ECONOMY

Aegean’s Vassilakis says Cyprus air sale could mean lower fees

Aegean Airlines SA could benefit from the privatization of Cyprus Airways Public Ltd. even if it doesn’t eventually buy the carrier, as the process paves the way for a review of airport fees and policies.

Aegean’s interest in state-run Cyprus Airways hinges more on prospects in the Cypriot air-travel market than on the company’s current prospects, Aegean Vice Chairman Eftichios Vassilakis said in an interview at Aegean’s headquarters in Athens.

“Cyprus Airways’ retreat is so deep we can’t say the company itself offers huge interest,” Vassilakis said. “It’s the market that’s interesting.”

Aegean, which last year absorbed competitor Olympic Air SA, said in July it may be interested in buying shares or assets from Cyprus Airways. Ryanair Holdings Plc, Aegean’s main competitor in the Greek market, said in August it’s also among those interested in buying the Nicosia-based carrier.

A move to sell the government’s stake in Cyprus Air, along with discussions on upgrading and privatizing Greece’s regional airports, may spur governments in both countries to review airport fees and policies, the executive said.

While a Greek government agreement in July set concession fees for regional airports at “competitive levels,” a review is needed for the Athens hub, Vassilakis, a Yale-trained economist, said in the interview. Athens International Airport is “a very good airport, but a very expensive one.” A concession extension should be part of “a deal between the state and shareholders to materially reduce fees” to levels closer to competing hubs like Barcelona, Lisbon, or Istanbul, he said.

Russia sanctions

European Union trade sanctions on Russia, Aegean’s sixth- biggest market, is a concern though the effect could be offset by growth elsewhere, Vassilakis said, noting that Germany has made the “biggest comeback” in terms of tourism in Greece. A record 19.5 million tourists are expected to visit Greece this year, according to the Association of Greek Tourism Enterprises.

Greece needs to stretch its peak tourist season beyond summer to maintain pricing and employment in the industry, Vassilakis said. Aegean this winter will experiment with keeping what had been seasonal flights on its schedule to destinations including Copenhagen, Stockholm, Zurich and Abu Dhabi. [Bloomberg]