“Star Alliance Carrier Aegean Airlines said on Oct. 21 that it had completed talks to acquire rival Olympic Air, the former Greek flag carrier, from Marfin Investment Group pending approval from competition authorities.
“Aegean Airlines and Marfin Investment Group agreed today on the sale of 100 percent of Olympic Air to Aegean,” the company said in a statement that also put the value of the deal at 72 million euros ($94 million).
“The deal is subject to approval by the Competition Authorities, a process which will also determine the timing of its execution,” it added.
The acquisition is to be paid for in installments, and the brand names and logos of the two companies will be maintained with distinct aircraft and flight staff, Aegean said.
In January 2011, the EU’s competition watchdog blocked a planned merger between the two airlines, the two biggest in Greece, arguing that it would have created a quasi-monopoly in the country.
In the meantime however, regional rival Cyprus Airways has expanded its network, in part early this month via a code sharing agreement with Gulf Air, and is reportedly set to add several new flights to Greece as of October 28. “The two companies contribute in excess of 270 million euros to the Greek state revenues in airport taxes, fees, social security contributions,” said Aegean chairman Theodoros Vassilakis.
“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,” Vassilakis said.
The new company would have 50 aircraft and combined would have carried an estimated 8.9 million passengers in 2012, Aegean said.
“The synergies from this agreement will allow us to reduce unit costs and offer enhanced network coverage with competitive prices to the consumers,” Vassilakis said.
Aegean posted a net loss of 27.2 million euros in 2011 on sales of 668.2 Million Euros.
egean Airlines began scheduled passenger operations in May 1999, following the liberalisation of the Greek domestic market. The strategy of the company at its inception and to date is to provide full service, premium quality short and medium haul services.
In December 1999, expanding rapidly, Aegean bought Air Greece while in 2001 the company merged with another Greek carrier Cronus Airlines, a move that also marked its entry in international routes. Following its increasing acceptance by its customers Aegean became by 2005 the leading carrier on domestic routes. In 2005 Aegean reached an agreement with Lufthansa to become its partner in Greece. After four years of profitable operation Aegean was listed on the Athens stock exchange in July 2007, raising additional funds to support for fleet and network development. In 2008 through its gradual expansion of its international network, and its consistent delivery of high quality services Aegean became the largest Greek airline by passenger numbers. On June 30, 2010 Aegean joined Star Alliance.
Another important milestone was in 2005 when Aegean reached an agreement with Airbus to fully renew its fleet with new A320 family aircraft. The fleet renewal and improvement process facilitated network expansion and also contributes to the airline’s customer appeal in terms of punctuality, service and comfort. Aegean took the first deliveries in 2007 while since May 2011 the company operates for the first time in its history with a homogeneous fleet consisting of 29 Airbus (A319, A320, A321) with an average age of 3 years.
AEGEAN was named “Best Regional Airline Europe” at the SKYTRAX 2011 World Airline Awards and was the runner-up in the “World’s Best Regional Airline” category, in “Airline Staff Service Excellence for Europe” category as well as in “Best Airline Southern Europe” category. In its 12 year history, Aegean has been awarded six times by the European Regions Airline Association (ERA). Furthermore, the company has been repeatedly awarded by the Athens International Airport as the greatest contributor to the airport’s passenger volume increase.