domestic and 120 international) in 44 countries. Our efforts to invest in our people and our fleet continue at an unabated pace, so that we can remain a first choice in air travel. This strategy is being continued by an equally significant increase in available seats during the winter season and by the retention of more destinations. Therefore, by the end of 2019 the number of offered seats reached 17.6 million, including 10.2 million seats reserved for international flights. At the same time, we are investing in maintaining more seasonal destinations active in the winter period and raising the number of available seats in our foreign network.

GIG: You have made a commitment to activate the bulk of your fleet at the start of the 2020 tourist season. What are the benefits? And what are the risks? How are you affected by the performance of Greece’s tourism sector and a hoped-for expansion of the tourist season? How do you view prospects going forward?

Vassilakis: For us at AEGEAN, extending the Greek tourism season is of paramount importance, a core goal, and one of our strategic priorities. The systematic effort to expand the tourism season by activating the bulk of the fleet at the beginning of the tourist season, as it was done in 2018, poses a financial risk to the company, but it is necessary both for fleet utilisation and for enhancing tourism. And it ultimately yields results.

At the same time, we support initiatives and large-scale investment projects, such as the Hellinikon Project, that reflect a national vision for the country and establish Greece (and Athens in particular) as an all-year destination. As the Official Hellinikon Project Air Carrier we aspire to contribute significantly to tourism growth. 

GIG: What more needs to be done to attract more visitors throughout the year, not only during the peak holiday season? How do you view Greece’s current tourism strategy?

Vassilakis: The Greek tourism strategy focuses on the infrastructure and the improvement of the licensing framework for tourism investments; improving the accessibility and interconnectivity of Greece by strengthening the air connections along with other means of transport; offering a quality and attractive experience; and redesigning the overall tourism product. We believe that this strategy is on the right track.

At the same time, we are intensifying our efforts to work with all relevant authorities to address certain issues – foremost among which is the management of air traffic, which, particularly during peak season, affects both the overall experience we as a country want to offer as well as the day-to-day operations.

GIG: What proportion of AEGEAN’s business does the international market account for, and how much comes from the domestic market? How do you see this split going forward?

Vassilakis: 2018 – and most probably 2019 – was another year during which air traffic recorded particularly high growth rates, with passenger traffic across Greek airports increasing by 10%. AEGEAN managed to increase both domestic and international passenger traffic, transporting more passengers than in 2017 (despite increased competition) thanks to the enrichment of its destinations, network maturity, the operation of the Athens hub, the efficient fare and flight management, and the attractive and regular fare offers that led to higher occupancy rates.

AEGEAN set a new passenger traffic record in 2019, reaching the 15 million passenger threshold, recording growth of 7% in the total passenger traffic for 2019, 11% more through the international network, and 3% more via the domestic network.

However, we must call attention to the fact that none of the above would have been possible without the devotion, creativity, professionalism, dedication, and dynamism of our people, to whom we owe a big thank you. After all, we are making every effort to meet their expectations and needs by offering as many opportunities for internal mobility and development as possible.

GIG: How concerned are you about a number of recent airline industry business failures in a very competitive market, as well as the collapse of Thomas Cook? And how does this affect your business and strategy going forward?

Vassilakis: AEGEAN operates in an environment in which tour operators and low-cost airlines operate mainly during the summer season. On the other hand, AEGEAN maintains bases, in addition to its one in Athens, in cities like Thessaloniki, Heraklion, Chania, Rhodes, and Kalamata, ensuring connectivity with key destinations abroad all year round. The recent development with Thomas Cook does not affect our strategy, which remains intact and focused on maximising its network and supporting Greek tourism.

GIG: How are you preparing to tackle key challenges the airline industry is facing, including Brexit and mitigating the effects of climate change?

Vassilakis: Regarding Brexit, we do not see any eminent risk or, in order to be more accurate, any risk against which we haven’t taken proactive measures. The UK has the largest aviation network in Europe and the third largest in the world. There are 200 million people flying to and from the UK each year. The basic air connectivity between the EU and the UK, along with the rest of the world, is ensured, as the UK has signed more than 100 bilateral air-service agreements with other countries. In the immediate term, flights should continue with minimal interruption.

For AEGEAN, our compliance with the obligations arising from environmental legislation and the international best practices expresses our commitment to participate in our joint effort to reduce greenhouse gas emissions as well as to maintain our values concerning the respect and protection of the environment.

We acknowledge climate change being one of the most eminent challenges, not only for AEGEAN but for the global community as well, and we are working hard to tackle it. Protecting the environment and minimising our footprint is a non-negotiable priority for AEGEAN and strongly linked with every facet of our operation, extending from adopting green practices to raising awareness and supporting organisations that work to protect the environment. We have already implemented an ambitious emissions reduction program, starting with actions to reduce fuel consumption, making better use of aircraft recycling materials, and minimising water and paper consumption – initiatives that enabled us to reduce CO₂ emissions to approximately 20,500 tons annually. 

In addition, the new A320neo aircraft family with the new generation of engines will offer savings in fuel consumption, significantly reduced emissions and noise. 

GIG: To what extent are you benefitting from increased investment at Athens International Airport? What about Fraport’s planned upgrades at a number of regional airports around the country after the first phase of regional airport privatisations?

Upgrading the facilities of regional airports enables us to provide an improved customer experience and an upgraded tourist product. Yet actions should aim towards the extension of the tourist season and increase capacity through incentives and competitive prices for airport users.

GIG: You also announced plans to build a new 12,000 square metre training centre with flight simulators for your flight crews at Athens International Airport. Can you tell more on how that’s going?

Vassilakis: The decision to invest in the new aircrafts would be incomplete if it wasn’t followed by a complementary investment with regards to our personnel. We are therefore extremely proud as this is the first educational centre and an investment that will exceed €30 million. The training centre will therefore follow. Additionally, we are launching the first scholarship programme, enabling aspiring young pilots from Greece and abroad to acquire a pilot licence. This is a milestone for Greece and we could not be more excited. This €7 million program is designed for 100 people and with an 18-month timeframe. It will offer tools and access to candidates to seek a promising career. This is yet another substantial investment in the country and its human capital. Seventy people have already been selected from a total of 1,000 candidates and already participate in the programme. 

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