Olympic Air will probably “remain loss-making” within the Aegean Airlines group, admits managing director Dimitris Gerogiannis.
“As a standalone operation, it would not be possible [for Olympic] to make money,” says the Aegean boss, but he adds that operational synergies brought by the Greek regional operator more than outweigh this.
“Most likely, the Olympic operation itself will remain loss-making, but the benefit for the total group comes from consolidating back-office, commercial, finance, administration and IT activities, along with IT support contracts and consolidating premises,” Gerogiannis tells Flightglobal.
Acquired by Aegean in October 2013, Olympic incurred a €12.7 million ($17.5 million) loss in its latest financial year, but Gerogiannis expect the reverses to reduce over the coming years as support costs it had before its acquisition are stripped out.
“Olympic had a very small operation but needed a lot of support, it needed sales, it needed marketing and everything else an airline needs... This operation was supporting a very small revenue-generating operation. This has now really been reduced,” he says, adding: “At the end of the day, what is important is the ‘costability’ of the total thing – not the individual parts. In that respect, even this year – if you consider Aegean as one group – we are profitable.”
Olympic will now form a “production unit for Aegean” with its fleet of Bombardier Dash 8/Q100s and Q400s wet-leased to Aegean, which will use them to operate within the Greek island market and for some regional services within the Balkans.