Aegean Airlines to buy rival Olympic Air
Aegean Airlines is attempting to buy rival Olympic Air, Greece’s second largest airline, in a deal worth €72m
The carrier, already the largest in Greece, said it had reached an agreement with Olympic owners Marfin Investment Group to acquire the airline, however a proposed merger of the two loss-making companies, announced in 2010, was blocked by the European Commission which feared it would restrict competition.
The latest deal will also come under scrutiny of the EU, but Aegean said the merger was vital if the two airlines were to survive Greece’s economic crisis. Last year, they lost a total of €64.8m.
Aegean chairman Theodoros Vassilakis said: "The two companies contribute in excess of €270m to the Greek state revenues in airport taxes, fees, social security contributions. However, 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."
Following the proposed sale, Olympic, which was formed from the privatisation of Olympic Airways, will become a subsidiary of Aegean and the brand names of both airlines will be maintained and each will retain separate aircraft and crew. However, the merger of administrative, planning, purchasing and commercial functions will lead to substantial savings, said Aegean.
Aegean flies 6m passengers a year on 29 aircraft to 70 destinations, Olympic carries 2.9m passengers a year on 21 aircraft to 45 destinations. Aegean lost €27.2m last year; Olympic lost €37.6m.
By Linsey McNeill
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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