Aegean Airlines FY2025 Earnings Call Summary

## Financial Performance

Aegean Airlines reported strong FY2025 results with revenue of €1.86 billion (5% YoY), carrying 17.3 million passengers (6% YoY). EBITDA reached €421 million (4%), pre-tax profit hit €192 million (17%), and net profit after tax totaled €147-148 million (+14%). The company proposes increasing its dividend to €0.90 per share, representing a 29% increase and an €81-82 million total payout.

The airline ended 2025 with €955 million in cash and €155 million in pre-delivery payments to Airbus. On March 12, Aegean repaid its first publicly-listed bond (€200 million issued in 2019), having issued a new €250 million bond in summer 2025.

Cost Pressures

Regulatory costs increased €43 million:
- First year of mandatory 2% SAF (Sustainable Aviation Fuel) intake
- Gradual elimination of ETS CO2 allowance grandfathering (down another 25% in 2025, adding €20 million in costs)
- Continued air traffic control disruption costs in Greece

Offsetting factors:
- 10% better fuel rates in 2025 (though benefit 20% lower than regulatory cost increases)
- Favorable euro-dollar exchange rate providing valuation benefits

Pratt & Whitney GTF Engine Crisis

The airline averaged 10 grounded aircraft in 2025 (vs. 8 in 2024) due to mandatory GTF engine checks, peaking at 13-14 aircraft grounded at year-end. Management stated this represents the peak disruption, expecting improvement going forward with partial Pratt & Whitney support.

For 2026, despite receiving 7 new A321s, the airline expects 10 aircraft grounded at peak (July-August), but will operate 33 neos total (vs. 26 in 2025), including 22 A321neos (vs. 12 in 2024), significantly improving fuel efficiency and seat capacity.

Fleet Strategy Changes

Original 2026 plan: Receive 2 A321XLR aircraft from another airline’s cancelled order
Revised plan: Walked away from XLR contract due to 7-8 month delays from seat certification issues

New configuration:
- Replaced with 2 regular A321neos from different opportunity
- Converting 2 additional A321s to A321LRs
- Maintains commitment to 60 neo aircraft total (38 delivered to date)
- 39 will be A321s (larger variant)
- 6 aircraft capable of longer distances (all A321LRs)
- Long-range aircraft configured with 178 seats and 16 sleeper seats

Impact: Launch to Indian market delayed approximately 1 year, but creates homogeneous 6-aircraft long-range subfleet instead of mixed XLR/LR fleet.

Middle East War Impact (12 Days Old at Time of Call)

Suspended destinations: 7 Middle Eastern destinations across Israel, Jordan, Lebanon, Saudi Arabia, Iraq, and UAE
- Peak operations: 7 daily rotations from Athens + 3-4 from regional bases (Thessaloniki, Larnaca, Crete)
- Represents 4.5-5% of seats, 6.2-6.5% of ASKs
- Without these routes, 2026 growth would be flat (originally guided 6-8% growth)

Fuel hedging position:
- 60% hedged through end of 2026 based on original network
- 65-66% hedged excluding suspended Middle East routes
- Hedging relatively flat throughout year (Q3 slightly higher at 63-64%)
- Approximately 1/3 of activity exposed to current fuel price volatility

Booking impact:
- Initial 8-10% reduction in booking flow (similar to Russia-Ukraine war onset)
- Beginning to normalize but uncertain
- Cyprus routes experiencing higher impact than 10% average due to proximity
- Management expects 2-3 week initial reaction cycle; better clarity expected by end of March

Market Outlook

Greek tourism trends:
- Continued growth in incoming tourism and Greek outbound travel
- Winter growth percentages higher than summer (seasonal extension + summer capacity constraints at Greek airports/ATC)
- Pre-crisis expectations: 6% market capacity growth Q2, 3-4% Q3

Competitor capacity redeployment: Too early to assess as airlines haven’t decided whether suspensions are short-term (weeks) or extended (full summer). Some airlines beginning to remove Israel from summer schedules.

Strategic Initiatives

MRO (Maintenance, Repair, Overhaul) development:
- Operating new MRO facility for 2.5 years
- Already serving 2 subsidiaries of Europe’s 3 largest airline groups
- Acquired 45% stake in APELLA (€15 million revenue Greek company specializing in wheels/brakes support)
- Building “maintenance support ecosystem” for underserved Greek aviation market

Volotea investment update:
- Total invested: €37 million (€31M in 2024, €6M in 2025)
- Current stake: 20%
- Expected additional investment: €10 million in 2026
- Company improving EBITDA year-over-year but still net negative due to legacy financial burden
- Benefits from no Middle East exposure; operates France, Italy, Spain
- Challenge: fare elasticity if forced to pass through fuel cost increases

Management Outlook

CEO Eftichios Vassilakis acknowledged being “conservative and flexible,” stating Aegean won’t pull back on long-term development plans despite short-term uncertainty. The airline will continue pursuing:
- Premium short-haul product differentiation
- MRO capacity expansion
- Longer-distance routes with premium cabin offering (2027 launch)

Management expects to provide network adjustments, fuel surcharge decisions, and capacity reallocation plans over next 2-3 months, declining to provide immediate guidance given Middle East situation volatility.