Graham Newton speaks to Dimitris Gerogiannis, Aegean Airlines’ CEO, about how Aegean weathered the Greek economic and political storm


How difficult has it been to run the airline given the turbulent Greek economic and political situation in recent years? 

It has been very difficult but actually Aegean has never had an easy ride. Since the beginning of our operation there has always been a challenge that we needed to navigate through. We started in 1999 as a small, private airline with two aircraft and, in our first few years, we were competing against a subsidized, state-run airline domestically.

We faced 9/11 early in our development and intensifying low-cost competition on our international routes from 2003 onwards. The list of challenges was extended year-on-year but we learned that with a strong focus on the job, good people on board, training, and consistency we stood a good chance of getting through the crises.  

The image of Greece abroad was hit hard because of the deterioration of the economy, political volatility, and so forth

By 2009, as the Greek crisis was becoming apparent, the Greek national carrier, Olympic Airways, underwent a privatization process. The new, privatized company was aggressive as you would expect while Greek traffic was falling fast because of the poor economic environment. At the same time, the image of Greece abroad was hit hard because of the deterioration of the economy, political volatility, and so forth. So, international traffic wasn’t faring much better either.

Our previous experience helped us to adapt faster and adapt better to the Greek crisis. We managed to defend our position by shifting capacity from a slowing domestic market to international markets and expanded our international network even during the more difficult years of the Greek crisis.

The strategy started to pay off as early as 2013 when the situation in the country showed the first signs of stability. And, in October 2013, we acquired Olympic Air.

Significant network and cost synergies started to kick in from 2014, facilitating further organic growth and resulting to more benefits for the customers. We kept expanding our international network, which grew from 22 destinations out of Athens in 2012 to 70 destinations in 2016. 

We also rolled out innovative services for our customers and invested in electronic and mobile services to facilitate their journey. We improved our efficiency and productivity by investing in new technologies across every department and process of the company. 

How has the Aegean brand developed, given that you have taken over the national carrier?

Our thinking has not changed and our focus remains on what it has always been—the quality of customer service, innovation, and improving efficiency and productivity. This is what we want our brand to be associated with. Taking over Olympic didn’t change Aegean.

We use the Olympic brand domestically as it has been very strong; we want the Olympic brand to be also associated with high quality service and innovation.

You keep winning “best regional airline in Europe” awards but do you see yourself as a regional airline?

We fly to practically every European country, multiple destinations in most of them.

What is important is to remain focused on the job and on being competitive in the markets in which we are active

We fly to Russia and a number of ex-Soviet Union countries, and we serve a number of Middle East destinations. What does that make us? It is just a question of definition and that isn’t really important. 

What is important is to remain focused on the job and on being competitive in the markets in which we are active. The aim is always to develop the company profitably and sustainably.

Are you optimistic about 2017 and the next few years for your airline?

Currently, there is a degree of stability in the domestic economic and political situation and the potential to maintain and improve it. If this potential materializes, it will really help.

During the most difficult crisis years, there were times when our planning window was reduced to a week or 10 days at most. That is not normal for an airline or any business. They were extremely unusual circumstances. It is good experience to work in adverse circumstances but it cannot be the norm.

I hope we have a more stable environment ahead of us that will give us the chance to develop the company with a normal planning horizon. Aegean’s future is still very much tied to the Greek economy, but it would be good to have the opportunity to work under a more normal external environment. 

In addition, assuming a stable environment, there is significant untapped potential for Greek tourism, and particularly for developing Athens as an attractive city destination. Aegean is in the best position to contribute towards unleashing this potential and to benefit from rising tourist arrivals.

Do you still see a role for alliances in the modern aviation environment?

Alliances must adapt as airlines do. There is always room for cooperation between airlines to better serve the customer. Alliances as they were conceived in the mid-1990s may not be the way forward but there is still a place for them as they adapt to changing realities and focus on the customer journey.

Traveler familiarity with Aegean is a positive development and Star gives us that

We joined Star Alliance in 2010 just as we began to establish ourselves in international markets. Star helped our customers reach parts of the world that we could not reach directly through our network. 

We benefit from the incremental traffic increase, there is increased loyalty to Aegean because of the tie-ins with the frequent flyer programs of the other member airlines, and greater awareness of our brand abroad. Traveler familiarity with Aegean is a positive development and Star gives us that.

Are you happy with the local infrastructure and its performance—both on the ground and in the air?

Athens International Airport is quite new. It opened in 2001 and operates at a high standard. Charges are high, though, and we hope that in the context of an ongoing discussion about contract extensions, charges will be reduced. 

It’s a different picture for the smaller, regional airports. They have significant traffic during the summer season and they are in desperate need of improvement. A privatization process is almost complete as Fraport has won the contract to run 14 Greek regional airports.

Thanks to the European Aviation Safety Agency, there has been harmonization of regulations on airline operations

This development opens up the opportunity for major upgrades while the charges remain at competitive levels.

Developing these airports would not only help airlines but also the Greek economy by improving the infrastructure needed to attract foreign visitors. This is crucial especially in the current economic situation.

As for airspace, this should be seen at a European level. Thanks to the European Aviation Safety Agency, there has been harmonization of regulations on airline operations across all European countries.

Not only do we have common standards throughout the industry but also the processes applied in reaching those standards are common too. That has had a very positive impact. Initiatives at the European level must be taken to improve the effective utilization of European airspace.  

A decade into the job, what are the main lessons you have learned about being an airline CEO?

I am an engineer by profession so I like hands-on jobs and the airline business is definitely one of those. Hands-on means working with people and, as every business has its peculiarities, learning everything from the bottom up. Go out and load bags—you must do it this way to understand what problems colleagues face to get their job done.

This is a ‘people’ business and will remain so in the foreseeable future despite all the technology involved. Technology is easy to replicate and, therefore, in the long-term does not create competitive advantage.

We invest a lot in technology to improve our customer service and to assist our frontline people in their day-to-day processes. However, it is the combination of skills and attitude of our people in the day-to-day operation that make the difference in this business and this is what cannot be easily replicated. Our people are our asset and our competitive advantage. 

For a company to develop sustainably, it’s not enough that the principles of the firm—in our case a focus on customer service, innovation, and agility in a changing market—are shared by the broader management team.

The principles become the DNA of a company only when everyone understands and lives them day-to-day.

Whether the fight is then for survival, for growth, for facing a fierce competitive challenge or a crisis, colleagues will go for it if they are part of an organisation with a culture based on open and straight communication, consistency between talk and action, teamwork, and integrity. We are focused on these values. We wouldn’t be here today if every colleague didn’t stick to them every day.