AEGEAN | Cruising steadily
Our new note on Aegean argues that the moderating supply growth in 2019e sets the scene for satisfactory operating profit growth next year, with Aegean expected to operate an unchanged number of aircraft. We also look into Aegean’s re-fleeting plan arguing that this is not likely to decidedly change the capital structure, as we expect operating leases to remain the main means of financing. We also stress that the expiration of the bulk of Aegean’s leases by 2023 provides the group with great flexibility regarding the financing of its fleet renewal.Against this background and thanks to the healthy cash flow generation and the strong balance sheet, we expect Aegean to maintain a high dividend-paying policy despite the $250m pre-delivery outlays by 2021.
As for IFRS 16, initial calculations by the company point to the recognition of a right-to-use asset equal to c€340m, which would be small in the context of the annual rental payment (
Aegean Airlines is an airline carrier based in Greece. Co. is engaged in aviation transportation, providing services that concern the transportation of passengers and commodities in the sector of public aviation transportation inside and outside Greece, conducting scheduled and unscheduled flights. Co. provides full service, premium quality short and medium haul services. Co. maintains a network of 145 destinations, 111 international in 45 countries and 34 domestic destinations. Co. is a member of global airline network, the Star Alliance network.
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