Air and Aegean to merge
Plus, 26 February 2010
Greece’s two largest air carriers, recently privatized Olympic Air
and Aegean Airlines, announced on February 22 an agreement to join
forces in a bid to withstand the country’s economic downturn and tougher
competition in the aviation industry.
The sole shareholder of Olympic Air, Martin Investment Group (MIG),
and Aegean’s main shareholder, the Vassilakis Group, have agreed on
the merger to create an airline servicing 106 domestic and international
routes, employing 5,850 staff members and operating a fleet of 64 planes.
The new company will carry the Olympic Air name, which is considered
"The conditions prevailing in the Greek economy as well as in the aviation
sector dictate the combination of forces in order to maintain competitive
customer prices, protect levels of employment and increase our competitiveness
at a European level,” said Andreas Vgenopoulos, chairman of Olympic
The Vassilakis Group, which currently has a 36 percent stake in Aegean,
and MIG will hold equal stakes of 25-27 percent each in the newly formed
venture, the two companies said in a joint statement that did not provide
any financial details. The rest will be held by Aegean’s other current
The two airlines surprised the market in mid-February when they announced
that they were in talks to create a single company that would have
annual sales in excess of 1 billion euros.
Stocks in the newly formed venture will be listed on the Athens bourse.
The agreement between the two airlines, which jointly control 95 percent
of Greece’s air travel market, is subject to approval by European Union
competition authorities, which are expected to seek the assistance
of the Greek competition watchdog.
Ministers said it was important that the merger did not jeopardize
competition and the provision of quality services at reasonable prices.
The two airlines, which spoke of the creation of a "national champion" in
their joint statement, contend that their combined share of the Greek
air transport market - both domestic and international flights - amounts
to no more than one-third and that, therefore, the merger poses no
threat to competition.
Aegean currently serves 24 domestic and 26 foreign destinations, while
Olympic Air’s respective figures are 41 and 15.
Sources said layoffs as a result of the merger are not expected to