Aegean Air has posted a €32.6m net loss for the first six months of 2010, compared to a €13.4m profit for the same period last year.
It blamed part of the loss on a €6.6m tax payment to the "extraordinary social contribution charge" levied because of Greece's dire economic situation.
During the six months, the Greek carrier said revenue has dropped by 3% to €267.4m and the number of passengers remained "flat" at 2.9m.
On domestic flights, Aegean said passenger numbers fell by 11% to 1.5m while it carried 1.4m on its international services, an 18% year-on-year rise.
It said the decline in revenue was partly due to the "economic crisis" and the drop in passengers particularly on flights out of Greece.
Dimitris Gerogiannis, Aegean's managing director, said:"The negative economic environment had a profound impact on our first half financial performance."
He said the airline would continue with its cost controls and concentrate on the potential benefits of joining the Star Alliance.
He added:"We must focus on destinations where we maintain a competitive advantage either due to our new Airbus A320 fleet or due to our entry into the Star Alliance.
"A possible imminent approval of our agreement with OA (an investment group) could allow us to ably present in the summer of 2011 an expanding profile which is necessary for both our company and our country. "
www.aegeanair.com