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ΑΕ GEAN AIRLINES S.A.
GENERAL COMMERCIAL
REGISTRTY 1797901000
ANNUAL FINANCIAL
REPORT
FOR THE FISCAL YEAR 2022
In accordance with art. 4 of Law 3556/2007 and the Board of
Directors’ Resolutions of the Hellenic Capital Market Commission
2
Contents
1. Statements of the Board of Directors' Members .......................................................................................................... 4
1 Annual Report of the Board of Directors of AEGEAN AIRLINES S.A. on the Consolidated and Company Financial
Statements for Fiscal Year from 1 st January to 31 st December 2022 ..................................................................................... 6
2.1 Report of the Board of Directors ........................................................................................................................ 6
2.2 Key Risks and Risk Management ..................................................................................................................... 23
2.3 Non–Financial Information ............................................................................................................................. 25
2.4 Statement of Corporate Governance ................................................................................................................ 48
2.5 Explanatory Statement .................................................................................................................................... 96
3. Independent Auditors Report ................................................................................................................................. 100
4. Consolidated Financial Statements in accordance with IFRS for the period 1 January 2022 - 31 December 2022 .. 111
4.1 Statement of Financial Position of the Company 31.12.2022 ....................................................................... 111
4.2 Statement of Financial Position of the Group 31.12.2022 ............................................................................ 112
4.3 Statement of Comprehensive Income of the Company 31.12.2022 ............................................................. 113
4.4 Statement of Comprehensive Income of the Group 31.12.2022 .................................................................. 114
4.5 Statement of changes in the Equity of the Company 31.12.2022 ................................................................. 115
4.6 Statement of changes in the Equity of the Group 31.12.2022 ...................................................................... 116
4.7 Cash Flow Statement of the Company 31.12.2022 ....................................................................................... 117
4.8 Cash Flow Statement of the Group 31.12.2022 ............................................................................................ 118
4.9 Notes to the Financial Statements ................................................................................................................. 119
5. Company announcements as per Art.10 Law 3401/2005 published during the fiscal year 2022 ............................. 192
6. Website of the Annual Financial Report .................................................................................................................... 195
3
1. Statements of the Board of Directors' Members 2.
4
1. Statements of the Board of Directors' Members
(in accordance with art. 4 paragraph 2 of Law 3556/2007)
It is hereby stated that, to the best of our knowledge, the Annual Financial statements of Aegean Airlines S.A. for the period 1 January 2022 to 31 December 2022, which were prepared in accordance to the International Financial Reporting Standards as adopted by EU, truly reflect all Assets, Liabilities and Shareholders’ Equity along with the Income Statement of the Company, as well as of the companies included in the consolidation.
It is also declared that, to the best of our knowledge, the Board of Directors’ Annual Report truly reflects the business developments, the performance and the position of the Company, as well as of the companies included in the consolidation, including the key risks and uncertainties they are facing.
Spata, 15 March 2023
The undersigned
Eftichios Vassilakis
Dimitrios Gerogiannis
Nikolaos Sofianos
Chairman of the BoD
Chief Executive Officer
Member of the BoD
5
2. Annual Report of the Board of Directors of AEGEAN AIRLINES S.A. on the Consolidated and Company Financial Statement for Fiscal Year from 1st January to 31st December 2022
6
1 Annual Report of the Board of Directors of AEGEAN AIRLINES S.A. on the Consolidated and Company Financial Statements for Fiscal Year from 1 st January to 31 st December 2022
2.1 Report of the Board of Directors
Introduction
The Board of Directors’ report of the company “AEGEAN AIRLINES S.A.” (hereinafter called the “Company” or “AEGEAN”) covers the twelve-month period ending 31.12.2022 and has been published on the Company’s website under the European Single Electronic Format – «ESEF», in accordance with the provisions of Law 3556/2007. The content of this report has been prepared in accordance with the provisions of articles 150-154 of L. 4548/2018, article 4 of L.3556/2007 and decision 8/754/14.4.2016 of the Hellenic Capital Markets Commission.
The Consolidated and Parent Company Financial Statements have been prepared in accordance with the International Financial Reporting Standards (IFRS), as endorsed by the European Union.
This report contains financial and non-financial information of AEGEAN and its fully owned subsidiaries Olympic Air S.A. (100% ownership), Aegean Cyprus Limited (100% direct and indirect ownership), Hellenic Aviation Maintenance Center S.A. (100% ownership) and its subsidiary Animawings Aviation Srl. (51,00% ownership), (hereinafter the subsidiaries jointly with the Company, called the “Group”), description of significant events that took place during the current financial year, description of anticipated significant risks and uncertainties for the following financial year, disclosure of material transactions that took place between the Company and the Group and their related parties, presentation of qualitative information and estimates relating to the development of operations of the Company and the Group for the following financial year, as well as presentation of the most significant non-financial information that has an impact on the Company and the Group.
7
The Company and the Group
The Company and the Group operate in the aviation sector, providing services of air transportation for passengers and cargo with domestic and international, scheduled and non-scheduled flights, in short and medium haul destinations. Moreover, they offer airlines-related services, aircraft technical support and ground handling services.
Olympic Air and Aegean Cyprus Limited are wholly owned subsidiaries (100% direct and indirect ownership) of the Company. AEGEAN also owns a 51,00% stake of its subsidiary AnimaWings Aviation Srl.
On 15.10.2022 the Company has established a company under the name Hellenic Aviation Maintenance Center Single Member S.A which is a 100% subsidiary company of the Group.
On 09.11.2022, the Company has established the company with the name "Aegean Airlines Executive Sole Proprietorship S.A.", which is also a 100% subsidiary company of the Group.
The parent company Aegean Airlines S.A. is listed on the Athens Stock Exchange. AEGEAN’s bond loan is also listed on the Athens Stock Exchange.
The Ordinary General Meeting held in July 2022 has approved the change of the Company’s Head office from the Municipality of Kifissia to the Municipality of Spata.
The Company has branches and offices in Greece and abroad. The majority of the administrative staff, the flight and technical operations center are based at the Headquarters of the Company, in Athens International Airport “Eleftherios Venizelos” Building 57, while the Customer Service and the Call Center departments are located at the Branch of the Company, in Kifissia.
The Company’s business activities include, among others, the following:
services related to the transportation of passengers and cargo, with domestic and international, scheduled and non-scheduled flights;
airline services of all kinds;
aircraft technical support and ground handling services;
participation in domestic or foreign companies with similar activities (related in the tourism sector);
establishment of subsidiaries and agencies;
import, trade and leasing of aircraft and spare parts.
Mission
The Group’s mission is to provide high quality services across all travel stages, via an extensive network of domestic and international destinations. Key pillars in the Groups’ mission implementation consist of the investment in training and continuous development of its employees and the customer- centric approach.
Vision
The Group’s vision is to operate responsibly, contributing to the sector and economy development, creating value to all stakeholders.
Corporate Values
8
The Group’s operation is governed by ethical and professional standards and the values that stem from its mission and vision. They constitute the foundations of the Group’s growth and are focused on the “continuous development, quality service & reliability” approach.
Continuous Development
- Investment in innovation, aiming at the continuous improvement of its services and the enhancing of passenger travel experience;
- Investment in employees training and development;
- Sustainable growth with multiplier benefits to the tourism sector, the economy and all stakeholders;
Quality Services
- Customer-centric approach and authentic high-quality passenger service culture;
- Support and development of Greek tourism product;
- Partnership with key sector stakeholders, targeting at the promotion of Greek tourism;
Reliability
- Conduct business in a responsible and respectful way towards the environment, its employees, passengers, suppliers and local communities;
- Best representation of Greece abroad;
- Support of the local communities.
Strategic Priorities
In an industry characterized by intense seasonality, cyclicality and increasing competition the strategic priorities are the following:
- Efficient commercial policy, focusing on network planning and revenue management, efficiently adapting in the volatile market conditions;
- Maintaining competitive unit costs, focusing on the fixed and variable costs related to the aircraft fleet, following the recent investment in the Airbus A320neo family fleet, as well as on the distribution costs;
- Investing in further development and exploitation of the loyalty program;
- Integration of modern technologies and their application into efficient solutions for the passengers, improvement of the travel experience and the Group’s business needs;
- Exploiting the opportunities offered from the new fleet, targeting the improvement of the passengers services, the reduction of CO2 emissions and enhancement of the Group’s competitiveness overall;
- Investing in training, aiming to skills and talents development;
- Creation of a Maintenance, Repair and Overhaul Facility and a Simulator and Training Center for pilots and cabin crew members;
- Strategic partnerships with key sector stakeholders, promoting the Greek tourism product and its quality characteristics.
9
2022 Financial Review and Business Development
Macroeconomic Conditions Overview
-Global economy faced major challenges in 2022
After a strong recovery in 2021, global economy faced serious challenges in 2022. The economic consequences of the war in Ukraine combined with soaring prices on energy, raw materials and food, eroded global economy’s growth rate, accounting for the slowdown in the growth of international trade. China’s ongoing lockdowns further disrupted global supply chain. Despite rising cost of living, private consumption showed resilience, on the back of savings built up during the pandemic and fiscal support measures, as pandemic restrictions abated.
-Restrictive monetary policy by the Central Banks
The Central Banks in USA and EU proceeded with interest rate increases, in an effort to contain inflation. ECB raised its interest rate on the main refinancing operations (MRO) from -0.50% to 2.50% in 5 consecutive meetings since July 2022. ECB estimates that interest rates have to continue increasing at a steady pace until they reach at levels that are sufficiently restrictive to ensure a timely return of inflation to its 2% medium-term target.
-Greek economy showed resilience despite the increased uncertainty
Greek economy in 2022 continued its good performance, growing at a steady pace while benefiting from private consumption, investments and the revival of tourism which is closely tied with country’s economic recovery and growth. Private consumption pick-up is consistent with triggering spending among households that had been postponed during the pandemic. The economic climate index in 2022 showed resilience, falling by only 0.9 points (to 105.7 in 2022 against 106.6 points in 2021), when correspondingly in the Eurozone the drop was 9.3 points (to 101.5 from 110.8 units in 2021). Inflation rose significantly mainly due to soaring energy and food prices, affecting the real disposable income.
- GDP growth rate is expected to decelerate mainly due to economic activity slowdown in the Eurozone and the weakening in household consumption on the back of heightened inflationary pressures. Prudent use of available funds from Recovery and Resilience Fund will allow the country to become more resilient in a slowdown.
- In January 2023 Fitch Ratings has upgraded Greece's Long-Term Foreign-Currency Issuer Default Rating (IDR) to 'BB+' from 'BB', similar to S&P rating, one notch below investment grade.
10
GDP %
2021
2022 (estimate)
2023 (forecast)
2024 (forecast)
Global
6,2%
3,4%
2,9%
3,1%
Eurozone
5,3%
3,5%
0,9%
1,5%
Europe
5,4%
3,5%
0,8%
1,6%
Greece
8,4%
5,5%
1,2%
2,2%
Inflation
% change
2021
2022 (estimate)
2023 (forecast)
2024 (forecast)
Global
4,7%
8,8%
6,6%
4,3%
Eurozone
2,6%
8,4%
5,6%
2,5%
Europe
2,9%
9,2%
6,4%
2,8%
Greece
0,6%
9,3%
4,5%
2,4%
Data: IMF, European Commission
-High volatility in oil price and the euro dollar exchange rate
Russia’s invasion in Ukraine and the ensuing EU and US oil sanctions against Russia caused high volatility in the price of crude oil in 2022. The price of crude oil in 2022 followed an upward trend from $77,78/bbl on 31/12/2021 to $85,91/bbl on 31/12/2022, with the average price reaching $99,04/bbl from $70,95/bbl in 2021. Crude oil price spiked to $125/bbl in 2021.
The average price of jet fuel (JET FOB MED) increased by 80% in 2022 compared to 2021. The jet fuel crack spread increased significantly, reaching an all-times high level.
USD appreciation during 2022 disrupted international trade denominated in USD. Euro currency appreciated in the last quarter of 2022 following rising interests’ rates by the ECB and the subsequent implementation of quantitative tightening policies by the authorities. USD strengthened against the Euro with the exchange rate standing at 1,0666 on 31/12/2022 compared to 1,1326 on 31/12/2021. The average euro/dollar exchange rate in 2022 stood at 1,0532 compared to 1,1827 in 2021.
11
Airline Sector Overview in Greece and Europe
-Passenger traffic recovered over the course of the year
Aviation industry recovered a significant part of its losses, caused by the pandemic outbreak due to strong demand. The first couple of months were greatly affected by the highly contagious Omicron variant, while Russian invasion in Ukraine at the end of February, created only a short-term instability in the outlook for the summer period. Global air passenger traffic regained momentum and continued to recover from May onwards. After two years, which were heavily affected by the pandemic, the accumulated desire for travelling, combined with the lifting of travel restrictions, low unemployment rates and the significant increase in households savings during the previous years contributed to a significant recovery in total passenger traffic and strong pre-sales of tickets for the summer period.
-Global air traffic exceeded two-thirds of the respective pre-pandemic levels
Airline sector in 2022 showed a significant recovery in total capacity offered, reaching 71,9% of 2019 Available Seat Kilometers, a 39,8% increase compared to 2021. Global air traffic, as measured in Revenue Passenger Kilometers, in 2022 reached 68,5% of the respective pre-pandemic levels, 64,4% higher compared to 2021, according to IATA. Load factor reached 78,7%, 3,9 percentage points lower compared to 2019.
Within this complex business environment, according to IATA's latest forecast, the industry is expected to narrow its losses to $6,9 billion from $42 billion losses recorded in 2021. The yield increased by 8,4% compared to 2021. EBIT margin is estimated at -1,3%.
European airline sector is expected to record losses, totaling $3,1 billion in 2022, with EBIT margin close to -1,3%. ASKs reached 82% while RPKs reached 78% of the pre-pandemic levels.
According to IATA estimates, in 2023 the industry is expected to return to profitability amounting to $4,7 billion, recording a marginal EBIT margin of 0,4%. Marginal profitability of $0,6 billion is expected for European airline sector, with an EBIT margin of 0,6%.
-Flight activity in Greece during the summer period exceeded 2019 levels
Flight activity at all airports in Greece recovered at a faster pace compared to the rest European airports. According to Eurocontrol data, Greece was the only Mediterranean country where total flights exceeded pre-pandemic levels, with the rest of the Mediterranean countries standing at an average rate of 9% lower compared to 2019 flight activity. In August 2022 total flights to and from Greece were 6% higher compared to August 2019, with the rest of the countries in Europe either returning to pre-pandemic levels (Croatia and Portugal) or falling short by an average rate of 8% compared to August 2019.
According to Hellenic Civil Aviation Authority total flights increased by 0,6% compared to 2019.
12
-Inbound tourist growth and extension of Greece’s tourism season
Within this complex environment, Greece managed to gain market share against competing countries by recording higher international passengers’ traffic during the summer period, which continued with increased dynamics in the fourth quarter as well.
Domestic and international traffic for the country reached 63,5 mil. in 2022, marginally lower compared to 2019. International traffic recovered faster, reaching 47,3 mil. passengers, marginally higher than 2019. Domestic passenger traffic reached 16,1 million, covering 95% of 2019 passenger traffic.
% change in passenger traffic compared to 2019
Total Greek Airports
1 st quarter
2 nd quarter
3 rd quarter
4 th quarter
Domestic Traffic
-27,5%
-1,8%
-0,7%
3,5%
International Traffic
-37,3%
-0,2%
5,7%
3,5%
Total Traffic
-32,8%
-0,6%
4,4%
3,5%
Athens International Airport’s traffic reached 22,7 million passengers, exceeding the respective 2021 levels by 84,1% but still below the 2019 levels by 11,1%. Domestic passengers exceeded 2021 levels by 60,3% and international passengers by 98,3%, while compared to 2019 levels, domestic passengers were below by 4,7% and international passengers by 13,9%.
% change in passenger traffic compared to 2019
Athens International Airport
1 st quarter
2 nd quarter
3 rd quarter
4 th quarter
Domestic Traffic
-28,3%
-2,8%
0,2%
5,4%
International Traffic
-39,7%
-13,5%
-7,2%
-5,5%
Total Traffic
-36,0%
-10,3%
-5,0%
-2,3%
Regional destinations recorded the highest recovery in international traffic, during the summer months. The airports with the highest tourist traffic recovery are Aktion, Paros, Santorini, Skiathos, Corfu, Mykonos, Rhodes, Kefalonia and Chania compared to 2019. Thessaloniki Airport recovered 88% of 2019 passenger traffic in 2022. During the first nine months of 2022, according to Bank of Greece data, arrivals from Germany and Great Britain were at the top of total incoming passenger arrivals, followed by arrivals from France, the Netherlands and Austria.
13
The Group in 2022
Business Developments
Robust demand combined with network expansion and fleet growth, following the new aircraft deliveries, contributed to a gradual increase in capacity offered and thus to passenger traffic recovery.
The year started with relatively lower activity and load factors in the first quarter due to Omicron variant and high seasonality. When all the COVID-19 prevention measures were lifted during the second quarter, the Group was able to restore its capacity, thus recorded an improvement in its load factor. Due to strong demand for leisure travelling to Greece, the Group was able to record further improvement in its load factor, exceeding 83% in the third, and seasonally strongest, quarter. Total capacity offered reached 93% of pre-pandemic levels, measured in available seats. The positive momentum has continued in the fourth quarter as well.
In 2022 the Group offered 15,8 million seats, 42% higher compared to 2021, flying 36% more sectors compared to 2021. The load factor stood at 79,8%, 14 percentage points higher than 2021.
The Group carried 12,5 mil. passengers, 73% more compared to 2021, having regained 83% of pre-pandemic levels, 81% in the domestic and 84% in the international flights.
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Selected Operating Figures
2022
% change compared to 2019
1 st quarter
2 nd quarter
3 rd quarter
4 th quarte r
1 st quarter
2 nd quarter
3 rd quarter
4 th quarter
Passengers ('000)
1.502
3.228
4.666
3.069
-41%
-18%
-10%
-9%
Domestic Passengers ('000)
717
1.394
1.832
1.186
-36%
-15%
-14%
-15%
International Passengers ('000)
785
1.834
2.834
1.883
-44%
-20%
-7%
-4%
Available Seats
2.313
4.125
5.557
3.808
-26%
-14%
-7%
-4%
ASKs
2.211
4.301
6.136
4.096
-27%
-16%
-3%
-1%
Total Sectors Flown
15.104
26.379
35.958
23.899
-24%
-15%
-9%
-6%
Load Factor (RPK/ASK)
66,1%
79,2%
83,9%
82,3%
-16,2pp
-2,9pp
-3,8pp
-3,6pp
2019
2021
2022
% change 2022/2021
% change 2022/2019
Passengers ('000)
14.992
7.194
12.465
73%
-17%
Domestic Passengers ('000)
6.297
3.447
5.129
49%
-19%
International Passengers ('000)
8.695
3.747
7.336
96%
-16%
Available Seats
17.855
11.153
15.803
42%
-11%
ASKs
18.596
10.825
16.744
55%
-10%
Total Sectors Flown
115.765
74.343
101.340
36%
-12%
Load Factor ( RPK/ASK)
84,8%
65,5%
79,8%
14,3pp
-5,0pp
-Fleet renewal contributes to increasing efficiency and strengthening competitiveness
The Group has delivered 10 new Airbus A320 neo family aircraft in 2022, having taken delivery of a total of 19 new Airbus A320 neo family aircraft since 2019.
15
Additionally, in 2022 the Group completed the restructuring of its turboprop fleet, with the early redelivery of 8 Q400 type aircraft. The original leasing contracts were expiring in June 2023 and with the new agreement all 8 Q400 aircraft were re-delivered within 2022. At the same time, the Group had agreed within 2021 the purchase of three ATR72-600 type aircraft, delivered in 2022. In addition, the Group agreed with lessors to lease 6 ATR72-600 aircraft on highly competitive terms, out of which one was delivered in 2021 and the rest were delivered in 2022.
Fleet modernization contributed to cost reduction, while further strengthening Group’s competitiveness by upgrading passenger services.
On 31.12.22 the Group's fleet totaled 69 aircraft (of which 55 jets and 14 turboprops).
As part of AEGEAN’s continued efforts to develop service offering for passengers, in 2022 the Group enhanced its onboard travel experience by offering its passengers high-speed inflight internet access, and a rich entertainment platform through its new digital portal, thus further exploiting new fleet’s technological capabilities.
-Establishment of an Aircraft Maintenance, Repair and Overhaul facility and a Flight Training Center
In 2022, AEGEAN has announced the establishment of a Maintenance, Repair and Overhaul facility and a Flight Training Center which will be based in Building 56 of Athens International Airport. The main activities include:
• The Maintenance, Repair and Overhaul facility (MRO), with the development of a technical base of up to 10 bays for various types of aircraft
• The Flight Training Center for pilots and cabin crew members, utilizing up to 7 state-of-the-art full flight simulators for various aircraft types as well as facilities for carrying out special cabin crew training.
The new investment further enhances Group’s competitiveness and technical capabilities, bringing a vast range of services that up to date have been performed abroad whereas at the same time, and upon maturity, it creates a new dynamic and full potential for offering MRO & Flight training to third parties. The investment has a strong “green” footprint, is fully harmonized with the company’s wider sustainability roadmap, but also has a strong social, environmental and national impact.
Impact of COVID-19 pandemic, measures and planning
COVID-19 affected the activity of the Group to a lesser extent, mainly during the 1st quarter of the year where the Omicron variation prevailed. The easing of the pandemic during 2022 along with the extensive vaccinations permitted the lifting of restrictive measures and thus capacity recovery. After two years of various travel restrictions and pandemic containment measures, there was an accumulated desire for travel which has not been realized due to the pandemic. As conditions for travelling improved, demand for travelling increased and thus a significant recovery in passenger traffic and pre- bookings in the industry for the summer season was recorded.
Future resurgence of the outbreak in connection with new variants and mutations and the re-introduction of some or all of the restrictive measures on travel withing the European Union will affect Group’s activity. Moreover, any possible outbreaks of epidemiological data in combination with other exogenous factors may drastically change the demand for travelling.
16
Group’s main priorities continue to be the implementation of the necessary procedures for the protection of the health of passengers and its employees, the flexible and dynamic network and fleet management in order to adapt efficiently to volatile market conditions.
Geopolitical events
The Russian invasion of Ukraine at the end of February has temporarily interrupted the strong course of pre- bookings that started in the beginning of the year. The strong desire for leisure travel, as recorded during the summer season of 2022, was not affected by geopolitical events. The Russian invasion to Ukraine has caused the cancellation of all flights from / to these countries, nevertheless their contribution in the overall flight activity is not considered as material for the Group (less than 3% in total passenger traffic) and the whole market (2% of total passengers’ arrivals).
The indirect consequences, however, led the oil price to record high volatility due to geopolitical instability and EU and US sanctions on oil imports from Russia. The sharp increase in fuel costs affected Group's results, from the second quarter of the year, with the fuel price in 2022 being 77% higher compared to 2021 and 82% higher compared to 2019. Part of the fuel cost increase was offset by derivative products agreed by the Group.
The aviation industry is significantly affected by geopolitical developments which might adversely affect demand and fuel costs and thus flexibility and adaptability to market conditions remain strategic priorities for the Group.
Issues related with climate
The Group, in line with the aviation sector, remains committed towards the sustainability targets that have been set, despite the strong effect of the pandemic during the last 2 years. However, there are several challenges associated with “Green” transitioning.
Within the Fit-for-55 framework, regarding net greenhouse gas emission (GHG) reduction of 55% by 2030, the EU is considering 3 measures in order to reduce aviation C02 emissions. These measures are:
-Revision of the EU ETS (Emissions Trading Scheme), that aims at the gradual and eventually full phase-out of carbon allowances (EU-ETS Allowances), as well as for EU-ETS to continue to apply to Intra-European flights.
-Refuel EU Aviation, which sets specific targets for the use of Sustainable Aviation Fuel (SAF) within the EU (from 2% in 2025 up to 63% in 2050).
-Energy Taxation Directive, that will impose a tax on kerosene (over a transition period up to 2033).
The Group believes that these measures may impact the cost of air travel to a large extent and may have a negative competitive effect to destinations like Greece, which borders and competes with countries that are not being affected by European law.
The above measures, do not take in consideration the overall negative impact on the competitiveness of economies with strong dependence on tourism and seasonality.
The proposal regarding the establishment of a SAF Allowance Mechanism will moderate the increase in fuel costs that will be seen initially, but is not sufficient.
In addition, there is no clarity regarding any measures that would be necessary to address the significant fuel cost increase for member-states with many islands.
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Selected Consolidated Financial Information
The following tables present the financial results of the Group, the Alternative Performance Indicators and the Operating Performance Indicators, which were calculated based on the consolidated financial statements for the years 2022 and 2021.
The Group analyzes the main financial data using Alternative Performance Measures (based on the ESMA Guidelines) used. In addition, the Group evaluates the efficiency of its activity by measuring among others, the Operating Performance Indicators which are used globally in the aviation industry.
Performance metrics should not be construed as substituting for other figures calculated under IFRS, as well as other historical financial ratios.
Selected Indicators
Definition
EBITDA
Earnings before net interest and financial expenses, income taxes, depreciation and amortization
ΕΒΙΤ DA Margin
It is calculated as the ratio of Earnings before net interest and financial expenses, income taxes, depreciation and amortization to total revenue.
RASK (Revenue per Available Seat Kilometer)
It is calculated as the ratio of the total revenue to the total available seats multiplied by the total kilometers covered.
CASK (Cost per Available Seat Kilometer)
It is calculated as the ratio of the total expenses to the total available seats multiplied by the total kilometers covered.
CASK (Cost per Available Seat Kilometer) excluding fuel cost
It is calculated as the ratio of the total expenses minus the fuel cost to the total available seats multiplied by the total kilometers covered.
Passenger Yield
It is calculated as the ratio total revenue to total passengers multiplied by the total kilometers covered.
Load Factor
It is calculated as the passenger kilometers (RPK) to the available seat kilometers (ASK) for scheduled flights. RPK’s is the number of revenues passengers carried multiplied by the distance flown in kilometers.
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Selected Financial ratios and operational performance indicators for fiscal years 2022 and 2021, from the Consolidated Statement of Comprehensive Income.
(amounts in € thousands)
31/12/2022
31/12/2021
Profit/ (Losses) before taxes (a)
141.308,71
(9.345,62)
Depreciation (b)
127.680,73
149.946,57
Financial income (c)
112.385,60
40.173,94
Financial expenses (d)
118.334,92
79.575,49
Earnings before taxes, interest and depreciation (EBITDA) (e) = (a) + (b) - (c) + (d)
274.938,76
180.002,50
Revenue from contracts with customers (A)
1.336.832,34
674.828,30
EBITDA margin = (e)/(Α)
21%
27%
(amounts in € thousands,
unless noted otherwise)
31/12/2022
31/12/2021
Revenue from contracts with customers (a)
1.336.832,34
674.828,30
Other operating income reported
44.602,51
105.628,47
Other operating income excluding non-headline (exceptional) income (b)
44.602,51
13.101,51
Total income (a+b)
1.381.434,85
687.929,81
ASK (Total Available Seat Kilometers in millions) (c)
16.744,38
10.825,75
RPK (Total Revenue Passenger Kilometers in millions) (d)
13.326,94
7.081,90
RASK (in € cents) ((a)+(b))/(c)
8,25
6,35
Passenger Yield (in € cents) ((a)+(b))/(d)
10,37
9,71
Personnel expenses (e)
133.431,17
66.868,55
Depreciation (f)
127.680,73
149.946,57
Consumption of goods and services
973.064,92
533.585,72
Consumption of goods and services excluding non-headline (exceptional) income (g)
973.064,92
503.773,69
Financial income (h)
112.385,60
40.173,94
Financial expenses (i)
118.334,92
79.575,49
Total expenses (e)+(f)+(g)-(h)+(i)
1.240.126,14
759.990,36
CASK (in € cents) ((e)+(f)+(g)-(h)+(i))/c
7,41
7,02
Aircraft fuel (j)
338.915,69
134.241,20
CASK excluding the fuel cost (in € cents) ((e)+(f)+(g)-(h)+(i)-(j))/c
5,38
5,78
Load Factor
79,59%
65,42%
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The Group in 2022 recorded a significant increase of 98,1% in consolidated revenues, amounting to € 1.336.832,3 thousand from € 674.828,3 thousand in 2021, 2,1% higher compared with 2019. Robust demand combined with network expansion and fleet growth, following the new aircraft deliveries, contributed to a gradual increase in load factor, which stood at 79,59%, 14,2 p.p. higher than 2021.
RASK increased significantly due to the increased contribution of last-minute bookings as well as the sales mix differentiation with higher contribution of business and comfort flex fares. RASK stood at € 8,25 cents in 2022, significantly higher than 2021, as well as from € 7,14 cents in 2019, an increase of 16%. Yield was also significantly improved and reached € 10,37 cents from € 9,71 cents in 2021 and € 8,42 cents in 2019.
The other operating income related to flights was also improved due to the new services and products offered.
Operating expenses for 2022 amounted to € 1.106.496,09 thousand from € 570.642,24 thousand in 2021 mainly due to:
1) higher fuel costs as a result of the increase in the price of higher fuel price and an increased consumption as flight activity was restored,
2) the increase in employee benefits which are also related with the gradual restoration of the flight activity and
3) the increase in expenses related to airports and ground handling charges which are also related with traffic and activity recovery.
More specifically, the cost of employee benefits amounted to € 133.431,17 thousand in 2022 from € 66.868,55 thousand in 2021 mainly due to the increase in the number of flights (+ 36,3%) and block hours (+ 53,7%).
Following the geopolitical crisis in Ukraine and the subsequent spike in fuel price, Group’s results had been significantly impacted. The average fuel price in 2022 was 77% higher than the fuel price in 2021 and 82% higher than 2019. Part of the fuel cost increase was offset by derivative products agreed by the Group. In total, fuel costs amounted to € 338.915,69 thousand in 2022 compared to € 134.241,20 thousand in 2021.
Consumption of goods and services, excluding fuel costs increased by 71,6% and amounted to € 634.149,23 thousand from € 369.532,49 thousand in 2021, mainly due to flight activity recovery.
EBITDA amounted to € 274.938,76 thousand, 53% higher compared to 2021 and 2,1% higher than in 2019, due to effective management of the network, the fleet and the cost structure.
Depreciation expenses amounted to € 127.680,73 thousand, down from € 149.946,57 thousand, while the interest regarding leases (IFRS 16) and loan obligations amounted to € 42.326,50 thousand.
In the fourth quarter, the Group proceeded with the earlier partial repayment of its stated guaranteed Bond Loan agreed in 2020 with the four systemic Greek Banks, under the utilization of the COVID-19 Enterprize Guarantee Fund. The Company in January 2023 has notified the banks that the outstanding balance of 68,500,000 euro million will be fully repaid on 15 March 2023.
CASK, excluding fuel costs, stood at € 5,38 cents, from € 5,78 cents in 2021, while including fuel costs CASK stood at € 7,41 cents from € 7,02 cents.
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Profit before taxes for 2022 amounted to € 141.308,71 thousand compared to Losses of € 9.345,62 thousand in 2021. Profits after taxes for the Group amounted to € 106.778,71 thousand from Profits € 5.069,16 thousand in 2021. It is noted that total non-headline (exceptional) income of €62,7 mil which include the state aid amount net of the warrants valuation and a provision related to the restructuring of the fleet was recognized in 2021.
The Group recorded a profit of € 13.585,42 thousand in the fourth quarter of 2022 for the first time in its history as a result of passenger traffic growth, the increase in revenue per seat and the efficient capacity investment in its key base in Athens and in the region. Consolidated revenue in the fourth quarter increased by 14,6% compared to the fourth quarter of 2019. In 2022 the Group recorded for the first-time profitability higher than that recorded in the nine-month period. The third quarter remains the strongest seasonally quarter, in which the Group records most of its revenue and profitability, always determining the result of the year. However, the positive result of this fourth quarter highlights the strong momentum for the Greek tourism product and starts to pay-off Group’s continuous effort during the previous years to extend the tourism season.
2022 as a % of 2019
First Quarter 2022
Second Quarter 2022
Third Quarter 2022
Fourth Quarter 2022
Total Year 2022
Available Seat Kiolmetres (ASK)
73%
84%
97%
99%
90%
Revenue
70%
94%
111%
115%
102%
Earnings before tax
-
56%
123%
-
132%
In 2022, the Group strengthened its capital base, by further improving its equity. Total Equity stood at € 348.102,22 thousand on 31.12.2022 from € 328.425,11 thousand on 31.12.2019.
Net debt (including IFRS 16 liabilities) amounted to € 477.603,05 thousand on 31.12.2022 from € 286.040,68 thousand on 31.12.2021. Excluding IFRS 16 liabilities, the Group shows net cash of € 259.716,10 thousand on 31.12.2022 from € 128.192,83 thousand on 31.12.2021.
Cash inflows from operating activities after lease payments amounted to € 223.180,22 thousand from inflows of € 111.617,46 thousand in 2021. Within 2022 the Group paid € 75.805,82 million for asset purchases and aircraft advances.
Cash and cash equivalents amounted to € 527.901,17 thousand on 31.12.2022 from € 474.393,59 thousand on 31.12.2021.
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- Prospects, Key Risks and Uncertainties.
- Prospects and Strategy of the Group for 2023
First signs for 2023 summer season are promising with demand for leisure travel remaining strong. Greece continues to capitalize on the strong momentum it developed in 2022, being among the top countries of interest for leisure travel. According to first estimates, passenger traffic at all Greek airports is expected to exceed 2019 levels, with total capacity offered to remain significantly higher than pre-pandemic levels.
In AEGEAN, this dynamic is evidenced from higher pre-sales, which during the first two months of the year exceeded the pre-pandemic levels.
Passenger traffic in January and February 2023 increased significantly compared with the same months of 2019, with international traffic being the key driver for this growth.
As a % of 2019
January 2023
February 2023
Available seats
107%
105%
International Passengers
114%
113%
Total Passengers
105%
102%
In an environment where competition becomes more intense, AEGEAN’s strategic direction to invest in the differentiation of its product becomes more crucial and confirms its importance as premium quality tourism products and innovation seems to be at the top of the preferences of passengers. In 2023 the Group plans 60% of its aircraft fleet to consist of new technology aircraft contributing to its cost structure efficiency and its ability to provide higher quality of services offered.
AEGEAN continues to invest in 2023 in its key hubs in Athens and Thessaloniki, strengthening its existing network during the summer and winter seasons, essentially investing in the extension of the tourist season. In 2023, the Group plans to start its summer schedule by one month earlier, expanding its network and further increasing frequencies in existing and new markets. At the same time the new lounges and the new A320 neo family fleet with which the Group operates its schedule, enhance the travel experience and the quality of the product offered.
In 2023 the Group plans to operate, adding new destinations and offering a total of 18 million seats, with 11 million international seats, 2 million more compared to 2022 and 800 thousand more than 2019. The Network will cover 46 countries, with 264 routes to 161 destinations from a total of 8 bases.
However, in an environment where geopolitical balances have been disrupted, energy and fuel costs have risen, and inflationary pressures are affecting household disposable income, vigilance, flexibility and adaptability remain priorities.
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Risk factors that may affect the business and financial situation of the Group
1. A deep and extended recession in Greece and the countries where the Group operates will negatively affect demand for leisure travel,
2. Rising cost of living and energy costs may adversely affect consumer behavior and demand for air travel, as a significant portion of air travel is discretionary consumer spending.
3. Operational problems in the aviation services chain, mainly in Europe, leading to flight cancellations and delays poses a major challenge affecting product quality.
4. Possible outbreaks of epidemiological data or possible new mutations with consequent new travel restrictions may adversely affect the Group’s operations,
5. Significant increases in fuel costs or a significant appreciation of the dollar against the euro may adversely affect the financial position and operating results of the Group,
6. Any imposition of additional environmental taxes or other charges and the inability to pass that cost on to the end user may adversely affect the Group.
- Subsequent Events After the Financial Year 2022
On January 19, 2023, Olympic Air transferred its participation (of 45,45%) in Aegean Cyprus Limited to Aegean Airlines S.A..
In January 2023 the Company has notified the four systemic Greek banks that the outstanding balance of 68.500.000 euro million related to the syndicated bond loans of €150 million that AEGEAN has received in October 2020 will be fully repaid on 15 March 2023.
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2.2 Key Risks and Risk Management
Foreign Exchange Risk
The Company incurs a substantial portion of its expenses, such as aviation fuel, aircraft lease expenses, distribution costs, spare parts, maintenance expenses and aviation insurance premiums in U.S. dollars, whereas it generates most of its revenue in euro. Appreciation of the Euro versus the U.S. dollar positively impacts Group operating profit as the euro equivalent of the U.S. dollar operating expenses decreases, while depreciation of the Euro versus the U.S. dollar negatively impacts the Group operating profit. Despite the foreign exchange risk hedging policies, substantially adverse movements of the U.S. dollar could potentially have a material negative impact on the business activity, the financial position and the operating results of the Group.
As at 31.12.2022, the Group had entered into forward contracts to hedge 45% and 11% of its estimated needs in US dollar for 2023 and 2024, respectively . At 31 December 2021, the Group entered into agreements to hedge the 31% and 30% of its estimated annual US dollar needs for 2022 and 2023, respectively. Note 3.23.
Interest Rate Risk
The Group is exposed to interest rate fluctuations risk through its bank deposits as well as through the aircraft leases agreed on a floating interest rate. The Group policy is to continuously monitor its exposure to cash flow risk from interest rate fluctuations relating to its aircraft leases. At 31 December 2022, the Group maintained its hedging accounting for covering its interest rate risk from four (4) aircraft leases, expected to be delivered within the period 2023. Note 3.23.
Jet Fuel Risk
The Group is exposed to the fluctuations of oil price which has a direct impact on the jet fuel price. To manage this risk, the Group enters into derivative agreements on oil products to hedge part of its projected jet fuel needs. At 31 December 2022, the Group maintained derivative contracts for the purchase of aircraft fuel covering 49% of the projected fuel needs for 2023. At 31 December 2021, the Group maintained derivative contracts for the purchase of aircraft fuel covering 44% and 6% of the projected fuel needs for 2022 and 2023, respectively. Note 3.23.
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Credit Risk
The Group monitors its trading receivables on a regular basis, to be protected against credit risk, and whenever needed, it assesses their timely collection. This risk in the current circumstances has not increased in relation to the past.
Liquidity Risk
The prudent management of liquidity risk supposes sufficient cash balances. The Group manages the risk by maintaining adequate cash and cash equivalents, securities of immediate liquidation and sufficient credit lines from the suppliers, always align to its operational, investment and financial needs.
Related Parties’ Transactions
The Company’s transactions with related parties, according to IAS 24, are presented in the below table:
2022
Revenue
Expenses
Receivables
Payables
Olympic Air
20.409,54
46.932,26
3.264,53
545,46
Aegean Cyprus
22,90
1.668,27
0
0
Anima Wings
1.541,73
701,76
540,99
25,34
Hellenic Aviation Maintenance Center
0,30
0
0,33
0
Autohellas Hertz Group
1.404,50
1.416,46
213,00
93,25
Other related parties
2.685,74
2.394,21
39,02
143,90
2021
Revenue
Expenses
Receivables
Payables
Olympic Air
75.212,24
181.943,54
2.538,21
0
Aegean Cyprus
191,07
2.931,67
0
155,84
Anima Wings
156,57
36,99
37,58
0
Autohellas Hertz Group
801,09
1.197,76
135,69
211,97
Other related parties
66,18
601,66
13,22
95,18
The Company Directors and Board of Directors’ members remuneration for the period 1/1-31/12/2022 was € 4.283,35, while the amount for the Group was € 4.718,78. As of 31.12.2022, the outstanding obligations both for the Company and the Group amounted to €1.069,20 thousand. There were no outstanding receivable balances from the Directors or the Board of Directors members neither for the Company nor for the Group.
The Company Directors and Board of Directors’ members remuneration for the period 1/1-31/12/2021 was €1.452,66, while the amount for the Group was €1.538,47. As of 31.12.2021, no outstanding obligations of the Company towards the Director’s existed, while the outstanding obligations of the Group amounted to €5,69 thousand. There were no outstanding receivable balances from the Directors or the Board of Directors members neither for the Company nor for the Group .
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2.3 Non–Financial Information
This non-financial information Report (statement) includes the information related to the performance of “Aegean Airlines S.A.” and its subsidiaries, Olympic Air S.A., AEGEAN Cyprus Limited and Anima Wings Aviation SRL (hereinafter jointly with the Company referred to as “the Group”), in accordance with article 151 of Law 4548/2018 and section 7 “non-financial information Report (statement)” of circular 62784/2017 and pursuant to the provisions of Law 4403/2016.
Business Model
The Group operates in the sector of aviation transportation, providing services of air transportation for passengers and cargo with domestic and international, scheduled and non-scheduled flights (charter flights), in short and medium haul range. Moreover, the company provides airline related services of all kinds, as well as technical support and ground handling aircraft services.
Sustainable development, social contribution and engagement in collective goals that promote social prosperity and protect the environment are sustainable practices of utmost importance for the Group in its day to day business, since inception.
The Group focuses on issues that reflect the important economic, environmental and social impacts it creates throughout its value chain and consequently to all of its stakeholders. The Group’s basic principle is to engage in dialogue with its stakeholders, as they are defined based on the company’s nature of operations and the impacts the company has on them, as well as how these stakeholders influence the company overall.
The following graph provides a description of how the Group transformed its business resources (inputs) into results (outputs), via the implementation of its business operations.
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27
Policies
The Internal Operation Regulation was revised as per the 14.07.2021 decision of the Board of Directors and has the minimum content referred to in Article 6 of L. 3016/2002, as currently in force, and is in accordance with the corporate governance statement and the Corporate Governance Code, adopted and applied by AEGEAN. The Internal Regulation of Operation includes the following:
• Code of Professional Conduct
• Procurement Code of Ethics and Conduct
• Human Rights Policy
• Conflict of Interest Management Policy
• Sustainable Development Policy
• Suitability Policy of the Members of the Board of Directors
• Training Policy of the members of the board of directors, the executives, as well as other executives of the Group
• Regulatory Compliance Policy
• Policy & Procedure for the Periodic Evaluation of the Internal Control System
• Privileged Information Management and Public Information Policy
• Related Party Management Policy
• Transaction policy of persons with managerial duties and persons with close relations with them
• Policy and Procedure of adequate and effective shareholder engagement mechanisms
• Whistleblowing Policy
• Risk Management Policy
• Organizational Health & Safety Policy
• Environmental Policy
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Sustainable Development issues – Environmental, Social and Governance (ESG)
The Group fully integrates the principles of sustainable development since they are the basis for its dynamic and sustainable development, as well as its successful response to the challenges faced by modern enterprises.
The Group has assessed and prioritized the material issues of its operations, in order to efficiently and systematically manage its sustainable development. The issues are evaluated based on the guidelines of the Global Reporting Initiative (GRI Standards) guidelines - a significant tool in the development of the annual action plan, as well as the content of the Sustainable Development Report. In addition, the Group systematically records the expectations and requirements of the stakeholders, and seeks to effectively respond to them.
Pillar Ε : Environmental
A responsible attitude towards the environment is a priority for the Group. An integral part of the Group’s overall policy is the full compliance with the applicable legislative requirements in the conduct of any corporate activity, as well as the ongoing effort to improve its environmental performance for minimizing its environmental footprint.
The Group's sustainability policy validates the management commitment to protecting the environment through adoption of appropriate and best practices, public and employee awareness campaigns as well as the support of organizations which are active in the environmental protection sector.
Impacts
Due diligence policy and other policies
Climate Change and Greenhouse Gas Emissions
The Group recognizes the fact that the climate change impact is one of the greatest challenges for the global community. Given that air transport contributes to 2% of total carbon dioxide emissions, the Group launched a sustainability program which starts with actions such as the reduction in fuel consumption, efficient operational and fleet management, recycling materials, reduce noise and replacement of the existing fleet with new A320neo and A321neo family aircraft, which significantly reduce carbon dioxide emissions. Moreover, the Group explores potential use of sustainable aviation fuels on a regular basis, making it sustainable both: practically and financially. The Group records fuel consumption and the produced emissions based on the aircraft logbooks and with the help of the operational software systems. These procedures are in full compliance with the EU Emissions Trading System Directive (EU ETS Directive 2003/87/EC) and all subsequent updates and additions. To this end, the relevant reports and procedures are verified by the competent external auditors.
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The Group is systematically considering the use of sustainable aviation fuels on its aircraft, and from 2022, the first program for the systematic use of Sustainable Aviation Fuels (SAF) on flights in Greece has been implemented in cooperation with the ELPE Group. More specifically, the Group uses SAF on all flights departing from its base in Thessaloniki, making it the first Greek airline and one of the few in Europe to regularly operate flights using sustainable fuels. Under this agreement, the two organizations pave the way for timely adapting our country to the objectives of the forthcoming European legislation for the mandatory use of 2% SAF in 2025 on all flights from EU airports. Moreover, they lay the foundation for the creation of the necessary conditions that will put the country on the map of sustainable aviation.
Noise
AEGEAN carries out a number of measures to reduce noise pollution caused by its operational activity.
The new A320neo family aircraft reduce noise pollution by almost 50% compared to the previous generation aircraft, which has a direct positive impact on passengers, airports and residents in surrounding areas. In addition, the crew fully complies with airports’ instructions regarding landing and take-offroutes, directions and angles to reduce the noise impact on the environment.
Although AEGEAN aircraft noise emission level is less than the strict requirements laid down by the ICAO, the Group examines further measures to reduce noise impact, such as the reduction of night flights, the use of specialized technology, satellite navigation systems, etc.
Environmentally Sound Management (ESM) of Waste
Environmental policy, as well as all waste management related procedures are in full compliance with the regulatory and legislative framework. In accordance with the ISO 14001:2015 certified Management System, the Group implements recycling and sound waste management daily. Recycling is an issue of key importance, therefore, as the Group has designed an in-flight recycling program separating 4 materials. On the ground, AEGEAN makes every effort in order to minimize the use of consumables and recycle waste. As far as organic waste is concerned, in collaboration with the Athens International Airport (AIA), the Group implements a waste composting program.
The nature of the Group's operations makes the use of chemical products necessary, but the procedures are strictly governed by the relative frameworks, thus ensuring sound management.
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Pillar S: Human Resources, Society and responsible market activity
Human Resources Issues
Human Resources are at the center of the Group’s operation, as the evolution of the employees is interrelated with the evolution of the Group itself. Employees are a key pillar for the Group to achieve its business goals, which is why the management works systematically to ensure the attraction and retention of talent, their training and development, the provision of equal opportunities in the work environment, and the provision of additional benefits for all.
Moreover, the Group, contributes decisively towards creating value for society, by providing employment prospects in Greece and the local communities, support for local economies and the employability of young people
Impacts
Due diligence policy and other policies
Employee Training and Development
Through its history of operation, part of the Group's strategy has been to enhance and develop its employees through appropriate professional training and technical expertise. Training needs arise in areas of knowledge, skills, experience or even personal abilities, which are presented as workplace behaviours.
In the context of developing its human resources, the Group provides a range of training programs to foster employees' professional competences. As a consequence, it creates a positive impact, forming a working environment that recognizes the employees personality and their contribution and supports the on- going development of every employee.
An additional important aspect of employee training is related to the development, implementation and maintenance of a safety program which conforms to the relevant international standards of ICAO (International Civil Aviation Organization) and IATA (International Air Transport Association) as well as related practices.
Assessment and promotion
Since 2021, the Group implemented a comprehensive assessment process for all its employees. Employees are part of an annual performance and development assessment process that applies specific criteria aligned to modern standards, to encourage and support progress and professional skills development. The Group has put in place specially designed Assessment Centers in order to recognize the dynamics of employees and encourage their development. This procedure makes
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it possible to define how ready the candidates are to undertake more demanding or leadership positions in the near future.
Health and safety at work
The Group recognizes its employees’ contribution to its daily operation and to provision of quality services and in this context ensures the creation of a safe and healthy workplace. To protect Health and Safety, the Group is not only limited to the compliance and observance of the applicable legislative framework, but also extends to the adoption of best practices and training and awareness activities. All the aforementioned issues are coordinated and systematically monitored by the Occupational Health and Safety Management System, certified according to the international standard ISO 45001:2018.
Diversity, Equal Opportunities and Human Rights
The Group respects human rights, supports employee diversity (age, sex, nationality, religion, disability, specific skills, sex orientation, etc.) and operates towards all of its employees with respect. It condemns all forms of child, forced or compulsory labor and has developed policies and procedures for the defense of human and labor rights as defined in the “International Labor Organization's” declaration on Fundamental Principles and Rights at Work. As an employer, the Group contributes towards improving the standard of living of its employees through full and safe employment and decent work. It ensures excellent working conditions; it staffs and maintains qualified personnel in accordance with the principles of equal treatment, without discrimination and provides merit-based development. Equality and inclusion are basic and non-negotiable principles of the company and are crucial elements for enhancing the productivity of the Group and the well-being of its employees.
Social contribution
Sustainable development, social contribution and engagement in collective goals that promote social prosperity and protect the environment are sustainable practices of utmost importance for the Group in its day to day business, since inception. Today, when the challenges regarding society and the environment are becoming all the more acute, the responsibility of entrepreneurship is even greater, since businesses cannot be successful when the society around them is failing.
In this context the Group implements an extensive plan of social responsibility actions, focusing on people and the environment, and at the same time when the challenges call, places its human and financial resources at the disposal of the society and the authorities.
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Τ he following main pillars constitute the basis for our social contribution:
-Caring for the needs of the society and the vulnerable social groups.
-Supporting the young people through actions and initiatives focused on education.
-Contributing to cultural institutions and bodies.
-Supporting the national sports teams.
-Actively participating in partnership with tourism agencies to promote tourism in Greece.
Impacts
Due diligence policy and other policies
Social contribution
Society
Social contribution constitutes a fundamental principle of the Group’s philosophy, by aiming to support vulnerable social groups, as well as the work of significant Non- Governmental Organizations (NGOs). With an extensive network of destinations in Greece and abroad, AEGEAN supports NGOs and civil society organizations that implement actions in Greece, by offering free tickets and/or cargo transportation in order to facilitate their work.
Some of the beneficiaries are the following:
• SOS Children's Villages of Greece
• ELEPAP (Hellenic Society for Protection & Rehabilitation of Disabled Persons)
• Make a Wish - Greece
• Together for Children
• Doctors of the World
• Doctors Without Borders
• Hellenic Rescue Team
• Cyber Crime Unit
Indicative actions:
The Group supports the “SOS Children's Villages Greece” since 2008, in a joint action with its passengers. When passengers issue their ticket from the company’s website,
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they are given the option of donating 2 euros for every transaction. For every contribution, the Group offers additionally 2 euros.
Since 2008 until 2022, a total of 738,509 passengers responded to our call, by contributing a total of €1,484,837. Along the corresponding financial support added by AEGEAN, a total amount of €2,924,537 has been raised and offered to “SOS Children's Villages Greece”.
Miles donation through the Miles+Bonus reward program to SOS Children's Villages of Greece, Together for Children and Ark of the World.
During Christmas, AEGEAN's employees volunteer team, together with the Basil & Elise (B&E) Goulandris Foundation, traveled around Greece offering gifts and moments of joy to more than 350 children and elderly people.
More than 130 employees- members of “AEGEAN’s Santa Crew” traveled at the same time to Thessaloniki, Heraklion, Chania, Rhodes, Alexandroupolis, Ioannina and Corfu, offered gifts they have wrapped themsleves and handcrafted Christmas ornaments and visual creations, inspired by the Foundation's Art Collection.
Education
With a new 3-year Scholarship Program for 120 young aviation enthusiasts, AEGEAN is creating the next generation of pilots in Greece.
AEGEAN offers the opportunity to 120 young aviation enthusiasts, for the next 3 years, to obtain a professional civil aviation license and start their career, as future captains at AEGEAN and Olympic Air by initiating once again a new Pilot Scholarship Program. The first Pilot Scholarship Program launched successfully in 2018.. With this CSR initiative, of a total value of more than 7 million euros, AEGEAN wishes to support young people who dream of becoming pilots, to make their dream come true as the scholarship program is covering most of the total cost required to obtain their license.
Aircraft Maintenance Engineer Scholarship Program
AEGEAN Aircraft Maintenance Engineer Scholarship Program operating in collaboration with the internationally recognized and certified Olympic Air Maintenance Training Organization, offers 40 attendees the chance to complete their full training and obtain the Professional Category B1.1 Degree (Part-66 Aircraft Maintenance License). The Program covers 50% of the tuition fees and ensures professional career.
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"Supporting the Youth" program
For 6 consecutive academic years (2013-2018), AEGEAN and Olympic Air stood by the students and their families. The program was addressed to all newly admitted students, studying in higher academic institutions, far from their place of residence, and coming from families with limited income.
A total of 1,500 students will receive more than 55,000 tickets, exceeding the value of 3.4 million euros. The program is valid until the graduation of the last beneficiaries in 2024.
We regularly support student competitions:
• “Economia” – student competition organized annually.
• Student competition for Corporate Social Responsibility “Nikos Analytis”, organized by the Greek Network for CSR.
• TEDx events in Greece.
• Center for Talented Youth (CTY Greece) of Anatolia College.
Culture
We support cultural institutions and their activities overtime and provide passenger tickets and cargo transportation for the convenience of their travel needs and the programs they implement. We are lifetime sponsors of Benaki Museum, Museum of Cycladic Art, Athens and Thessaloniki Concert Halls, International Film Festival and Thessaloniki Documentary Festival, Onassis Foundation, National Opera of Greece, National Theatre, Athens and Epidaurus Festival, National Museum of Contemporary Art, Cultural Conference Center of Heraklion. Moreover, we support an exceptionally high number of cultural events throughout Greece and Greek communities in foreign countries.
Tourism
We work closely and we contribute to communication programs, with GNTO (Greek National Tourism Organization), with MARKETING GREECE, with SETE (Association of Greek Tourists Business), with ADDMA (Athens Development and Destination Management Agency), with the Regions and the Municipalities, for the implementation of advertising campaigns. Furthermore, we support the travel needs regarding the familiarization trips organized by each body, for the transportation of journalists, bloggers, vloggers, etc. who visit our country.
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In addition, BLUE magazine - offered on our aircraft- accompanies our passengers and presents unique special features and guides for destinations in Greece and abroad.
Sports
We support Greek sports, and we stand by the national efforts of our athletes. In this context we firmly support:
- SEGAS as the major sponsor and official sponsor in the organization of the Athens Classic (authentic) Marathon,
- The National Basketball Teams and the Hellenic Basketball Federation for their transfers.
AEGEAN is the exclusive airline of the Hellenic Basketball Federation since 2014 – we carry our players of the national team to the top sports events, where they gain significant distinctions. In addition, on their Eurobasket 2022 journey, AEGEAN dedicated to the national team a brand new A320neo aircraft with the players' faces adorning its exterior.
Responsible market activity
Flight Safety, Business Continuity and Emergency Response
Flight safety is a top priority for the Group which is intertwined with its sustainable operation. The Group implements the SMS (Safety Management System), which is a key element of our responsibility and safety management process. The system creates the preconditions for the safety policy we apply and determines how we manage the safety of our operations as an integral part of our overall activities.
Business continuity
Business continuity is of utmost significance to the Group. The type and complexity of the operations call for a high level of operational readiness. A risk plan with the respective safeguards per risk is prepared and evaluated annually in order to manage them adequately. In addition, particular emphasis is placed on precautions aimed at preventing the occurrence of a potential risk.
Passengers
Quality product and passenger care
The Group offers high-quality services to its passengers at all travel stages. At the same time, by acknowledging the diverse needs of its passengers, it has adapted its offered services at all stages of the journey, thus attesting its commitment to provide high-
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quality services that correspond to the needs of its customers. Special reference should be made to the services that provide technologically advanced options to the traveler, thereby saving time and hassle during airline procedures. Aimed at satisfying its customers’ needs and improving their experience, it has developed and implemented a comprehensive quality management system.
New services introduced in 2022
1. AEGEAN Pass
A bundle of tickets at fixed price
2. WiFi on board & free entertainment platform
WiFi service along with a free entertainment platform was launched in February 2022 at neo aircraft
3. Extra Schengen business lounge
New business lounge at Athens International Airport, at extra Schengen area
4. Upcycling
Goods made from vests and old uniforms are sold through Shop in the clouds service on board
5. Athens Intra Schengen Lounge renovation
The AEGEAN Business Lounge at area B within the Schengen area of Athens International Airport "El. Venizelos" has been renewed, aesthetically and functionally.
6. genAIRation AEGEAN
A holistic approach that includes, among other things, a product offering specially designed for our young passengers between 18-25 years of age
Flight delays
The Group strictly enforces the European legislation regarding compensations, while its standard practice is to provide free tickets to passengers whose flight has been significantly delayed. In particular, in case of delays of more than one hour for a domestic flight and more than two hours for an international flight for which the Group is responsible, the latter provides a free ticket to the passengers of that flight.
Air transport of people with disabilities or reduced mobility
The Group is harmonizing its processes with and follows Regulation 1107/2006 of the European Parliament and of the Council of 5 July 2006 on the rights of persons with
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disabilities and persons with reduced mobility when traveling by air. As of 2019, the company's website complies with the International Web Accessibility Standard WCAG (World Content Accessibility Guidelines) 2.0 AA level.
Suppliers
The Group has a long list of suppliers, who play a decisive role in its effective operation. The Group’s suppliers are significant stakeholders in achieving the business objectives that will ensure its sustainable development and by extension its competitiveness which not only affects the financial performance of the Group, but also its relationships with all the stakeholders.
The Group applies the Procurement Code of Ethics and Conduct, which applies to the central and technical procurement departments, and describes the company's requirements from its suppliers. The Code is based on the principles of the UN Global Compact, the Universal Declaration of Human Rights, the United Nations Guiding Principles on Business and Human Rights, and the OECD Guidelines for Multinational Enterprises as well as the relevant environment- related practices.
Evaluation of Suppliers/Partners
The Group systematically monitors and objectively assesses its suppliers with respect to their contractual and ethical obligations. In addition, the procurement department staff are responsible for observing and applying the principles of the code of conduct that underpin their relationship. The Group’s code of conduct for suppliers sets the minimum ethical standards and responsible behaviour that must be observed by suppliers that collaborate with the Group during its normal course of business. The Group collaborates with suppliers that conform to the Code's requirements. The provisions of the Code are disclosed to prospective suppliers during their evaluation and if a collaboration agreement is achieved, the suppliers are bound in writing to comply with them.
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Pillar G: Sound Governance and Non-Financial Risks
The Group operates according to the principles of Corporate Governance and has adopted the Hellenic Corporate Governance Code of the Hellenic Corporate Governance Council (HCGC) for the Listed Companies. In this context, the Group implements a number of measures that focus on transparency issues and combating bribery, safety and access to information systems, adequate allocation of employee duties, approval limits at every hierarchical level, complete transparency in procurements, protection of corporate assets, assurance of transactions and protection of personal data.
Combating corruption and bribery-related issues
The Group recognizes that corruption, bribery and fraud undermine the ethical standards of its operation and might as well be in violation of Human Rights, distort competition, hinder distribution of financial resources and its economic development in general. According to the principles of Corporate Governance, we have zero tolerance for corruption and we are opposed to any form of bribery, as defined by the Code of Conduct, which is included in the Internal Operating Regulations of the company.
However, we are continuing our efforts and taking action to ensure that our zero tolerance regarding corruption and bribery will not change. Our daily functions are based on the principles of ethics, transparency and open procedures. In addition, as mentioned above, the Procurement Code of Ethics regarding the Group's expectations from its suppliers, is applied.
The Group operates a platform for monitoring suppliers and customers in order to avoid cooperation with those who are intentionally or unintentionally linked to money laundering. The relevant platform was installed in November contributing to:
• Control of partners, whether they are organisations or individuals.
• Identification of risks in the areas of Political Exposed Persons (PEP), Anti Money Laundering (AML), Sanctions, Regulatory reporting depending on the activities.
• Enhance and support the decision making process of Know Your Customer (KYC) and Know Your Supplier (KYS) workflows.
Personal data protection
Protection of personal data is a legal obligation of the Company, but also an essential component that lays the foundation for establishing relationships of trust with clients. The Company processes personal data in the lawful manner, regarding the rules of confidentiality and the rights of data subjects.
The Group invested in a software platform for the best management of information systems and databases related to the protection of personal data.
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In addition, the Group has established complaint communication channels in accordance with the European Directive 2019/1937 on the protection of persons reporting violations of EU law and is fully compliant with Law 4706/2020 & Law No. 4990/2022 in terms of ensuring anonymity as well as the independence of the person in charge of complaint management.
The Group has set up a specific email address and form as separate communication channels in order to ensure the anonymity of the petitioner / complainant and has appointed a competent executive and complaints committee for the above communications and their management.
Systematic risk identification and management
Risk identification and management involve systematic review of business activities and procedures that carry a potential risk. Identified non-financial and the measures the Group takes to effectively manage them are described below as follows: (p.9)
Main Risks
Main risks and their management
Deviations from the applicable legislation or amendments thereof, which are related to environmental issues or climate change
The Group systematically monitors changes to legislation and takes measures in order to address any new requirements that may arise from these.
Climate Change and Greenhouse Gas Emissions
1. Participation in Emission Marketing and Compensation Systems (EU-ETS, CORSIA, etc)
The Group acquires the legally required gaseous emission permits and purchases additional permits for its flight operations. AEGEAN participates in the European Emissions Trading Scheme (EU ETS), the Swiss Emissions Trading Scheme (CH ETS) and the United Kingdom Emissions Trading Scheme (UK ETS). At the same time, it has developed and implemented the appropriate infrastructure for monitoring emissions and submission of reports.
2. Fleet renewal with new engine technology aircraft
The company continues to deliver A320neo aircraft with Pratt & Whitney GTF engines. The engine’s new technology result in a 15% reduction per flight in fuel consumption and 19% -23% less CO 2 emissions, per passenger seat, in relation to previous generation Airbus ceo aircraft.
3. Flight procedures
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AEGEAN continues to implement flight optimization procedures (Route Optimization), as well as fuel saving practices, in particular during landing and take-off, which are associated with increased fuel consumption. Planning and efficient flight schedule is also of great importance, as it contributes to an improved on-time performance.
Failure to timely determine and manage risks due to changing conditions
In the context of contributing to the ongoing improvement of the organization's level of safety, formal risk identification and risk assessment procedures are conducted. This involves the systematic review of business activities and procedures that carry a potential risk. The objective is to quantify the operational risk, to determine risk acceptance and to develop the appropriate and effective safeguards that are deemed necessary for the proper management of recognized risks at an acceptable level.
In the context of the Safety Management System, the Company has created an Incident Reporting System. The safety information is collected, analyzed and assessed by the safety management team. Consequently, this procedure helps arrive at conclusions that can produce objectives for achieving the common goal, which is to maximize the organization’s level of safety. At the same time, the company’s written commitment supports the justice policy by encouraging employees to report operational risks.
Training in safety issues, which ensures that employees are able to perform safety management tasks in accordance with applicable regulations, is an important factor for the prevention and effective management. Training is adapted according to responsibility and participation in the safety management system of every group it addresses.
Emergency response training
The nature and the operational activities of the Group, impose the development of specific measures and actions in order to maintain business continuity at the highest possible level. The Group has developed contingency management plans that record responsibilities and necessary actions of the executive members involved. Emergency training includes training for: a) emergency response situations and b) unusual situations.
Security threats and breaches in cyberspace,
The Group’s business activity faces significant external threats, both in cyberspace and possible internal breaches of databases and software systems. The Group’s
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databases and software systems
data and systems may be vulnerable to theft, payment fraud, loss, damage and termination due to unauthorized access, security breaches, cyberspace attacks, computer viruses, power loss or other catastrophic events.
A potential electronic security breach could have a negative impact on the customers’ trust towards the Group and lead to flight disruption, negatively affecting its reputation.
A risk plan with the respective safeguards per risk is prepared and evaluated on an annual basis aimed at their adequate management. Particular emphasis is placed on preventive safeguards aimed at preventing the occurrence of a potential risk.
Information systems disaster recovery plan
During the last 2 years, the company has started a new project regarding the design and implementation of a recovery plan (DR - Disaster Recovery). The plan concerns the process of restoring IT systems and infrastructure after a partial or total disaster (natural or voluntary) and is an integral part of the business continuity of the Group.
Indirect or direct accident risks and non-accident risks 1
The Group has proceeded with the rigorous implementation of safety systems and metrics in order to assess their impact on the human body, but also to identify the needs for intervention in all workplaces.
Continuous progress and improvement are linked both to the preventive actions it takes and the experiences the Group derives from any incident and near accident. Staff training is of vital importance in maintaining and further developing an accident prevention culture.
P romotion of the Health and Safety of employees and partners is holistically ensured through the Health and Safety Management System the Group implements.
Information security and data protection
In order to continuously upgrade the level of information security and data protection, the company in 2019 created a special committee in which the participated parties are the Cyber Security Governance Board - (CSGB) as well as the subgroups Cyber Security Senior Management Team (CSSMT) and Security
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Operations Center (SOC), with the sole purpose of the smooth and safe operation of the systems.
Personal Data Protection
A large percentage of direct sales comes from the internet. Consequently, our customer/passenger privacy and the safety of their personal information is a priority of utmost importance. We have invested in processes and systems that protect the privacy of personal information and transactions. In order to offer secure transactions to the passengers that choose to issue their tickets by using a credit card (web site, call center), we created in 2008 the Fraud Prevention Department which aims to:
• Safeguard credit card holders from suspicious transactions.
• Protect the public from suspicious travel agencies.
The Fraud Prevention Department also includes Frequent Flyer Fraud prevention, which aims to make good use of the AEGEAN – Miles&Bonus reward program - and to prevent any informal action. The company is in full compliance with the PCI-DSS (Payment Card Industry Data Security Standard).
The policy related to Personal Data Protection is available on the website of our company.
https://en.about.aegeanair.com/corporate-governance/personal-data- protection/
Safeguarding Human Rights in our Business Operation
P rotection of human rights is a key issue in the training of personnel, as well as partners, providers of ground services on safety issues, travel document checks and vigilance.
Training is carried out with a view to ensuring equality for every passenger, equal treatment and preventing any racist behaviour. An important part of the training is the verification of travel documents, in the context of preventing the movement of illegal passengers and particularly the illegal movement of children and persons under forced conditions (trafficking).
In 2022, we prevented over 20,515 cases of passenger travelling with travel documents of dubious authenticity, to the destination they were attempting to reach.
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Training sessions held in 2022 also focused on management of passengers and their rights (e.g. flight delays, flight cancellations, lost or damaged luggage, etc.), safeguarding of human rights and the corresponding regulations.
Any deviation from the Group's principles and ethical practices by key suppliers
The Group applies systems and controls at preventative and detection level to ensure the proper selection of suppliers, the avoidance of disputed payments, the correctness of payments, as well as their accurate and transparent recognition in the books of the Group companies.
The code of conduct of suppliers and partners foresees the encountering of corruption and bribery conditions in the supply chain and is available on the company website:
https://en.about.aegeanair.com/corporate-governance/codes-and- policies/procurement-code-of-ethics-conduct/
1 Occupational risks are classified based on whether or not the risk results in an accident (Accident and Non-Accident Risks) with the former being divided into Indirect or Direct Accident Risks. Indirect Accidental Risks create the conditions that lead to an accident and include layout, functionality, access - evacuation, environment lighting and temperature of the workplace. Direct Accidental Risks lead to an accident and include natural, chemical and biological factors. Non- Accidental Risks do not lead to an accident, but have a short-term and long-term effect on the employee’s mental and physical health.
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Notifications related to article 8 of the EU Taxonomy Regulation
The European Green Deal set the basis for changes in climate, energy, transport and fiscal policies to reduce greenhouse gas emissions. In order to meet the emission targets, EU through the “Taxonomy Regulation” (EU 220/852) established the framework for the creation of the EU Taxonomy of environmentally sustainable economic activities. The EU Taxonomy requires Financial Market Participants, subject to the Regulation, to disclose how and to what extent their activities are associated with environmentally sustainable economic activities.
The EU Taxonomy Regulation establishes six environmental objectives:
a) Climate change mitigation
b) Climate change adaptation
c) The sustainable use and protection of water and marine resources
d) The transition to a circular economy
e) Pollution prevention and control
f) The protection and restoration of biodiversity and ecosystems
Article 8 of the EU Taxonomy regulation brings an obligation for a Public Interest Entity report the proportion of their 2021 economic activities that are considered Taxonomy-eligible to report (a) the proportion of their turnover derived from products or services associated with economic activities that qualify as environmentally sustainable under Articles 3 and 9; and (b) the proportion of their capital expenditure and the proportion of their operating expenditure related to assets or processes associated with economic activities that qualify as environmentally sustainable under Articles 3 and 9.
The Taxonomy regulation includes the sectors assessed to have the largest climate change mitigation and adaptation potential. The economic activity derived from aviation services is not considered taxonomy eligible as defined in the Climate Delegated Act (2021/2139/EU) and therefore the company declared that in fiscal year 2022 there are no eligible activities classified in EU Taxonomy.
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Results of the above policies and non-financial performance indicators
Environmental
ID ESG
ATHEX 1
31.12.2022
31.12.2021
Direct emissions (Scope 1) 1 (CO 2 ) in tons 3
C-E1
1,131,438
731,046
Indirect emissions (Scope 2) 4 (CO 2 ) in tons 3
C-E2
2,195
1,982
Group Consumption
Total energy consumption (TJ)
15,751
10,179
Total energy consumption (MWh x 10 6 )
C-E3
4,375
2,827
Fuel consumption (%)
99.91%
99.87%
Electricity consumption (%)
C-E3
0.09%
0.13%
Total
100%
100%
Energy consumption from non-renewable sources (%)
100%
100%
Energy consumption from renewable sources (%)
C-E3
0%
0%
Total
100%
100%
1 ESG Information Disclosure Guide of the Athens Stock Exchange (where C: Core Metrics, Α : Advanced Metrics, SS: Sector Specific Metrics)
https://www.athexgroup.gr/el/web/guest/esg-reporting-guide
2 This refers to carbon dioxide (CO2) emissions from the fuel consumption of the aircraft fleet, car fleet and gas consumption in the company's premises
3 Emissions intensity (CO2 ) will be published in Company’s Sustainability Report 2021
4 This refers to carbon dioxide (CO2 ) emissions from electricity consumption in the company's premises.
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Social
ID ESG
ATHEX
31.12.2022
31.12.2021
Stakeholder engagement
C-S1
Yes
Yes
Female employees
C-S2
54%
54%
Employee turnover
Employee voluntary turnover rate
C-S4
10.80%
7.10%
Employee involuntary turnover rate
C-S4
0.50%
0.50%
Human rights policy
C-S6
Yes
Yes
Collective bargaining agreements
C-S7
100%
100%
Employee training expenditure
A-S2
€6,037.85k
€3,291.66k
Labour law violations
SS-S4
No
No
Customer satisfaction
SS-S8
Yes
Yes
Customer grievance mechanism
SS-S9
Yes
Yes
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Governance
ID ESG
ATHEX
31.12.2022
31.12.2021
Board composition
C-G1
Yes
Yes
Sustainability oversight
C-G2
Yes
Yes
Materiality
C-G3
Yes
Yes
Sustainability policy
C-G4
Yes
Νο
Business ethics policy
C-G5
Yes
Yes
Data security policy
C-G6
Yes
Yes
Data security policy
Α-G1
Yes
Yes
Critical risk management
SS-G2
Yes
Yes
Analytical data regarding the above metrics and Non-Financial Information indicators are included in the Group's annual Sustainable Development Report, prepared based on the international sGRI Standards, SASB and UNGC and available on the company website:
https://el.about.aegeanair.com/eythyni/csr-
report/
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2.4 Statement of Corporate Governance
Hellenic Corporate
Governance Code
Explanation / Justification of the deviations from the specific practices of the
Greek Corporate Governance Code
Diversity Criteria
Other than the members of the Board of Directors for the selections of which the company applies the foreseen in the Suitability Policy of the members of the Board of Directors diversity criteria, there are no explicit diversity criteria concerning senior
The Board of Directors of the Company declares that the Company has adopted and fully complies with the existing corporate governance legislative framework in force in Greece and, in particular, according to the Articles 1-24 of L.4706/2020, the L. 4548/2018, the provisions of article 44 of L. 4449/2017 (Audit Committee) as it was amended by the article 74 of L.4706/2020 and the decisions, circulars and the guidelines of the Capital Market Commission, as currently in force.
In this context, the Company by decision of the General Assembly of its shareholders dated 14 July 2021, has amended and updated its internal regulation as it was initially approved by the Board of Directors’ Decision dated 31.03.2007 and revised by the Board of Directors’ decision dated 31.08.2018. In the company’s internal regulation are included above else, the organizational structure, its committees and its units, the characteristics of the System of Internal Controls as well as the procedures and policies the company has implemented. The Company's Rules of Operation include the minimum content referred to in article 14 of Law 4706/2020, as it applies today and is in line with the Company's Corporate Governance statement and the Corporate Governance Code approved and applied by the Company. The summary of the company’s internal regulation is made public in the company’s website, according to article 14 paragraph 2. section b’ of the L.4706/2020.
https://el.about.aegeanair.com/diakybernisi/,
In addition, with the Board of Directors’ decision dated 14 July 202114.07.2021, the company has adopted and implements the new Corporate Governance Code, dated June 2021, that has been prepared by the Hellenic Corporate Governance Council which is a respected authority according to the article 17 L.4706/2020 and the decision 916/7.6.2021 of the Board of Directors of the Capital Market Commission (hereinafter referred to as the “Code”).
This Code can be found at the website of the Hellenic Exchanges S.A. Group at the following address:
https://www.esed.org.gr/en/code-listed
The deviations in relation to the special practices as they are provided by the Code, are mentioned in the following table.
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Special Practice 2.2.15
management with specific gender representation objectives as well as timetables for achieving them.
The company considers a timetable for the adoption of suitable diversity criteria for senior and senior management, while accessing that extra time is going to be needed so that their entactment and implementation can be made feasible, taking into consideration the nature of the Company’s activities. It is estimated that there is no risk from the above deviation, for as long as it is in force.
Composition of Board of Directors
Special Practice 2.2.21
Special Practice 2.2.22
The Board of Directors does not appoint as an independent non-executive Vice- Chairman or a senior independent member one of its independent non-executive members, as this practice has the prerequisite of the Chairman of Board being a non- executive member. In accordance with the provisions of the article 8 paragraph 2 of L.4706/2020, the Board of Directors has appointed as Chairman of the Board one of its executive members and also one of its non-executive members as the Vice- President. In this context, the Board of Directors has appointed two (2) Vice- Presidents non-executive as members of the Board of Directors.
The Vice Chairman Α΄ may substitute the competences of the Chairman of the Board, as stated on the statutes of the Company, when he is unable to attend or impediment. In case of absence or impediment from the Vice Chairman A’, he is substituted by Vice Chairman B’.
The said composition ensures the Board’s efficient and productive operation. After the expiration of the Boards mandate, the company will review where it is deliberate and feasible to fully comply with the above Special Practice.
Remuneration of members of the Board of Directors
Special Practice 2.4.14
There is no specific provision in the contractual terms for all executive members of the Board of Directors in which is envisaged, that the Board of Directors may require the refund of all, or part of the bonus awarded, due to breach of contractual terms or incorrect financial statements of previous years or generally based on incorrect financial data, used for the calculation of this bonus.
In order to fully comply with this Special Practice, the Company examines the amendment of the contracts with the addition of explicit terms for the above and accesses that extra time will be needed. It is estimated that there is no risk from the above deviation, for as long as it is in force. Besides that, according to the remuneration policy for the Members of the Board of Directors, the payment for variable remuneration can be postponed with the decision of the BoD, especially if there are special circumstances that justify this postponement (i.e. the profitability of the company has been affected from an unpredictable event), while the payment of the bonus can be recalled with a decision from the Board of Directors, if the member
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has been sentenced or the elements of the company’s profitability based on the published financial statements are proved to be inaccurate.
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Internal Audit System
The Internal Audit System is defined as the set of internal control mechanisms and procedures, including risk management, internal control and regulatory compliance, which covers on a continuous basis every activity of the Company and contributes to its safe and efficient operation.
Aims:
The Internal Control Audit System aims at the following objectives:
a) consistent implementation of the business strategy, with the efficient use of available resources;
b) identification and management of business and operational risks;
c) efficient operation of the internal audit department;
d) ensuring the completeness and reliability of the data and information required for the accurate
and timely determination of the financial situation and the preparation of reliable financial
statements, as well as the non-financial situation, in accordance with article 151 of law
4548/2018,
e) compliance with the regulatory and legislative framework, as well as company regulations;
f) supervision of the activity of the Company's Executives,
g) control of the transactions carried out by executives and associates of the Company on the
Company’s shares;
h) control of the circulation of the Company's information,
i) ensuring the perfect and effective organization and operation of the Company, in accordance with
these Internal Rules of Operation and the decisions of the Management.
Internal Control Instruments
The following instruments are provided for the performance of effective internal control:
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Results of the Internal Audit System’s evaluation process in accordance with article 1 4, par. 3 section j and par. 4 of L. 4706/2020 and the relevant decisions of the of the Capital Market Commission’s Board of Directors
The Company, by decision of its BoD, assigned to Ernst & Young (Greece) Certified Auditors Accountants S.A.
the assessment of the adequacy and effectiveness of the Internal Audit System of the company Aegean Airlines S.A. and its significant subsidiary, Olympic Air Single Person Societe Anonyme Company of Air Transports, with reference date of 31 December 2022, in accordance with the provisions of section j of par. 3 and par. 4 of article 1 4 of L. 4706/2020 and decision 1 /891 /30.09.2020 of the Capital Market Commission’s Board of Directors as applicable (the "Legislative Framework").
The assurance was carried out in accordance with the audit program included in the decision of the Hellenic Accounting and Auditing Standards Oversight Board (HAASOB), number 040/2022 and the International Standard on Assurance Engagement 3000 "Assurance Engagements other than Audits or Reviews of Historical Financial Information".
Based on the work carried out by the evaluator regarding the assessment of the adequacy and effectiveness of
the Company’s Internal Audit System and its significant subsidiaries, we report that no material weaknesses were
identified.
Internal Audit
The Company has Internal Rules of Operation, which were approved and initially entered into force with the decision of the Board of Directors of 31.03.2007, were revised with the decision of 30.08.2018 of the Board of Directors of the Company, most recently amended, with the 14.07.2021 decision of the Board of Directors, in order to adapt to amendments to the current legislation on corporate governance, including the provisions of L.4548/2018 and article 44 of L.4449/2017 (regarding the responsibilities of the Audit Committee). The Internal Rules of Operation of the
-Audit Committee, which consists of at least three (3) members and is either an independent Committee or a Committee of the Board of Directors of the Company. It consists of non-executive members of the Board of Directors and members that from the General Assembly of the Company’s Shareholders.
-Internal Audit, composing of members who exclusively conduct Internal Audit
- Risk Management and Regulatory Compliance.
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Company have the minimum content referred to in article 14 of L.4706/2020, as in force today and are in accordance with the corporate governance statement of the Company and the Corporate Governance Code adopted and implemented by the Company.
Internal Audit
The Company has an Internal Audit department, which is an independent, objective and consulting activity, designed to add value and improve the operations of the organization. It supports the Company in achieving its goals, by offering a systematic approach to assessing and improving the effectiveness of risk management, internal control systems and corporate governance.
The Internal Audit department monitors the accurate implementation of the legislation, the monitoring of the Company's Articles of Association and all its policies and procedures. The Director of the Internal Audit department develops and maintains a relevant manual of procedures, which covers all aspects of the activities of the Internal Audit and constantly monitors its effectiveness.
The internal auditors are independent in the execution of their work, are not hierarchically subordinated to any other service unit of the Company and are supervised by the Audit Committee. The Internal Audit department of the Company is an independent organizational unit, which reports to the Board of Directors and the Audit Committee, in accordance with the Articles of Association of the Internal Audit department and the Internal Rules of Operation of the Company. Specifically, in accordance with the relevant provisions of these texts, the Board of Directors, through the Audit Committee of the Company, is informed at least on a quarterly basis about the internal audit performed, by submitting reports which refer to the individual internal audit procedures and actions, as well as its findings.
The internal auditor of the Company has been appointed by the Board of Directors andis employeed full-time.A member of the Board of Directors, or executives or relatives of the above, up to the second degree by blood or by marriage, cannot be appointed as an internal auditor. The Company is obliged to inform the Hellenic Capital Market Commission of any change in the persons or the organization of the internal audit within ten (10) working days from this change.
In the performance of their duties, the internal auditors are entitled to be aware of any documents that are absolutely necessary for the performance of the audit. The members of the Board of Directors must cooperate and provide information to the Internal Audit department and the Audit Committee and generally facilitate their work in any way. The management of the Company, as
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it should, provides them with all the necessary means to facilitate their work. It is noted that the provisions of the "Articles of Association of the Internal Audit" of April 2021 do not conflict with the provisions of the Rules of Procedure of the Audit Committee, which were approved by the decision of the Board of Directors of 25.10.2018, amended by 22.04.2019 decision of the Board of Directors, were further updated with the decision of the Board of Directors dated 18.02.2021 and finally amended with the decision of the Board of Directors dated 14.7.2021.
Responsibilities
The Company's Internal Audit department has, indicatively, the following responsibilities:
• Monitors the implementation and continuous observance of the Internal Rules of Procedure and the Articles of Association of the Company, as well as the general legislation concerning the Company and in particular the legal framework of public limited companies and the stock exchange legislation,
• Monitors the commitments contained in the reports and the business plans of the Company regarding the use of the funds raised from the Stock Exchange,
• Controls the legality of the remuneration and all kinds of benefits to the members of the management regarding the decisions of the competent bodies of the Company,
• Reports to the Board of Directors cases of conflict of private interests of the members of the Board of Directors or the executives with the interests of the Company, which it ascertains during the exercise of its duties,
• Informs in writing, as required by law, at least once (1) once a quarter, the Audit Committee and the Board of Directors for the audits performed,
• Attends the general meetings of shareholders and if needed, provides information to the shareholders of the Company during these meetings,
• Provides, after the approval of the Board of Directors of the Company, any information requested in writing by the Supervisory Authorities, cooperates with them and facilitates in every possible way, the monitoring, control and supervision work they perform,
• Takes care of informing the staff about the current legislation concerning their activity.
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Furthermore, the Internal Audit department is responsible for the following:
• Ensuring the compliant representation of the Company's transactions,
• Confirming the reliability and accuracy and ensuring the completeness of the financial and operational information produced and the means used,
• The preparation of a flexible annual audit plan which includes any risk and control point identified by management,
• Assessing adequacy and effectiveness, as well as promoting quality and continuous improvement, control processes and risk management.
With the decision of the 18 February 2014 of the Board of Directors of the Company, the position of Internal Auditor has been taken over by Mr. Menexiadis Marios of Eugenios as a full-time and exclusive employee, who meets the criteria of independence of par. 3 of article 7 of L.3016/2002. Also, he meets the conditions regarding the responsibilities and especially the qualities of the Internal Auditor as they are mentioned in detail in the provisions of articles 7 and 8 of L.3016/2002, as well as in the decision 5/204/14.11.2000 of the Board of Directors of the Hellenic Capital Market Committee, regarding the companies that have listed their shares on the ATHEX, as amended and in force. The curriculum vitae of Mr. Marios Menexiadis has been uploaded on the corporate website.
Mr. Menexiadis Marios is also responsible for the communication of the Company with the Personal Data Protection Authority for the respective issues.
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General Assembly
Operation of the
General Assembly
The Board of Directors ensures that the preparation and conduct of the General Assembly of Shareholders facilitate the effective exercise of the shareholders' rights, who can be fully informed on all matters related to their participation in the Assembly, including the issues on the agenda and their rights at the General Assembly. The Board of Directors makes use of the General Assembly of shareholders to facilitate their substantive and open discussion with the Company.
In compliance with the provisions of L. 4548/2018, the Company posts on its website at least twenty (20) days before the General Assembly, in both Greek and English, information on:
• the date, time and location of the General Assembly of shareholders,
• the basic rules and practices of participation, including the right to include items in the agenda and submit questions, as well as the time limits within which such rights may be exercised,
• voting procedures, terms of proxy representation and the forms used for proxy voting,
• the proposed agenda for the assembly, including draft decisions for discussion and voting, as well as any accompanying documents,
• the proposed list of candidate members of the Board of Directors and their resumes (in case of election of new members), and
• the total number of shares and voting rights as of the date of the General Meeting.
At minimum, the Chairman of the Company's Board of Directors and/or Vice Chairman and Chief Executive Officer must be present in the General Assembly of shareholders, in order to provide information and updates on matters of their duties put forward for discussion and on questions or clarifications requested by the shareholders. The Chairman of the General Meeting must allow sufficient time to take questions from shareholders.
Main powers of
the General Assembly
The General Assembly of shareholders is the supreme body of the Company and is entitled to decide in general on every corporate affair. Its lawful decisions oblige both absent and disagreeing shareholders.
The General Assembly is the only competent body to decide on:
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• Any matter submitted to it by the Board of Directors or by the persons entitled, under the provisions of the Law or the Statute, to cause it to be convened.
• Amendments to the Statute. Such amendments relate to the increase or decrease of the share capital, the dissolution of the Company, the extension of its duration and its merger with another company.
• The election of the members of the Board of Directors and the auditors.
• The approval of the Company’s Remuneration Policy, according to L. 4548/2018.
• The election of the Company’s Audit Committee, as specified in L. 4449/2017 and in the Company’s Audit Committee Operating Regulation.
• The adoption or reform of the annual financial statements prepared by the Board of Directors and the allocation of the net profits.
• The approval, by special open vote, of the total management conducted by the Board of Directors and the discharge of the auditors from any responsibility after the approval of the annual financial statements and after hearing the report on the Board of Directors' actions and the general status of the Company’s corporate affairs. Only Members of the Board of Directors and employees who own shares may participate in the above voting.
• The hearing of chartered auditors about the auditing of the Company's books and accounts they have conducted.
• The issuance of bond loans with a right to profits, according to Article 72 of L. 4548/2018, and convertible bond loans.
• The appointment of liquidators in case of dissolution of the Company.
• The bringing of actions against members of the Board of Directors or auditors, for breach of their duties under the Law and the Statute.
Rights of shareholders
and ways of exercising them
Every shareholder appearing in the records of the entity where the Company’s securities are held may participate and vote in the General Assembly of the Company. The exercise of these rights does not entail blocking of the shares of the beneficiary or any similar procedure. Shareholders having the right to participate in the General Assembly may be represented by a person legally authorized by them.
The rights of the Company's shareholders deriving from its shares are proportional to the percentage of the capital that corresponds to the paid-up
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value of the share. Each share provides all rights specified in L. 4548/2018, as amended and in force, as well as the Company's Statute.
The Chairman of the Board of Directors, the Vice Chairman and the Chief Executive Officer are available for meetings with the shareholders of the Company that have significant holdings and discuss with them any issues related to the governance of the Company. Moreover, the Chairman makes sure that the views of the shareholders are communicated to the Board of Directors.
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Board of Directors
Information on the composition and operation of the Board of Directors
Pursuant to Article 6 of the Company's current Statute, the Company is governed by the Board of Directors, which consists of seven (7) to fifteen (15) members. A member of the Board of Directors may also be a legal entity. In this case, the legal entity is required to designate a natural person for the exercise of the legal person's powers as a member of the Board of Directors. Failure by the legal person to designate a natural person for the exercise of the respective powers within 15 days of the appointment of the legal person as a member of the Board of Directors shall be considered a resignation of the legal person from the position of a member.
The Board of Directors is elected by the General Assembly for a three-year term, which shall be extended until the expiry of the period within which the next Regular General Assembly must be convened after the expiry of its term of office and until the relevant decision is taken. In any case, the term may not exceed a period of four years. The members of the Board of Directors can be shareholders or not and they are always re-eligible and revocable.
The Board of Directors consists of executive and non-executive members, and independent non- executive members.
The role of the members of the Board of Directors as executive or non-executive is defined by the Board of Directors. The independent non-executive members are elected by the General Meeting of the Shareholders or appointed by the Board of Directors in accordance with par. 4 of article 9 of L.4706/2020 and meet the criteria of independence in accordance with applicable law and Suitability Policy Adopted by the Company.
The number of independent non-executive members of the Board of Directors must not be less than 1/3 of the total number of members and at least two (2) non-executive members of the Board of Directors are non-independent. and in case of a fraction, it is rounded to the next integer number.
The Company’s current Board of Directors was initially elected at the Annual Ordinary General Assembly of shareholders held on 17.07.2021 and consists of 12 members of which four (4) independent non-executive, in accordance with provisions of article 3 of L. 3016/2002 and article 5 of L. 4706/2020.
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The Board of Directors convened and formed into a body on 15.07.2021 as follows:
1. Eftichios Vassilakis, Chairman - executive member
2. Α nastasios David, A’ Vice Chairman - non- executive member
3. Panagiotis Laskaridis, Β ’ Vice Chairman - non- executive member
4. Dimitrios Gerogiannis, CEO - executive member
5. George Vassilakis, non-executive member
6. Stella Dimaraki, executive member
7. Konstantinos Kalamatas, independent, non-executive member
8. Achilleas Constantakopoulos, non-executive member
9. Nikolaos George Nanopoulos, non-executive member
10. Natalia Nikolaidis, independent, non-executive member
11. Alexandra Papalexopoulou, independent, non-executive member
12. Nikolaos Sofianos, independent, non-executive member
The elected Board has a 3-year term, which is extended until the expiration of the term within which the next ordinary shareholders meeting must be convened after the expiration of the Board’s term and until the relevant decision is taken which shall not exceed the four years.
Operation
and Responsibilities of the
Board of Directors
According to Article 11 of the Statute, the Board of Directors, acting collectively, is responsible for the management and administration of corporate affairs. It generally decides on any matter concerning the Company other than those which, either by Law or by the Statute, are decided by the General Assembly of shareholders. The responsibilities of the Board of Directors also include the issue of a bond loan, with the exception of convertible bond loans, for which the provisions of Article 3 of the Statute apply, and bond loans with a right to profits, for which the General Assembly is solely responsible. Indicatively and not restrictively, the Board of Directors:
(a) Represents the Company in and out of court.
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(b) Initiates and conducts trials, proceeds to confiscations, pre-notations and mortgages, consents to their removal, waives privileges, lawsuits and legal remedies, proceeds to settlements in and out of court and stipulates arbitration.
(c) Acquires, creates or delegates rights in rem and in personam to property and real property, without prejudice to Article 19 of L. 4548/2018, and accepts obligations, enters into any type of contracts, without prejudice to articles 99 ff. of L. 4548/2018, participates in public or other tenders, as well as in public or private calls for tenders and calls for bids.
(d) Appoints, places and terminates employees and representatives of the Company, regulates their remuneration and salaries, provides and revokes any general and special proxies for the Company.
(e) Issues, accepts and signs or warrants or endorses bills in order, bills of exchange, checks, as well as each title in order.
(f) Determines the Company's expenses in general.
(g) Inspects the Company’s books, prepares the annual financial statements, recommends depreciations in the facilities and bad debts, and proposes the dividends and profits to be distributed.
(h) Regulates the internal operation of the Company and issues the relevant regulations and, in general, proceeds to every act of management of the Company and its property and has every power and right to manage the corporate interests and the action of each act for the materialization of the goals pursued by the Company.
(i) Receives any type of loan or credit with or without a specific guarantee and provides loans to companies with which the Company has business relations for the purposes of the Company.
(j) Provides all kinds of guarantees for credit documents or obligations undertaken by companies in which the Company may have interests or participation, as well as for credit documents or obligations undertaken by companies or persons with whom the Company may have business relationships.
(k) Issues and prepares all types of credit documents, accepts and endorses them, including liabilities with or without security in rem.
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(l) Carries out and generally executes any act, contract, and relevant transaction, incidental or complementary, which is necessary or advisable for the achievement of the Company's purposes.
The Company is represented before third parties, as well as before any Public, Judicial or other Authority, by its Board of Directors. The Board of Directors has the right, by special decision, to delegate the representation of the Company to one or more persons, whether or not they are members of the Board of Directors.
Also, according to Article 9 of the Company's Statute, the Board of Directors meets at the registered office of the Company whenever the Law, the Statute or the Company's needs so require, at a date and time specified by the Chairman or the Vice-Chairman replacing him, or whenever at least two (2) of the members request so in writing. The Board of Directors may meet by teleconferencing in accordance with Article 90, par. 4 of Law 4548/2018. In this case, the invitation to the members of the Board of Directors includes the necessary information and technical instructions for their participation in the meeting. Also, any member of the Board of Directors may request that the meeting be teleconferenced, if he resides in a country other than that in which the meeting is held or if there is another important reason, particularly illness or disability.
Moreover, the Board of Directors is responsible for approving the Rules of Procedures of the Audit Committee and the Remuneration and Nominations Committee. It is also responsible for electing the members of the Company’s Remuneration and Nominations Committee.
The Board of Directors examines the main risks that the company faces at times, assisted, among others, by the Audit Committee and the Internal Audit Office. The Board of Directors also regularly reviews the Company’s corporate strategy, main business risks and internal audit systems.
Evaluation of the Board of Directors
The Board of Directors carries out a self-evaluation regarding its effectiveness, as well as that of its Committees (at a collective and individual level), based on the Regulations of the Board of Directors, as well as special practices 3.3.3 - 3.3.5 of the Greek Corporate Governance Code. The process is carried out with the assistance of the Remuneration and Nominations Committee, the sending of questionnaires and the discussion between the members of the Board of Directors. The evaluation of the period 1/1/2022 – 31/12/2022 did not highlight any particular issues that require corrective actions as the members agreed on
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the effective functioning of the Board of Directors and its Committees as well as on the effective fulfillment of the duties of the President and the CEO.
Chairman of the Board of Directors
Sets the daily agenda, ensures the prompt operation of the Board of Directors, facilitates the effective contribution by non-executive Board members to the work of the Board, ensures constructive relations between executive and non- executive members, is available for meetings with the shareholders of the Company, makes sure that the views of the shareholders are communicated to the Board of Directors, calls the members of the Board of Directors in meetings which he leads himself.
Himself in his own capacity or, after authorization by the Board of Directors, any member by the Board of Directors, any Company employee in whichever relation with the Company, or any lawyer of the Company, may:
• Represent the Company in court or out of court.
• Represent the Company before any authority.
• In case of obvious risk due to postponement and without a decision by the Board of Directors, raise or defend against legal claims and proceedings, assign plenipotentiaries and proceed to any court or out-of-court actions to defend the interests of the Company. These actions are immediately submitted to the Board of Directors for approval.
• Assume all responsibilities assigned by the Board of Directors and sign contracts on behalf of the Company according to the relevant authorizations given by the Board of Directors.
Chief Executive Officer
The Chief Executive Officer is responsible for the implementation of the Company’s strategic targets and its day-to-day management. He is responsible for the smooth, proper and effective operation of the Company according to its strategic targets, business plans and action guidelines as those are determined by the decisions of the Board of Directors and the General Assembly of Shareholders.
The Chief Executive Officer reports to the Company’s Board of Directors, provides guidance on strategic actions and validates the important decisions of
The Chairman’s and Chief Executive Officer’s responsibilities are outlined below:
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the Company. He is the Head of all Company divisions and, inter alia, is responsible for:
a) Strategic direction:
• Strategic decision making with respect to business strategy development, as well as proposing significant investments.
• Defining the Company’s organizational plans.
• Ensuring the implementation of the Company’s decisions and informing the Board of Directors regarding Company matters.
b) Executive Guidance:
• Coordination and supervision of senior management, ensuring their effectiveness and efficiency for the Company’s smooth operation.
• Decision making or participation in the process of significant business decisions of the Company.
• Defining the risk management policies. Risk assessment and application of actions and procedures for their effective management.
c) Performance Management:
• Defining budgetary targets as well as proposing annual performance targets. Implementing the annual budget targets.
• Supervising the Company’s financial management.
• Ensuring the procedure designed to meet targets and reach results.
d) Human Resources Development:
• Recruiting and providing guidance to the senior executives of the Company.
• Defining guidelines related to the performance evaluation, as well as the promotion, development and remuneration policy of executives.
The Chief Executive Officer is responsible for the coordination of the Company’s individual business units and for making proposals to the Board of Directors regarding matters within its power.
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Members of the Board of Directors
The table below includes the members of the Board of Directors:
Board of Directors members
Capacity
Date of appointment
End of Term
1. Eftichios Vassilakis
Chairman, Executive Member
15/7/2021
15/7/2024
2. Αnastasios David
A’ Vice Chairman - non- executive member
15/07/2021
15/07/2024
3. Panagiotis Laskaridis
Β’ Vice Chairman - non- executive member
15/07/2021
15/07/2024
4. Dimitrios Gerogiannis
CEO - executive member
15/07/2021
15/07/2024
5. Georgios Vassilakis
non-executive member
15/07/2021
15/07/2024
6. Stella Dimaraki
executive member
15/07/2021
15/07/2024
7. Konstantinos Kalamatas
independent, non- executive member
15/07/2021
15/07/2024
8. Achilleas Constantakopoulos
non-executive member
15/07/2021
15/07/2024
9. Nikolaos Georgios Nanopoulos
non-executive member
15/07/2021
15/07/2024
10. Natalia Nikolaidis
independent, non- executive member
15/07/2021
15/07/2024
11. Alexandra Papalexopoulou
independent, non- executive member
15/07/2021
15/07/2024
12. Nikolaos Sofianos
independent, non- executive member
15/07/2021
15/07/2024
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Members attendance of the meetings of the Board of Directors, Audit Committee and Remuneration Committee
Member
Board of Directors
Meetings
Audit Committee
Meetings
Remuneration Committee Meetings
Eftichios Vassilakis
9/9
Αnastasios David
9/9
Panagiotis Laskaridis
9/9
Dimitrios Gerogiannis
9/9
Georgios Vassilakis
9/9
Stella Dimaraki
8/9
Konstantinos Kalamatas
9/9
11/11
Achilleas Constantakopoulos
9/9
Nikolaos Georgios Nanopoulos
9/9
11/11
2/2
Natalia Nikolaidi
9/9
2/2
Alexandra Papalexopoulou
9/9
2/2
Nikolaos Sofianos
9/9
11/11
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Board of Directors CVs
The biographies of the Board of Directors of the Company have been posted on the Company's website at
https://en.about.aegeanair.com/corporate-governance/business-structure/
Determination of Independence of Board Members
The Board of Directors, following the relevant recommendation of the Remuneration and Nominations Committee, as well as:
a) Examination of Statements of the independent members of the Board of Directors,
b) Control of the Company's Shareholder structure,
c) Control of the Company's contracts and accounting records,
Concluded on 16/02/2023, according to par.3 of article 9 of Law 4706/2020, that the conditions of article 9 of Law 4706/2020 for the designation of the four members Natalia Nicolaidis, Konstantinos Kalamatas, Nikolaos Sofianos and Alexandra Papalexopoulou as independent members of the Board of Directors are still met and fulfilled.
Board of Directors Suitability Policy
The Suitability Policy was approved by the decision of the General Meeting of Shareholders on 15/07/2021, which has been formulated based on article 3 of Law 4706/2020 and No 60/18.09.2020 circular of the Hellenic Capital Commission, approved by the decision of the Board of Directors dated 24.06.2021, according to article 3 par.1 of Law 4706/2020 and is available on corporate website:
https://en.about.aegeanair.com/corporate-governance/codes-and-policies/ Each of the members of the Board of Directors meets the eligibility criteria provided in the Eligibility Policy of the Company's Board of Directors. Specifically, members:
a) have the moral references, reputation, knowledge, experience, judgment independence and skills required to perform the tasks assigned to them. In addition, it is noted that there is an adequate representation by gender of at least twenty-five percent (25%) of all members of the Board of Directors,
b) there are no obstacles or incompatibilities in the person of the members of the Board of Directors, based on the provisions of Law 4706/2020, the applicable Corporate Governance Code and the Company's Rules of Operation ,
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c) the composition of the new Board of Directors of the Company fully meets the requirements of Law 4706/2020, regarding the number of independent non-executive members of the Board of Directors and
d) each of the independent members of the Board of Directors meets the conditions of independence of article 4 of law 3016/2002 and article 9 of law 4706/2020.
Diversity criteria
The Company recognizes the benefits of diversifying the members of the Board of Directors and considers it a means of achieving maximum team efficiency and performance. Diversity is a means of expressing different opinions which reflect the social and business environment in which the Company operates and inspires confidence in all stakeholders.
The Board of Directors must take advantage of the parameters of skills, opinions, abilities, qualifications, educational backgrounds, professional training, experience, gender, sex, age and other attributes of its members and appropriately balance them where possible.
The nomination and election of the members of the Board of Directors is carried out based on the value, qualifications, abilities and professional experience of each member individually and of the Board of Directors as a whole.
In relation to the search for suitable candidates, the latter are evaluated on merit, based on objective criteria, as defined by the law and in the corporate culture, taking into account the advantages ensured by diversity in the composition of the Board of Directors.
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The Company opposes any case of exclusion of a candidate member due to criteria related to, but not limited to:
- gender,
- the race,
- the color,
- the national, ethnic or social origin,
- religious or political beliefs,
- disability,
- the property,
- the age,
- the birth and/or
- sexual orientation
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Other Professional Commitments
Eftichios Vassilakis, Chairman - executive member
In addition to being a member of the Board of Directors of the Company, the other professional commitments undertaken and maintained by the members of the Board of Directors are listed below. (including significant non- executive commitments to companies and non-profit institutions):
Company
AUTOHELLAS TOURIST AND TRADING SOCIETE ANONYME
CEO, Executive member of the BoD
KIA HELLAS S.A
Executive member of the BoD
HYUNDAI HELLAS S.A
Executive member of the BoD
FASTTRACK S.A.
Chairman of the BoD
SPORTSLAND SPORT FACILITIES-TOURISM AND HOTELS S.A.
Chairman of the BoD & CEO
CRETE GOLF S.A.
Chairman of the BoD
ΤΕΜΕ S S.A.
Non-executive member of the BoD
GOLF RESIDENCE SA HOTEL & TOURIST ENTERPRISES
Non-executive member of the BoD
GR Ο U Ν D D ΥΝΑΜΙ C HOLDING S.A.
Chairman of the BoD, Executive member
Trade Estates REIC
Member of the BoD, Senior Advisor & Non - Executive member of the BoD
S ΕΤΕ
Vice Chairman of the BoD
Hellenic Federation of Enterprises (SEV).
Member of the BoD
ENDEAVOR Greece ΑΜΚΕ
Member of the BoD
LAMDA DEVELOPMENT S.A.
Non-executive member of the BoD
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Anastasios David, A’ Vice Chairman - non- executive member
Panagiotis Laskaridis, Β ’ Vice Chairman - non- executive member
Company
Coca-Cola HBC A.G.
Chairman of the BoD
Sea Trade Holdings Inc.
Chairman of the BoD
Nephelle Navigation Inc.
Chairman of the BoD
Boval Sarl
Member of the BoD
Kar-Tess Holding
Member of the BoD
Adcom Advisory Ltd
Member of the BoD
Boval Ltd
Executive
Cyprus Union of Shipowners
Vice Chairman
The George and Kaity David Foundation
Member of the BoD
Company
Laskaridis Shipping Co Ltd.
CEO
Lavinia Corporation
CEO
Aikaterini Laskaridi F oundation
Chairman of the BoD
The Hellenic War Risks Maritime Association (The Hellenic Club)
Member of the BoD
Nautical Museum in Greece
Vice Chairman of the BoD
72
Dimitrios Gerogiannis, CEO - executive member
Georgios Vassilakis – non executive member
Styliani Dimaraki, executive member
Company
AEGEAN AIRLINES EXECUTIVE S.A.
Member of the BoD
Company
OLYMPIC AIR SINGLE PERSON SOCIETE ANONYME COMPANY OF AIR TRANSPORTS
Vice Chairman/ Member of the BoD & CEO until 08.09.2022
Company
AUTOHELLAS ATEE
Executive Member of the BoD
Hyundai Hellas
Vice Chairman of the BoD & CEO
KIA Hellas
Vice Chairman of the BoD & CEO
Technocar
Chairman of the BoD & CEO
AUTOTECHNICA HELLAS
Chairman of the BoD & CEO
SPORTSLAND SPORT FACILITIES-TOURISM AND HOTELS S.A.
Non-executive Member of the BoD
GOLF RESIDENCES SA HOTEL & TOURIST ENTERPRISES
Non-executive Member of the BoD
Hellenic Association of Motor Vehicle Importers Representatives
Chairman of the BoD
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Konstantinos Kalamatas, independent non-executive member
Achilleas Constantakopoulos, non-executive member
Company
Sport Union – Sports Centre of Kifissia
A’ Vice Chairman of the BoD
Company
TEMES S.A.
Chairman of the BoD
Yaco Maritime Investments
Chairman/ Sole Member of the BoD
ARKAL HOLDINGS PC C
Administrator
MARKETING GREECE S.A. PROMOTION AND DEVELOPMENT OF TOURISM
Member of the BoD
“Captain Vassilis & Carmen Konstantakopoulos” Foundation
Chairman of the BoD
The Hellenic Initiative
Member of the BoD
The Greek Tourism Confederation (SETE)
Member of the BoD
74
Nikolaos- Georgios Nanopoulos, non-executive member
Natalia Nikolaidi, independent, non-executive member
Company
Dynamic Counsel Ltd
CEO
Mytilineos S.A.
Independent Member of the BoD
SMCP S.A.
Independent Member of the BoD
Climate Governance Initiative Greece (NGO)
Member of the BoD
Bain & Company
Senior Advisor
Company
EFG Investment & Wealth Solutions Holding AG (Switzerland)
Chairman of the BoD
Diorama Investments I SICAR S.A. (Luxemburg)
Chairman & Chairman ofInvestment Committee
Diorama Investments II SICAR S.A. (Luxemburg)
Chairman
Η ELLENIC HOTELS COMPANY LAMPSA SA
Vice Chairman. Non-executive Independent Member of the BoD
Altius Insurance Ltd (Cyprus)
Member of the BoD
Foundation for Economic and Industrial Research ( IOBE)
Member of the BoD & Executive Committee
75
Alexandra Papalexopoulou, independent, non-executive member
Nikolaos Sofianos, independent, non-executive member
Company
TITAN CEMENT INTERNATIONAL S.A.
Executive Member of the BoD
COCA COLA HELLENIC BOTTLING COMPANY
Non-executive Member of the BoD
Paul and Alexandra Canellopoulos Foundation
Member of the Board and Treasurer
INSEAD BUSINESS SCHOOL
Member of the BoD
Company
Bank of Cyprus LTD
Independent non-executive member of the BoD, Chairman of the Audit Committee, Member of Risk Management Committee and Ethics Committee
Dovalue Greece SA
Independent non-executive member of the BoD
Arcela Investments LTD
Member of the BoD & CEO
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Number of Shares that BoD members hold as of 31.12.2022 (including indirect holdings)
Audit Committee
The Company has Rules of Procedures of the Audit Committee, which was approved and entered into force with the decision of the Board of Directors of 25.10.2018, amended with the decision of the Board of Directors of 22.04.2019 and further amended and updated with the 18.02.2021 decision of the Board of Directors and finally updated with the decision of the Board of Directors dated 14/7/2021.
The current Rules of Procedures of the Audit Committee have been uploaded on the Company's website.
The Rules of Procedures of the Audit Committee have been updated based on the article 44 of L. 4449/2017, as amended by the article 74 of L.4706/2020, and covers, among others, the composition, the role, the responsibilities and the operation and evaluation of the Audit Committee as defined by article 44 of L. 4449/2017 and by the epistles no. 1302 / 28.04.2017 and 1508 / 17.07.2020 of the Hellenic Capital Market Commission.
BoD Member
Number of shares
Eftichios Vassilakis,
Chairman - executive member
33.860.144
(885.255 directly, 22.302.583 indirectly through the chain of controlled companies FELIX HOLDINGS S.àr.l. and Evertrans S.A. and 10.672.306 shares indirectly through the chain of controlled companies FELIX HOLDINGS S.àr.l., Evertrans S.A., Main Stream S.A. and Autohellas)
Α nastasios David, A’ Vice Chairman - non- executive member
851.059
Panagiotis Laskaridis, Β ’ Vice Chairman - non- executive member
7.766.622 shares indirectly through the controlled company Alnesco Enterprises Limited
Dimitrios Gerogiannis, CEO - executive member
3.408
Achilleas Constantakopoulos,
non-executive member
5.000.605
(3.727.794 directly and 1.272.811 shares indirectly through the controlled company Ateria Ventures Ltd)
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Audit Committee
composition
Based on the rules of procedures of the Audit Committee, the Committee is composed from three (3) members and is:
a) Committee of the company’s Board of Directors, which consists of non- executive members, or
b) independent committee, which consists of non-executive members of the Board of Directors and third members, or
c) independent committee, which consists of only third-party members.
The type of the Audit Committee, the term of office, the number and the capacity of its members are decided by the General Meeting of the Company's shareholders.
Its composition is formed at the discretion of the General Assembly within the respective legislative framework.
The members of the Audit Committee are by an independent majority, within the meaning of article 4 of L.3016/2002 as in force, article 9 of L. 4706/2020. The participation in the Audit Committee of persons who simultaneously hold positions or capacities or who carry out transactions incompatible with the purpose of the Commission is prohibited. Subject to the above, the participation of a person in the Audit Committee does not exclude his participation in another Committee of the Board of Directors, as long as this does not affect the proper performance of the person's duties as a member of the Audit Committee.
The members of the Audit Committee as a whole have sufficient knowledge and experience in the field of activity of the Company. At least one member of the Audit Committee, who is independent from the Company, has sufficient knowledge and experience in auditing or accounting.
The members of the Audit Committee are appointed by the General Meeting of Shareholders of the Company, when it is an independent committee, or by the Board of Directors, when the Audit Committee is a committee of the Board of Directors, in accordance with the law, with a decision that sufficiently justifies the qualifications of the proposed members of the Committee as well as the independence of the nominated independent members. In case of resignation or death or in any other way of losing the membership of the Audit Committee, then the Board of Directors appoints from the existing members a new member to replace the one who leaves, for the period until the end of his term, if there is a case of paragraphs 1 and 2 of article 82 of L.4548/2018, which is applied
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accordingly. When the member of the previous paragraph is a third person and not a member of the Board of Directors, the Board of Directors appoints a third person, a non-member of the Board of Directors, as a temporary replacement, and the next General Meeting of the Shareholders appoints either the same member or elects another, for the period until the end of his term of office in the Audit Committee.
The Chairman of the Audit Committee is appointed by its members and is obligatorily independent of the Company within the meaning of the provisions of L.3016/2002, as in force, and article 9 of L.4706/2020. The Chairman of the Board of Directors cannot be the same person with the Chairman of the Audit Committee. By the same decision, one of the elected independent members of the Committee is appointed as Deputy Chairman, while it is also possible for the Committee to appoint members to replace the regular members of the Audit Committee in case of disability.
The members of the Audit Committee of the Company were initially appointed by the decision of the Board of Directors dated on the 15.07.2021, with a three- year term, while the Audit Committee at its meeting on the 16.07.2021 decided to appoint the independent non-executive member of the Board, Mr. Nikolaos Sofianos as its Chairman and was formed into a body. Therefore, the Company's Audit Committee consists of a non-executive member of the Board and two independent non-executive members of the Board. Specifically, it consists of the following persons:
1) Nikolaos Sofianos – independent non-executive member of the Board of Directors, Chairman
2) Georgios-Nikolaos Nanopoulos – non-executive member of the Board of Directors, member
3) Konstantinos Kalamatas – independent non-executive member of the Board of Directors, member.
Meetings and decision making
The Audit Committee is convened exclusively by its Chairman or, in case of his absence or incapacity, by his deputy.
The Audit Committee meets regularly at least four (4) times a year. It meets extraordinarily, when at the discretion of the Chairman of the Board or the Chairman of the Audit Committee is deemed necessary. The Audit Committee may also meet, without the presence of the Management, with the regular auditor of the Company. The meeting may take place live or through audiovisual media, at the Company's registered office or at any place suitable for the
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purpose of the meeting. The duties of secretary are performed by the Director of Internal Audit, who keeps the minutes of the meetings.
The meetings of the Audit Committee are sought to involve as much as possible all its members (live or through audiovisual media). If at least two members (regular or alternate) are not present at the meeting, the meeting is canceled and repeated without new invitation no later than seven (7) days after its cancellation (where again at least two members will be required to be present). Decisions are taken by the majority of its members, and in the event of a tie, the vote of the Chairman shall prevail.
The member of the Audit Committee who has sufficient knowledge and experience in auditing or accounting is obliged to attend the meetings of the Audit Committee concerning the approval of the financial statements.
In addition, the Audit Committee invites, whenever it deems appropriate, key executives involved in the Company's governance, including the Chief Executive Officer, the Chief Financial Officer and the Internal Audit Director, to attend specific meetings or specific issues on the agenda and to pose their view on them.
The Audit Committee, in addition to the scheduled meetings, holds mandatory meetings with the management and the relevant executives during the preparation of the financial reports as well as with the chartered accountant during the planning stage of the audit, during its execution and during the stage of preparation of audit reports.
The Audit Committee meets at least once a quarter, with the Internal Audit Director to discuss issues within its competence, as well as problems that may arise from the internal audits.
Audit Committee
duties
The Audit Committee operates as an independent and objective body, which is responsible for reviewing and evaluating audit practices and the performance of internal and external auditors. The main mission of the Audit Committee is to assist the Board of Directors in the execution of its duties, overseeing the financial information procedures, policies and internal control system of the Company.
In accordance with article 44 of L.4449/2017, in accordance with its Rules of Operation, the Audit Committee, inter alia:
(a) monitors the financial reporting process and make recommendations or proposals to ensure its integrity,
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(b) informs the Board of Directors of the Company about the result of the statutory audit and explains how the statutory audit contributed to the integrity of the financial information and what was the role of the Audit Committee in this process,
(c) monitors the effectiveness of the internal control, quality assurance and risk management systems of the company and, where appropriate, of its internal audit department, regarding the financial information of the Company without violating the independence of the latter,
(d) monitors the statutory audit of the annual corporate and consolidated financial statements and in particular its degree of performance, taking into account any findings and conclusions of the competent authorities in accordance with paragraph 6 of Article 26 of Regulation (EU) No 182/2011; 537/2014 and par. 5 of article 44 of L.4449/2017,
(e) reviews and monitors the independence of chartered accountants or audit firms in accordance with Articles 21, 22, 23, 26 and 27, and Article 6 of Regulation (EU) No 182/2011; 537/2014 and in particular the adequacy of the provision of non-audit services to the audited entity in accordance with Article 5 of Regulation (EU) no. 537/2014,
(f) is responsible for organizing the selection process for chartered accountants or auditing firms and recommends the chartered accountants or auditing firms to be appointed in accordance with Article 16 of Regulation (EU) No 182/2011; 537/2014, unless par. 8 of article 16 of Regulation (EU) no. 537/2014,
(g) gives an opinion on the approval and revision of the Company's Operating Regulations, of the Corporate Governance Code, as well as submits at its discretion a proposal for the revision of this Regulation.
For the results of all the above actions, the Audit Committee informs the Board of Directors by submitting semi-annual reports of its findings and with proposals for the implementation of corrective actions, if deemed appropriate.
The Audit Committee presents and submits to the Board of Directors the reports submitted to it every three (3) months by the Internal Audit Department, according to article 16 of L.4706/2020, together with its observations or earlier if deemed necessary.
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The Audit Committee has full access to every element of the Company that is needed to carry out its duties and the Company makes available to the Audit Committee any person that the Committee deems necessary.
The Rules of Procedure of the Audit Committee are published on the Company's website, at the following link:
https://en.about.aegeanair.com/corporate-governance/committees-and-
external-auditors/rules-of-procedures-of-aegean-airlines-audit-committee/
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During 2022, the Audit Committee, exercising its responsibilities, held eleven (11) meetings in which all its members participated, the topics of which are briefly mentioned below:
Proceedings of the Audit Committee and Meetings
• Internal Audit Unit work progress.
• Regulatory Compliance and Risk Management Unit work progress.
• Approval for special services by EY.
• Update on the progress of the audit of the financial statements for the year 1/1/2022 – 31/12/2022.
• Declaration of independence of the Internal Audit Unit.
• Annual internal audit plan for the period 1/1/2022 – 31/12/2022.
• Self-assessment of the Audit Committee and self-assessment of the Internal Audit Unit for the period 1/1/2022 – 31/12/2022.
• Update on Cyber Security issues.
• Update on issues of the internal control system.
• Annual report of the Audit Committee's activities for the year 2022 to the General Meeting of the Shareholders.
• Approval of interim financial statements 1/1/2022 – 30/6/2022.
• Approval of financial statements 1/1/2022 – 31/12/2022.
• Appointment / selection of chartered accountants - auditors for the period 1/1/2023 – 31/12/2023.
• Request for the submission of an offer to provide auditing services.
• Fees pre-approval for permitted non-audit services by EY chartered accountants.
• Report on the activities of the Audit Committee for the first and second half semesters of 2022.
• Approval of financial results for the first half of 2022.
• Presentations and evaluation of chartered accountants’ offers.
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Remuneration and Nominations Committee
Composition of
the Remuneration and Nomination Committee
According to the Rules of Procedure of the Remuneration and Nominations Committee, the Committee consists of three (3) members with a three-year term, who are all non-executive members of the Board of Directors and by a majority independently, within the meaning of the law, as applicable. The Remuneration and Nominations Committee is chaired by an independent non- executive member of the Board. The Chairman of the Remuneration and Nominations Committee is responsible for the planning and conduct of the meetings. The term of office of the members is automatically extended until the first Ordinary General Meeting after the end of their term of office, which may not exceed four (4) years. In case of vacancy of a member of the Remuneration and Nominations Committee (indicatively due to resignation), the Board of Directors appoints its replacement without delay.
The participation in the Committee of Remuneration and Nominations of persons who simultaneously hold positions or qualities or who conduct transactions incompatible with the purpose of the Commission is prohibited. The Executive Chairman, the Chief Executive Officer and the Chief Financial Officer of the Company (possibly other members of the Board of Directors if deemed necessary by the Committee) may be invited by the Committee to attend the meetings).
• Approval of minutes of meetings.
• Recommendation for the appointment / selection of the regular chartered accountants.
• Annual self-assessment of the Audit Committee.
• Update of the Audit Committee Rules of Operation.
• Annual self-assessment of the Internal Audit Unit.
• Annual internal audit plan for the period 1/1/2023 – 31/12/2023.
• Annual work plan of the Risk Management and Regulatory Compliance Unit.
• Independent audit of the Corporate Governance Framework according to the provisions of Law 4706/2020.
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The members of the Remuneration and Nominations Committee as a whole have sufficient knowledge and experience in matters of remuneration formation.
The members of the Remuneration and Nominations Committee are appointed by the Board of Directors with a decision which sufficiently justifies the qualifications of the members of the Committee. By the same decision, one of the elected independent members of the Committee is also appointed as Deputy Chairman, while it is also possible to appoint alternate members who replace the regular members of the Remuneration and Nominations Committee in case of their incapacity.
The participation of a person in the Remuneration and Nominations Committee does not exclude his participation in another Committee of the Board of Directors, as long as this does not affect the proper performance of the person's duties as a member of the Remuneration and Nominations Committee.
The current composition of the Remuneration and Nominations Committee of the Company consists of the following members of the Board of Directors, who were elected by the decision of the Board of Directors of 15.07.2021 and have a three-year term:
1) Natalia Nikolaidi, independent non-executive member of the Board,
2) Nikolaos-Georgios Nanopoulos, non-executive member of the Board, and
3) Alexandra Papalexopoulou, independent non-executive member of the Board.
During the meeting of the Remuneration and Nominations Committee on 16.07.2021, Mrs. Natalia Nikolaidi independent non-executive member of the Board, was appointed as its Chairwoman and was formed into a body.
Meetings and Decision
making
During the meeting of the Remuneration and Nominations Committee on 16.07.2021, Ms. Natalia Nikolaidi independent non-executive member of the Board, was appointed as its Chairman and was formed into a body.
The Remuneration and Nominations Committee is convened exclusively by its Chairman or, in case of her absence or incapacity, by his / her deputy.
The Remuneration and Nomination Committee meets regularly at least two (2) times per year and definitely before the preparation of the Remuneration Policy and the preparation of the Remuneration Report, or any revision thereof. It meets extraordinarily, when at the discretion of the Chairman of the Board or the Chairman of the Committee deemed necessary. The meeting may take place live or through audiovisual media, at the Company's registered office or at any place suitable for the purpose of the meeting. By decision of the Board of
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Directors, the secretary of the Remuneration Committee is appointed who keeps the minutes of the meetings. The representation of a member of the Remuneration and Nominations Committee by another member is prohibited, unless it is the case of the replacement of a regular member by an alternate, due to obstruction of the former. The replacement of the regular members may in no case lead to the composition of the Remuneration and Nominations Committee other than that which is obligatorily defined in the Rules of Procedure of the Remuneration and Nominations Committee.
The convening of the Remuneration and Nominations Committee is done by invitation which is notified to them two (2) working days at least before the meeting, or five (5) days if the place of the meeting is not the registered office of the Company. The invitation mentions the items on the agenda, the date, time and place of the meeting of the Remuneration and Nominations Committee. An invitation is not required if all members are present on the day of the meeting and no one objects.
All members of the Remuneration and Nominations Committee will be invited to participate in the meetings as much as possible (live or through audiovisual media). If at least two members (regular or alternate) are not present at the meeting, the meeting is canceled and repeated without new invitation no later than seven (7) days after its cancellation (where again at least two members will be required to be present). Decisions are taken by a majority of its members, and in the event of a tie, the vote of the Chairman shall prevail.
Unless specifically defined in the Rules of Procedure of the Remuneration and Nominations Committee, articles 89-93 of Law 4548/2018 apply to the meetings and decision making of the Remuneration and Nominations Committee.
Responsibilities of the
Remuneration and Nominations Committee
The Remuneration and Nominations Committee operates as an independent and objective body, which transparently assists the Board of Directors in the performance of its duties regarding the issues related to the remuneration of the Board of Directors, the executives and the employees of the Company and undertaking the procedures for drafting and controlling the Remuneration Policy and the Remuneration Report of articles 110-113 Law 4548/2018. Specifically, the Remuneration and Nominations Committee:
a) Prepares the Remuneration Policy for the members of the Board of Directors of the Company with the possibility to include in it, other executives and employees of the Company. The Remuneration and Nomination Committee determines and includes in the Remuneration Policy at least all the elements required by law and the Corporate Governance Code applied by the Company, with all the appropriate variations depending on the role and duties of each of these persons.
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b) Suggests a temporary derogation from the Company's Remuneration Policy, provided that (a) the Remuneration Policy sets out the procedural conditions under which a derogation from its content may apply, (b) the Remuneration Policy sets out the details to which the derogation can be applied and (c) this derogation is necessary to serve the long-term interests of the company as a whole or to ensure its viability.
c) Reviews the remuneration and working conditions of the company's employees and takes into account the relevant findings when determining the Remuneration Policy.
d) Submits proposals to the Board of Directors on any matter concerning the remuneration of the Board of Directors, the executives and the employees of the Company, complying, in terms of the formation of such remuneration, with the principles of law and the Company Corporate Governance Code and taking into account international best practices and the European Commission Recommendations.
e) Regularly reviews the terms of the current contracts of the members of the Board of Directors and the executives with the Company, including the compensations, in case of departure, and the pension arrangements.
f) In case of revision of the Remuneration Policy, submits a report to the Board of Directors describing and explaining all the changes in the Remuneration Policy, as well as the way in which the votes and views of the shareholders on the Remuneration Policy and Report have been taken into account, since the last vote on these issues.
g) Defines the measures for the avoidance or management of conflicts of interest regarding remuneration issues that are incorporated in the Remuneration Policy.
h) Defines the performance targets regarding any variable remuneration of the executive members of the Board of Directors and the senior executives, and the targets related to the programs of granting rights or shares.
i) Examines and submits proposals to the Board of Directors (and through it to the General Meeting of Shareholders, when required) regarding any programs for the granting of stock options or the granting of shares.
k) Submits proposals for the revision and improvement of any process related to the drafting of the Remuneration Policy, the Remuneration Report and the definition of the elements contained in them.
l) Prepares the Remuneration Report of article 112 L.4548/2018. The Remuneration and Nomination Committee determines and includes in the Remuneration Report all the elements required by L.4548/2018 and the
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Corporate Governance Code of the Company. The Remuneration and Nomination Committee submits a report to the Board of Directors describing the manner in which the Remuneration Report takes into account the result of the General Meeting of the Shareholders vote on the previous Remuneration Report.
m) It is generally responsible to suggest, make decisions and express an opinion on any issue that falls under articles 109-114 of L.4548/2018, voluntarily or upon request by the Board of Directors or the General Meeting of the Shareholders.
n) Prepares and proposes to the Board of Directors for approval the Suitability Policy of the members of the Board of Directors which includes the selection criteria and the placement procedures of the members of the Board of Directors.
o) Regularly reviews the Suitability Policy of the members of the Board of Directors.
p) Plans and coordinates the process of selecting candidates suitable for the vacant positions of the Board of Directors, describes the responsibilities and required skills as well as their expected time commitment.
q) Ensures the promotion of differentiation and diversity as well as ensuring the concentration of a wide range of qualifications, knowledge and skills of the members of the Board of Directors, in accordance with the Suitability Policy.
r) Periodically evaluates the size and composition of the Board of Directors and submits to it proposals regarding its desired overall profile.
s) Formulates and submits to the Board of Directors for approval, a succession plan of the members of the Board of Directors and the Senior Managers.
t) Monitors and evaluates that the members of the Board of Directors meet the criteria of individual suitability in particular in relation to the adequacy of knowledge and skills, the guarantees of morality and reputation and the allocation of sufficient time.
u) Monitors and evaluates possible situations of conflict of interest to the extent that the ability of the members of the Board of Directors to exercise their duties independently and objectively is submitted by submitting relevant reports to the Board of Directors.
v) Ensures that the members of the Board of Directors meet the criteria of independence based on the requirements of law.
w) Recommends to the Board of Directors the Training Policy of the members of the Board of Directors, the Executives, as well as the other executives of the Company.
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x) Recommends to the Board of Directors the process of hiring Senior Managers and evaluating their performance.
y) Supervises the planning and implementation of the program for the integration of new members of the Board of Directors, as well as the continuous development of knowledge and skills of all members, supporting the effective exercise of their duties.
The Rules of Procedure of the Remuneration and Nominations Committee are published on the Company's website at the following link:
During 2022, the Remuneration and Nominations Committee, exercising its responsibilities, held two (3) meetings in which all its members participated, the topics of which are briefly mentioned below:
Proceedings of the Remuneration and Nominations Committee and Meetings
• Revision of the Rules of Operation of the Remuneration and Nominations Committee.
• Recommendation to the Board of Directors regarding the remuneration of a) non-executive and independent non-executive members of the Company's Board of Directors and b) the members of the Board of Directors who participate in the Committees of the Board of Directors.
• Approval of the Remuneration Report of the Board of Directors for the fiscal year 1/1/2021 – 31/12/2021.
• Approval of the Company's Revised Remuneration Policy.
• Succession plan of directors and BoD members.
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Sustainability Development Committee
The Company has a Sustainability Development Committee, following the decision of 16.09.2021 of the Board of Directors of the Company.
The Rules of Procedures of the Sustainable Development Committee have been posted on the Company's website.
Composition
According to the Rules of Procedures of the Sustainability Development Committee, the Committee consists of three (3) members of which one independent non-executive member of the Board of Directors, one executive member of the Board of Directors and the Chief Financial Officer.
The term of the Sustainability Development Committee is three years and coincides with the term of the Board of Directors, extended until the expiration of the deadline within which the next Ordinary General Meeting must convene after the end of the term of the Board of Directors and until the relevant decision is taken. and not exceeding four years.
In the event of resignation, death or any other loss of membership of the Committee, the Board of Directors shall immediately appoint a new member to replace the one missing, for the period until the end of the term of office, if applicable, of par. 1 and 2 of article 82 of Law 4548/2018, which is applied accordingly.
The Chairman of the Sustainability Development Committee is appointed by its members and is independent of the Company within the meaning of the provisions of Law 3016/2002, as in force, and article 9 of Law 4706/2020.
The members of the Sustainability Development Committee of the Company were initially appointed by the decision of the Board of Directors dated 16.09.2021. With the meeting of the Committee for Sustainable Development from 20.09.2021 and its formation in a body, its chairman was appointed. In particular, the Commission consists of the following persons:
1.Natalia Nikolaidi, independent non executive member of the BoD, Chairwoman
2.Stiliani Dimaraki, executive member of the BoD, Member
3.Michalis Kouveliotis, Chief Financial Officer, Member
Meetings and Decision Making
The Sustainability Development Committee meets whenever necessary, keeps minutes of its meetings and submits reports to the Board of Directors, if necessary.
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The Committee shall meet at the invitation of its Chairwoman, who shall determine the agenda, place, time and manner of the meeting. Any member of the Committee may request in writing that it be convened to discuss specific matters.
Duties and Responsibilities
The tasks and responsibilities of the Sustainability Development Committee include:
(a) Monitoring and evaluating the Company's compliance with the regulatory and legislative framework and with the practices, due diligence policies, procedures, reporting mechanisms, commitments and objectives it has adopted regarding sustainable development and sustainable business practice and ESG issues, including indicative:
- the UN "Agenda 2030" with the 17 Global Sustainable Development Goals,
- the 10 Principles of the UN Universal Pact,
- the other environmental criteria applied by the Company, ie. the way in which the Company ensures the safest possible operation for the environment,
- the social criteria applied by the Company in relation to its relations with employees, suppliers, passengers, shareholders / investors, and the communities in which it operates,
- the organization and operation of the corporate governance system, including issues related to the leadership of the Company, the supervision of sustainable development by the Board of Directors, business ethics, labor relations, transparency and prevention of corruption, shareholders' rights, etc.
(b) The monitoring of international and domestic trends and best practices in matters of sustainable development and ESG and the submission of proposals, reports and any kind of suggestions to the Board of Directors of the Company regarding:
- the improvement of the environmental performance and the strengthening of the environmental actions and initiatives of the Company, including the actions for the climate change and the reduction of carbon dioxide emissions, the waste management and the protection of the biodiversity,
- the support of actions of social offer and corporate social responsibility in the context of the strategy and the business model of the Company,
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- issues of social nature, such as the health and safety of employees and customers, labor and human rights, animal rights, the development of local communities and the promotion of sustainable urban development through the provision of safe and affordable transport systems for more and more people,
- corporate governance and business ethics,
- the indicators for publishing ESG information.
(c) The cooperation with the respective units, departments and committees of the Company in order to promote the goals of sustainable development of the Company.
(d) To provide assistance to the Board of Directors regarding the monitoring of the implementation of the Sustainable Development Policy of the Company and the provision of any other assistance that may be required, in particular as to the existence of mechanisms of knowledge and understanding of the interests of stakeholders, that the company has an impact.
(e) Determining the impact of the Company's activities on the environment and the wider community based on non-financial factors related to the environment, social responsibility and governance (ESG) that are economically significant for the Company and the collective interests of key stakeholders, such as employees, customers, suppliers, local communities and others, as well as the monitoring and evaluation of the Company's response to non-financial actors and their integration into the business strategy and decision-making.
(f) Submitting recommendations to the Board of Directors for the establishment of working groups to promote sustainable development and ESG issues, including indicative issues of environment, social responsibility, protection of human rights, ethics, actions against corruption and bribery, labor, etc.
(g) Monitoring and evaluating the compliance of third parties providing services to the Company (supply chain) or in its name and on its behalf (including partners and suppliers, intermediaries, and any other persons with whom the Company cooperates under contracts, outsourcing or other agreements) or third parties acting on behalf of or in cooperation with the Company (value chain) with the standards, criteria and principles set and applied by the Company in terms of sustainable development, environmental protection , the positive impact on society and good governance.
(h) Promoting to the shareholders and stakeholders the Company's action in matters of sustainable development and ESG and ensuring that all publications
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related to the management and performance of the Company in these matters are available to the above persons.
The Regulation of the Sustainability Development Committee is posted on the Company’s website at the following link:
https://en.about.aegeanair.com/corporate-governance/committees-and- external-auditors/esg-committee/
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Senior Management CVs
Senior Management
Zisis Pehlevanoudis
Accountable Manager
He studied Electrical and Mechanical Engineering at the Braunschweig University of Technology and the Lufthansa School of Aircraft Operation. He worked in Germany for 10 years as pilot at German Air Rescue Aerodienst and Milanflug. He has been working for the Company since 1995 as a pilot and has been the Director of Operations for 21 years. Since 2018 he is the Accountable Manager of AEGEAN and Olympic Air, having in his responsibilities the full responsibility in matters of quality, compliance and safety, covering all business sectors of the air carriers, according to the respective regulatory requirements as well as the restrictions and the licenses set out in the AOC Certificates.
Michail Kouveliotis
Chief Financial Officer
He graduated from Athens University of Economics and Business in 1987. He works for 31 years in the Vassilakis Group, for 6 years he was the Financial Director of TECHNOCAR SA. He holds the position of Chief Financial Officer of the Company since 2003.
He is executive Vice Chairman of the Board of Directors and CEO of Olympic Air. He is also Vice Chairman of the Board of Directors of Animawings Aviation Srl, a member of the Board of Directors of Aegean Executive S.A. and a member of the Sustainability Development Committee of the Company.
Roland Jaggi
Chief Commercial Officer
He started his airline career 1994 at Swissair. After 12 years in various roles at headquarters in Zurich, in Russia and in Portugal, he moved to Athens in 2006 to join Aegean Airlines to build the Revenue Management and Pricing capability.
Over the years his responsibilities expanded, since 2018 he is leading the entire Commercial Organization of Aegean Airlines.
Panagiotis Nikolaidis
Chief Ground Operations Officer
Panos has an overall airline experience of over 30 years and has been working for Aegean Airlines Ground Operations for the last 23 years starting as Station
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Manager from 1999 until 2005, then as Airport Services Manager until 2010, Ground Operations Director until 2020 and since then as Chief Ground Operations Officer. He is the nominated person for Ground Operations in Aegean. His responsibilities cover all Airports (more than 150 stations domestic and international), Customer Experience including Call Center, Customer Relations and Customer Care Center. He has under his responsibility the Ground Handling agreements and Airport contracts, Cargo Operations, Airport Services continuous improvement projects, Ground Operations safety, lounges, baggage and Ground Operations Digital products. As of 2020 Emergency Response Planning, Occupational Health and Safety and Environmental Departments as also part of his responsibilities within Aegean Airlines. Under his leadership Aegean Ground Operations launched several digital products for IRROPS handling, under the code name Ariadne (digitalization of snack and meal vouchers, hotel accommodation, monetary compensation, re- accommodation of customers and notification of these to customers), the automated generation of baggage PIRs for all Aegean customers. Finally, the creation of multi-dimensional analytics for Baggage performance, On-time Performance, etc. He served as a member of IATA Aviation Ground Services Agreements Task Force (AGSA) until 2021. He is currently a member of IATA Ground Operations Group (GOG). Panos participates in the Star Alliance Customer Experience Strategy Group since 2014.
Aristidis Kamvysis
Chief Information Officer
Mr. Kamvysis studied in the UK, earning a B.Sc. in Computer Science from Leeds University (1992) and an M.Sc. in Virtual Reality, from Hull University (1993). During his studies, he worked for a year in Paris, with Air Inter. Prior joining Aegean, he worked in carious with Greek companies. From 1995 to 1997 he worked at Attica Bank, in the IT Department. From 1997 to 1999, he worked in the IT Department, at Athens International Airport. He joined Aegean Airlines in 1999.
Ioannis Aloukos
Technical Director
He is an Aeronautical Engineer holding a BEng in Aerospace Engineering and an MSc in Advanced Manufacturing. He is a member of Technical Chamber.
During his 14-year career in Aegean he have worked in Quality Unit as a Quality Auditor, holding managerial positions in various Technical Department sections such as Workshops and Base Maintenance. He is the Technical Director since September of 2020.
Marios E. Menexiadis
Internal Audit Director
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He is an economist specializing in Internal Audit. He holds a Postdoc and PhD in Internal Auditing and Best Practices from the National and Kapodistrian University of Athens, an MSc in Internal Auditing from City University and a MAcc in International Accounting and Financial Management from Glasgow University. In parallel, he is F.C.P.A., C.P.I.A., C.R.C.O. certified from the Association of Certified Public Accountants International, certified in governance, risk management and compliance G.R.C. by the International Compliance Association.
He has offered his services for a number of years as Internal Audit Director of listed groups in the Athens Stock Exchange. Prior to joining the airline industry in 2009, he served as Internal Audit Director in the chemical industry as well as the food and beverage industry. His professional career began at the "Big 5" (Andersen & PwC), while in parallel, he has offered his services as Audit Committee Member at the Hellenic Institute of Internal Auditors.
Number of Shares that Senior Management hold as of 31.12.2022 (including indirect holdings)
Director
Number of shares
Michail Kouveliotis
3.580
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2.5 Explanatory Statement
(Article 4, paragraph. 7 & 8 of L.3556/2007)
1. Structure of the Company’s share capital
The Company’s share capital amounts to forty-five million eighty-three thousand and five hundred forty euros (€45.083.540), divided into ninety million one hundred sixtyseven thousand and one hundred common voting shares (90.167.100 shares) of a par value of fifty euro cents each ( €0,50). All the shares are registered and listed for trading in the Securities Market of the Athens Stock Exchange under the “Large Cap” classification.
2. Limits on transfer of Company shares
There are no restrictions set by the Company’s Articles of Association regarding the transfer of shares.
3. Significant direct or indirect holdings in accordance with the provisions of articles 9 – 11 of Law 3556/2007
As of 31.12.2022 the following investors held more than 5% of the Company’s voting rights: Eftichios Vassilakis 37,55% (0,98% directly, 24,73% indirectly through the chain of controlled companies Felix Holdings S.ar.l and Evertrans S.A. and 11,84% indirectly through the chain of controlled companies Felix Holdings S.ar.l, Evertrans S.A., Main Stream S.A. and Autohellas S.A.), Alnesco Enterprices Company Limited 8,61%, Siana Enterprices Company Limited 8,56% and Achilleas Constantakopoulos 5,54% (4,13% directly and 1,41% indirectly through the controlled company Ateria Ventures LTD).
4. Shares conferring special control rights
There are no Company shares that carry any special rights of control.
5. Limitations on voting rights
The Articles of Association make no provision for any limitations on voting rights.
6. Shareholder agreements which result to limitations in the transfer of shares or limitations to exercise voting rights
The Company is not aware of any Shareholder agreements which result to limitations in the transfer of shares or limitations to exercise voting rights.
7. Rules governing the appointment and replacement of members of the Board of Directors and the amendment of the Articles of Association
The members of the Board of Directors are elected from the General Shareholders’ Meeting, through a secret voting procedure, for a three-year term extended up to the Annual General Shareholders’ Meeting due in the term’s final year. The members may be shareholders or non-shareholders and can be re-elected.
Replacement of a member can be authorized by at least three (3) other members and is subject to the approval of the next General Shareholders’ Meeting.
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The Board may consist of seven (7) up to fifteen (15) members.
8. Authority delegated to the BoD or certain members of the Board for the issue of new shares or acquisition of own shares
( Α ) According to the provisions of article 24 para. 1 case b and c of Law 4548/2018, by decision of the Shareholders General Assembly, the Board of Directors can be authorized for a period not exceeding five years, to decide on a partial or full share capital increase through the issuance of new shares, where the relevant decision will be taken with a majority of at least 2/3 of all its members. In this case, the share capital may be increased by an amount not exceeding three times the share capital existing at the date on which the Board of Directors was granted the respective authorization.
This authorization may be renewed by decision of the Shareholders General Assembly for a period not exceeding five years for each renewal granted. Each renewal shall take effect on expiry of the previous validity period. The decisions of the Shareholders General Assembly regarding the granting or renewal of the authorization of the Board of Directors to decide on a share capital increase are subject to publicity. These extraordinary share capital increases constitute an amendment of the Articles of Association of the Company but are not subject to management approval.
There is no decision of the Company’s Shareholders General Assembly currently in force regarding (A).
( Β ) In accordance with article 49 of Law 4548/2018, the Company may, by itself or through a person acting in his/her name but on the Company's behalf, acquire its own shares but only after the approval of the Shareholders General Assembly defining the terms and conditions for such acquisitions and particularly the maximum number of shares that may be acquired, the duration for which such approval is granted, which cannot exceed twenty-four (24) months and, in case of acquisition in return of payment, the minimum and maximum amounts, under the specific terms and conditions set out in detail in article 49 of Law 4548/2018.
The Ordinary General Meeting dated 07.07.2022 approved a share buyback program to repurchase its own shares, pursuant to provisions of article 49 of L. 4548/2018, in accordance with the provisions of Regulation (EU) 596/2014 and delegated Regulation (EU) 2016/1052. The maximum number of Company shares to be repurchased will not exceed the 10% of the share capital of the Company, within a period of 24 months from the date of the relevant decision of the General Shareholders Meeting, with the price range set from €2 (minimum price) to €9 (maximum price) per share.
On 31.12.2022 the company did not hold any own shares.
(C) In accordance with the provisions of article 113 of Law 4548/2018, by decision of the Shareholders General Assembly adopted by an increased quorum and majority, pursuant to the provisions of paragraphs 3 and 4 of article 130 and 2 of article 132 of Law 4548/2018, a programme can be established regarding the distribution of shares to members of the Board of Directors and employees of the Company as well as of other affiliated Companies in the sense of Article 32 of Law 4308/2014 in the form of a stock option right, under the specific terms of this decision, a summary of which is subject to the publication formalities of article 12 of Law 4548/2018. Persons providing services to the Company on a regular basis may also be designated as beneficiaries. The total nominal value of the shares disposed hereby cannot exceed one tenth (1/10) of the share capital paid up at the date of the decision of the Shareholders General Assembly. This decision must define the maximum number of shares that may be
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acquired or issued if the beneficiaries exercise the right granted to them to purchase shares, the price at which the shares are disposed or the method of determining such price, the terms of distribution of shares to the beneficiaries, as well as the beneficiaries or their categories and the method for determining the acquisition price, without prejudice to paragraph 2 of Article 35 of L. 4548/2018, the programme duration, as well as any other relevant term.
By the same decision of the Shareholders General Assembly, the Board of Directors may be authorized to determine the beneficiaries or their categories, the way of exercising the right, as well as any other term of the share distribution plan. By its decision, the Board of Directors arranges any other relevant detail not otherwise arranged by the General Meeting, while, according to the terms of the programme, issues to those shareholders who exercised their right, certificates of the right to acquire shares and, every calendar quarter at most, delivers the shares already issued or issues and delivers the shares to the above beneficiaries, increasing the Company’s share capital and amending the Articles of Association accordingly. It also certifies the shares capital increase and complies with the publication formalities. The Board of Directors’ decision on share capital increase and the certification of its payment is adopted every calendar quarter, notwithstanding the provisions of article 20 of Law 4548/2018. The provisions of article 26 of Law 4548/2018 do not apply to such capital increase.
Finally, in accordance with para. 5 of Article 113 of L. 4548/2018, in the case of companies listed in a regulated market, if the share distribution plan is included in the approved remuneration policy, the adoption of such plan does not require a decision of the Shareholders General Assembly.
Moreover, the Shareholders General Assembly, by its decision that is adopted by an increased quorum and majority, pursuant to the provisions of paragraphs 3 and 4 of article 130 and 2 of article 132 of Law 4548/2018 and is subject to publication formalities, may authorise the Board of Directors to adopt a share distribution plan under the conditions of the preceding paragraphs, potentially increasing capital and taking all other relevant decisions. This authorisation is valid for five (5) years, unless the Shareholders General Assembly sets a shorter validity period.
According to Article 114 of Law 4548/2018, by decision of the Shareholders General Assembly adopted by an increased quorum and majority, pursuant to the provisions of paragraphs 3 and 4 of article 130 and 2 of article 132 of Law 4548/2018, a decision may be taken for the free distribution of shares to members of the Board of Directors and employees of the Company as well as of other Companies affiliated with it in the sense of Article 32 of Law 4308/2014. Persons providing services to the Company on a regular basis may also be designated as beneficiaries. A summary of the decision shall be made public.
There is no decision of the Company’s Shareholders General Assembly currently in force regarding (C).
Pursuant to the decision of the Annual General Meeting of the Company dated 07.07.2022, which was registered in the General Commercial Registry (G.E.MI.) on 26.07.2022, under registration code 2983679, following a relevant proposal of the Remuneration and Nominations Committee and the recommendations of the Board of Directors, the amendment of the Company's Remuneration Policy was approved, in accordance with articles 110-111 of Law 4548/2018.
9. Important agreements which are entered in force, amended or terminated in the event of change in the control of the Company following a public offer
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There are no agreements which enter into force, are amended or terminated in the event of change in the control of the Company following a public offer.
10. Agreements that the Company has entered into with Board members or employees regarding compensation payments in the case of resignation, dismissal without valid reason and termination of their office period or employment because of a public offering.
The Company has no significant agreements with members of the Board of Directors or its employees providing for the payment of compensation, especially in the case of resignation or dismissal without valid reason or termination of their period of office or employment due to a public offer.
11. The Company has branches or offices in 49 locations in Greece and abroad.
Athens, March 15, 2023
Chief Executive Officer
Aegean Airlines S.A.
Dimitrios Gerogiannis
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3. Independent Auditors Report
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EΡΝΣΤ & ΓΙΑΝΓΚ (ΕΛΛΑΣ) Ορκωτοί Ελεγκτές – Λογιστές Α.E. Χειμάρρας 8 Β, Μαρούσι 151 25 Αθήνα
Τηλ.: 210 2886 000 Φαξ: 210 2886 905 ey.com
THIS REPORT HAS BEEN TRANSLATED FROM THE ORIGINAL VERSION IN GREEK
INDEPENDENT AUDITOR’S REPORT
To the Shareholders of AEGEAN AIRLINES S.A..
Report on the Audit of the Separate and Consolidated Financial Statements
Opinion
We have audited the accompanying separate and consolidated financial statements of Aegean Airlines S.A. (the Company), which comprise the separate and consolidated statement of financial position as of December 31, 2022, the separate and consolidated statement of comprehensive income, the statement of changes in equity and cash flows for the year then ended and a summary of significant accounting policies and other explanatory information.
In our opinion, the accompanying separate and consolidated financial statements present fairly in all material respects the financial position of Aegean Airlines S.A., and its subsidiaries (the Group) as at December 31, 2022 and its consolidated financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards, as endorsed by the European Union.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs), as incorporated in Greek Law. Our responsibilities under those standards are further described in the “Auditor’s Responsibilities for the Audit of the Separate and Consolidated Financial Statements” section of our report. We remained independent of the Company and Group throughout the period of our appointment in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code), as incorporated in Greek Law, together with the ethical requirements that are relevant to the audit of the consolidated financial statements in Greece, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the separate and consolidated financial statements of the current period. These matters and the related risks of material misstatement , were addressed in the context of our audit of the separate and consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
For each matter below, our description of how our audit addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the “Auditor’s Responsibilities for the Audit of the Separate and Consolidated Financial Statements” section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the separate and consolidated financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying separate and consolidated financial statements.
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Key Audit Matter
How our audit addressed the key audit matter
Revenue recognition and loyalty programs (separate and consolidated financial statements)
Revenues for the year ended December 31, 2022 amounted to €1.241m and €1.337m for the Company and the Group, respectively, and refer to sales of flight tickets and products and services rendered.
Flight ticket sales represent the main revenue source and comprise direct ticket sales, ticket sales through agents and interline ticket sales.
Revenues related to flight ticket sales are accounted for as flown and at year-end deferred revenue is recognized for the non-flown tickets as the service has not yet been provided. This amount is subsequently recognized as revenue when the flight takes place. Deferred revenues as at December 31, 2022 amounted to €186m and €190m for the Company and the Group respectively.
In addition, the Company and the Group have established a loyalty program that is treated as a separate component of the sales transaction which requires delivery in the future upon redemption of the miles earned by customers. The management makes judgements, estimates and assumptions with a high degree of uncertainty and uses actuarial methods and historical data and information for the quantification of the fair value of the miles offered to customers and the percentage of miles which are not expected to be redeemed. Relevant deferred
revenues at December 31, 2022 amounted to €51m for the Company and the Group.
We identified the revenues from ticket sales and deferred revenues as a key audit matter due to the level of the related accounts, the amount of transactions involved and the volume of information processed in various IT systems, the inherent risk of not recognizing revenues in the correct period, the amount of time needed to audit these accounts and the judgements, estimates and assumptions used by the management for the calculation of the related amounts.
The Company’s and the Group’s disclosures relevant to the accounting policy, the judgements, the estimates and the assumptions used for the revenues from ticket sales and for deferred revenues can be found in notes 2.2, 2.4, 3.21 and 3.24 of the separate and consolidated financial statements.
The audit procedures that we performed, among others, have as follows:
• We tested the IT controls of systems and applications supporting the significant classes of transactions related to revenue such as logical access, change and IT operation management control.
• We audited reconciliations between accounting and commercial systems.
• For a sample of direct sales we tested revenues recorded in the system upon issuance of the ticket and the classification when tickets were flown.
• For sales through agents we received the monthly sales analysis per country and we audited the reconciliation of the accounts involved to general ledger. We audited a sample of reports from agents and tested the reconciliation of basic fare, VAT and taxes to the relevant accounts in the general ledger.
• For interline revenue, we received the monthly clearance by International Air Transport Association (IATA) and we audited the reconciliation to the revenue accounts in the general ledger.
• We identified non-financial information that enabled us to draw conclusions for the variation of the value of sales performed.
• For a sample of revenue for tickets not flown until December 31, 2022, we checked the breakdown of current and deferred revenue.
• For the Miles and Bonus loyalty program, we tested the calculation of the part of the revenue that is deferred to next year, we assessed the actuarial valuation of the Company in relation to the fair value of the miles awarded and the assumptions with respect to the percentage of awarded miles not expected to be redeemed through the use of historical trends. We included in our team experts in actuarial assessments.
We assessed the sufficiency of related disclosures in the separate and consolidated financial statements.
Key Audit Matter
How our audit addressed the key audit matter
Provision for aircraft maintenance (separate and consolidated financial statements)
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The Company and the Group operate aircrafts, under lease agreements based on which certain maintenance requirements have to be met. During the contract period, a provision is made with the estimated amounts required to be paid in the future for the fulfilment of the contractual commitments. The calculation of the related amounts requires by management the use of judgements, estimates and assumptions which may change in the future. The provision for aircraft maintenance as at 31 December 2022 amounted to €94m and to €99m for the Company and the Group, respectively.
We have identified the provision of aircraft maintenance as a key audit matter because of the high degree of uncertainty of the judgements, the significant estimates and assumptions in their reassessment, used by the management and the of the magnitude of the related amounts.
The Company’s and the Group’s disclosures relevant to the accounting policy, the judgements, the estimates and the assumptions used on the provision for aircraft maintenance can be found in notes 2.2 and 3.19 of the separate and consolidated financial statements.
The audit procedures that we performed, among others, were as follows:
• We assessed the design of management controls over the calculation of the provision for aircraft maintenance.
• We assessed whether the Company and the Group used consistently to those used in prior periods the methodology for the calculation of the provision for aircraft maintenance, using also historical data and discussed with the management the key judgements, estimates and assumptions used in the calculation of the provision for aircraft maintenance.
• We audited the key judgements, estimates and assumptions for the expected cost of maintenance of aircrafts, engines and other components, the flight hours or flight cycles, the maintenance program taking into consideration the agreements signed with maintenance providers for aircrafts and engines as well as we audited the assumptions used for the discount rate and the foreign exchange rates.
• We compared estimates and assumptions used to internal and external sources and data, where available.
• We recalculated the amounts included in the model used by the management.
Also, we assessed the sufficiency of related disclosures in the separate and consolidated financial statements.
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Key Audit Matter
How our audit addressed the key audit matter
Derivative contracts (separate and consolidated financial statements)
The Company and the Group enters into derivative contracts to hedge risks arising from the variation of prices in fuel, interest rates and foreign exchange. Derivatives are considered by the management as cash flow hedges and any change in their fair value is transferred to other comprehensive income, otherwise are recognized at the statement of comprehensive income of the year. At December 31, 2022 the Company and the Group had recognized derivative assets of €58m and derivative liabilities of €15m, respectively.
We have identified the valuation and recognition of derivative contracts as a key audit matter due to the level and the nature of the related accounts, the complexity of the accounting treatment and the uncertainties surrounding the judgements, estimates and assumptions used by the management for the calculation of the related amounts and the implementation of the hedging accounting on the hedge effectiveness and its effect on the statement of comprehensive income.
The Company’s and the Group’s disclosures relevant to the accounting policy, the judgements, the estimates and the assumptions used for the calculation of the measurement of derivatives can be found in notes 2.2, 2.8 and 3.23 of the separate and consolidated financial statements.
The audit procedures that we performed, among others were as follows:
• For all derivative contracts which were effective at the year-end we compared their fair value and their corresponding carrying amount recognized in the financial statements with the valuations of the counterparties.
• We audited the terms of the derivative contracts which were effective as at December 31, 2022 and for a sample of them we recalculated their fair value.
• We assessed whether the derivative contracts meet the criteria set by the relevant accounting standards and where applicable, the criteria for hedge accounting by category of derivatives.
• We included in our team derivative experts specialized in the hedge effectiveness and valuation of derivative contracts.
• We audit the management's estimates for the future cash flows for which the hedge accounting has been used and in cases where the management's initial estimate was revised, we confirmed the correct accounting treatment.
• We audited the fulfillment and the proper accounting treatment of the contracts expired within the year as well as of the effective contracts as of December 31, 2022.
• We audited the classification of derivative contracts in current and non-current assets and liabilities in the statement of financial position.
We assessed the sufficiency of related disclosures in the separate and consolidated financial statements.
Other information
Management is responsible for the other information in the Annual Report.The other information, includes the Board of Directors’ Report, for which reference is also made in section “Report on Other Legal and Regulatory Requirements”, the Statements of the Members of the Board of Directors, but does not include the separate and consolidated financial statements and our auditor’s report thereon.
Our opinion on the separate and consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the separate and consolidated financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the
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separate and consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Management and Those Charged with Governance for the Separate and Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the separate and consolidated financial statements in accordance with International Financial Reporting Standards as endorsed by the European Union, and for such internal control as management determines is necessary to enable the preparation of separate and consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the separate and consolidated financial statements, management is responsible for assessing the Company’s and Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company and the Group or to cease operations, or has no realistic alternative but to do so.
The Audit Committee (Law 44 ν.4449/2017) is responsible for overseeing the Company’s and the Group’s financial reporting process.
Auditor’s Responsibilities for the Audit of the separate and c onsolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the separate and consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs, as incorporated in Greek Law, will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these separate and consolidated financial statements.
As part of an audit in accordance with ISAs, as incorporated in Greek Law , we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the separate and consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s and the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s and the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the separate and consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company and the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the separate and consolidated financial statements, including the disclosures, and whether the separate and consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the separate and consolidated financial statements. We are
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responsible for the direction, supervision and performance of the Company and its subsidiaries. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the separate and consolidated financial statements of the current period and are therefore the key audit matters.
Report on Other Legal and Regulatory Requirements
1. Board of Directors’ Report
Taking into consideration that management is responsible for the preparation of the Board of Directors’ Report and Corporate Governance Statement that is included therein, according to the provisions of paragraph 5 article 2 of Law 4336/2015 (part B), we report that:
a) The Board of Directors’ Report includes a Corporate Governance Statement that contains the information required by article 152 of Law 4548/1920.
b) In our opinion the Board of Directors’ Report has been prepared in accordance with the legal requirements of article 150-151 and 153-154 and paragraph 1 (c and d) of article 152 of Law 4548/2018 and the content of the Board of Directors’ report is consistent with the accompanying financial statements for the year ended December 31, 2022.
c) Based on the knowledge and understanding concerning Aegean Airlines S.A. and its environment, obtained during our audit, we have not identified information included in the Board of Directors’ Report that contains a material misstatement.
2. Additional Report to the Audit Committee
Our opinion on the separate and consolidated financial statements is consistent with our Additional Report to the Audit Committee of the Group, in accordance with Article 11 of the EU Regulation 537/2014.
3. Provision of Non-audit Services
We have not provided any prohibited non-audit services per Article 5 of the EU Regulation 537/2014. Non-audit services provided by us to the Company and its subsidiaries during the year ended December 31, 2022, are disclosed in note 3.39 of the separate and consolidated financial statements.
4. Appointment of the Auditor
We were firstly appointed as auditors of the Company by the General Assembly on May 12, 2015. Our appointment has been renewed annually by virtue of decisions of the annual general meetings of the shareholders for a continuous period of 8 years.
5. Rules of Procedure
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The Company has in place Rules of Procedure, the context of which is in accordance with the provisions of article 14 of Law 4706/2020.
6. Reasonable Assurance report on the European Single Electronic Format
We have examined the digital files of the Company and the Group, prepared in accordance with the European Single Electronic Format (“ESEF”) as defined in the EU Delegated Regulation 2019/815, as amended by the EU Delegated Regulation 2020/1989 of the European Commission (hereinafter referred to as “the ESEF Regulation”), that comprise an XHTML file «213800VI8OH5EJM18L21-2022-12-31-el.xhtml», which includes the separate and consolidated financial statements of the Company and the Group for the year ended December 31, 2022, and an XBRL file « 213800VI8OH5EJM18L21-2022-12-31-el.zip» with the appropriate tagging of the aforementioned consolidated financial statements, including the explanatory notes. Regulatory Framework
The digital files of the European Single Electronic Format are prepared in accordance with the ESEF Regulation and the Interpretative Communication of the European Commission 2020/C 379/01 dated 10 November 2020, as required by Law 3556/2007 and the relevant communications of the Hellenic Capital Market Commission and the Athens Stock Exchange (hereinafter referred to as the "ESEF Regulatory Framework").
This Framework provides, among others, the following requirements:
• all annual financial reports should be prepared in XHTML format.
• for the consolidated financial statements prepared in accordance with International Financial Reporting Standards, the financial information in the statement of total comprehensive income, the statement of financial position, the statement of changes of equity and the statement of cash flows, as well as the financial information included in the explanatory notes, should be marked-up (XBRL tags and block tags), according to the Taxonomy of ESEF (ESEF Taxonomy), as applicable. The technical specifications for ESEF, including the relevant taxonomy, are set out in the ESEF Regulatory Technical Standards.
The requirements set out in the ESEF Regulatory Framework provide appropriate criteria for us to express a reasonable assurance conclusion.
Responsibilities of Management and Those Charged With Governance
Management is responsible for the preparation and submission of the separate and consolidated financial statements of the Company for the year ended December 31, 2022, in accordance with the requirements set out in the ESEF Regulatory Framework, and for such internal control as management determines is necessary to enable the preparation of the digital files that is free from material misstatement, whether due to fraud or error.
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Auditor’s Responsibilities
Our responsibility is to plan and perform this assurance engagement in accordance with the Decision 214/4/11-02- 2022 of the Board of Directors of the Hellenic Accounting and Auditing Standards Oversight Board and the “Guiding instructions to auditors in connection with their assurance engagement on the European Single Electronic Format (ESEF) of public issuers in regulated Greek markets”, as issued by the Institute of Certified Public Accountants of Greece on February 14, 2022 (hereinafter referred to as “ESEF Guiding Instructions”), in order to obtain reasonable assurance that the separate and consolidated financial statements prepared by management in accordance with ESEF comply, in all material respects, with the ESEF Regulatory Framework.
Our work was performed in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code), as incorporated in Greek Law, and we have fulfilled our other ethical independence responsibilities in accordance with Law 4449/2017 and the EU Regulation 537/2014.
The assurance engagement we performed, in accordance with the International Standard on Assurance Engagements 3000, "Assurance Engagements Other Than an Audit or Review of Historical Financial Information", is limited to the objectives included in the ESEF Guiding Instructions. Reasonable assurance is a high level of assurance, but it is not a guarantee that this reasonable assurance engagement will always detect a material misstatement with respect to non- compliance with the requirements of the ESEF Regulatory Framework when it exists.
Conclusion
Based on the procedures performed and the evidence obtained, we express the conclusion that the separate and consolidated financial statements of the Company and the Group for the year ended December 31, 2022, in XHTML file format «213800VI8OH5EJM18L21-2022-12-31-el.xhtml», as well as the required XBRL files «213800VI8OH5EJM18L21-2022-12-31-el.zip» with relevant tagging on the aforementioned consolidated financial statements, including the explanatory notes, have been prepared, in all material respects, in accordance with the ESEF Regulatory Framework.
Athens, 15 March 2023
Ioannis Pierros
Certified Auditor Accountant
SOEL R.N. 3505
ERNST & YOUNG (HELLAS)
Certified Auditors – Accountants S.A.
8B Chimarras, Maroussi,
151 25, Greece
Company SOEL R.N. 107
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4. Consolidated Financial Statements for the period 1 January 2022 - 31 December 2022
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The annual financial statements for the year ended 31.12.2022 have been approved by the Board of Directors of Aegean Airlines on March 15, 2023.
The financial statements constitute an integral part of the Annual Financial Report which can be found at
www.aegeanair.com
and which incorporates the Independent Auditor’s Report.
The undersigned
Chairman of the BoD
Chief Executive Officer
Chief Financial Officer
Chief Accountant
Eftichios Vassilakis
I.D. no ΑΝ049866
Dimitrios Gerogiannis
I.D. no ΑΒ642495
Michail Kouveliotis
I.D. no ΑΟ148706
Maria Zannaki
I.D. no ΑΟ135556
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4. Consolidated Financial Statements in accordance with IFRS for the period 1 January 2022 - 31 December 2022
4.1 Statement of Financial Position of the Company 31.12.2022
Note
31.12.2022
31.12.2021
ASSETS
Non-current assets
Intangible assets
3.1
30.052,30
27.083,02
Tangible assets
3.2
252.661,35
133.583,87
Right of use assets
3.3
686.881,55
404.473,01
Advances for future aircraft leases
3.5
8.526,51
26.544,63
Investments in subsidiaries
3.4
82.188,10
81.688,10
Other long term assets
3.7
37.994,58
44.748,32
Deferred tax asset
3.6
12.632,79
54.727,65
Derivatives
3.23
7.074,53
9.671,60
Financial Assets
3.8
19.679,93
20.703,93
Total non-current assets
1.137.691,63
803.224,13
Current assets
Inventories
3.9
27.311,45
16.910,98
Trade and other receivables
3.10
102.248,54
80.116,87
Current prepaid expenses
3.11
24.577,13
18.231,25
Financial Assets
3.8
53.844,82
12.294,38
Derivatives
3.23
51.078,05
18.542,33
Advances for future aircraft leases
3.5
53.548,46
70.462,74
Restricted Cash
3.12
881,31
0
Cash and cash equivalents
3.12
441.473,33
370.503,00
Total current assets
754.963,09
587.061,54
TOTAL ASSETS
1.892.654,72
1.390.285,67
EQUITY
Share capital
3.13
45.083,54
58.608,61
Share premium
3.14
78.444,83
120.588,48
Other reserves
3.15
78.144,45
53.878,54
Retained earnings
113.205,33
(55.668,71)
Total equity
314.878,16
177.406,91
LIABILITIES
Long term liabilities
Borrowings
3.17
231.471,94
343.700,36
Derivatives
3.23
409,90
10.969,14
Provision for retirement benefits obligations
3.16
3.547,35
3.099,50
Provision for aircraft maintenance
3.19
53.658,29
49.880,89
Contract Liabilities
3.21
40.897,42
36.827,93
Lease Liabilities
3.3
597.498,78
304.472,15
Total long term liabilities
927.483,68
748.949,98
Short term liabilities
Trade and other payables
3.18
98.787,89
74.596,76
Borrowings
3.17
36.713,13
2.500,40
Other short term liabilities
3.20
105.492,95
80.668,36
Contract Liabilities
3.21
221.181,01
156.507,94
Accrued expenses
3.22
41.526,27
34.945,14
Derivatives
3.23
14.578,03
1.647,69
Provisions
3.19
43.572,87
33.585,03
Lease Liabilities
88.440,72
79.477,45
Total short term liabilities
650.292,87
463.928,78
Total liabilities
1.577.776,55
1.212.878,75
TOTAL EQUITY AND LIABILITIES
1.892.654,72
1.390.285,67
112
4.2 Statement of Financial Position of the Group 31.12.2022
Note
31.12.2022
31.12.2021
ASSETS
Non-current assets
Intangible assets
3.1
45.097,83
42.526,20
Goodwill
3.1, 3.4
40.137,70
40.137,70
Tangible assets
3.2
281.841,64
164.719,75
Right of use assets
3.3
745.761,80
412.768,13
Advances for future aircraft leases
3.5
8.526,51
26.544,63
Financial assets
3.8
19.679,93
20.703,92
Deferred tax assets
3.6
25.237,30
66.438,03
Other long term assets
3.7
40.784,13
50.303,15
Derivatives
3.23
7.074,53
9.671,60
Total non-current assets
1.214.141,37
833.813,12
Current assets
Inventories
3.9
33.717,08
22.763,58
Trade and other receivables
3.10
124.060,08
115.720,67
Current prepaid expenses
3.11
26.813,97
24.228,19
Financial assets
3.8
53.844,82
12.294,38
Derivatives
3.23
51.078,05
18.542,33
Advances for future aircraft leases
3.5
53.548,46
70.462,74
Restricted Cash
3.12
881,31
0
Cash and cash equivalents
3.12
462.288,61
442.586,58
Total current assets
806.232,38
706.598,47
TOTAL ASSETS
2.020.373,75
1.540.411,58
EQUITY
Share capital
3.13
45.083,54
58.608,61
Share premium
3.14
78.444,83
120.588,48
Foreign currency translation reserve
3.15
(1.137,54)
(1.199,51)
Other reserves
3.15
62.644,45
38.378,54
Statutory reserve
3.15
16.973,96
16.973,96
Retained earnings
146.715,42
(20.316,24)
Equity attributable to the equity holders of the parent
348.724,66
213.033,84
Non-controlling interest
(622,44)
603,29
Total equity
348.102,22
213.637,13
LIABILITIES
Long term liabilities
Borrowings
3.17
231.471,94
343.700,36
Derivatives
3.23
409,90
10.969,14
Provision for retirement benefits obligations
3.16
3.881,43
3.399,64
Provision for aircraft maintenance
3.19
56.081,92
54.363,12
Contract Liabilities
3.21
40.897,42
36.870,49
Lease Liabilities
3.3
641.464,48
309.373,14
Total long term liabilities
974.207,09
758.675,89
Short term liabilities
Trade and other payables
3.18
123.578,12
130.345,77
Borrowings
3.17
36.713,13
2.500,40
Other short term liabilities
3.20
111.219,25
86.386,35
Contract Liabilities
3.21
227.457,75
164.149,46
Accrued expenses
3.22
41.176,82
40.416,41
Derivatives
3.23
14.578,03
1.647,69
Provisions
3.19
47.486,67
37.792,10
Lease Liabilities
3.3
95.854,67
104.860,37
Total short term liabilities
698.064,44
568.098,56
Total liabilities
1.672.271,53
1.326.774,45
TOTAL EQUITY AND LIABILITIES
2.020.373,75
1.540.411,58
113
4.3 Statement of Comprehensive Income of the Company 31.12.2022
Condensed Statement of Comprehensive Income
Note
2022
2021
Revenue from contracts with customers
3.24
1.240.943,04
512.361,56
Other operating income
3.25
50.582,47
115.976,31
Personnel expenses
3.27
(119.888,69)
(59.196,38)
Depreciation
3.1, 3.2, 3.3
(114.675,21)
(115.056,16)
Consumption of goods and services
3.26
(906.139,25)
(403.250,34)
Finance income
3.28
107.861,33
36.087,40
Finance expense
3.28
(110.158,71)
(73.975,51)
Profit/(Loss) before tax
148.524,98
12.946,87
Income tax
3.29
(35.425,50)
8.803,91
Profit/(Loss) after tax
113.099,49
21.750,77
Other comprehensive income
(a) Other comprehensive income that may be reclassified to profit or loss in subsequent periods
Cash flow hedging
Reclassification of Profit / (Loss)
3.23
(91.308,59)
(2.136,23)
Net change in fair value
127.162,15
43.133,01
Income tax
(7.887,78)
(9.000,82)
Debt Instruments at FV through OCI
Reclassification of Profit / (Loss)
(108,73)
40,27
Net change in fair value
(1.567,64)
796,30
Income tax
368,80
(184,04)
Total (a)
26.658,21
32.648,49
(b) Other comprehensive income that will not be reclassified to profit or loss in subsequent periods
Net actuarial profit/ (loss) on defined benefit plans
(49,17)
(117,95)
Deferred tax
155,02
25,95
Net change in fair value - equity instruments
(3.086,91)
(570,57)
Deferred tax
694,61
125,52
Total (b)
(2.286,45)
(537,04)
Other comprehensive income/ (losses) for the period net of tax
24.371,76
32.111,45
Total comprehensive income/(losses) for the period net of tax
137.471,25
53.862,22
114
4.4 Statement of Comprehensive Income of the Group 31.12.2022
Condensed Consolidated Statement
Note
2022
2021
Revenue from contracts with customers
3.24
1.336.832,34
674.828,30
Other operating income
3.25
44.602,51
105.628,47
Personnel expenses
3.27
(133.431,17)
(66.868,55)
Depreciation
3.1, 3.2, 3.3
(127.680,73)
(149.946,57)
Consumption of goods and services
3.26
(973.064,92)
(533.585,72)
Finance income
3.28
112.385,60
40.173,94
Finance expense
3.28
(118.334,92)
(79.575,49)
Profit/(Loss) before tax
141.308,71
(9.345,62)
Income tax
3.29
(34.530,00)
14.414,79
Profit/(Loss) after tax
106.778,71
5.069,16
Distributed in:
Equity holders of the parent
108.004,44
4.905,16
Non-controlling interest
(1.225,73)
164,01
Total
106.778,71
5.069,16
Other comprehensive income
(a) Other comprehensive income that may be reclassified to profit or loss in subsequent periods
Cash flow hedging
Reclassification of Profit / (Loss)
3.23
(91.308,59)
(2.136,23)
Net change in fair value of cash flow hedges
127.162,15
43.133,01
Income tax
(7.887,78)
(9.000,82)
Debt Instruments at FV through OCI
Reclassification of Profit / (Loss)
(108,73)
40,27
Net change in fair value of cash flow hedges
(1.567,64)
796,30
Income tax
368,80
(184,04)
Total (a)
26.658,21
32.648,49
(b) Other comprehensive income that will not be reclassified to profit or loss in subsequent periods
Net actuarial profit/ (loss) on defined benefit plans
(52,17)
(120,96)
Deferred tax
155,68
26,61
Net change in fair value - equity instruments
(3.086,91)
(570,57)
Deferred tax
694,61
125,52
Total (b)
(2.288,79)
(539,39)
Other comprehensive income/ (losses) for the period net of tax
24.369,42
32.109,10
Total comprehensive income/(losses) for the period net of tax
131.148,13
37.178,27
Distributed in:
Equity holders of the parent
132.373,86
37.014,26
Non-controlling interest
(1.225,73)
164,01
Total
131.148,13
37.178,27
Basic earnings per share in €
1,184
0,062
Diluted earnings per share in €
1,134
0,060
Weighted Average number of shares
90.167.100,00
81.573.350
115
4.5 Statement of changes in the Equity of the Company 31.12.2022
Company
Issued capital
Share premium
Cash flow hedge reserves
Reserves (other)
Debt Instruments at FV through OCI
Accumulated Profit / (Loss)
Total equity
Balance at 01.01.2021
46.421,11
72.775,98
(16.068,97)
10.136,56
134,44
(77.327,49)
36.071,62
Profit/(Loss) for the year
0
0
0
0
0
21.750,77
21.750,77
Other comprehensive income/ (losses)
0
0
31.995,97
(445,04)
652,53
(92,00)
32.111,46
Total comprehensive income/ (losses)
0
0
31.995,97
(445,04)
652,53
21.658,77
53.862,23
Warrants Reserve
0
0
0
27.473,04
0
0
27.473,04
Share capital increase
12.187,50
47.812,50
0
0
0
0
60.000,00
Balance on 31.12.2021
58.608,61
120.588,48
15.927,00
37.164,56
786,97
(55.668,72)
177.406,91
Balance on 01.01.2022
58.608,61
120.588,48
15.927,00
37.164,56
786,97
(55.668,72)
177.406,91
Profit/(Loss) for the year
0
0
0
0
0
113.099,49
113.099,49
Other comprehensive income/ (losses)
0
0
21.791,72
3.916,22
(1.442,02)
105,85
24.371,76
Total comprehensive income/ (losses)
0
0
21.791,72
3.916,22
(1.442,02)
113.205,33
137.471,25
Share capital decrease
(13.525,07)
(42.143,64)
0
0
0
55.668,71
0
Balance on 31.12.2022
45.083,54
78.444,83
37.718,72
41.080,78
(655,05)
113.205,32
314.878,16
116
4.6 Statement of changes in the Equity of the Group 31.12.2022
Attributable to the equity holders of the parent
Group
Issued capital
Share premium
Cash flow hedge reserves
Reserves (other)
Debt Instruments at FV through OCI
Accumulated Profit / (Loss)
Total
Non-controlling interests
Total equity
Balance at 01.01.2021
46.421,11
72.775,98
(16.068,97)
8.094,28
134,44
(25.950,33)
85.406,51
0
85.406,51
Profit/(Loss) for the year
0
0
0
0
0
4.905,16
4.905,16
164,01
5.069,16
Other comprehensive income/ (losses)
0
0
31.995,97
(445,04)
652,52
(94,35)
32.109,10
0
32.109,10
Total comprehensive income/ (losses)
0
0
31.995,97
(445,04)
652,52
4.810,81
37.014,26
164,01
37.178,27
Foreign currency translation reserve
0
0
0
2.316,74
0
455,47
2.772,21
0
2.772,21
Warrants Reserve
0
0
0
27.473,05
0
0
27.473,05
0
27.473,05
Share capital increase
12.187,50
47.812,50
0
0
0
0
60.000,00
0
60.000,00
Subsidiary acquisition
0
0
0
0
0
367,81
367,81
439,28
807,09
Balance on 31.12.2021
58.608,61
120.588,48
15.927,00
37.439,03
786,96
(20.316,24)
213.033,84
603,29
213.637,13
Balance on 01.01.2022
58.608,61
120.588,48
15.927,00
37.439,03
786,96
(20.316,24)
213.033,84
603,29
213.637,13
Profit/(Loss) for the year
0
0
0
0
0
108.004,44
108.004,44
(1.225,73)
106.778,71
Other comprehensive income/ (losses)
21.791,70
3.916,22
(1.442,02)
103,52
24.369,42
0
24.369,42
Total comprehensive income/ (losses)
0
0
21.791,70
3.916,22
(1.442,02)
108.107,96
132.373,86
(1.225,73)
131.148,13
Foreign currency translation reserve
0
0
0
61,97
0
3.254,99
3.316,96
0
3.316,96
Share capital decrease
(13.525,07)
(42.143,64)
0
0
0
55.668,71
0
0
0
Balance on 31.12.2022
45.083,54
78.444,83
37.718,70
41.417,22
(655,06)
146.715,42
348.724,66
(622,44)
348.102,22
117
4.7 Cash Flow Statement of the Company 31.12.2022
31.12.2022
31.12.2021
Cash flows from operating activities
Profit/ (Loss) before tax
148.524,98
12.946,87
Adjustments for:
Depreciation (Notes 3.1, 3.2, 3.3)
114.675,21
115.056,16
Provisions for aircraft maintenance , bad debts and other provision (Notes 3.8, 3.16, 3.19(2))
19.397,57
41.595,26
Losses/(gains) from foreign exchange differences (Note 3.28)
(5.899,86)
31.156,15
(Revenue)/ expense, (Gain) / loss from investing activities
(32.808,48)
(23.690,45)
Government grant (Note 3.25)
0
(92.526,96)
Finance Cost (Note 3.28)
42.407,17
30.673,23
Cash flows from operating activities before changes in working capital
286.296,59
115.210,26
Changes in working capital
(Increase)/Decrease in inventories (Note 3.9)
(10.400,47)
(2.648,69)
(Increase)/ Decrease in receivables
(23.490,78)
3.051,47
Increase/ (Decrease) in liabilities
150.586,80
14.953,88
Total changes in working capital
116.695,55
15.356,66
Government grant received (Note 3.25)
0
92.526,96
Interest expenses paid
(40.229,97)
(28.261,94)
Net cash flows from operating activities
362.762,16
194.831,94
Cash flows from investing activities
Purchases of tangible assets (Notes 3.1, 3.2)
(85.748,92)
(5.292,91)
Sales of tangible assets
242,85
35,86
Tangible assets prepayments
(36.195,46)
(17.533,23)
Investment in subsidiaries
(500,00)
(850,00)
Purchases of financial assets
(53.356,09)
(788,00)
Purchase of equity instruments
(2.062,90)
(500,06)
Sales of financial assets
12.237,31
733,48
Interest and other financial income received
1.330,41
393,64
Net cash flows from investing activities
(164.052,78)
(23.801,21)
Cash flows from financing activities
Borrowing received
0
92.000,00
Borrowing paid
(81.500,00)
(184.000,00)
Share capital increase
0
60.000,00
Aircraft leases paid
(90.619,74)
(91.815,06)
Future aircraft lease prepayments (Note 3.5)
(704,11)
(2.798,11)
Future aircraft lease prepayments (Note 3.5)
46.328,74
(71.413,06)
Government grant (warrant reseve) (Note 3.15)
0
27.473,04
Bond securities
0
(10.800,00)
Net cash flows from financing activities
(126.495,10)
(181.353,20)
Net increase/ (decrease) in cash and cash equivalents
72.214,28
(10.322,47)
Cash, cash equivalents at the beginning of the period (Note 3.12)
370.503,00
376.425,14
Net foreign exchange differences
(1.243,94)
4.400,33
Cash, cash equivalents at the end of the period
441.473,33
370.503,00
118
4.8 Cash Flow Statement of the Group 31.12.2022
31.12.2022
31.12.2021
Cash flows from operating activities
Profit before tax
141.308,71
(9.345,62)
Adjustments for:
Depreciation (Notes 3.1, 3.2, 3.3)
127.680,73
149.946,56
Provisions for aircraft maintenance , bad debts and other provision (Notes 3.8, 3.16, 3.19(2))
17.151,30
45.104,85
Losses/(gains) from foreign exchange differences (Note 3.28)
(1.041,89)
31.684,59
(Revenue)/ expense, (Gain) / loss from investing activities
(32.845,97)
(23.358,21)
Government grant (Note 3.25)
0
(92.526,96)
Finance Cost (Note 3.28)
45.144,38
31.011,47
Cash flows from operating activities before changes in working capital
297.397,26
132.516,67
Changes in working capital
(Increase)/Decrease in inventories (Note 3.9)
(10.953,50)
(2.748,75)
(Increase)/ Decrease in receivables
(3.043,08)
(39.536,82)
Increase/ (Decrease) in liabilities
108.611,38
58.949,96
Total changes in working capital
94.614,80
16.664,39
Interest expenses paid
(41.775,81)
(30.244,75)
Government grant received (Note 3.25)
0
92.526,96
Net cash flows from operating activities
350.236,25
211.463,27
Cash flows from investing activities
Purchases of tangible assets (Notes 3.1, 3.2)
(86.181,95)
(5.971,13)
Sales of tangible assets
242,85
35,86
Tangible assets prepayments
(36.195,46)
(17.533,23)
Purchases of financial assets
(53.356,10)
(788,00)
Purchase of equity instruments
(2.062,90)
(500,05)
Investment in subsidiaries
0
(765,00)
Sales of financial assets
12.237,31
733,48
Interest and other financial income received
1.516,90
392,00
Capital return from subsidiary’s share capital reduction
(163.799,35)
(24.396,08)
Cash flows from financing activities
Borrowing paid
(81.500,00)
(184.000,00)
Borrowing received
0
92.000,00
Share capital increase
0
60.000,00
Aircraft leases paid
(126.351,92)
(97.047,69)
Bond securities
0
(10.800,00)
Future aircraft lease prepayments (Note 3.5)
(704,11)
(2.798,11)
Government grant (warrant reseve) (Note 3.15)
0
27.473,04
Future aircraft lease prepayments (Note 3.5)
46.328,74
(71.413,06)
Net cash flows from financing activities
(162.227,29)
(186.585,83)
Net increase/ (decrease) in cash and cash equivalents
24.209,61
481,36
Cash, cash equivalents at the beginning of the period (Note 3.12)
442.586,58
437.067,98
Net foreign exchange differences
(4.507,58)
5.037,24
Cash, cash equivalents at the end of the period
462.288,61
442.586,58
119
4.9 Notes to the Financial Statements
Contents
1 Information for the Group ............................................................................................................................................. 121
1.1 General Information ................................................................................................................................................... 121
1.2 Nature of Operations ................................................................................................................................................ 121
2. Basis of Preparation of the Annual Financial Statements ............................................................................................ 121
2.1 Standards, Interpretations and amendments to existing standards ........................................................................ 124
2.2 Important judgments, accounting estimates and assumptions ............................................................................... 127
2. 3 Foreign Currency Translation .................................................................................................................................... 131
2.4 Revenue and expenses recognition ............................................................................................................................ 131
2.5 Foreign Currency Translation .................................................................................................................................... 133
2.6 Tangible Assets ........................................................................................................................................................ 134
2.7 Pre-delivery payments .............................................................................................................................................. 135
2.8 Financial Assets .......................................................................................................................................................... 135
2.9 Inventories ................................................................................................................................................................. 139
2.10 Leases ....................................................................................................................................................................... 139
2.11 Cash and cash equivalents - Restricted Cash ........................................................................................................... 141
2.12 Share Capital ............................................................................................................................................................ 141
2.13 Employee benefits due to retirement and other short-term benefits to employee ................................................ 141
2.14 Financial Liabilities .................................................................................................................................................. 142
2.15 Income tax and deferred tax ................................................................................................................................... 142
2.16 Provisions, contingent liabilities and contingent assets .......................................................................................... 143
2.17 Government grants .................................................................................................................................................. 144
2.18 Operating Segments ................................................................................................................................................ 144
3. Notes to the Financial Statements .............................................................................................................................. 145
3.1 Intangible Assets ........................................................................................................................................................ 145
3.2 Tangible Assets .......................................................................................................................................................... 146
3.3 Right of use assets/ Lease liabilities ........................................................................................................................... 149
3.4 Investment in subsidiaries ......................................................................................................................................... 152
3.5 Advances for future aircraft leases ........................................................................................................................... 152
3.6 Deferred tax assets/ liabilities .................................................................................................................................. 153
3.7 Other long-term assetsts ........................................................................................................................................... 154
3.8 Financial assets .......................................................................................................................................................... 154
3.9 Inventories .................................................................................................................................................................. 154
3.10 Customers and other trade receivables .................................................................................................................. 155
3.11 Prepayments ............................................................................................................................................................ 157
120
3.12 Cash and cash equivalents- Restricted Cash ............................................................................................................. 157
3.13 Share Capital ............................................................................................................................................................. 158
3.14 Share Premium ........................................................................................................................................................ 158
3.15 Other reserves .......................................................................................................................................................... 158
3.16 Provision for employee retirement benefits ........................................................................................................... 159
3.17 Borrowings ............................................................................................................................................................... 162
3.18 Suppliers and other liabilities ................................................................................................................................... 164
3.19 Provision .................................................................................................................................................................. 164
3.20 Other Short-Term Liabilities .................................................................................................................................... 166
3.21 Contract Balances .................................................................................................................................................... 166
3.22 Accrued Expenses .................................................................................................................................................... 168
3.23 Derivatives ............................................................................................................................................................... 168
3.24 Revenue from contracts with customers ................................................................................................................. 173
3.25 Other Income ........................................................................................................................................................... 175
3.26 Consumptions of materials and services ................................................................................................................. 175
3.27 Employee Costs ....................................................................................................................................................... 176
3.28 Financial Income/ Expense ...................................................................................................................................... 177
3.29 Income Tax ............................................................................................................................................................... 178
3.30 Contingent Liabilities/ Contingent assets ................................................................................................................ 178
3.31 Related parties’ transactions and balances ............................................................................................................. 179
3.32 Transactions with Directors and Board of Directors members ............................................................................... 180
3.34 Risk Management .................................................................................................................................................... 180
3.35 Commitments .......................................................................................................................................................... 187
3.36 Dividends ................................................................................................................................................................. 188
3.37 Subsequent Events .................................................................................................................................................. 188
3. 38 Existing Encumbrances ............................................................................................................................................. 189
3.3 9 Auditor’s fees ........................................................................................................................................................... 189
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Information for the Group
1.1 General Information
The Company AEGEAN AIRLINES S.A. , a Societe Anonyme airline company (hereafter referred as “The Company”), is the parent company of AEGEAN Group (hereafter referred as “The Group”), which bears the title of AEGEAN AIRLINES in its international transactions.
The Company’s duration has been defined until 31.12.2044 and can be extended after that, following the decision of the General Shareholders Meeting. The Company’s registered address is Greece , in the Municipality of of Spata- Artemida, Attiki , Building 57 of Athens International Airport, PC 190 19 .
The Company and the Group operate in the sector of public airline transportations, providing transport of passengers and goods inside and outside the Greek territory , conducting scheduled and charter flights. At the same time, they render aviation application services, aircraft technical support and ground handling services.
The financial statements for the period that ended in the 31 st December 2022 have been prepared according to the International Financial Reporting Standards and have been approved by the Board of Directors of the Company on March 15, 2023 and are subject to approval of the General Shareholders Meeting that will take place within July 2023.
1.2 Nature of Operations
The Company and the Group operate in the sector of public airline transportations, providing transport of passengers and goods inside and outside the Greek territory, conducting scheduled and unscheduled flights. At the same time, they render aviation services, technical support and ground handling aircraft services. Indicatively, the Company’s and the Group’s objectives include among others the following activities/operations:
• participation in any type of local or foreign company of similar nature of operations;
• establishment of subsidiaries and agencies;
• import, trade, leasing of aircraft and spare parts.
2. Basis of Preparation of the Annual Financial Statements
The Company’s financial statements have been prepared in accordance with the International Financial Reporting Standards (“IFRS”), as adopted by EU. The financial statements have been prepared under the historical cost principle except for certain categories of assets and liabilities measured at fair values. These categories are the ones stated below:
Financial derivatives;
Debt and equity instruments
Financial statements are presented in thousand euro (€ ‘000), except if stated otherwise. In case of small variances in decimals are mainly due to rounding.
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Business developments
After a strong recovery in 2021, global economy faced serious challenges in 2022. The economic consequences of the war in Ukraine combined with soaring prices on energy, raw materials and food, eroded global economy’s growth rate, accounting for the slowdown in the growth of international trade. China’s ongoing lockdowns further disrupted global supply chain. Despite rising cost of living, private consumption showed resilience, on the back of savings built up during the pandemic and fiscal support measures, as pandemic restrictions abated.
The Central Banks in USA and EU proceeded with interest rate increases, in an effort to contain inflation. ECB raised its interest rate on the main refinancing operations (MRO) from -0.50% to 2.50% in 5 consecutive meetings since July 2022. Russia’s invasion in Ukraine and the ensuing EU and US oil sanctions against Russia caused high volatility in the price of crude oil in 2022.
Aviation industry recovered a significant part of its losses, caused by the pandemic outbreak due to strong demand. The first couple of months were greatly affected by the highly contagious Omicron variant, while Russian invasion in Ukraine at the end of February, created only a short-term instability in the outlook for the summer period. Global air passenger traffic regained momentum and continued to recover from May onwards.
COVID-19 affected the activity of the Group to a lesser extent, mainly during the 1st quarter of the year where the Omicron variation prevailed. The easing of the pandemic during 2022 along with the extensive vaccinations permitted the lifting of restrictive measures and thus capacity recovery. After two years of various travel restrictions and pandemic containment measures, there was an accumulated desire for travel which has not been realized due to the pandemic. As conditions for travelling improved, demand for travelling increased and thus a significant recovery in passenger traffic and pre- bookings in the industry for the summer season was recorded.
The Group has delivered 10 new Airbus A320 neo family aircraft in 2022, having taken delivery of a total of 19 new Airbus A320 neo family aircraft since 2019. Fleet modernization contributed to cost reduction, while further strengthening Group’s competitiveness by upgrading passenger services.
The Russian invasion of Ukraine at the end of February has temporarily interrupted the strong course of pre- bookings that started in the beginning of the year. The strong desire for leisure travel, as recorded during the summer season of 2022, was not affected by geopolitical events. The Russian invasion to Ukraine has caused the cancellation of all flights from / to these countries, nevertheless their contribution in the overall flight activity is not considered as material for the Group (less than 3% in total passenger traffic) and the whole market (2% of total passengers’ arrivals).
The indirect consequences, however, led the oil price to record high volatility due to geopolitical instability and EU and US sanctions on oil imports from Russia. The sharp increase in fuel costs affected Group's results, from the second quarter of the year, with the fuel price in 2022 being 77% higher compared to 2021 and 82% higher compared to 2019. Part of the fuel cost increase was offset by derivative products agreed by the Group.
Management assessed the basic financial figures, verified Entity’s compliance with medium-term budgeted amounts, as wells as loan covenants and concluded that the going concern assumption is suitable to be used for
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the preparation of the annual financial statements of the Group and the Company and there is no doubt regarding the Group's ability to operate based on the going concern principle.
Basis of Consolidation
The accompanied consolidated financial statements include parent’s financial statements, as well as the financial statements of any subsidiary in which the parent company has significant control. The subsidiaries (companies in which the Group directly or indirectly controls more than 50% of the votes or otherwise controls the administration) have been consolidated. Subsidiaries are consolidated from the date on which effective control is transferred to the Group and cease to be consolidated from the date on which control ceases to be in effect.
The financial statements of subsidiaries are prepared on the same date and with the same accounting principles as the financial statements of the parent. Intra-group transactions (including investments), balances and unrealized gains on transactions between Group companies are eliminated. Losses are allocated to non-controlling interests even if the balance is negative. Transactions that lead to change in ownership in subsidiaries are recognized in shareholders’ equity. The results of subsidiaries acquired or sold during the financial period are included in the consolidated statement of comprehensive income from or up to the date of acquisition or sale, respectively.
Business combinations and goodwill
A business combination is a transaction or other event in which an acquirer obtains control of one or more businesses. A business is defined as a set of activities and assets that can be managed for the purpose of creation of benefits to its owners.
If the acquired assets are not a business, the transaction is accounted for as an acquisition of an asset and the acquisition cost is allocated to assets and liabilities, based on their relative fair values at the acquisition date.
Business combinations are accounted with the acquisition method. The cost of an acquisition is the fair value of the assets acquired, equity issued and liabilities assumed at the date of exchange, plus the amount of non-controlling interest measured in, for each combination, either at fair value or at the proportion of non-controlling interest at fair value of the net identifiable assets acquired. Acquisition-related costs are expensed as incurred.
If the cost of acquisition is less than the fair value of the net identifiable assets acquired, the difference is recognized directly in the income statement.
Goodwill on acquisitions of subsidiaries is recorded as an intangible asset. Goodwill is not amortized but is subject to at least annual testing for impairment. Thus, after initial recognition, goodwill is measured at cost less any accumulated impairment losses. For impairment testing purposes, goodwill is allocated, at the acquisition date, to each cash-generating unit that is expected to benefit from the combination.
The impairment test is performed by comparing the recoverable amount (value in use) of the unit with the carrying amount of each unit including the goodwill allocated to this unit. The recoverable amount is the higher of fair value less any costs to sell, and the unit value in use. More specifically the value in use is determined by using discounting future cash flows with an appropriate discount rate. An impairment loss recognized for goodwill is not reversed in subsequent periods. Impairment loss recognized for goodwill is not reversed in subsequent periods. Gains and losses on the disposal of subsidiaries are determined taking into account the goodwill relating to the entity sold.
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Investment in subsidiaries
In the financial statements of the parent company, investments in subsidiaries are valued at cost of acquisition less any accumulated impairment losses. The impairment test is carried out whenever there is any indication of impairment based on the provisions of IAS 36 "Impairment of Assets" (Note 3.4)
2.1 Standards, Interpretations and amendments to existing standards
Α ) Changes in accounting policies and disclosures
The accounting policies adopted are consistent with those of the previous financial year except for the following IFRS amendments which have been adopted by the Group/Company as of 1 January 2022:
• IFRS 3 Business Combinations; IAS 16 Property, Plant and Equipment; IAS 37 Provisions, Contingent Liabilities and Contingent Assets as well as Annual Improvements 2018-2020 (Amendments)
The amendments are effective for annual periods beginning on or after 1 January 2022 with earlier application permitted. The IASB has issued narrow-scope amendments to the IFRS Standards as follows:
➢ IFRS 3 Business Combinations (Amendments) update a reference in IFRS 3 to the previous version of the IASB’s Conceptual Framework for Financial Reporting to the current version issued in 2018 without significantly changing the accounting requirements for business combinations.
➢ IAS 16 Property, Plant and Equipment (Amendments) prohibit a company from deducting from the cost of property, plant and equipment any proceeds from the sale of items produced while bringing the asset to the location and condition necessary for it be capable of operating in the manner intended by management. Instead, a company recognizes such sales proceeds and related cost in profit or loss.
➢ IAS 37 Provisions, Contingent Liabilities and Contingent Assets (Amendments) specify which costs a company includes in determining the cost of fulfilling a contract for the purpose of assessing whether a contract is onerous. The amendments clarify, the costs that relate directly to a contract to provide goods or services include both incremental costs and an allocation of costs directly related to the contract activities.
➢ Annual Improvements 2018-2020 make minor amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards , IFRS 9 Financial Instruments , IAS 41 Agriculture and the Illustrative Examples accompanying IFRS 16 Leases
The amendments had no material impact on the financial statements of the Group.
• IFRS 16 Leases-C ο vid 19 Related Rent Concessions beyond 30 June 2021 (Amendment)
The Amendment applies to annual reporting periods beginning on or after 1 April 2021, with earlier application permitted, including in financial statements not yet authorized for issue at the date the amendment is issued. In March 2021, the Board amended the conditions of the practical expedient in IFRS 16 that provides relief to lessees from applying the IFRS 16 guidance on lease modifications to rent concessions arising as a direct consequence of the covid-19 pandemic. Following the amendment, the practical expedient now applies to rent concessions for which any reduction in lease payments affects only payments originally due on or before 30 June 2022, provided
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the other conditions for applying the practical expedient are met. The amendment had no material impact on the financial statements of the Group.
Β ) Standards issued but not yet effective and not early adopted
• IFRS 17: Insurance Contracts
The standard is effective for annual periods beginning on or after 1 January 2023 with earlier application permitted, provided the entity also applies IFRS 9 Financial Instruments on or before the date it first applies IFRS 17. This is a comprehensive new accounting standard for insurance contracts, covering recognition and measurement, presentation and disclosure. IFRS 17 applies to all types of insurance contracts issued, as well as to certain guarantees and financial instruments with discretional participation contracts. The Group does not issue contracts in scope of IFRS 17; therefore its application does not have an impact on the Group financial performance, financial position or cash flows.
• IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting policies (Amendments)
The Amendments are effective for annual periods beginning on or after January 1, 2023 with earlier application permitted. The amendments provide guidance on the application of materiality judgements to accounting policy disclosures. In particular, the amendments to IAS 1 replace the requirement to disclose ‘significant’ accounting policies with a requirement to disclose ‘material’ accounting policies. Also, guidance and illustrative examples are added in the Practice Statement to assist in the application of the materiality concept when making judgements about accounting policy disclosures. Management estimates that the amendments will not have material impact on the group financial statements.
• IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates (Amendments)
The amendments become effective for annual reporting periods beginning on or after January 1, 2023 with earlier application permitted and apply to changes in accounting policies and changes in accounting estimates that occur on or after the start of that period. The amendments introduce a new definition of accounting estimates, defined as monetary amounts in financial statements that are subject to measurement uncertainty, if they do not result from a correction of prior period error. Also, the amendments clarify what changes in accounting estimates are and how these differ from changes in accounting policies and corrections of errors. Management estimates that the amendments will not have material impact on the group financial statements.
• IAS 12 Income taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments)
The amendments are effective for annual periods beginning on or after January 1, 2023 with earlier application permitted. The amendments narrow the scope of and provide further clarity on the initial recognition exception under IAS 12 and specify how companies should account for deferred tax related to assets and liabilities arising from a single transaction, such as leases and decommissioning obligations. The amendments clarify that where payments that settle a liability are deductible for tax purposes, it is a matter of judgement, having considered the
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applicable tax law, whether such deductions are attributable for tax purposes to the liability or to the related asset component. Under the amendments, the initial recognition exception does not apply to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences. It only applies if the recognition of a lease asset and lease liability (or decommissioning liability and decommissioning asset component) give rise to taxable and deductible temporary differences that are not equal. Management estimates that the amendments will not have material impact on the group financial statements.
• IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current (Amendments)
The amendments are effective for annual reporting periods beginning on or after January 1, 2024, with earlier application permitted, and will need to be applied retrospectively in accordance with IAS 8. The objective of the amendments is to clarify the principles in IAS 1 for the classification of liabilities as either current or non-current. The amendments clarify the meaning of a right to defer settlement, the requirement for this right to exist at the end of the reporting period, that management intent does not affect current or non-current classification, that options by the counterparty that could result in settlement by the transfer of the entity’s own equity instruments do not affect current or non-current classification. Also, the amendments specify that only covenants with which an entity must comply on or before the reporting date will affect a liability’s classification. Additional disclosures are also required for non-current liabilities arising from loan arrangements that are subject to covenants to be complied with within twelve months after the reporting period. The amendments have not yet been endorsed by the EU. Management evaluation of amendments impact on the group financial statements is currently in process.
• IFRS 16 Leases: Lease Liability in a Sale and Leaseback (amendments)
The amendments are effective for annual reporting periods beginning on or after January 1, 2024, with earlier application permitted. The amendments are intended to improve the requirements that a seller-lessee uses in measuring the lease liability arising in a sale and leaseback transaction in IFRS 16, while it does not change the accounting for leases unrelated to sale and leaseback transactions. In particular, the seller-lessee determines ‘lease payments’ or ‘revised lease payments’ in such a way that the seller-lessee would not recognise any amount of the gain or loss that relates to the right of use it retains. Applying these requirements does not prevent the seller-lessee from recognising, in profit or loss, any gain or loss relating to the partial or full termination of a lease. A seller-lessee applies the amendment retrospectively in accordance with IAS 8 to sale and leaseback transactions entered into after the date of initial application, being the beginning of the annual reporting period in which an entity first applied IFRS 16. The amendments have not yet been endorsed by the EU. Management estimates that the amendments will not have material impact on the group financial statements.
• Amendment in IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture
The amendments address an acknowledged inconsistency between the requirements in IFRS 10 and those in IAS 28, in dealing with the sale or contribution of assets between an investor and its associate or joint venture. The main consequence of the amendments is that a full gain or loss is recognized when a transaction involves a business (whether it is housed in a subsidiary or not). A partial gain or loss is recognized when a transaction involves assets that do not constitute a business, even if these assets are housed in a subsidiary. In December 2015 the IASB postponed the effective date of this amendment indefinitely pending the outcome of its research project on the
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equity method of accounting. The amendments have not yet been endorsed by the EU. Management estimates that the amendments will not have material impact on the group financial statements.
2.2 Important judgments, accounting estimates and assumptions
The preparation of financial statements according to International Financial Reporting Standards (IFRS) requires the formulation of judgments, assumptions and estimates by the management that affect assets, liabilities and related disclosures at the reporting date of the financial statements. They also affect the disclosures of contingent assets and liabilities at the reporting date as well as the published revenues and expenses during the period. Actual results may differ from those estimated. Estimates and judgments are based on experience from the past as well as other factors including expectations for future events which are considered reasonable under specific circumstances while they are reassessed continuously with the use of all available information.
Judgments, estimates and assumptions
During the application of accounting policies, Company’s management applies its judgment based on market information in which it operates. Possible future changes in the current conditions are considered in order for the most proper accounting policy to be applied. Specific amounts which are included in or affect the financial statements and the relevant disclosures are assessed by the Group management in order to proceed in assumptions regarding values or conditions non certain at the preparation of the financial statements. An accounting estimate is considered important when it is significant for the financial position and the results of the Group and it requires difficult, subjective or complex judgments by the Group management and is often a result of uncertain assumptions. The Group evaluates such estimates continuously, based on historical experience, experts consultation, current trends, other methods which are deemed reasonable at the moment, as well as assumptions on how these could alter in the future.
Management’s judgment, estimates and assumptions regarding estimates used in accounting policies, are summarized in the following categories:
Accounting treatment of liabilities (provisions) regarding aircraft maintenance
The Group is committed to satisfy certain maintenance obligations, as prescribed by the contract terms, upon lease termination. During the lease period the Group is obliged to follow the maintenance program required by the airframe and engine constructors. The estimated maintenance cost is charged in group expenses within the lease period, based on the expected maintenance for the airframe, engines and limited life parts using the flight hours or flight cycles. This estimation is based on Group maintenance program and the relevant contracts agreed with maintenance providers (Note 3.19(2)).
Impairment
IFRS 9 introduces the expected credit loss (“ECL”) approach to be applied on all financial assets measured at amortized cost (“AC”) or at fair value with the corresponding changes allocated to other comprehensive income (“FVTOCI”).
Debt Instruments
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With respect to debt instruments the Group applies the general impairment model, under which the Group assess at each reporting date, whether the credit risk associated to any particular debt instrument has been increased, since its initial recognition, applying in addition the low risk simplification for all investment grade debt securities. Upon a significant increase in credit risk the Group measures lifetime expected credit losses. Note 3.8
Customers and other trade Receivables
Τ he Group applies the IFRS 9 simplified approach to measure expected credit losses using a lifetime expected loss allowance for all trade and other receivables. Therefore, the Group measures at each reporting date the loss allowance for its trade and other receivables at an amount equal to their lifetime expected credit losses.
Financial assets with contractual payments over 90 days past due, constitute default events, but assess any given creditworthiness information with respect to certain cases, when a contractual claim collection problem is considered possible.
The expected credit losses on the trade and other receivables are estimated using a provision matrix based on the Group’s historical experience of credit losses and cash recoveries on defaulted exposures. Note 3.10
Impairment of intangible assets, owned aircrafts, right of use assets and investment in subsidiaries
The management examines at each balance sheet date or earlier, if there are indications, whether impairment exists for goodwill (in consolidated level) and intangible assets with indefinite useful life, i.e. slots (in consolidated and stand-alone level) and whether there are impairment indications for:
Other intangible assets
Owned aircrafts and Right of Use assets
Investments in subsidiaries
Determining impairment indications requires management to make judgments regarding external and internal factors and the extent to which they affect the recoverability of these assets. If indications of impairment exist, the Company makes an estimate of the recoverable amount. The impairment loss is the amount by which the book value of the cash-generating unit exceeds its recoverable amount.
The calculation of the recoverable amount requires estimates regarding future cash flows associated with the investment, business plan, discount and growth rates.
At 31.12.2022 no indications of impairment noticed for other intangible assets, owned aircrafts, right of use assets and investments in subsidiaries, therefore, Group management performed impairment test on goodwill and intangible assets with indefinite useful life. More specifically, the impairment test used discounted cash flows, based on the 5-year Group business plan, which is considered as one cash generating unit (CGU). Group management based the business plan preparation to key assumptions, past experience and observable market data, which were those to which the CGU recoverable amount is most sensitive. More specifically, the below key assumptions were used for the cash flow projections:
• projected range of USD/EURO exchange rate for a 5-year period (1,06 – 1,15)
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• projected range of fuel price for a 5-year period ($850 – $892)
• projected average fare price movement (0%)
• projected range of load factor for a 5-year period (83% – 84%)
Future cash flows over the Group 5-year business plan were determined on the basis of an estimated long-term growth rate of 0,25%, which was considered reasonable by the Management. The discount rate used was 9,5%.
In the above assumptions, a sensitivity analysis was performed to determine the impact on the recoverable amount due to a possible unfavorable change in these assumptions.
No need for impairment occurred, since the CGU recoverable amount exceeded the carrying value at 31.12.2022 (Note 3.1, 3.2, 3.3, 3.4).
Loyalty program revenue recognition
The Group estimates the fair value of unredeemed loyalty points (miles) of Miles and Bonus program, by utilizing historical and statistical data. This calculation uses estimates for the expected redemption rate as well as the fair value of the redeemable product. (Note 2.4d, 3.21)
Determining lease period with extension option
The Group determines as lease period, the contractual lease duration, including any period referring to (a) lease extension option, if it is highly probable that will be exercised or (b) lease termination option, if it is highly probable that will be exercised.
The Group, in certain lease agreements, retains the option to extend the lease period. The Group assesses if it is certain that this option will be exercised, considering all the factors that create financial incentive to exercise the renewal option. Subsequently the lease inception date, the Group reassesses the lease period, if a significant event occurs or there is a change in the conditions that could affect the exercise option (or not) of right renewal (such as a change in Group business strategy).
Income tax (current and deferred)
The measurement of income taxes provisions is heavily based on estimates. There are a lot of transactions for which the accurate calculation of the tax is not possible in the normal course of business. The Company recognizes liability provisions for anticipated tax matters, based on estimates for potential amounts due for additional taxes. When the expected final tax payable is different from the initial estimates in the financial statements when those are finalized, both income tax and provisions for deferred taxation are affected. Moreover, possible effects from the tax audit of previous periods are included in note 3.29 and are recorded in the account ‘Income Tax’ of the Income Statement.
Deferred tax assets are recognized to the extent that it is probable that future taxable profits will occur against which tax losses may be offset and tax credits may be used. The recognition of deferred tax assets requires significant estimates and judgment with respect to future activities and prospects of the Group and the amount and timing of taxable profits. Note 3.6
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Fair value of derivatives and other financial instruments / Hedge accounting
The Company uses derivatives to manage a series of risks including interest rates, foreign currency exchange rates (EUR/USD) and jet fuel price. Accounting for derivatives, in order to qualify for hedge accounting, requires that at the inception of the arrangement the details of the hedging relationship must be formally documented and the hedged value and the hedging instrument must meet certain requirements. From the beginning of a hedging and thereafter, every quarter the hedging effectiveness is evaluated both retrospectively and prospectively. In cases where the hedging becomes ineffective, it does no longer qualify as a hedge instrument in the future. The fair values of the derivative contracts are calculated using pricing models from an independent platform, making assumptions based on the market, which are confirmed by independent sources. Additional information regarding the use of derivatives is provided in note 3.23.
Fair value of financial instruments
All assets and liabilities for which the fair value is measured or disclosed in the financial statements, are categorized according to the hierarchy levels, described below:
The fair value of financial instruments traded in active markets is determined at each reporting date in relation to the stock market values or values determined by broker offers, without deduction for transaction costs (Hierarchy Level 1).
The fair value of financial instruments not traded in active markets is determined using: (i) appropriate valuation techniques for which the data, that have significant impact on the fair value accounted for, are directly or indirectly identifiable (Hierarchy Level 2), (ii) techniques for which the data, that have significant impact on the fair value accounted for, are not easily identified in the markets (Hierarchy Level 3) and may include recent transactions under normal conditions, the current fair value of another instrument similar to these instruments, discounted cash flow analysis or other valuation models.
For assets and liabilities recognized in the financial statements at fair value, the Group determines whether there are transfers made during the year between the hierarchy levels at the end of each year.
Contingencies
The Company is involved in litigation and claims in its normal course of operations. Management, based on experience and the fact that the trial procedures are still in process, estimates that any resulting settlements would not materially affect its financial position and operations. However, the determination of contingent liabilities relating to the litigation and claims is a complex process that involves judgments as to the possible outcomes and interpretation of laws and regulations. Future changes to the judgments or the interpretations may increase or decrease the Company’s contingent liabilities in the future. Contingent assets / liabilities balances are analyzed in note 3.30.
Useful life of depreciable assets
The Group management evaluates the useful life of depreciable assets in every period. On December 31st 2022 the management believes that the useful lives of the assets are in line with their expected usage. The depreciable amounts are analyzed in notes 3.1 and 3.2. Intangible assets useful life can be considered definite or indefinite.
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Discount rate
Future lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. Otherwise, the Company and the Group use the incremental borrowing rate.
A single discount rate is applied to a portfolio of leases with similar characteristics, such as the lease duration and the transaction currency, evaluating specific market financial ratios and other bond loan issued by companies of similar creditworthiness.
In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments or a change in the assessment of an option to purchase the underlying asset.
2.3 Foreign Currency Translation
The Group financial statements are presented in Euros (€) which is its operating currency.
Foreign currency transactions are converted into the operating currency using the exchange rates prevailing at the date of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the conversion of remaining balances at year-end exchange rates, are recognized in the income statement in the accounts “financial income” and “financial expense”, respectively. Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.
2.4 Revenue and expenses recognition
The Company and the Group recognize revenues in order to reflect the transfer of the promised goods or services to customers in an amount equal to the consideration they consider fair to collect for these goods or services.
Revenue from contracts with customers is recognized when all of the following criteria are met:
• The parties to the contract have approved the contract and are committed to perform their respective obligations
• The Company or the Group can identify each party’s rights regarding the goods or services to be transferred
• The Company or the Group can identify the payment terms for the goods or services to be transferred
• The contract has a commercial substance and
• It is possible that the Company or the Group will collect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.
Revenue is measured at the fair value of the benefit received, net of tax, credits, trade discounts and airport fees. All taxes and related charges collected by the Group from passengers on behalf of third parties (e.g. airport taxes) are recorded on a net basis, as the Group acts as an agent.
The amount of revenue is estimated that it can be measured reliably only when all contingent liabilities related to it have been resolved.
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The Company's respective trade receivables are mainly paid in advance or have a limited maturity (up to 3 months).
(a) Scheduled and charter flights
The Company and the Group operate in the sector of public airline transportations, providing transport of passengers and goods inside and outside the Greek territory, conducting scheduled and unscheduled flights.
Therefore, it recognizes revenues when it satisfies the performance obligation of rendering the service to the customer at a given point in time. The performance obligation is satisfied when the flight is flown and the passenger is uplifted. With the adoption of IFRS 15 there has been no change in the revenue recognition from scheduled and charter flights.
The Group separates other obligations that may be included in the contract and constitute a separate performance obligation and determines the proportion of revenue attributable to them (i.e. customer loyalty miles, see (d))
(b) Ancillary Services
Specific categories of ancillary services, such as baggage fees, reissuing tickets fees, "fast track" and "chargeable seat" services, etc., are considered to be a modification of the contract and are directly related the flight performance. Therefore, they are recognized as revenue when the flight is flown. Under IAS 18, the major part of these ancillary services was recognized at the transaction date.
(c) Unused tickets
Passengers pay for their ticket, but do not always exercise its right, i.e. the ticket remains unused. Recognition of unused tickets as revenue is based on the expected breakage amount of tickets remaining unused in proportion to the pattern of rights exercised by the passenger based on historical information. The portion of revenues that has not been recognized based on the said exercise is transferred to a contract liability account and recognized by the company when the likelihood of the passengers exercising their remining rights becomes remote. Prior to the adoption of IFRS 15, revenues from unused tickets were recognized only when the likelihood of the passengers exercising their remining rights becomes remote.
(d) Customer loyalty program
The Company has a loyalty program for its customers, whose members can earn points (miles) through flights with the Group’s airline companies, Star Alliance companies or through transactions with other partners. Part of ticket revenue attributable to earned miles reduces revenue recognized when the flight is flown and is transferred to contract liability account. The Company determines the separate sale price of this deferred income using the expected cost-plus margin approach. The redemption rate is calculated based on an actuarial study, using historical data of passengers’ behavior in relation to mileage redemption. The obligation shall be reduced with the corresponding recognition of the revenue, when the actual miles are redeemed by passengers, which in substance is when the obligation performance is satisfied.
In the event of non-redeeming miles through the Company’s channels, the related charges received from other partners are netting of the related revenue, since the Company acts as an agent.
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There has been no significant change in the recognition of this revenue since the adoption of IFRS 15, which is though coincided with the use of an actuarial study by the Company, in order to assess more accurately the future behavior of passengers in terms of mileage redemption.
(e) Goods
The sale of goods refers to product sales on board. Related revenue is recognized at the transaction date, when the performance obligation is satisfied, and the customer takes control of the asset. The adoption of IFRS 15 did not affect the recognition of travel value revenue.
(f) Interest Income
Interest income is calculated using the method of the effective interest rate, which is the rate discounting future flows for the expected duration of the financial instrument at the net book value of the asset or liability.
Incremental costs of obtaining a contract with customers
The Company and the Group incur various costs in order to obtain a contract (sale of a ticket) with a customer, which they would not have incurred if the contract haven’t been obtained (sales commission etc). These direct sales costs are considered as incremental contract costs and are directly related to the contract. They increase the resources that will be used to fulfill the performance obligation in the future and are expected to be recovered.
These costs are initially recognized in Advances of current assets. Then, they are allocated to the corresponding flight performance obligation and are amortized when this flight is flown in the income statement. See note 3.11
With respect to baggage claims paid to passengers for damages occurred, these amounts are recognized against respective revenue.
Other Expenses
Expenses are recognized in the income statement on an accrual basis. Interest expense is recognized on a time- proportion basis using the effective interest rate.
2.5 Intangible Assets
Intangible assets include airports slots, software licenses, Olympic Air brand and goodwill. Airport slots are assets with an indefinite useful life, given the Group satisfies their minimum use, they remain available for future use and therefore not amortized but subject to an impairment test annually. Exercise for impairment indications is mainly based on available slots trading data. Software licenses are valued at historic cost less amortization and/or any other possible impairment. Amortization of intangible assets is calculated applying the straight-line method in the useful life of the assets which is between 1 to 10 years.
Goodwill is an asset with an indefinite useful life, therefore it is not amortized, but is subject to impairment testing annually. It derives from the company’s acquisitions and is calculated as a balance between the acquisition price and the fair value of the net assets acquired. (Note 3.1)
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Useful life for Intangible Assets.
Category
Useful life
Software
5 years
Olympic Air brand name
Contract terms (49 years)
Other
10 years
Intangible assets impairment
If the Group is unable to estimate the recoverable amount of an asset for which there is an indication of impairment, it determines the recoverable amount of the cash-generating unit to which the asset belongs.
The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. Net selling price is considered as the possible proceeds from the sale of an asset in an arm's length transaction in which the parties have full knowledge and adhere voluntarily, after deducting any additional direct cost of disposal of the asset, while value in use is the present value of the estimated future cash flows expected to be realized by the continuing use of an asset and its disposal at the end of its estimated useful life.
Reversal of an impairment loss on the value of assets recognized in prior years (except goodwill impairment) is made only when there is sufficient evidence that the impairment no longer exists or has decreased. In such cases the above reversal is recognized as income.
2.6 Tangible Assets
Tangible assets are recognized in the financial statements at acquisition cost, less accumulated depreciation and loss of impairment, if any. The acquisition cost includes all the directly attributable expenses for the acquisition of the asset. Subsequent expenditure is added to the carrying value of the tangible asset or is recognized as a separate fixed asset, only if it is expected to increase the future economic benefits for the Company and their cost can be accurately and reliably measured.
Depreciation of tangible fixed assets (other than Land which is not depreciated) is calculated using the straight-line method over their useful life, as follows:
Category
Useful life
Buildings
10-20 years
Machinery
6-22 year
Aircrafts
20-25 years
Vehicles
3-5 years
Aircraft/airport equipment
3-8 years
Other equipment
5 years
The residual values and useful economic life of tangible fixed assets are reassessed at each reporting period. Upon sale of a tangible assets, any difference between the proceeds and the book value is recognized as gain or loss to the income statement.
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Tangible assets impairment
If the Group is unable to estimate the recoverable amount of an asset for which there is an indication of impairment, it determines the recoverable amount of the cash-generating unit to which the asset belongs. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. Net selling price is considered as the possible proceeds from the sale of an asset in an arm's length transaction in which the parties have full knowledge and adhere voluntarily, after deducting any additional direct cost of disposal of the asset, while value in use is the present value of the estimated future cash flows expected to be realized by the continuing use of an asset and its disposal at the end of its estimated useful life.
Reversal of an impairment loss on the value of assets recognized in prior years is made only when there is sufficient evidence that the impairment no longer exists or has decreased. In such cases the above reversal is recognized as income.
2.7 Pre-delivery payments
Pre-delivery payments in foreign currency are paid by the Company to Airbus in order to finance the aircraft manufacture, in accordance to the contractual terms of the agreement. Such advances are recognized at cost and classified as non-current assets.
The Company is likely to enter into a sale and leaseback agreement in the future with lessors who will finance these aircrafts in full. According to these agreement’s clauses, the right and the commitment to purchase the aircraft is assigned to the lessor on the date of its delivery. At the delivery date, the lessor pays the full purchase price and the Company collects the full amount already paid in advance. Consequently, the related non-current asset is derecognized, and any gain or loss is recognized in the statement of comprehensive income.
The present value of the pre-delivery payments relating to future sale and leaseback agreements is determined based on discounted cash flows and is translated using the prevailing exchange rate at each reporting date. These advances are classified in Advances for future aircraft leases in Current and Non-Current Assets.
In case of no sale and leaseback agreement, the pre-delivery payments are considered part of the final aircraft purchase price. As such, they are classified in the Tangible assets, translated in the foreign exchange rate at the date of the transaction.
2.8 Financial Assets
Initial Recognition of financial assets
The Group measures financial assets on their initial recognition at their acquisition fair value. The Group recognizes initially trade receivables without a significant financing component at their transaction price.
Classification and Measurement of financial assets
All financial assets that fall within the scope of IFRS 9 are measured, subsequently to their initial recognition, at amortized cost or fair value.
Accordingly, Company’s financial assets are classified in one of the following categories:
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• Amortized cost (“AC”)
• Fair Value through other comprehensive income (“FVTOCI”)
• Fair Value through profit or loss (“FVTPL”)
The basis of their classification and subsequent measurement depends on the following two conditions:
• Entity’s business model for managing the financial assets ((“Business Model Assessment”)
• Entity’s contractual cash flow characteristics (SPPI test)
The business model of the Group refers to how the Group manages its financial assets in order to generate cash flows and determines whether cash flows will result from collecting contractual cash flows, selling financial assets or both. The business model assessment is performed based on scenarios that the Group reasonably expects to occur, and not based on “worst case” or “stress case” scenarios.
The SPPI test, according to which the asset’s contractual cash flows should be determined that are solely payments of principal and interest on the principal amount outstanding, is the second condition for classification of a financial asset in either AC or FVTOCI categories by the Group. In particular, for a debt instrument to be measured at AC or FVTOCI, its contractual terms must give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Amortized cost (“AC”)
A financial asset is measured at AC only if both of the following conditions are met, unless it is designated as at FVTPL on initial recognition:
i. The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows (“HTC”) and,
ii. The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding
Accordingly, the Group classifies financial assets at AC, when the financial assets both are held within a business model with the objective to hold them until maturity, collecting mostly of their contractual cash flows and these financial assets give rise to cash flows consisting only of payments of principal and interest. All financial assets that fail the SPPI test are subsequently measured at FVTPL; except for investments in equity instruments not held for trading that are elected at initial recognition to be measured at FVTOCI.
The Group subsequent to their initial recognition measures financial assets under this category at amortized cost using the effective interest. These financial assets are subject to the impairment requirements as per IFRS 9. Amortized cost of a financial asset is defined as the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus or minus the cumulative amortization using the effective interest method of any difference between that initial amount and the maturity amount and adjusted for any loss allowance.
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Fair Value through Other Comprehensive Income (“FVTOCI”)
A financial asset is measured at FVTOCI only if both of the following conditions are met, unless it is designated as at FVTPL on initial recognition:
i. The financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets.
ii. the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Accordingly, the Group classifies financial assets at FVOCI, when are held within a business model with objective to hold the financial assets to collect the contractual cash flows, but also the Group expects to sell these financial assets when this is necessary (e.g. to fulfill a specific need for liquidity). In addition, these financial assets give rise to cash flows consisting only of payments of principal and interest.
The Company subsequent to their initial recognition measures financial assets under this category at fair value, with changes in their fair value recognized in other comprehensive income (“OCI”), except for:
• interest income
• foreign exchange gains or losses
• impairment gains or losses
Are recognized in profit and loss and computed in the same manner as for financial assets measured at AC. Any fair value changes recognized in OCI are transferred to profit and loss when the debt security is derecognized.
Fair Value through Profit and Loss (“FVTPL”)
A financial asset shall be measured at fair value through profit or loss unless it is measured at amortized cost or at fair value through other comprehensive income. Any financial asset that fails the SPPI test is classified by the Group, at FVTPL (except if it is an investment in equity instrument designated in FVTOCI).
The Group classifies the financial assets that are not held within the “hold to collect” or “hold to collect and sell business models”, at FVTPL.
Since the option to designate a financial asset at fair value in its initial recognition is irrevocable, if a financial asset is designated as at FVTPL at initial recognition, the Group does not reclassify out of FVTPL to AC or FVTOCI, if the business model changes.
Financial assets at FVTPL are carried in the statement of financial position at fair value with changes in the fair vale between reporting dates in the statement of profit and loss. Financial assets at FVTPL are not subject to the impairment requirements .
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Equity Instruments
By default, the Group classifies equity participations under the scope of IFRS 9 at FVTPL unless; the Group makes an irrevocable election/designation at initial recognition for particular investments in equity to present subsequent changes in fair value in other comprehensive income.
Only dividend income that does not clearly represent a recovery as part of the cost of the investment is recognized in profit or loss, with all other gains and losses recognized in OCI. These gains and losses remain permanently in equity and are not subsequently reclassified to profit or loss, following derecognition.
Reclassification of Financial assets
A financial asset is reclassified by the Group, only when Group’s business model for managing financial assets changes. In general, a change in the business model is expected to be rare and occurs when the Group either begins or ceases to perform an activity that is significant to its operations. An example of business model’s change is when a business line is acquired, disposed of or terminated.
Changes in intention related to particular financial, the temporary disappearance of a particular market for financial assets or a transfer of financial assets between parts of the Group with different business models, are not considered by the Group changes in business model.
The reclassification is applied prospectively from the reclassification date, which is the first day of the first reporting period following the change in the business model, therefore previously recognized gains, losses (including impairment gains or losses) or interest are not restated.
Financial derivatives and hedge accounting
The Company has not adopted the requirements of IFRS 9, with respect to hedge accounting, and continues to apply IAS 39.
All financial derivative assets are initially recognized at the fair value on the trade date and subsequently at their fair value. Financial derivative instruments are recognized in assets when their fair value is positive and in liabilities when their fair value is negative. Their fair value is calculated from the value they have on an active market or through other valuation techniques when an active market does not exist for these financial instruments.
The profit or loss recognition depends whether a derivative has been determined as a hedging item and if hedging exists based on the nature of the hedged item. Profit or loss arising from the change of the fair value of derivatives that are not recognized as hedging items, is recognized in the income statement. The Company is using hedge accounting when at the commencement of the hedging transaction, and the subsequent use of financial derivatives can determine and justify the hedging relationship between the hedged item and the instrument used for hedging, relating to its risk management policy and strategy for hedging. Moreover hedge accounting is used only when it is expected that the hedging strategy will be highly effective and reliably and continuously calculated, for the periods it was intended for, as per the reconciliation of the movements in the fair value or the cash flows resulting from the hedged risk. The Company is hedging cash flows using financial derivative instruments.
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Cash flow hedging
With cash flow hedging the Company is covering risks coming from an asset, liability or future transaction that cause fluctuations in the cash flows and which could have an impact to the period’s result. For financial derivatives classified as hedging items for cash flow hedging purposes, special accounting treatments are required. In order to fulfill the hedge accounting requirements, certain conditions relating to justification, hedging effectiveness and reliable calculation must be met.
The changes in the fair value of the effective part of the hedging derivative are recognized in the equity while the ineffective part is recognized in the comprehensive income statement. The accumulated balances in the equity are transferred in the income statement of the periods where the hedging derivatives are recognized. In particular, amounts relating to hedging of fuel prices increase or decrease fuel expenses, amounts relating to hedging of foreign exchange rate increase or decrease relative expenses and amounts relating to hedging of interest rates increase or decrease finance costs.
When a financial instrument expires, is either sold or exercised without being replaced, or when a hedged item does no longer fulfill the criteria of hedge accounting, cumulative gain or loss remains in equity and it is recognized when the transaction occurs. If the hedged transaction is not expected to occur, gains or losses are recognized directly in the income statement.
2.9 Inventories
The inventories include aircraft spare parts and goods. The purchase price includes all the costs incurred to bring the inventories at their current location and condition, less any discounts. The inventories cost is calculated using the weighted average cost method every reporting period.
Aircraft spare parts of significant value that be can be utilized for over a period of one year are capitalized in tangible assets. Otherwise, they are expenses as incurred in the statement of income.
On the balance sheet date, the inventories are measured at the lower of valuation cost and net realizable value (NRV). The Company at the end of each fiscal year considers any case of obsolescence of inventory and establishes any provision or write off.
2.10 Leases
At inception of a contract, the Group assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
The Group as a lessee
Right of use asset (ROU)
At the date the asset is available for use, the Group recognizes a right of use asset and a lease liability.
The cost of the right-of-use asset shall comprise:
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• the amount of the initial measurement of the lease liability;
• any lease payments made at or before the commencement date, less any lease incentives received;
• any initial direct costs incurred by the Group; and
• an estimate of costs to be incurred by the Group in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease, unless those costs are incurred to produce inventories. The Group incurs the obligation for those costs either at the commencement date or as a consequence of having used the underlying asset during a particular period.
Right of use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets. If ownership of the leased asset transfers to the Group at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.
The right-of-use assets are also subject to impairment.
Lease liabilities
At the commencement date of the lease, the Group recognizes lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments less any lease incentives receivable. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating the lease, if the lease term reflects the Group exercising the option to terminate.
The group determines the long-term and short-term portion of a lease liability based on its settlement date.
In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date in case the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made.
In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments or a change in the assessment of an option to purchase the underlying asset.
Exemptions
The Company and the Group decided to apply the exemptions provided by the standard concerning the short-term leases (duration of 12 months or less, without purchase option of the underlying asset). Lease payments associated with those leases are recognized as an expense on either a straight-line basis over the lease term or another systematic basis.
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Group as a lessor
Leases in which the Group does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms.
2.11 Cash and cash equivalents - Restricted Cash
Cash and cash equivalents include cash at bank, petty cash as well as short term highly liquid deposits with an original maturity of three months or less . Restricted cash refer to cash collaterals with counterparties that derivative contracts have been signed, in order to offset exchange rate or fuel price fluctuations.
2.12 Share Capital
Share capital is determined using the nominal value of shares that have been issued. Share premium reserve includes all premiums more than the nominal price received at the date of the issue.
A share capital increase through cash includes any share premium during the initial share capital issuance. Any cost related to the capital increase or any tax benefit is deducted from the product of the share capital increase.
Retained earnings include the result of the current and the previous periods.
2.13 Employee benefits due to retirement and other short-term benefits to employees
Short term benefits
Short term employee benefits in cash or in kind are recognized as expense when incurred. Any unpaid amount is recognized as liability.
Retirement benefits
The Company has established both defined benefit and defined contribution plans.
Typically, defined benefit schemes provide for a benefit the employee will receive on retirement, based on factors such age, service years and compensation received.
The balance sheet liability in respect of a defined benefit plan is the present value of the defined benefit obligation at the balance sheet date less the fair value of the plan’s assets.
The defined benefit obligation is measured annually by independent actuaries using the projected unit credit method. The current value of the defined benefits is estimated by discounting the future expected cash outflows (using the interest rate of European bonds index Iboxx AA Corporate Overall 10+ EUR indices), issued in the currency the benefits will be paid at and have similar maturity terms to those of the retirement’s liability.
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The actuarial gains or losses that result from adjustments based on empirical adjustments and changes in actuarial assumptions are recorded in other comprehensive income and through it in retained earnings.
A defined contribution plan is a retirement scheme where the Company pays defined contributions, to an independent institution (the fund) that operates the contributions and provides the benefits, on a compulsory or non-compulsory basis. The Company has no other legal or any other type of obligation for further contributions if the fund is unable to meets its contract requirements and provide to the employees the agreed benefits for current or past services. Prepaid contributions are recognized as assets to the extent the cash return or decrease is expected in the future payments (Note 3.16).
2.14 Financial Liabilities
Financial liabilities include derivative liabilities, trade and other payable liabilities, borrowings and lease liabilities measured at amortized cost.
Financial liabilities are recognized when the Company becomes a party to the contractual agreements of the instrument and derecognized when the obligation under the liability is discharged, cancelled or expires.
Borrowings provide a short-term or long-term financing source to the Group. They are initially recognized at cost, which includes the initial proceeds less any issuance cost. Subsequent of initial recognition, borrowings are measured at amortized cost using the effective interest rate method.
All interest related charges are recognized as an expense in “financial expense” in the income statement.
Trade payables are recognized initially at their nominal value and subsequently valued at their amortized cost less any settlement payments.
Dividends payable to the shareholders are in included in “Other short-term liabilities” when they are approved by the Shareholders’ General Meeting.
When a current financial liability is exchanged with another of different type and terms but from the same originator, this is dealt as termination of the initial liability and commencement of a new one. Any difference in the book values is recognized in the income statement.
2.15 Income tax and deferred tax
Current Income Tax
Current income tax receivables / liabilities comprise of obligations to / or claims from tax authorities, based on taxable income of the current or previous reporting periods that have not been settled until the balance sheet date.
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They are measured at tax rates and tax laws that are enacted on the respective financial year based on the taxable profits for the period. All differences in tax assets / liabilities are charged to the income statement for the period as part of the income tax expense.
Deferred tax
Deferred income tax is calculated with the net liability method focuses on temporary differences between the carrying amounts of assets and liabilities of the financial statements and the corresponding tax bases. Deferred tax assets are re-examined at every balance sheet date and are reduced to the extent that it is no longer possible that enough taxable income will be available to allow the use of benefit (in total or partially) of the deferred tax asset. Deferred tax liabilities are recognized for all temporal tax differences except when the deferred tax liability arises from the initial recognition of goodwill.
Deferred tax assets and liabilities are measured at tax rates that are expected to be enacted when the asset will be recovered or the liability settled taking into consideration the tax rates already enacted by the time of the balance sheet date.
Most changes in deferred tax assets or liabilities are recognized as tax revenue - expense. Changes in deferred tax assets or liabilities related to a change in the value of asset or liability recognized in equity through the statement of other comprehensive income or directly, are recognized in equity through the statement of comprehensive income or directly respectively.
The Company recognizes a previously unrecognized deferred tax asset to the extent that it is probable that future taxable profit will allow the recovery of the deferred tax asset.
The Group is subject to periodic tax audits by the tax authorities. In case of complex and uncertain tax treatments, the Group Management proceeds with judgements and estimates for the determination of the income tax as well as of the deferred tax. If deemed necessary, the Group seeks for experts’ advice, in order to identify the most proper tax treatment, as well as to recognize the adequate provision. When the Group proceeds with the payment of imposed amounts, in order to appeal against the tax authorities and assesses that the outcome of the case will be favorable, the respective payments are posted as receivables, to be offset against potential liabilities in case of a negative outcome or to be refunded in case of a positive outcome. Upon finalization of said cases, any difference in relation to the provisions is recognized in the income statement.
2.16 Provisions, contingent liabilities and contingent assets
Provisions are recognized when the Company has present legal or assumed obligations as a result of past events, their settlement is probable through an outflow of economic resources from the Company and the liability can be estimated reliably. The time frame or the resources’ outflow may be uncertain. A present obligation stems from the existence of a legal or assumed obligation resulting from past events such as warranties, legal disputes or onerous contracts. When the total or part of the estimated provision settlement amount is expected to be paid by a third party, the remuneration will be recognized only if it is more probable than not that the remuneration will be paid by the financial entity. The remuneration amount recognized cannot exceed the provision amount.
The expense relating to a provision is presented in the income statement, net of the provision initially formed. A provision is used only for the purpose it was initially formed. Provisions are evaluated at each balance sheet date
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and adjusted accordingly in order to depict the best most current estimation. Provisions are valued at the balance sheet date and are adjusted in order to reflect the present value of the obligation’s expected settlement cost.
In such cases where the possible economic resources outflow as a result of present obligation is not probable or the amount or the provision cannot be reliably estimated no provision for contingent obligations is recognized in the financial statements however they are disclosed if the probability of economic resources outflows is high. Contingent assets are recognized in the financial statements but are disclosed when the economic resources inflow is probable. Possible economic resources inflows for the Company that do not meet the conditions for an asset are considered as contingent assets.
2.17 Government grants
Government grants related to expenses are recognised in profit or loss on a systematic basis over the periods in which the Group recognises as expenses the related costs for which the grants are intended to compensate. A government grant that becomes receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the entity with no future related costs, shall be recognised in profit or loss of the period in which it becomes receivable.
2.18 Operating Segments
The Group is managed as one business unit that provides high-quality air transport within and outside the Greek territory. Operations are monitored and managed by the Board of Directors, which acts as the Chief Operating Decision Maker - CODM.
For more efficient decision-making, CODM is provided with all necessary information (route revenue, available resources, competition analysis), which is evaluated for the entire network, with the goal of maximizing the overall financial results and not to improve the results of a particular route.
Finally, it should be noted that profitability is measured based on the result, profit or loss, from operating activities before income tax, without taking into account the financial results and extraordinary items.
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3. Notes to the Financial Statements
3.1 Intangible Assets
As at 31.12.2022 intangible assets amounted to € € 30.052 and € 45.098for the Company and the Group, respectively.
The Group performs its annual impairment test of goodwill (€40 mil) occured since the acquisition of Olympic Air, at the end of every year (December 31st) or earlier, if any impairment indications exist.
As of 31.12.2022, the Group Management performed an impairment test of goodwill and intangible assets with indefinite useful life. In the context of this exercise, the management assessed that these assets do not generate independent cash flows and as such they should be tested for impairment in Group level, which is considered as one cash generating unit (CGU). Key assumptions used for the impairment exercise are analyzed in Note 2.2. There was no need of impairment, since the CGU recoverable amount highly exceeded its current book value at 31.12.2022.
Intangible assets movement is analyzed as follows:
Company
Slots
Software
Other
Total
Cost of acquisition
Balance 01.01.2021
22.030,00
21.358,34
4.060,82
47.449,16
Additions
0
1.927,76
0
1.927,76
Disposals/Write offs
0
(8,10)
0
(8,10)
Balance 31.12.2021
22.030,00
23.278,00
4.060,82
49.368,82
Depreciations
Balance 01.01.2021
0
17.758,47
3.035,36
20.793,83
Depreciations
0
1.316,47
175,51
1.491,97
Balance 31.12.2021
0
19.074,94
3.210,87
22.285,80
Net Book value at 31.12.2021
22.030,00
4.203,06
849,96
27.083,02
Cost of acquisition
Balance 01.01.2022
22.030,00
23.278,00
4.060,82
49.368,82
Additions
0
4.791,64
0
4.791,64
Balance 31.12.2022
22.030,00
28.069,64
4.060,82
54.160,46
Depreciations
Balance 01.01.2022
0
19.074,94
3.210,87
22.285,80
Depreciations
0
1.711,66
110,69
1.822,35
Balance 31.12.2022
0
20.786,60
3.321,56
24.108,16
Net Book value at 31.12.2022
22.030,00
7.283,04
739,26
30.052,30
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Group
Brand name
Slots
Software
Other
Total
Cost of acquisition
Balance 01.01.2021
21.750,05
22.030,00
27.250,98
4.060,77
75.091,80
Additions
0
0
2.253,40
0
2.253,40
Disposals/Write offs
0
0
(8,10)
0
(8,10)
Balance 31.12.2021
21.750,05
22.030,00
29.496,27
4.060,77
77.337,10
Depreciations
Balance 01.01.2021
5.959,92
0
23.625,54
3.037,40
32.622,85
Depreciations
412,84
0
1.599,70
175,51
2.188,05
Balance 31.12.2021
6.372,76
0
25.225,24
3.212,91
34.810,90
Net Book value at 31.12.2021
15.377,30
22.030,00
4.271,03
847,87
42.526,20
Cost of acquisition
Balance 01.01.2022
21.750,05
22.030,00
29.496,27
4.060,77
77.337,10
Additions
0
0
4.848,42
0
4.848,42
Balance 31.12.2022
21.750,05
22.030,00
34.344,70
4.060,77
82.185,52
Depreciations
Balance 01.01.2022
6.372,76
0
25.225,24
3.212,91
34.810,90
Depreciations
0
0
2.166,10
110,69
2.276,79
Balance 31.12.2022
6.372,76
0
27.391,34
3.323,60
37.087,70
Net Book value at 31.12.2022
15.377,30
22.030,00
6.953,36
737,17
45.097,82
3.2 Tangible Assets
The Group Management examined the existence of any impairment indications of tangible assets. No impairment indications that could affect the recoverable amount of assets existed as at 31.12.2022.
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Company
Land and Buildings
Aircraft Owned
Aircraft – Maintenance component
Aircraft equipment
Airports equipment
Other vehicles
Furniture and other equipment
Advances for tangible assets
Total
Cost of acquisition
Balance 01.01.2021
13.645,85
31.089,37
27.449,46
55.342,43
2.039,17
985,88
15.559,88
36.075,02
182.187,05
Additions
1.717,99
0
0
1.534,09
0
0
810,67
40.771,90
44.834,64
Disposals/write offs
0
0
0
(1.109,74)
0
0
(140,60)
(23.238,58)
(24.488,93)
Balance 31.12.2021
15.363,83
31.089,37
27.449,46
55.766,77
2.039,17
985,88
16.229,94
53.608,33
202.532,76
Depreciations
Balance 01.01.2021
9.425,86
6.092,89
1.284,75
25.892,53
1.719,83
787,36
11.852,39
0
57.055,62
Depreciations
1.142,26
2.646,74
2.584,37
5.113,37
56,19
100,32
1.097,98
0
12.741,22
Disposals/write offs
0
0
0
(709,04)
0
0
(138,91)
0
(847,96)
Balance 31.12.2021
10.568,12
8.739,63
3.869,12
30.296,86
1.776,02
887,68
12.811,46
0
68.948,88
Net book value 31.12.2021
4.795,72
22.349,74
23.580,34
25.469,91
263,15
98,20
3.418,49
53.608,33
133.583,88
Cost of acquisition
Balance 01.01.2022
15.363,83
31.089,37
27.449,46
55.766,77
2.039,17
985,88
16.229,94
53.608,33
202.532,76
Additions
3.988,85
30.444,31
18.265,79
58.527,28
30,65
58,72
2.099,09
78.884,87
192.299,57
Disposals/write offs
(6,54)
0
0
(270,64)
0
(9,43)
(18,15)
(53.736,39)
(54.041,15)
Balance 31.12.2022
19.346,14
61.533,68
45.715,25
114.023,42
2.069,82
1.035,17
18.310,89
78.756,81
340.791,18
Depreciations
Balance 01.01.2022
10.568,12
8.739,63
3.869,12
30.296,86
1.776,02
887,68
12.811,46
0
68.948,88
Depreciations
1.292,47
4.148,23
4.809,68
7.844,18
47,74
76,46
1.236,72
0
19.455,48
Disposals/write offs
(6,54)
0
0
(240,42)
0
(9,43)
(18,15)
0
(274,53)
Balance 31.12.2022
11.854,04
12.887,86
8.678,79
37.900,62
1.823,77
954,71
14.030,03
0
88.129,83
Net book value 31.12.2022
7.492,10
48.645,82
37.036,46
76.122,80
246,05
80,46
4.280,86
78.756,81
252.661,36
148
Group
Land and Buildings
Aircraft Owned
Aircraft – Maintenance component
Aircraft equipment
Airports equipment
Other vehicles
Furniture and other equipment
Advances for tangible assets
Total
Cost of acquisition
Balance 01.01.2021
13.645,85
62.965,27
27.449,46
54.392,52
2.039,17
1.147,73
21.423,77
36.648,02
219.711,77
Additions
1.717,99
403,89
0
1.535,19
0
0
1.476,66
41.314,22
46.447,95
Disposals/write offs
0
0
0
(1.109,74)
0
0
(140,60)
(23.663,33)
(24.913,68)
Foreign currency translation reserve
0
3.017,30
0
0
0
0
0
0
3.017,30
Balance 31.12.2021
15.363,83
66.386,46
27.449,46
54.817,97
2.039,17
1.147,73
22.759,83
54.298,91
244.263,35
Depreciations
Balance 01.01.2021
9.425,86
8.581,51
1.284,75
25.479,21
1.719,83
940,25
16.686,45
0
64.117,86
Depreciations
1.142,26
5.963,73
2.584,37
5.018,39
56,19
102,92
1.435,68
0
16.303,54
Disposals/write offs
0
0
0
(709,04)
0
0,18
(168,93)
0
(877,80)
Balance 31.12.2021
10.568,12
14.545,24
3.869,11
29.788,56
1.776,02
1.043,35
17.953,20
0
79.543,60
Net book value 31.12.2021
4.795,72
51.841,22
23.580,34
25.029,41
263,15
104,37
4.806,63
54.298,91
164.719,75
Cost of acquisition
Balance 01.01.2022
15.363,83
66.386,46
27.449,46
54.817,97
2.039,17
1.147,73
22.759,83
54.298,91
244.263,35
Additions
3.988,85
21.690,67
27.019,44
58.540,18
30,65
58,72
2.462,44
79.002,71
192.793,66
Disposals/write offs
(6,54)
0
0
(270,64)
0
(9,43)
(18,15)
(53.921,87)
(54.226,63)
Foreign currency translation reserve
0
3.001,75
0
0
0
0
0
0
3.001,75
Balance 31.12.2022
19.346,14
91.078,87
54.468,90
113.087,51
2.069,82
1.197,02
25.204,13
79.379,75
385.832,14
Depreciations
Balance 01.01.2022
10.568,12
14.545,24
3.869,11
29.788,56
1.776,02
1.043,35
17.953,20
0
79.543,60
Depreciations
1.292,47
7.510,79
6.355,16
7.742,03
47,74
79,06
1.694,16
0
24.721,42
Disposals/write offs
(6,54)
0
0
(240,42)
0
(9,43)
(18,15)
0
(274,53)
Balance 31.12.2022
11.854,04
22.056,03
10.224,28
37.290,17
1.823,77
1.112,98
19.629,21
0
103.990,48
Net book value 31.12.2022
7.492,10
69.022,84
44.244,62
75.797,34
246,05
84,04
5.574,91
79.379,75
281.841,65
Part of Group and Company Aircraft Owned and Aircraft – Maintenance component additions refers to the exercise of the purchase right for one aircraft, that was classified as Right of Use Asset in prior year figures (€21.379). Furthermore, the additions contain the purchase of three new aircraft. Aircraft equipment additions of the Group and the Company mainly include the purchase of four spare engines, as well as the wi-fi on board installation in certain aircrafts. Group and Company Advances for tangible assets additions mainly relate to the pre-delivery payments made for aircraft acquisition. Same category disposals reflect the four spare engines recognition in Aircraft equipment.
149
3.3 Right of use assets/ Lease liabilities
At 31.12.2022 the Group fleet consisted of 69 aircraft, out of which 9 were owned aircraft.
The table below presents the Group fleet at 31.12.2022.
FLEET 31.12.2022
Manufacturer/ Model
Aegean
Olympic Air
Aegean Cyprus
Total
Airbus A320ceo
27
-
2
29
Airbus A320neo
7
-
-
7
Airbus A321ceo
6
-
-
6
Airbus A321neo
12
-
-
12
Airbus A319ceo
1
-
-
1
De Havilland Dash 8-100
-
2
-
2
ATR 72-600
-
9
9
ATR 42-600
-
3
-
3
Total
53
14
2
69
The Company also owns one Learjet 60 and leases one Gulfstream G550, which are used for air-taxi flights (Note 3.2).
Group fleet at 31.12.2021 was as follows:
FLEET 31.12.2021
Manufacturer/ Model
Aegean
Olympic Air
Aegean Cyprus
Total
Airbus A320ceo
28
-
2
30
Airbus A320neo
5
-
-
5
Airbus A321ceo
10
-
-
10
Airbus A321neo
4
-
-
4
Airbus A319ceo
1
-
-
1
De Havilland Dash 8-Q400
-
8
-
8
De Havilland Dash 8-100
-
2
-
2
ATR 72-600
-
1
1
ATR 42-600
-
4
-
4
Total
48
15
2
65
The right of use assets, as well as the respective lease liabilities for the Company and the Group at 31.12.2022 were:
150
Company
Right of use assets
Aircraft
Aircraft Engines
Buildings
Vehicles
Total Assets
Lease liabilities
Opening balance 1.1.2022
381.373,29
6.793,66
15.572,32
733,74
404.473,01
383.949,60
Additions
354.486,08
4.820,51
9.584,37
419,50
369.310,46
368.800,99
Modifications
36.306,24
2.036,33
1.416,06
0
39.758,63
39.758,63
Disposals
(28.201,94)
0
(3.596,09)
0
(31.798,03)
(10.179,22)
Depreciation
(87.658,57)
(3.380,39)
(3.337,90)
(485,66)
(94.862,52)
0
Interest expense
26.362,69
Payments
(126.687,40)
(Gain)/Loss
(701,42)
FX Valuation
4.635,64
Ending balance 31.12.2022
656.305,10
10.270,11
19.638,76
667,58
686.881,55
685.939,50
Group
Right of use assets
Aircraft
Aircraft Engines
Buildings
Vehicles
Total Assets
Lease liabilities
Opening balance 1.1.2022
389.190,17
6.793,66
15.996,09
788,21
412.768,13
414.233,51
Additions
372.711,06
4.820,51
44.103,86
419,66
422.055,09
421.521,91
Modifications
36.637,81
2.036,33
1.416,06
0
40.090,20
40.090,20
Disposals
(23.503,98)
0
(3.733,95)
(21,36)
(27.259,30)
(5.637,86)
Depreciation
(94.543,00)
(3.380,39)
(3.461,26)
(507,67)
(101.892,32)
0
Interest expense
27.765,51
Payments
(166.573,65)
(Gain)/Loss
(209,03)
FX Valuation
6.128,56
Ending balance 31.12.2022
680.492,06
10.270,11
54.320,79
678,85
745.761,80
737.319,15
Company
Right of use assets
Aircraft
Aircraft Engines
Buildings
Vehicles
Total Assets
Lease liabilities
Opening balance 1.1.2021
417.529,37
9.005,39
7.861,76
1.067,81
435.464,34
392.703,15
Additions
44.017,81
825,12
9.474,50
210,69
54.528,11
41.946,86
Modifications
15.472,83
0
1.806,14
0
17.278,96
17.278,96
Disposals
0
0
(738,64)
(0,64)
(739,28)
(739,27)
Depreciation
(95.646,71)
(3.036,85)
(2.831,44)
(544,12)
(102.059,12)
0
Interest expense
14.592,92
Payments
(109.227,11)
(Gain)/Loss
(2.572,90)
FX Valuation
29.966,98
Ending balance 31.12.2021
381.373,29
6.793,66
15.572,32
733,74
404.473,01
383.949,60
151
Group
Right of use assets
Aircraft
Aircraft Engines
Buildings
Vehicles
Total Assets
Lease liabilities
Opening balance 1.1.2021
446.709,37
9.005,39
8.830,98
1.124,08
465.669,81
425.134,45
Additions
53.166,56
825,12
9.541,94
233,69
63.767,30
51.074,82
Modifications
15.472,83
0
1.309,18
0
16.782,01
16.782,16
Disposals
0
0
(761,06)
(0,64)
(761,70)
(761,22)
Depreciation
(126.158,58)
(3.036,85)
(2.924,95)
(568,90)
(132.689,29)
0
Interest expense
15.781,75
Payments
(123.238,20)
(Gain)/Loss
(2.613,71)
FX Valuation
32.073,45
Ending balance 31.12.2021
389.190,17
6.793,66
15.996,09
788,21
412.768,13
414.233,51
Aircraft disposals in Group and Company amounts mainly reflect the exercise of the purchase right for one aircraft, that was classified as Right of Use Asset in prior year figures (Note 3.2). Furthermore, Aircraft disposals in Company amounts relate to the early termination of an aircraft lease - owned by Aegean Cyprus Ltd - that since then is leased by Anima Wings SRL.
Group and Company Aircraft modifications and additions mainly concern new aircraft lease contracts, aircraft lease extensions, lease of new airport spaces and renewal of building lease contracts with duration over 12 months.
In 2022, AEGEAN established an Aircraft Maintenance Services Center and a Simulation and Training Center. Aegean entered into a concession agreement for the long-term lease of the old Olympic Air’s technical base in Athens airport. Group Building additions reflect the new lease contract of Buildings 56, 53 and 57 between the subsidiary Olympic Air and the Athens International Airport.
All amounts recognized in the income statements are summarized below:
Company
Group
31.12.2022
31.12.2021
31.12.2022
31.12.2021
Depreciation expense of right of use assets
94.862,52
102.059,12
101.892,32
132.689,29
Interest expense on lease liabilities
26.362,69
14.592,92
27.765,51
15.781,75
Short-term lease expenses
1.503,80
6.346,37
1.913,35
7.542,47
Total
122.729,02
122.998,41
131.571,19
156.013,50
The lease payments are analyzed as follows:
Company
Group
31.12.2022
31.12.2021
31.12.2022
31.12.2021
Payments relating to lease liabilities
126.687,40
109.227,11
166.573,65
123.238,20
Payments relating to short-term leases
1.503,80
6.346,37
1.913,35
7.542,47
Total
128.191,20
115.573,48
168.487,00
130.780,66
The Group Management examined the existence of any impairment indications of right of use assets. No impairment indications that could affect the recoverable amount of assets existed as at 31.12.2022.
152
3.4 Investment in subsidiaries
Investments in subsidiaries are analyzed as follows:
Company
Country
Participation
31.12.2022
31.12.2021
Olympic Air S.A.
Greece
100%
62.416,56
62.416,56
Aegean Cyprus LTD
Cyprus
54,55%
18.010,00
18.010,00
Anima Wings SRL
Roumania
51,00%
1.261,54
1.261,54
Hellenic Aviation Maintenance Center
Greece
100,00%
500,00
0
Investment in subsidiaries
82.188,10
81.688,10
Company’s participation percentage in Aegean Cyprus Ltd amounts to 54,55%. The 100% subsidiary company of the Group, Olympic Air, participates in Aegean Cyprus Ltd with a percentage 45,45%. Thus, Company’s direct and indirect participation percentage is set to 100%. On 15.10.2022 the Company proceeded to establish a company under the name Hellenic Aviation Maintenance Center Single Member S.A. which is a 100% subsidiary company of the Group.
On 09.11.2022, the Company proceeded to establish the company with the name "Aegean Airlines Executive Sole Proprietorship S.A.", which is also a 100% subsidiary company of the Group.
The Group Management examined the existence of any impairment indications of investment in subsidiaries. No impairment indications that could affect the recoverable amount of investment in subsidiaries existed as at 31.12.2022.
3.5 Advances for future aircraft leases
Advances for future aircrafts leases (Pre-delivery payments) refers to sale and leaseback agreements with lessors who will finance these aircrafts in full.
According to these agreement’s clauses, the right and the commitment to purchase the aircraft is assigned to the lessor on the date of its delivery.
At the delivery date, the lessor pays the full purchase price and the Company collects the full amount already paid in advance. Consequently, the related asset is derecognized, and any gain or loss is recognized in the statement of comprehensive income.
These advances are presented based on discounted cash flows and are translated using the prevailing exchange rate at each reporting date.
As at 31.12.2022, from the total outstanding balance of € 62.074,97, an amount of € 53.548,46 is anticipated to be settled within next fiscal year. As at 31.12.2021, from the total outstanding balance of € 97.007,37, an amount of €70.462,74 was anticipated to be settled the current year.
The year-end translation of advances resulted in a gain of € 11.065,69 (31.12.2021: gain of €4.087,36).
Furthermore, the discount result amounted to €330,63 (income).
Both amounts have been recognized in finance income/expense accounts.
153
3.6 Deferred tax assets/ liabilities
The deferred tax assets/liabilities arising from the corresponding temporary tax differences for the Company and the Group are the following:
Company
31.12.2022
31.12.2021
Asset
Liability
Asset
Liability
Assets and depreciation/amortization
0
(18.095,89)
0
(5.337,87)
Right of use depreciation
0
(133.165,67)
0
(70.031,58)
Lease Liabilities
137.457,18
0
69.757,84
0
Receivables
18.660,67
0
14.889,91
0
Provisions for employee retirement benefits
0
(739,35)
2.212,47
0
Derivatives
0
(10.060,36)
0
(2.827,77)
Other financial instruments valuation
240,77
0
0
(151,95)
Other short-term liabilities
12.406,25
0
2.175,22
0
Deferred tax asset
5.929,19
0
44.041,38
0
Total amount to be offset/recovered
174.694,06
(162.061,27)
133.076,82
(78.349,17)
Balance
12.632,79
54.727,65
Group
31.12.2022
31.12.2021
Asset
Liability
Asset
Liability
Assets and depreciation/amortization
0
(8.005,44)
0
(6.203,59)
Right of use depreciation
0
(149.914,80)
0
(74.131,51)
Lease Liabilities
152.562,21
0
77.882,32
0
Receivables
18.313,29
0
13.974,70
0
Provisions for employee retirement benefits
0
(285,89)
2.626,29
0
Derivatives
0
(10.060,36)
0
(2.827,77)
Other financial instruments valuation
240,76
0
0
(151,96)
Other short-term liabilities
4.240,69
0
5.466,25
0
Deferred tax asset
18.146,83
0
49.803,30
0
Total amount to be offset/recovered
193.503,79
(168.266,49)
149.752,86
(83.314,83)
Balance
25.237,30
66.438,03
The recognition of deferred tax asset mainly concerns the tax benefit from the existence of Group and Company tax losses of previous years, which are expected to be offset against future tax profits.
The management used the Group 5-year business plan results, adjusted to the tax-based figures, in order to assess the deferred asset recoverability and consequently the existence of sufficient future taxable profits, taking also into consideration the revenue and expense value and timing of recognition, according to the provision of L. 4172/2013, as being in force at 31.12.2022.
154
3.7 Other long-term assets
Other long-term assets are analyzed as follows:
Company
Group
31.12.2022
31.12.2021
31.12.2022
31.12.2021
Security deposits relating to lease agreements
27.108,15
25.235,69
29.801,82
30.790,51
Other assets
0
0
95,88
0
Pledged Cash
496,03
19.512,64
496,03
19.512,64
Pledged Bonds
10.390,40
0
10.390,40
0
Total
37.994,58
44.748,32
40.784,13
50.303,15
Pledged cash at 31.12.2021 included an amount of €19.512 deposited by the Company in the Debt Service Reserve Account (DSRA) in favor of the bondholders, in accordance with the terms of the Common Bond Loan Program of €200m as amended by the 30.3.2021 decision of the bondholders’ meeting (Note 3.17). Within 2022, an amount of €10.800 was released from the DSRA according to the terms of the Program. In addition, the Company proceeded in replacing part of the remaining pledged cash deposited in the DSRA with the placing a pledge on fixed income securities in favor of the bondholders with market value of €10.390 (Pledged Bonds – Hierarchy level 1), according to the terms of the Program.
Furthermore, the Other long-term assets include security deposits provided by the Company and the Group, in accordance with aircraft or buildings lease contract terms.
3.8 Financial assets
The account includes Company’s investments in debt and equity instruments, which are traded in primary and secondary markets and they are measured at fair value through other comprehensive income (Fair value hierarchy Level 1 and 3).
Within 2022, the Company purchased debt securities amounted to € 63.969 (31.12.2021 €788) and received an amount of € 12.237 (31.12.2021 €733) from debt securities’ sales and repayments.
At 31.12.2022, an impairment for expected credit losses of € 108.732 (31.12.2021 €40,27) was recognized, which is included in the financial expenses. (Note 3.28)
Change in fair value in other comprehensive income, not reclassified to profit or loss in subsequent periods, refers to valuation loss of equity instruments amounted to €3.087.
No transfers of financial assets between hierarchies’ levels were made.
3.9 Inventories
The inventories refer to goods sold on board during international flights and to aircraft spare parts.
Regarding the aircraft spare parts, the Company and the Group maintain specific volume of spare parts to respond in any possible maintenance and repair needs. Spare parts increase compared to 2021 is due to the creation of sufficient spare part inventory for the new Neo fleet as well as the gradual increase of in-house maintenance.
155
Company
Group
Closing balance inventories
31.12.2022
31.12.2021
31.12.2022
31.12.2021
Travel value
603,45
529,13
638,92
574,27
Aircraft spare parts
26.708,00
16.381,85
33.078,16
22.189,32
Total
27.311,45
16.910,98
33.717,08
22.763,59
Inventories movement is analyzed below:
Movement
Company
Group
31.12.2022
31.12.2021
31.12.2022
31.12.2021
Travel value
Opening balance
529,13
541,21
574,27
541,21
Purchases
1.645,73
720,61
1.645,73
765,75
Consumption
(1.571,41)
(732,70)
(1.581,11)
(732,70)
Closing balance
603,45
529,13
638,88
574,27
Aircraft spare parts
Opening balance
16.381,85
13.721,09
22.189,32
19.430,67
Purchases
18.171,70
9.221,20
21.750,61
11.564,50
Consumption
(7.845,55)
(6.560,44)
(10.861,73)
(8.805,85)
Closing balance
26.708,00
16.381,85
33.078,19
22.189,32
Total inventories
27.311,45
16.910,98
33.717,07
22.763,59
3.10 Customers and other trade receivables
Customers and other trade receivables refer to the following balances:
Company
Group
31.12.2022
31.12.2021
31.12.2022
31.12.2021
Trade receivables
Domestic customers
12.800,45
6.649,75
15.900,11
5.312,83
International customers
7.696,43
2.097,83
5.757,33
3.682,86
Greek State
739,96
671,27
753,44
1.258,92
Other debtors
29.300,80
12.322,93
32.720,59
27.379,90
Subtotal
50.537,64
21.741,79
55.131,47
37.634,51
Allowance for expected credit loss (ECL)
(3.011,46)
(2.303,52)
(5.409,40)
(4.883,62)
Trade receivables total
47.526,19
19.438,27
49.722,07
32.750,89
Other receivable subject to allowance for ECL
Accrued income
28.528,10
31.412,62
29.508,00
33.546,49
Contract Assets
10.587,24
9.165,38
7.795,51
6.555,13
Suppliers advances
11.192,87
14.045,26
18.052,03
24.068,76
Total
50.308,21
54.623,26
55.355,54
64.170,37
Allowance for expected credit loss (ECL)
(16,13)
(16,30)
(19,54)
(27,30)
Other receivable subject to allowance for ECL total
50.292,08
54.606,95
55.336,01
64.143,07
Other receivable not subject to allowance for ECL
4.430,26
6.071,65
19.002,00
18.826,71
Total Trade and Other Receivables
102.248,54
80.116,87
124.060,08
115.720,67
156
Trade receivables increase, compared 31.12.2021 amounts, is due to the improved flight activity of the Company and the Group within 2022.
Other debtors balance refers to receivables from ticket sales through IATA travel agents in Greece or abroad and tickets sold to other airline companies.
Contract assets outstanding balance refers to 2022 revenue invoiced within 2023 and mainly include interline revenue, as well as revenue from redemption/conversion of award points in loyalty programs that Company participates.
Accrued income includes mainly claims to aircraft lessors for reimbursement from maintenance reserves, in cases a maintenance has been carried out within 2022, but the invoice is issued within 2023.
2022 allowance for expected credit losses, is included in the Consumption of materials and Services balance.
Other receivable balance not subject to allowance for ECL includes claim for VAT receivable or Greek State receivable.
Trade and other receivables amount is considered to be short-term and therefore their fair value is not considered to be materially different from their book value.
Ageing Analysis of customers/debtors (Company)
31.12.2022
Not past due
less than 30 days
30-60 days
61- 90 days
more than 90 days
Total
Expected Credit Loss Rate
0,75%
2,35%
26,45%
39,4 3%
61,40 %
3,00%
Trade and other receivable
86.851,32
9.532,20
1.372,47
491, 64
2.598, 22
100.84 5,86
Expected Credit Loss
650,98
224,48
363,00
193, 83
1.595, 30
3.027,5 8
Ageing Analysis of customers/debtors (Group)
31.12.2022
Not past due
less than 30 days
30-60 days
61- 90 days
more than 90 days
Total
Expected Credit Loss Rate
0,70%
2,37%
26,46%
39,4 8%
79,48 %
4,91%
Trade and other receivable
94.047,83
9.546,95
1.377,95
499, 96
5.014, 33
110.48 7,02
Expected Credit Loss
654,93
226,40
364,65
197, 40
3.985, 55
5.428,9 3
Ageing Analysis of customers/debtors (Company)
31.12.2021
Not past due
less than 30 days
30-60 days
61- 90 days
more than 90 days
Total
Expected Credit Loss Rate
0,43%
2,08%
32,18%
41,5 4%
70,38%
3,04%
Trade and other receivable
64.255,33
8.909,9 3
741,69
386, 92
2.071,18
76.365, 05
Expected Credit Loss
277,46
185,26
238,64
160, 73
1.457,74
2.319,8 3
157
Ageing Analysis of customers/debtors (Group)
31.12.2021
Not past due
less than 30 days
30-60 days
61-90 days
more than 90 days
Total
Expected Credit Loss Rate
0,44%
1,85%
22,38%
41,66%
85,43%
4,82%
Trade and other receivable
85.308,13
10.410, 45
1.079,70
391,84
4.614,7 6
101.804,88
Expected Credit Loss
371,13
192,70
241,59
163,26
3.942,2 5
4.910,92
The movement of provision is analyzed below:
Company
Group
31.12.2022
31.12.2021
31.12.2022
31.12.2021
Balance at the beginning of the year
2.319,82
2.670,73
4.910,92
5.571,42
Provision utilized
0
0
0
0
ECL allowance (Note. 3.26)
707,76
(350,91)
518,02
(660,50)
Balance at year end
3.027,58
2.319,82
5.428,93
4.910,92
The Company and the Group made no write-offs for uncollected receivable at 31.12.2022 and 31.12.2021.
3.11 Prepayments
Prepayments relate to amounts paid in advance to third parties or to the Company and Group employees.
Prepayments balance is analyzed below:
Company
Group
31.12.2022
31.12.2021
31.12.2022
31.12.2021
Other advances paid
280,71
205,60
304,52
242,42
Prepaid expenses
24.296,42
18.025,65
26.509,45
23.985,77
Total
24.577,13
18.231,25
26.813,97
24.228,19
Prepaid expenses mainly relate to aircraft maintenance cost, aircraft insurance cost and other operating expesnes. Prepaid expenses account also includes the asset recognized by the incremental costs of obtaining contract with customers (travel agents commissions, CRS and GDS costs etc).
3.12 Cash and cash equivalents- Restricted Cash
Cash and cash equivalents of the Company and the group are analyzed as follows:
Company
Group
31.12.2022
31.12.2021
31.12.2022
31.12.2021
Cash
127,54
162,53
168,86
204,30
Current accounts
167.360,39
300.477,27
183.457,87
361.230,33
Short-term time deposits
235.943,23
52.983,00
240.599,71
64.271,75
Cash equivalents
38.042,18
16.880,20
38.062,17
16.880,20
Total
441.473,33
370.503,00
462.288,61
442.586,58
158
Cash equivalents refer to low risk investments which can be immediately liquidated (less than 3 months). (Treasury bills, money market funds).
The Company and the Group restricted cash as at 31.12.22 amounted to €881 (31.12.2021: nil), concerning cash collateral provided to third parties, in the context of contracts for derivative financial instruments.
Part of Company and Group cash accounts, amounting to €103,62m (31.12.2021: €49,60m) and €117,08m (31.12.2021: €51,67m), respectively, include cash denominated in foreign currency (mainly USD).
3.13 Share Capital
The Ordinary General Meeting at 07.07.2022, approved the Reduction of the Company’s share capital by the amount of €13.525.065, i.e. from €58.608.615 to €45.083.550, through the reduction of the nominal value of all Company’s shares, totaling 90.167.100 shares, from €0,65 to €0,50 per share, to offset an equivalent amount of prior years losses, for the write-off of losses of previous years of an equal amount.
From the increase of the share capital decided by the Company's Board of Directors dated 14.05.2021, a total capital of € 60 million was raised, through the exercise of pre-emptive rights and the pre-registration right of the eligible shareholders. The use of the raised funds was fully paid until 30.06.2022. The report on the use of Funds Raised and the Agreed Upon Procedures report of the Certified Public Accountant are available in the 30.06.2022 interim report.
Given the Greek State grant disbursement, the Company also issued and delivered warrants without consideration to the Hellenic Republic as per article 30 of Law 4772/2021 and article 56 of Law 4548/2018 and the relevant contract was signed. More specifically, 10.369.217 warrants were issued, each warrant providing the right to purchase one new common registered share, at an exercise price of €3,20 per share, which can be exercised between 03.07.2023 and 03.07.2026, whilst the Company retains a call option to buy back the warrants at their market value.
3.14 Share Premium
Following the share capital decrease (Note 3.13), the Ordinary General Meeting held on July 7 th 2022 approved the set-off of an amount equal to €42.143.642,36 of the Company’s “Share premium” account, for the write-off of an equivalent amount of prior years losses according to article 35 par. 3 of L. 4548/2018. Therefore, the share premium at 31.12.2022 amounts to € 78.444,83 compared to 31.12.2021 that amounted to € 120.588,48
3.15 Other reserves
Other reserves comprise of statutory reserves, special reserves, cash flow hedge reserve, reserves arising from financial assets measured at fair value through OCI as well as warrants reserve.
Given the grant disbursement, the Company also issued and delivered warrants without consideration to the Hellenic Republic as per article 30 of Law 4772/2021 and article 56 of Law 4548/2018 and the relevant contract was signed. More specifically, 10.369.217 warrants were issued, each warrant providing the right to purchase one new
159
common registered share at an exercise price of €3,20 per share, which can be exercised between 03.07.2023 and 03.07.2026, whilst the Company retains a call option to buy back the warrants at their market value (Note 3.13).
Company’s other reserves are analyzed as follows:
Reserves
Statutory reserve
Special Reserves
Fair value reserve (cash flow hedge)
Warrants reserve
Financial Assets reserve
Total
Balance at 31.12.2020
15.499,98
(5.363,47)
(16.068,93)
0
134,46
(5.797,96)
Change for the period
0
(445,04)
31.995,97
27.473,04
652,52
59.676,49
Balance at 31.12.2021
15.499,98
(5.808,51)
15.927,04
27.473,04
786,98
53.878,53
Change for the period
3.916,22
21.791,72
0
(1.442,02)
24.265,92
Balance at 31.12.2022
15.499,98
(1.892,29)
37.718,77
27.473,04
(655,05)
78.144,45
Group other reserves are analyzed as follows:
Reserves
Statutory reserve
Special Reserves
Fair value reserve (cash flow hedge)
Warrants reserve
Financial Assets reserve
Total
Balance at 31.12.2020
16.973,93
(8.879,67)
(16.068,94)
0
134,45
(7.840,23)
Change for the period
0
1.871,69
31.995,97
27.473,04
652,52
61.993,22
Balance at 31.12.2021
16.973,93
(7.007,99)
15.927,03
27.473,04
786,97
54.152,99
Change for the period
0
3.978,19
21.791,72
0
(1.442,02)
24.327,89
Balance at 31.12.2022
16.973,93
(3.029,79)
37.718,75
27.473,04
(655,05)
78.480,88
The fair value reserves are presented net of deferred taxes.
3.16 Provision for employee retirement benefits
The amounts analyzed below are recognized as defined benefit plan for the Company and they are based on independent actuarial calculations:
160
Company
31.12.2022
31.12.2021
Amounts recognized in the income statement
Current service cost
505,62
439,05
Interest cost
28,01
22,79
Additional post retirement and termination benefits paid out, not provided for
639,60
150,84
Total expense to the income statement
1.173,23
612,68
Changes in net obligation recognized in the balance sheet
Net obligation at the start of the year
3.099,50
2.532,10
Benefits paid by the employer
(774,55)
(163,23)
Total expense recognized in the income statement
1.173,23
612,68
Amount recognized in other comprehensive income
49,22
118,00
Net obligation at the end of the year
3.547,40
3.099,55
Changes in the present value of the obligation
Present value of the obligation - Opening period
3.099,50
2.532,10
Current service cost
505,62
439,05
Interest cost
28,01
22,79
Benefits paid by the employer
(774,55)
(163,23)
Additional payments
639,55
150,79
Actuarial loss
49,22
118,00
Present value at the end of fiscal year
3.547,35
3.099,50
Actuarial assumptions were:
31.12.2022
31.12.2021
Discount rate
2,50%
0,90%
Expected salary increase percentage
2,20%
1,80%
Average years of working life
22,12
22,10
161
The Group amounts are as follows:
Group
31.12.2022
31.12.2021
Amounts recognized in the income statement
Current service cost
541,04
492,66
Interest cost
30,60
25,09
Additional post retirement and termination benefits paid out, not provided for
639,60
150,84
Cost recognized in the income statement
1.211,23
668,59
Pre-service cost recognition
0
0
Total cost recognized in the income statement
1.211,23
668,59
Changes in net obligation recognized in the balance sheet
Net obligation at the start of the year
3.399,64
2.787,71
Benefits paid by the employer
(870,20)
(269,19)
Total expense recognized in the income statement
1.296,11
766,18
Amount recognized in the Other Comrehensive Income
50,93
114,99
Net obligation at the end of the year
3.876,49
3.399,69
Changes in the present value of the obligation
Present value of the obligation - Opening period
3.399,64
2.787,71
Current service cost
540,99
492,61
Interest cost
30,60
25,09
Benefits paid by the employer
(870,20)
(269,19)
Additional payments
729,47
248,43
Actuarial loss
50,93
114,99
Present value at the end of the year
3.881,43
3.399,64
The sensitivity analysis of the actuarial calculation for the Group and the Company is analyzed as follows:
Using a higher by 0,5% discount rate the actuarial obligation would be lower by 3%. In contrary if the discount rate was decreased by 0,5% the actuarial obligation would be higher by 3%.
The relevant sensitivity checks for the expected salaries % increase are as follows:
If the expected salaries % increase was increased by 0,5% then the actuarial obligation would be higher by 3% and if the expected salaries % increase was decreased by 0,5% then the actuarial obligation would be lower by 3%.
162
The actuarial obligation for the Company for each scenario mentioned above is analyzed as follows:
Actuarial Obligation
% Change
Discount rate increase by 0,5%
3.446,22
(3)%
Discount rate decrease by 0,5%
3.653,51
3%
Expected salaries % increase by 0,5%
3.653,30
3%
Expected salaries % decrease by 0,5%
3.445,45
(3)%
3.17 Borrowings
Company
Group
31.12.2022
31.12.2021
31.12.2022
31.12.2021
Bond loan (€200m) - short-term
2.177,14
2.131,93
2.177,14
2.131,93
Bond loan (€150m) - short-term
34.535,99
368,48
34.535,99
368,48
Borrowings - short-term
36.713,13
2.500,41
36.713,13
2.500,41
Bond loan (€200m) - long-term
198.124,70
197.583,35
198.124,70
197.583,35
Bond loan (€150m) - long-term
33.347,24
146.117,01
33.347,24
146.117,01
Borrowings - long-term
231.471,94
343.700,36
231.471,94
343.700,36
Common Bond Loan of €200m
As at 12.03.2019, the Company issued a Common Bond Loan, of 7-year duration, allocating 200.000 dematerialized common bearer bonds, each of a nominal value of €1.000, with final yield of 3,60%.
At 31.12.2022, the fair value of the common bond loan liabilities of the Company and the Group, considering the market price in the fixed income securities’ regulated market of Athens Stock Exchange, amounted to €200.579.
The Group and the Company lease liabilities are analyzed as follows:
Company
Group
31.12.2022
31.12.2021
31.12.2022
31.12.2021
Borrowings
Long-term portion
198.124,70
197.583,35
198.124,70
197.583,35
Short-term portion
2.177,14
2.131,93
2.177,14
2.131,93
Carrying value of bond loan
200.301,84
199.715,28
200.301,84
199.715,28
163
The movement of bond loan account is analyzed as follows:
Company
Group
31.12.2022
31.12.2021
31.12.2022
31.12.2021
Bond loan and accrued interest
202.131,86
202.122,74
202.131,86
202.122,74
Less: bond loan issuance cost
(2.416,58)
(2.934,45)
(2.416,58)
(2.934,45)
Opening balance
199.715,28
199.188,29
199.715,28
199.188,29
Interest of the year
7.325,27
7.289,12
7.325,27
7.289,12
Amortization of issuance cost
541,29
517,86
541,29
517,86
Payments
(7.280,00)
(7.280,00)
(7.280,00)
(7.280,00)
Ending balance
200.301,84
199.715,27
200.301,84
199.715,27
At 31.12.2022 the amount deposited by the Company in the Debt Service Reserve Account (DSRA) amounted to €0,50, since within 2022 an amount of €10.800 was withdrawn from the DSRA, according to the terms of the Program. In addition, the Company proceeded in replacing part of the remaining amount deposited in the DSRA with the establishment of the real security rights in favor of the bondholders on bonds amounted €10.390 (Pledged Bonds), according to the terms of the Program. Respective amounts are included in the Other long-term assets (note 3.7). For the fiscal years ended December 31, 2022 and December 31, 2021 the Company fully complies with the financial covenants of the Common Bond Loan.
The report on the use of funds from the Bond Loan and the Agreed Upon Procedures report of the Certified Public Accountant are available in the 30.06.2022 interim report
Bond Loan of €150mil
In October 2020, the Company has signed an agreement with the four Greek systemic banks for the issuance of a Bond Loan amounting to €150 million with a floating interest rate (3M EURIBOR + spread), using the Covid-19 Loan Guarantee Fund, in the form of a guarantee mechanism of 80% of the loan nominal amount, with a maturity in 2025.
Company
Group
31.12.2022
31.12.2021
31.12.2022
31.12.2021
Borrowings
Long-term portion
33.347,24
146.117,01
33.347,24
146.117,01
Short-term portion
34.535,99
368,48
34.535,99
368,48
Carrying value of bond loan
67.883,23
146.485,49
67.883,23
146.485,49
164
The movement of bond loan account is analyzed as follows:
Company
Group
31.12.2022
31.12.2021
31.12.2022
31.12.2021
Bond loan and accrued interest
150.143,48
150.448,22
150.143,48
150.448,22
Less: bond loan issuance cost
3.658,05
5.094,29
3.658,05
5.094,29
Opening balance
146.485,43
145.353,94
146.485,43
145.353,94
Interest of the year
3.523,67
3.342,19
3.523,67
3.342,19
Amortization of issuance cost
3.103,29
1.436,24
3.103,29
1.436,24
Payments
(85.229,16)
(3.646,88)
(85.229,16)
(3.646,88)
Ending balance
67.883,23
146.485,49
67.883,23
146.485,49
As of December 2022, Management proceeded partially to an early repayment of sixty-four million (64.000.000) bonds, with a nominal value of €1, in order to early repay the total amount of bonds within the first quarter of 2023. The adjustment of revised contractual cash flows directly affected (catch-up adjustment) the financial expense by an amount of €1.587.
The Group retains a financing line of €120 million from the 4 Greek systemic banks, with no outstanding balance at 31.12.2022 (Note 3.38)
3.18 Suppliers and other liabilities
The analysis for the Company and the Group is as follows:
Company
Group
31.12.2022
31.12.2021
31.12.2022
31.12.2021
State-owned entities
1,62
1,69
1,62
1,69
International suppliers
55.839,41
41.907,78
61.943,84
53.786,84
Domestic suppliers
42.946,85
32.687,30
61.632,66
76.557,24
Total
98.787,89
74.596,76
123.578,12
130.345,77
International suppliers outstanding balance mainly relates to aircraft maintenance, fuel cost and airport charges liabilities.
The increase noticed as of 31.12.2022, is a consequence of the improved flight activity of the Company and the Group compared to 2021, where the variable costs, such as fuel cost and airport charges were affected by the covid- 19 pandemic and the reduced activity.
Suppliers and other liabilities book values approximate their fair values.
3.19 Provision
1) Tax unaudited years
The Company has been tax audited for the fiscal years 2007 - 2010 by the tax authorities.
For the fiscal years 2011-2021 the Company has been audited according to the L.2238/1994 and the L.4174/2013 by its certified auditor accountants.
165
The subsidiary Olympic Air S.A. has been tax audited for the fiscal years 2011 - 2021 according to L.2238/1994 and the L.4174/2013 by its certified auditor accountants.
The subsidiaries Aegean Cyprus LTD and Anima Wings SRL have not been audited by the tax authorities of Cyprus and Romania, respectively.
The Company and the Group have not formed a provision for tax audit differences, since the Group management estimates that the results of future audits by the tax authorities, if ultimately realized, will not have a material effect on the financial statements of the Group.
For the year ended 31.12.22, the Company and its subsidiary Olympic Air, are tax audited by the certified auditor accountants according to the Article 65A of the L.4174/2013. The audit is in progress and the relevant tax certificates will be issued after the publishment of the 2022 financial statements. In case of any additional tax obligations, the Management estimates that these will have no material effect in the financial statements of the Group.
2) Maintenance Reserves
The accumulated provision for future aircraft maintenance is as follows:
Company
Group
31.12.2022
31.12.2021
31.12.2022
31.12.2021
Opening balance
81.851,01
39.235,14
90.318,99
46.669,97
Annual provision
126.957,80
94.922,15
126.957,80
96.455,76
Less: Provision utilized
(114.803,11)
(52.306,27)
(118.393,49)
(52.806,74)
Closing balance
94.005,69
81.851,01
98.883,30
90.318,99
At Company an amount of € 40.347,41 has been provided for short-term maintenance expenses, anticipated to occur within next year. For long-term maintenance expenses the amount provided is € 53.658,29.
At Group an amount of € 42.801,38 has been provided for short-term maintenance expenses, anticipated to occur within next year. For long-term maintenance expenses the amount provided is € 56.081,92.
Provision utilized includes realized maintenance event costs, as well as maintenance reserves charged by the aircraft lessors for future maintenance events (net of any maintenance reserve claims for realized maintenance events).
Aircraft maintenance provision is calculated based on the realized flight hours and is reduced with the maintenance event costs.
The consequences of covid-19 measures imposed in 2021, significantly reduced the flight activity and accordingly the maintenance plan of the Company and the Group.
The improved Company and Group flight activity within 2022, increased consequently the maintenance provision compared to 2021.
166
Other Provisions
The Company has established a provision for litigation cases amounting to € 658,94. The respective amount for the Group amounts to € 667,84 (31.12.2021 € 658,94 for the Company and € 667,84 for the Group).
Provision of unused vacation leave for the year 2022, for the Company and the Group, amounts to € 2.524,56 and € 2.970,08, respectively (2021 € 955,96 and € 1.177,28 for the Group).
3.20 Other Short-Term Liabilities
Account relates to Group and Company short-term liabilities to airports, social security organizations and other creditors that are directly related to business operation. The analysis is as follows:
Company
Group
31.12.2022
31.12.2021
31.12.2022
31.12.2021
Airport Taxes
79.027,83
56.075,87
81.897,42
57.975,29
Deferred income
317,66
35,86
317,66
35,86
Social Security Contributions
6.180,09
6.417,24
6.663,61
8.902,28
Other Short term liabilities
10.597,98
14.463,64
12.525,58
15.585,09
Payroll and other taxes
9.369,39
3.675,76
9.814,98
3.887,83
Total
105.492,95
80.668,36
111.219,25
86.386,35
3.21 Contract Balances
Company
Group
31.12.2022
31.12.2021
31.12.2022
31.12.2021
Trade Receivables (Note 3.10)
47.526,19
19.438,27
49.722,07
32.750,89
Contract assets (Note 3.10)
10.587,24
9.165,38
7.795,51
6.555,13
Contract Liabilities
(262.078,43)
(193.335,87)
(268.355,17)
(201.019,95)
Contract assets outstanding balance concerns revenue of the current year that was invoiced within the following year. Revenue mainly concerns interline revenue, charter revenue, as well as revenue from redemption/conversion of award points in loyalty programs that the Company participates.
Contract balances increased compared to 31.12.2021, due to the improved flight activity of the Company and the Group within 2022.
167
1) Contract Liabilities – short term
Company
Group
31.12.2022
31.12.2021
31.12.2022
31.12.2021
Liabilities from tickets sold but non-flown
Fare
142.069,09
82.199,77
145.250,52
86.308,73
Ancillary services
12.045,17
8.405,73
12.888,46
9.275,85
Total
154.114,26
90.605,51
158.138,97
95.584,58
Credit Voucher
31.431,21
43.645,17
31.431,21
43.645,17
Customer advances
25.904,80
12.847,99
28.156,83
15.510,45
Liabilities from customer loyalty program – short term
9.730,73
9.409,27
9.730,73
9.409,27
Total contract liabilities – short term
221.181,01
156.507,94
227.457,75
164.149,46
2) Contract Liabilities – Long term
Long-term portion of contract liabilities for the Company and the Group concerns Loyalty program liability (Miles and Bonus) and amounts to € 40.897,42 (2021: €36.827,93 ).
Loyalty program liability movement (Miles and Bonus)
Total loyalty program liability as at 31.12.2022 (short-term and long-term) for the Company and the Group amounts to €50.628,15 thous. (short-term portion €9.730,73 thous., long-term portion € 40.897,42thous).
Balance movement at 31.12.2022 and 31.12.2021 is analyzed below:
2022
2021
Opening balance
46.237,20
46.111,23
Additions of miles
14.461,67
7.589,08
Redemption of miles
(10.070,73)
(7.463,11)
Closing balance
50.628,15
46.237,20
168
3.22 Accrued Expenses
Accrued expenses are analyzed as follows:
Company
Group
31.12.2022
31.12.2021
31.12.2022
31.12.2021
Agents’ commissions
7.281,23
4.132,57
7.451,16
4.533,67
Use of software
73,77
33,09
73,77
33,09
Aircraft fuel
1.284,53
844,97
1.317,04
1.056,12
Aircraft maintenance expense
4.735,96
10.956,33
4.933,38
12.745,61
Airport charges
12.822,23
7.135,30
5.649,54
10.439,00
Other Airline companies' Cost
3.532,70
9.776,58
6.403,43
191,87
Other fees payable
9.485,95
231,19
9.628,08
2.697,99
Other expenses
2.309,90
1.835,10
5.720,42
8.719,05
Total
41.526,27
34.945,14
41.176,82
40.416,41
3.23 Derivatives
Derivatives are analyzed as follows:
169
Company and Group
Nominal Value
31.12.2022
Nominal Value
31.12.2021
Non-current assets
Derivatives for cash flow hedge
Forward contracts in US $
20.500.000
529,52
123.000.000
4.678,73
Commodities’ swaps (jet fuel)
0
18.000 MT
289,91
Interest rate swaps
0
40.000.000
2.296,39
Total
529,52
7.265,02
Derivatives
Forward contracts in US $
120.000.000
4.178,58
72.000.000
2.406,57
Interest rate swaps
34.300.000
2.366,43
0
Total
6.545,01
2.406,57
Derivatives assets (long-term portion)
7.074,53
9.671,60
Current assets
Derivatives for cash flow hedge
Interest rate swaps
167.000.000
25.939,65
0
Forward contracts in US $
139.000.000
12.989,01
120.000.000
5.320,73
Commodities’ swaps (jet fuel)
77.000 MT
7.251,28
133.000 MT
11.441,82
Total
46.179,95
16.762,55
Derivatives
Forward contracts in US $
60.000.000
4.898,10
62.000.000
1.779,78
Total
4.898,10
1.779,78
Derivatives assets (short-term portion)
51.078,05
18.542,33
Total derivative assets
58.152,58
28.213,93
Non-current liabilities
Derivatives for cash flow hedge
Forward contracts in US $
39.500.000
(409,84)
15.000.000
(76,06)
Commodities’ swaps (jet fuel)
0
6.000 ΜΤ
(169,57)
Interest rate swaps
0
332.000.000
(3.463,81)
Total
(409,84)
(3.709,43)
Derivatives
Forward contracts in US $
0
Interest rate swaps
0
135.300.000
(7.259,64)
Total
0
(7.259,64)
Derivatives liabilities (long-term portion)
(409,84)
(10.969,07)
Current liabilities
Derivatives for cash flow hedge
Forward contracts in US $
114.500.000
(5.024,20)
18.000.000
(91,84)
Commodities’ swaps (jet fuel)
123.137 MT
(5.182,90)
26.000 ΜΤ
(1.529,10)
Interest rate swaps
0
0
Total
(10.207,10)
(1.620,94)
Derivatives
Forward contracts in US $
62.000.000
(4.370,93)
10.000.000
(26,82)
Commodities’ swaps (jet fuel)
0
0
Total
(4.370,93)
(26,82)
Derivatives liabilities (short-term portion)
(14.578,03)
(1.647,76)
Total derivative liabilities
(14.987,87)
(12.616,84)
170
31.12.2022
Cash flow hedge
Fair Value
Fair value movement in Other comprehensive income (Other reserves)
Amount reclassified from hedging reserve to profit and loss
Forward contracts in US $
8.084,50
(13.779,49)
15.526,56
Commodities’ swaps (jet fuel)
2.068,39
(68.171,76)
76.121,98
Interest rate swaps
25.939,65
(26.412,65)
(339,95)
Total
36.092,53
(108.363,90)
91.308,59
Interest rate swap reserve ammortized through the period
12.231,10
(18.798,26)
19,19
Non hedge derivatives recognised in income statement
Fair Value
Non-hedge derivatives valuation
Non-hedge derivatives valuation results
Forward contracts in US $
4.705,75
546,23
8.359,74
Interest rate swaps
2.366,43
9.626,07
13.041,98
Total
7.072,18
10.172,29
21.401,72
171
31.12.2021
Cash flow hedge
Fair Value
Fair value movement in Other comprehensive income (Other reserves)
Amount reclassified from hedging reserve to profit and loss
Forward contracts in US $
9.831,56
17.944,79
(482,11)
Commodities’ swaps (jet fuel)
10.033,13
16.965,13
(671,36)
Interest rate swaps
(1.167,42)
8.862,04
(982,76)
Total
18.697,27
43.771,96
(2.136,23)
Interest rate swap reserve ammortized through the period
(6.547,96)
0
(642,81)
Non hedge derivatives recognised in income statement
Fair Value
Non-hedge derivatives valuation
Non-hedge derivatives valuation results
Forward contracts in US $
4.159,53
10.485,65
(940,06)
Commodities’ swaps (jet fuel)
0
(87,33)
3.385,26
Interest rate swaps
(7.259,64)
9.459,46
0
Total
(3.100,11)
19.857,78
2.445,20
172
The Company holds derivatives used as cash flow hedging instruments to hedge the risk of exchange rate fluctuations ($/€), the risk of fuel price fluctuations, the interest rate risk from future aircraft leases as well as open positions in dollar forward contracts, for which no hedge accounting has been applied (hedge accounting).
Hedging derivatives are classified either as assets or liabilities. Fair value of a derivative considered as hedging instrument is classified either as a non-current asset or a non- current liability (if hedged item maturity is more than 12 months) or as a current asset or a current liability (if hedged item maturity is less than 12 months).
Fair value of dollar forward contracts, for which no hedge accounting has been applied, is classified as non-current asset or long-term liability, if the remaining maturity of the contract is longer than 12 months and as a current asset item or short-term liability, if the remaining maturity of the contract is less than 12 months.
a) Forward contracts in US dollars (currency forwards and options)
Forward contracts are used for cash flow hedging of risk relating to USD/EURO exchange rate fluctuation.
As at 31.12.2022, the Group had entered into forward contracts to hedge 45% and 11% of its estimated needs in US dollar for 2023 and 2024, respectively. As at 31.12.2021, the Group had entered into forward contracts to hedge 31% and 30% of its estimated needs in US dollar for 2022 and 2023, respectively (future transactions).
The nominal amount as of open forward contracts at 31.12.2022 was € 293.924,62 (31.12.2021: € 243.687,09) (Level 2).
Maturity
Nominal amount in thousand $ 31.12.2022
Nominal amount in thousand $ 31.12.2021
2022
0
138.000,00
2023
253.500,00
138.000,00
2024
60.000,00
0
Total
313.500,00
276.000,00
In addition to the aforementioned positions held for cash flow hedging purposes, the Group as of 31.12.2022 held open positions of 242 million US dollar forward contracts with maturity within the years 2023-2024, for which the Group has not applied hedge accounting. These positions are held in accordance with the Company's foreign exchange risk management policy adopted since 01.01.2019 in combination with the IFRS 16 adoption. The nominal amount of these forward contracts on 31.12.2022 amounts to € 226.889,18 ( 31.12.2021 €127.141,09) (Level 2).
b) Commodity swaps (jet fuel swaps)
The Group holds jet fuel swaps derivatives as cash flow hedging instruments to hedge the risk of fuel price fluctuations.
At 31.12.2022, the Group had entered into jet fuel swaps (commodity jet and brent swaps) amounting to 176,137 thous. metric tons and options (Zero Cost Collar) 24 thous. metric tons, that covered 49% of the projected jet fuel needs for 2023.
173
At 31.12.2021, the Group had entered into jet fuel swaps amounting to 144 thous. metric tons and options (Zero Cost Collar) 15 thous. metric tons, that covered 44% of the projected jet fuel needs in 2022. In addition, at 31.12.2021, the Group had entered into jet fuel swaps amounting to 24 thous. metric tons that covered 6% of the projected jet fuel needs in 2023.
Maturity
Metric Tons 31.12.2022
Metric Tons 31.12.2021
2022
0
159.000
2023
200.137
24.000
Total
200.137
183.000
c) Interest Rate Swaps
Interest rate swaps (IRS) are used as hedging instruments to hedge financial liabilities cash flow and more specifically to cover the interest rate risk from future aircraft leases.
At 31.12.2022, the Company had entered into interest rate swap contracts to cover the interest rate risk of four (4) aircraft leases, expected to be delivered within the period 2023, amounted to $167.000. (31/12/2021: $372.000).
In addition, the Company had entered into interest rate swap contracts for which no hedge accounting criteria are met and consequently no hedge accounting treatment is applied. The nominal amount of open interest rate swaps at 31.12.2022 amounted to $34.300 (31.12.2021: $135.300).
The nominal value of the open IRS contracts as at 31.12.2022 was $188.730,55 (31.12.2021 $447.907,47).
Derivatives are measured at fair value at the balance sheet date, which is provided by the financial institutions that the Company has entered into an agreement, and they represent, in good faith, assumptions and estimations of the mentioned institutions, based on the available information for the market trends. The parameters used to calculate the fair value differ depending on the type of derivative.
3.24 Revenue from contracts with customers
Revenue from contracts with customers refers to tickets sales, sales of goods and other services rendered.
Revenue from contracts with customers per service category is analyzed as follows:
Company
Group
2022
2021
2022
2021
Revenue from scheduled flights
1.054.609,84
343.856,80
1.136.805,5 7
558.293,19
Revenue from chartered flights
58.560,58
85.320,34
71.631,26
37.880,89
Other operating income related to flights
127.772,61
83.184,42
128.395,50
78.654,23
Total
1.240.943,04
512.361,56
1.336.832,3 3
674.828,31
174
A geographic breakdown of revenue from contracts with customers is provided below:
Company
2022
Domestic
International
Total
Revenue from scheduled flights
220.955,29
833.654,55
1.054.609, 84
Revenue from chartered flights
9.979,40
48.581,18
58.560,58
Other operating income related to flights
31.611,42
96.161,19
127.772,61
Total
262.546,11
978.396,92
1.240.943, 04
Company
2021
Domestic
Internation al
Total
Revenue from scheduled flights
1.788,82
342.067,98
343.856,80
Revenue from chartered flights
42.909,80
42.410,53
85.320,34
Other operating income related to flights
23.351,11
59.833,32
83.184,42
Total
68.049,73
444.311,83
512.361,56
Group
2022
Domestic
Internation al
Total
Revenue from scheduled flights
298.531,33
838.274,24
1.136.805,5 7
Revenue from chartered flights
18.180,08
53.451,19
71.631,26
Other operating income related to flights
34.184,82
94.210,68
128.395,50
Total
350.896,23
985.936,11
1.336.832,3 3
Group
2021
Domestic
Internation al
Total
Revenue from scheduled flights
176.763,87
381.503,30
558.267,17
Revenue from chartered flights
5.774,39
32.133,50
37.907,89
Other operating income related to flights
18.950,26
59.702,99
78.653,25
Total
201.488,52
473.339,79
674.828,31
175
3.25 Other Income
Other income account includes income by other than Company and Group main business operation and is analyzed as follows:
Other Income
Company
Group
2022
2021
2022
2021
Hellenic Manpower Employment Organization subsidies
147,32
15,90
147,32
15,90
Services rendered to third parties
50.298,59
23.014,84
26.274,87
6.362,44
Training services rendered
0
0
630,79
306,14
Other income
136,56
418,61
17.549,53
6.417,03
Government grant
0
92.526,96
0
92.526,96
Total
50.582,47
115.976,31
44.602,51
105.628,4 7
Within 2021, the Company proceeded with the increase of its share capital by raising funds amounting to € 60.000 thousand, requirement for the State aid grant amounted to €120m. Given the grant disbursement, the Company also issued and delivered warrants without consideration to the Hellenic Republic as per article 30 of Law 4772/2021 and article 56 of Law 4548/2018. The warrants were recognized at their fair value in a special equity reserve and the remaining amount from the State aid grant was recognized in Other income account.
3.26 Consumption of materials and services
These amounts refer to the operating expenses of the Company and the Group and they are analyzed as follows:
Company
Group
2022
2021
2022
2021
Aircraft fuel
304.832,67
94.345,51
338.915,69
134.241,20
Aircraft maintenance
127.833,91
95.028,24
140.616,43
115.904,19
Overflight Expenses
61.600,21
31.914,60
65.101,43
38.916,89
Handling charges
64.426,79
27.607,17
73.849,73
45.431,29
Airport charges
64.641,15
26.017,53
68.300,55
41.439,06
Catering costs
33.753,62
17.301,79
34.564,91
20.627,58
Distribution costs
75.442,56
33.920,14
81.336,33
44.486,01
Marketing costs
20.528,84
11.577,29
20.932,20
11.910,13
Rentals
30.457,46
7.980,84
24.072,75
9.653,53
Inventories’ consumption
1.571,41
732,70
1.571,41
732,70
Other operating expenses
121.050,63
56.824,51
123.803,49
70.243,14
Total
906.139,25
403.250,35
973.064,92
533.585,72
The increase between the two fiscal years is mainly due to the improved flight activity of the Company and the Group within 2022, which consequently affected the cost of materials and services.
176
Further analysis of Other operating expenses is presented below:
Company
Group
2022
2021
2022
2021
Third party fees
6.467,21
5.683,88
7.265,87
6.021,38
Board of Directors remuneration
1.115,50
185,57
1.173,57
185,57
Cargo expenses
1.850,65
1.189,75
1.877,78
1.429,09
Personnel training
3.528,22
2.513,85
6.037,85
3.261,73
Mail and Telecommunications expenses
3.945,10
2.650,58
4.020,81
2.762,51
Rents
226,23
148,84
658,94
209,42
Insurance premiums
3.081,45
2.309,27
3.302,57
2.454,98
Maintenance for building and equipment
334,82
227,47
338,22
240,78
Travel expenses
6.228,85
3.819,86
7.408,92
6.732,80
Stationary
573,43
360,88
628,08
381,40
Subscriptions
2.996,34
1.954,26
3.651,89
2.415,55
Emissions rights
32.373,87
1,86
23.774,44
1,86
Other expenses
58.328,94
35.778,45
63.664,57
44.146,07
Total
121.050,63
56.824,51
123.803,49
70.243,14
Other expenses account includes provision for expected credit losses of € 707,77 for the Company and € 518,03 for the Group, respectively (31.12.2021 € 350,91 for the Company and € 660,50 for the Group, respectively) (Note 3.10).
Other expenses increase is due to the significant increase of Group and Company flight activity within 2022 compared to 2021.
Emissions rights cost variation is related to the increased flight activity of the year compared to 2021 as well as to the significantly higher emissions market price.
3.27 Employee Costs
Employee costs include salaries as well as provisions for retirement benefits.
Company
Group
2022
2021
2022
2021
Salaries and wages
105.374,91
58.696,66
117.530,40
65.992,95
Employers’ contribution
12.369,59
1.295,42
13.620,80
1.406,61
Provision for retirement benefits
533,63
461,84
669,41
615,34
Provision for unused vacation leave
1.610,56
(1.257,53)
1.610,56
(1.146,33)
Total
119.888,69
59.196,38
133.431,17
66.868,55
Salaries and Employers’ contribution increase compared to 2021, is due to the prior year use of the horizontal measures offered by the Greek state to support the companies in order to deal with the covid-19 consequences.
177
As at 31.12.2022 the number of employees is the following:
Company
Group
2022
2021
2022
2021
Employees
2.500
2.253
2.684
2.445
3.28 Financial Income/ Expense
Financial income / expense analysis is as follows:
Company
Group
2022
2021
2022
2021
Interest and expenses from long term liabilities
14.474,81
14.669,54
14.474,81
14.669,54
Interest and expenses from short term liabilities
0
2,12
135,69
182,81
Letters of Guarantee commissions
338,67
308,37
501,44
489,51
Leases interest
26.398,51
14.726,52
27.716,01
15.812,11
Cash flow hedging ineffective portion
0
339,95
0
339,95
Loss from non-cash flow hedge derivatives
0
1.027,40
0
1.027,40
Foreign exchange losses
67.973,46
41.920,41
74.508,83
45.994,47
Other financial expenses
864,53
1.021,47
889,42
1.099,99
Impairment of financial assets
108,73
(40,27)
108,73
(40,27)
Total financial expenses
110.158,71
73.975,51
118.334,92
79.575,49
Other interest income
2.029,15
577,53
2.046,19
452,69
Gain from non-cash flow hedge derivatives
31.574,01
23.334,24
31.574,01
23.334,24
Foreign exchange gains
74.258,17
12.175,62
78.765,39
16.387,01
Total financial income
107.861,33
36.087,40
112.385,59
40.173,94
Foreign exchange accounts (Gains and Losses) derive from the fact that the Company and the Group have a significant number of transactions in foreign currencies (inflows and outflows), which were affected by the improved Company and Group flight activity within 2022, as well as the EUR/USD foreign exchange rate movement.
Cash flow hedging ineffective portion includes the ineffective portion of derivatives used for hedging accounting purposes.
The Gain/Loss from non-cash flow hedge derivatives account includes the fair value movement and the settlement results of derivatives not used for hedging purposes. Account increase or decrease reflects the market valuations. The amount € 10.172,29 (income) includes the results of the period January 2022-December 2022, along with the valuation of derivatives as of 31.12.2022, which were considered as non-cash flow hedge instruments and relate to forward contracts, jet fuel swaps and interest rate swaps.
178
3.29 Income Tax
Income tax is analyzed below:
Company
Group
2022
2021
2022
2021
Deferred tax
(35.425,50)
8.803,91
(34.530,00)
14.414,79
Total Tax
(35.425,50)
8.803,91
(34.530,00)
14.414,79
Profit /(loss) before taxes
148.524,98
12.946,87
141.308,71
(9.345,62)
22%
22%
22%
22%
Tax on existing tax rate
(32.675,50)
(2.848,31)
(31.970,91)
2.529,52
Tax on expenses not deductible for tax purposes
(2.750,00)
(3.300,00)
(2.915,00)
(3.388,00)
Other adjustments
0
0
355,91
0
Tax due to tax rate change
0
(5.403,71)
0
(5.082,67)
Revenue exempted Tax
0
20.355,93
0
20.355,93
Income Tax
(35.425,50)
8.803,91
(34.530,00)
14.414,79
Income tax rate for legal entities in Greece for the year ended 31.12.2022 and 31.12.2021 is 22%.
3.30 Contingent Liabilities/ Contingent assets
Legal or in arbitration disputes
The Group management, based on previous court decisions, estimates that the existing pending legal or in arbitration disputes are not expected to have a material effect in the financial position or the operation of the Company and the Group.
An analysis of the pending legal cases follows:
Company
Group
31.12.2022
31.12.2021
31.12.2022
31.12.2021
Labor disputes
(64,09)
452,92
(64,09)
452,92
Other
3.721,17
874,15
4.337,97
1.287,86
Total
3.657,08
1.327,07
4.273,88
1.740,78
Contingent Liabilities
The contingent liabilities of the Company and the Group arising from the issuance of bank letters of guarantee are analyzed as follows:
Company
Group
31.12.2022
31.12.2021
31.12.2022
31.12.2021
Letters of guarantee
27.555,58
20.730,02
41.750,98
39.096,04
179
3.31 Related parties’ transactions and balances
The most significant transactions of the Company with related parties according to IAS 24, appear on the following table:
Company
Balances with other companies owned by the major shareholder
31.12.2022
31.12.2021
Receivables
213,00
135,69
Payables
93,25
211,97
Balances with subsidiaries
Receivables
3.805,85
2.575,79
Payables
570,80
155,84
Balances with other related parties
Receivables
39,02
13,22
Payables
143,90
95,18
Company
Transactions with other companies owned by the major shareholder
2022
2021
Income – Services rendered by the Company
1.404,50
801,09
Expenses – Services rendered to the Company
1.416,46
1.197,76
Transactions with subsidiaries
Income – Services rendered by the Company
21.974,47
75.559,88
Expenses – Services rendered to the Company
49.302,29
184.912,20
Transactions with other related parties
Income – Services rendered by the Company
2.685,74
66,18
Expenses – Services rendered to the Company
2.394,21
601,66
Group
Balances with other companies owned by the major shareholder
2022
2021
Receivables
213,14
136,34
Payables
96,03
233,90
Balances with other related parties
Receivables
39,02
13,22
Payables
147,06
95,31
Group
Transactions with other companies owned by the major shareholder
2022
2021
Income – Services rendered by the Group
1.410,44
812,45
Expenses – Services rendered to the Group
1.483,25
1.217,09
Transactions with other related parties
Income – Services rendered by the Group
2.685,74
66,18
Expenses – Services rendered to the Group
2.410,52
645,10
180
The transactions with companies owned by the major shareholder of the Company relate mainly to rental expense and services rendered. The transactions with the subsidiary company mainly relate to aircraft leases and other services rendered. All transactions are on arm’s length basis.
3.32 Transactions with Directors and Board of Directors members
Compensation to Directors and Board of Directors members is analyzed below:
Company
Group
2022
2021
2022
2021
BoD members remunaration
1.115,50
0
1.175,50
0
Directors’ salaries
2.895,00
1.152,62
3.239,04
1.234,53
Directors’ social insurance expenses
126,62
43,27
151,35
43,27
Benefits in kind to directors
146,23
256,78
152,90
260,66
Total
4.283,35
1.452,66
4.718,78
1.538,47
Liabilities to directors’
1.069,20
0
1.069,20
5,69
No other transactions, receivables or liabilities with the directors or the Board of Directors members existed for the Company and the Group, respectively.
3.33 Earnings/Loss per share
Earnings/(Loss) per share was calculated based on the weighted average number of shares and the total number of shares and is analyzed as follows:
Group
2022
2021
Profit / (Loss) before tax
141.308,71
(9.345,62)
Income tax
(34.530,00)
14.414,79
Profit / (Loss) after tax
106.778,71
5.069,16
Weighted Average number of shares
90.167.100,00
81.573.350,00
Basic earnings per share in €
1,184
0,062
Diluted earnings per share in €
1,134
0,060
The diluted earnings per share reflect the Net profit of the year divided by the number of diluted shares outstanding (i.e. basic shares and warrants).
3.34 Risk Management
The Group is exposed to multiple risks. The risk management policy of the Group aims to reduce the negative impact on outcome resulting from the unpredictability of financial markets and the variations in costs and revenue. The Group uses financial derivative instruments to hedge its exposure to certain types of risk. The risk management policy is executed by the Financial Department of the Group. The procedure is the following:
Evaluation of risks associated with the activities and operations of the Group
Design of methodology and selection of appropriate financial products to reduce risks
Execution / implementation of risk management, in accordance with the procedure approved by the management
181
Foreign currency risk
The Group due to the nature of the industry is exposed to fluctuation in foreign currency exchange rate which arise mainly from US Dollar. This kind of risk arises from the transactions in foreign currency. The Group’s exposure to foreign exchange risk varies during the year based on the seasonal volume of transactions in foreign currency.
To manage this kind of risk the Group enters into forward currency exchange contracts with financial organizations.
Interest rate risk
The Group’s policy is to minimize interest rate cash flow risk exposure on long – term financing. With respect to this kind of risk the Group follows a cash-flow hedge policy to cover the interest fluctuation derived by its lease obligations.
Jet fuel risk
The Group is exposed to the fluctuations of the oil price which directly influences the price of jet fuel. To manage this risk the Group enters into derivative contracts on oil products in order to hedge part of its projected jet fuel needs.
The following tables present:
The sensitivity of the period’s result as well as of the equity’s if a reasonable movement of +/- 50 basis points in the Euro / USD exchange rate takes place.
The sensitivity of the period’s result as well as of the equity’s in a reasonable movement of +/- 10 basis points in the interest rates.
The sensitivity of the period’s result as well as of the equity’s in a reasonable movement of +/- $75/ ΜΤ in the Jet fuel price.
Company 31.12.2022
Balance sheet value
Foreign exchange risk
Interest rate risk
Fuel price risk
+50 bps
-50 bps
+10 bps
-10 bps
+75 USD/MT
-75 USD/MT
Financial assets (FVOCI)
49.412,72
(49,39)
49,86
(121,36)
121,94
0
0
Receivables
92.810,42
(337,78)
340,96
0
0
0
0
Restricted cash
881,31
(3,01)
3,04
0
0
0
0
Cash and cash equivalents
152.915,48
(502,58)
507,31
(10,67)
10,65
0
0
Derivatives - cash flow hedging
36.092,53
(1.038,79)
1.048,44
823,48
(823,48)
10.511,00
(10.129,21)
Derivatives - non hedging
7.072,18
(796,28)
803,65
226,29
(226,29)
0
0
Liabilities
(696.505,58)
2.534,87
(2.558,75)
0
0
0
0
Net earnings after tax/Equity
845,84
(853,94)
226,29
(226,29)
0
0
Total comprehensive income after tax/Equity
(1.038,79)
1.048,44
691,45
(690,88)
10.511,00
(10.129,21)
182
Company 31.12.2021
Balance sheet value
Foreign exchange risk
Interest rate risk
Fuel price risk
+50 bps
-50 bps
+10 bps
-10 bps
+75 USD/MT
-75 USD/MT
Financial assets (FVOCI)
12.294,39
0
0
(31,30)
31,46
0
0
Receivables
121.874,70
(417,82)
421,52
0
0
0
0
Restricted cash
0
0
0
0
0
0
0
Cash and cash equivalents
65.925,13
(226,01)
228,01
0
0
0
0
Derivatives - cash flow hedging
18.811,86
(813,00)
820,11
2.022,94
(1.948,73)
9.252,76
(9.329,26)
Derivatives - non hedging
(3.019,64)
(425,43)
429,15
705,29
(712,15)
0
0
Liabilities
(397.549,19)
1.362,91
(1.374,99)
0
0
0
0
Net earnings after tax/Equity
293,65
(296,30)
705,29
(712,15)
0
0
Total comprehensive income after tax/Equity
(813,00)
820,11
1.991,65
(1.917,27)
9.252,76
(9.329,26)
Group 31.12.2022
Balance sheet value
Foreign exchange risk
Interest rate risk
Fuel price risk
+50 bps
-50 bps
+10 bps
-10 bps
+75 USD/MT
-75 USD/MT
Financial assets (FVOCI)
49.412,72
(49,39)
49,86
(121,36)
121,94
0
0
Receivables
126.215,26
(459,35)
463,68
0
0
0
0
Cach Collateral
881,31
(3,01)
3,04
0
0
0
0
Cash and cash equivalents
173.882,20
(578,88)
584,34
(10,67)
10,65
0
0
Derivatives for cash flow hedge
36.092,53
(1.038,79)
1.048,44
823,48
(823,48)
10.511,00
(10.129,21)
Derivatives
7.072,18
(796,28)
803,65
226,29
(226,29)
0
0
Liabilities
(738.920,05)
2.689,24
(2.714,57)
0
0
0
0
Net earnings after tax/Equity
802,32
(810,01)
226,29
(226,29)
0
0
Total comprehensive income after tax/Equity
(1.038,79)
1.048,44
691,45
(690,88)
10.511,00
(10.129,21)
183
Group 31.12.2021
Balance sheet value
Foreign exchange risk
Interest rate risk
Fuel price risk
+50 bps
-50 bps
+10 bps
-10 bps
+75 USD/MT
-75 USD/MT
Financial assets (FVOCI)
12.294,39
0
0
(31,30)
31,46
0
0
Receivables
152.538,14
(522,94)
527,58
0
0
0
0
Cach Collateral
0
0
0
0
0
0
0
Cash and cash equivalents
74.679,71
(256,02)
258,29
0
0
0
0
Derivatives for cash flow hedge
18.811,86
(813,00)
820,11
2.022,94
(1.948,73)
9.252,76
(9.329,26)
Derivatives
(3.019,64)
(425,43)
429,15
705,29
(712,15)
0
0
Liabilities
(444.004,42)
1.522,17
(1.535,67)
0
0
0
0
Net earnings after tax/Equity
317,78
(320,64)
705,29
(712,15)
0
0
Total comprehensive income after tax/Equity
(813,00)
820,11
1.991,65
(1.917,27)
9.252,76
(9.329,26)
Fair value hierarchy levels
Company 31.12.2022
Derivative type
Level 1
Level 2
Level 3
Assets
Forwards contracts in USD
(FWD)
0
22.595,22
0
Jet fuel commodity swaps
(FWD)
0
7.251,28
0
Interest rate swaps
(IRS)
0
28.306,14
0
Bonds
64.235,22
0
0
Shares
17.116,97
0
2.562,96
Total Assets
81.352,20
58.152,65
2.562,96
Liabilities
Forwards contracts in USD
(FWD)
0
(9.804,97)
0
Jet fuel commodity swaps
(FWD)
0
(5.182,90)
0
Interest rate swaps
(IRS)
0
0
0
Total Liabilities
0
(14.987,87)
0
Fair value hierarchy levels
Company 31.12.2021
Derivative type
Level 1
Level 2
Level 3
Assets
Forwards contracts in USD
(FWD)
0
14.185,81
0
Jet fuel commodity swaps
(FWD)
0
11.731,73
0
Interest rate swaps
(IRS)
0
2.296,39
0
Bonds
12.294,38
0
0
Shares
19.442,40
0
1.261,54
Total Assets
31.736,78
28.213,93
1.261,54
Liabilities
Forwards contracts in USD
(FWD)
0
(194,72)
0
Jet fuel commodity swaps
(FWD)
0
(1.698,67)
0
Interest rate swaps
(IRS)
0
(10.723,45)
0
Total Liabilities
0
(12.616,84)
0
184
Fair value hierarchy levels
Group 31.12.2022
Derivative type
Level 1
Level 2
Level 3
Assets
Forwards contracts in USD
(FWD)
0
22.595,22
0
Jet fuel commodity swaps
(FWD)
0
7.251,28
0
Interest rate swaps
(IRS)
0
28.306,14
0
Bonds
64.235,22
0
0
Shares
17.116,97
0
2.562,96
Total Assets
81.352,20
58.152,65
2.562,96
Liabilities
Forwards contracts in USD
(FWD)
0
(9.804,97)
0
Jet fuel commodity swaps
(FWD)
0
(5.182,90)
0
Interest rate swaps
(IRS)
0
0
0
Total Liabilities
0
(14.987,87)
0
Fair value hierarchy levels
Group 31.12.2021
Derivative type
Level 1
Level 2
Level 3
Assets
Forwards contracts in USD
(FWD)
0
14.185,81
0
Jet fuel commodity swaps
(FWD)
0
11.731,73
0
Interest rate swaps
(IRS)
0
2.296,39
0
Bonds
12.294,38
0
0
Shares
19.442,40
0
1.261,54
Total Assets
31.736,78
28.213,93
1.261,54
Liabilities
Forwards contracts in USD
(FWD)
0
(194,72)
0
Jet fuel commodity swaps
(FWD)
0
(1.698,67)
0
Interest rate swaps
(IRS)
0
(10.723,45)
0
Total Liabilities
0
(12.616,84)
0
Level 1 values refer to published prices and Level 2 values are based on measurement techniques. Bonds and shares are traded in active markets and they are measured at their market price at the balance sheet date. Hedging derivatives are measured using international pricing platforms.
Apart from the above, the management estimates that all other financial assets and liabilities are presented at fair value at 31.12.2022, either due to their short-term nature or because they have floating interest rates.
185
Credit risk
The maximum exposure to credit risk, without taking into consideration any letters of guarantee and security deposits, is as follows:
Company
Group
Classes of assets
31.12.2022
31.12.2021
31.12.2022
31.12.2021
Cash, cash equivalents and restricted cash
442.354,64
370.503,00
463.169,92
442.586,58
Financial Assets
73.524,75
32.998,31
73.524,75
32.998,31
Derivatives assets
58.152,58
28.213,93
58.152,58
28.213,93
Trade and other receivables
102.248,54
80.116,87
124.060,08
115.720,67
Total
676.280,50
511.832,11
718.907,33
619.519,49
The management considers that all the above financial assets are of high credit quality.
In order to be protected against the credit risk, the Group monitors on a regular basis its trading receivables and whenever necessary, assesses the assurance of the receivables collection.
Possible credit risk also exists in cash and cash equivalents and in derivative contracts. The risk may arise from the possibility of the counterparty becoming unable to meet its obligations towards the Group. To minimize this risk, the Group examines regularly its degree of exposure to every individual financial institution. As far as the deposits are concerned, the Group is dealing only with reputable financial institutions of high credit ratings.
Liquidity risk
Liquidity risk is managed effectively by maintaining sufficient cash levels. The Group manages its liquidity by maintaining adequate cash levels as well as ensuring the provision of credit facilities not only from financial institutions but also from suppliers, always in relation to its operating, investing and financing requirements.
It is noted that as at 31.12.2022 the Group had a cash position of € 462.288,61mil. securing its ability to settle the short-term and medium-term liabilities.
The Company financial liabilities’ maturity as at 31.12.2022 are analyzed as follows:
Company
Within 6 months
6 – 12 months
1-5 years
More than 5 years
Borrowings
17.006,39
16.962,15
234.216,52
0
Lease liabilities
44.382,90
44.057,82
239.517,74
357.981,04
Trade payables
98.787,89
0
0
0
Other short term liabilities
146.701,56
317,66
0
0
Contract Liabilities (short term)
91.198,08
127.005,18
2.977,75
0
Derivatives
8.067,73
6.510,30
409,84
0
Contract Liabilities (long term)
0
0
12.031,63
28.865,79
Total
406.144,55
194.853,12
489.153,48
386.846,83
186
The respective maturity of the Company financial liabilities’ as at 31.12.2021 are analyzed as follows:
Company
Within 6 months
6 – 12 months
1-5 years
More than 5 years
Borrowings
0
0
144.905,71
198.794,65
Lease liabilities
40.802,13
39.423,36
165.169,71
138.559,80
Trade payables
74.596,76
0
0
0
Other short term liabilities
115.577,64
35,86
0
0
Contract Liabilities (short term)
53.775,65
102.732,29
0
0
Derivatives
502,37
1.071,94
319,01
10.723,45
Contract Liabilities (long term)
0
0
17.880,07
18.947,86
Total
285.254,55
143.263,45
328.274,50
367.025,76
The Group financial liabilities’ maturity as at 31.12.2022, based on the contractual non-discounted liabilities, are analyzed as follows:
Group
Within 6 months
6 – 12 months
1-5 years
More than 5 years
Borrowings
17.006,39
16.962,15
234.216,52
0
Lease liabilities
49.045,91
44.586,86
267.050,11
376.636,28
Trade payables
123.578,12
0
0
0
Other short term liabilities
152.078,41
317,66
0
0
Contract Liabilities (short term)
95.864,94
128.615,06
2.977,75
0
Derivatives
8.067,73
6.510,30
409,84
0
Contract Liabilities (long term)
0
0
12.031,63
28.865,79
Total
445.641,49
196.992,04
516.685,85
405.502,07
The Group financial liabilities’ maturity as at 31.12.2021 are analyzed as follows:
Group
Within 6 months
6 – 12 months
1-5 years
More than 5 years
Borrowings
0
0
144.905,71
198.794,65
Lease liabilities
51.782,57
46.955,91
176.891,10
138.603,92
Trade payables
130.345,77
0
0
0
Other short term liabilities
126.802,76
0
0
0
Contract Liabilities (short term)
59.425,55
104.723,92
19.478,27
44,11
Derivatives
502,37
1.071,94
319,01
10.723,52
Contract Liabilities (long term)
0
0
17.922,62
18.947,86
Total
368.859,02
152.751,77
359.516,72
367.114,06
The above maturities reflect the future gross cash flows.
Policies and procedures on capital management
Primary target of the capital management is to ensure preservation of the high-ranking credit rating as well as solid equity ratios, to support and expand the operations and maximize shareholders’ value.
The Company monitors capital based on shareholders’ total equity plus loans, less cash and cash equivalents as they appear on the statement of financial position.
The Capital for the fiscal years 2022 and 2021 is analyzed as follow:
187
Company
Group
31.12.2022
31.12.2021
31.12.2022
31.12.2021
Total Equity
314.878,16
177.406,91
348.102,22
213.637,13
Plus: Loans
268.927,70
346.943,40
268.185,07
346.943,40
Less: Cash and cash equivalents (including restricted cash)
(442.354,64)
(370.503,00)
(463.169,92)
(442.586,58)
Capital
141.451,23
153.847,32
153.117,37
117.993,96
Total Equity
314.878,16
177.406,91
348.102,22
213.637,13
Plus: Loans
268.927,70
346.943,40
268.185,07
346.943,40
Total capital
583.805,87
524.350,31
616.287,29
560.580,53
Capital / Total capital ratio:
0,24
0,29
0,25
0,21
The Company’s target is to maintain the above ratio of capital /total capital less than 0,50.
According to the existing legislation, specific provisions are required regarding the capital adequacy (Law 4548/2018). The Company is in total compliance with law.
3.35 Commitments
At 22.06.2018 the Company signed Aircraft Purchase Agreement with Airbus S.A.S. which provides for the acquisition of a total of 30 new generation aircraft of the A320neo family, two types of A320neo and A321neo. Aircraft deliveries begun within the second half of 2020 and are expected to be finalized during 2026.
The price of the above purchase agreement is based on the Airbus fuselage and engines public pricelist, with further discounts agreed by the parties. This amount is adjusted through an annual adjustment clause, designed to increase the price of each aircraft, by applying a formula that reflects the changes in the prevailing economic conditions. Prices are depending on the engine selection, the weights selected and any type of aircraft configuration. Scheduled pre-delivery payments at 31.12.2022 amounted to $202m.
In addition, the Company entered into lease agreements for 5 aircraft scheduled to be delivered within 2023-2024, of 12-year lease period. The Company has also executed sale and lease back agreements, relating to the title transfer and the corresponding lease agreement of 5 aircraft scheduled to be delivered within 2023-2024, with a 12-year lease period.
The lease commitments will depend on (1) aircraft delivery time, (2) US interest rates at delivery, (3) estimated lease rental future escalation (4) the Euro/US dollar exchange rate at the delivery date and (5) the aircraft type.
On 24.12.2019, the Company has signed the following agreements with International Aero Engines LLC :
• Engine Purchase and Support Agreement including manufacturer’s warranties and guarantees for the engines included in the Purchase Agreement with Airbus dated 22 June 2018 and for six spare engines. The agreed introductory assistance credits with IAE form the final net price of the Airbus aircraft included in the above mentioned agreement.
• Engine Fleet Management Program Agreement regarding 45 to 55 Airbus A320neo and A321neo, powered with PW1100G-JM engines which includes the aircraft ordered to Airbus under the Purchase Agreement dated 22
188
June 2018, the aircraft to be directly delivered from lessors and 6 spare engines PW1100G-JM. The Engine Fleet Management Program Agreement includes all the key terms of engines maintenance based on their flight activity.
3.36 Dividends
During the Regular General Assembly, dated 7 th July 2022, it was resolved the non-distribution of dividend for the year ended 2021, due to prior year losses.
3.37 Subsequent Events
On January 19, 2023, Olympic Air transferred its participation (of 45,45%) in Aegean Cyprus Limited to Aegean Airlines S.A.
In January 2023 the Company has notified the four systemic Greek banks that the outstanding balance of 68.500.000 euro million related to the syndicated bond loans of €150 million that AEGEAN has received in October 2020 will be fully repaid on 15 March 2023.
189
3.38 Existing Encumbrances
A mortgage has been set up in four owned aircrafts Airbus A320ceo, to maintain the financing line of €120 million from the 4 Greek systemic banks. (Note 3.17).
3.3 9 Auditor’s fees
Auditors’ fees for 2022 was €307 (2021: €260). The amount includes the statutory audit of financial statements according to IFRS and the provision of tax certificate for the fiscal year 2022. Furthermore, other audit services were provided for an amount of €84,5 (2021: €19,5) as well as permitted non-audit services for an amount of €12 (2021: €30).
190
The accompanied Financial Statements are the ones approved by the Board of Directors of “Aegean Airlines S.A.” on 15 March 2023 and are uploaded on the Company’s website (www.aegeanair.com) for investors’ reference, where they will remain for at least 5 years after their preparation and public announcement date.
Spata, 15 March 2023
Chairman of the BoD
Chief Executive Officer
Chief Financial Officer
Chief Accountant
Eftichios Vasilakis
Dimitrios Gerogiannis
Michail Kouveliotis
Maria Zannaki
I.D. no. ΑΝ049866
I.D. no. AB642495
I.D. no. ΑΟ148706
I.D. no. ΑΟ135556
191
5. Company announcements as per Art.10 Law 3401/2005 published during the fiscal year 2022
192
5. Company announcements as per Art.10 Law 3401/2005 published during the fiscal year 2022
Aegean Airlines had disclosed the following information over the period beginning 01/01/2022 and ending 31/12/2022, which are posted on the Company’s website
www.aegeanair.com
(in the link
https://en.about.aegeanair.com/investor-relations/announcements/announcements/
regarding the announcements and in the link
https://en.about.aegeanair.com/investor-relations/general-assemblies/
regarding the General Assemblies) as well as the website of Athens Exchange
www.helex.gr
.
Date
Announcement
04-Mar-22
6th Interest Payment Period of the Common Bond Loan
18-Mar-22
Financial Calendar 2022
21-Mar-22
Amendment of Financial Calendar 2022
21-Mar-22
Conference call invitation
23-Mar-22
2021 Financial Results
19-May-22
Release date of First Quarter 2022 trading update
26-May-22
First Quarter 2022 Trading Update
14-Jun-22
Amendment of Financial Calendar 2022
15-Jun-22
Invitation to Ordinary General Meeting
07-Jul-22
Decisions of the Ordinary Shareholders’ General Meeting
28-Jul-22
Reduction of its share capital through the reduction of the share’s nominal value for the purposes of offsetting losses
04-Aug-22
Credit Rating Review
02-Sep-22
Publication date of First Half 2022 financial results
05-Sep-22
Conference call invitation
05-Sep-22
7th Interest Payment Period of the Common Bond Loan
15-Sep-22
First Half 2022 results
17-Oct-22
Release date of the third quarter and nine-month 2022 trading update
18-Oct-22
Announcement for the lapse of the deadline pursuant to art. 100 of L.4548/2018
10-Nov-22
Nine Month 2022 Results & KPIs
23-Nov-22
Tax Audit 2021 and Tax Certificate Issuance
13-Dec-22
Write-off of the unclaimed dividend for fiscal year 2016
21-Dec-22
AEGEAN to create the first aviation ecosystem for technical support services and training in Greece
193
Additionally at website:
https://en.about.aegeanair.com/investor-relations/announcements/trade-acknowledgements
(
www.aegeanair.com
, Aegean Group/Investors, Financial Results/Announcements) and to the website of Athens Stock Exchange
www.helex.gr
Announcements of Regulated Information according to Law 3556/2007 (Transaction Disclosure) were posted on the following dates:
Date
Announcement
01-Jun-22
Trade Acknowledgements
07-Jun-22
Trade Acknowledgements
18-Nov-22
Trade Acknowledgements
6. Website of the Annual Financial Report
6. Website of the Annual Financial Report
The annual financial statements of the Company and the Group, the audit report of the Certified Auditor Accountant and the Management Report of the Board of Directors for the year ended December 31, 2022 have been posted to the Company's website
www.aegeanair.com
.
The Annual Financial Report is prepared in compliance with the European Single Electronic Format (ESEF) in xHTML and inline XBRL format and it is available on the website.
Also, the Data and Information and the Annual Financial Report according to the International Financial Reporting Standards of 100% subsidiary Olympic Air are published and posted on
www.aegeanair.com
an d
www.olympicair.com
.