Aegean Airlines has agreed to buy domestic rival Olympic Air for 72 million euros.
Olympic will become a subsidiary of Aegean but both brand names, logos, aircraft and staff will be retained. The two airlines’ administrative, planning and commercial functions will be merged.
Aegean has agreed to pay Olympic’s current owner Marfin Investment Group (MIG) 72 million euros in installments. The deal is subject to approval by Greek competition authorities.
Former state carrier Olympic Air was bought by MIG after being privatised in 2009 and is not listed. Both airlines posted losses in 2011.
The airlines tried to merge in January 2011 but the European Commission blocked the deal on competition grounds.
Theodoros Vassilakis, chairman of Aegean Airlines, said: “Our subscale size, combined with the effects of the unprecedented Greek crisis, restrict our ability to successfully compete within the European and Global Aviation market, leading us to further losses and further reductions of size and scope.
“As a result we are faced with the immediate danger of Greek Tourism, an industry essential for the country’s recovery, becoming entirely dependent on foreign carriers with permanent losses in local employment and state revenues.
“Aegean still possesses the financial reserves to lead the consolidation of aviation in Greece to the benefit of tourism and state revenues as well as our employees and shareholders. The synergies from this agreement will allow us to reduce unit costs and offer enhanced network coverage with competitive prices to the consumers. We hope that all Greeks will support us in this challenging, ambitious and necessary endeavor.”
Olympic has one of the youngest fleets in Europe, flying 21 aircraft across 38 domestic routes and seven international routes. Aegean has 29 aircraft and flies mostly international routes.