Aegean Airlines Agrees to Acquire Olympic Air for 72 Million Euro

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 UPDATE: “Aegean Airlines and Marfin Investment Group agreed today on the sale of 100% of Olympic Air to Aegean. Following the completion of the transaction, Olympic Air will become a subsidiary of the listed Aegean. The brand names and logos of the two companies will be maintained and each will have distinct aircraft and flight staff.The unification of administrative, planning, purchasing and commercial functions will lead to substantial economies of scale, in buying power and elimination of duplicate systems. Fleet usage and network planning will be optimized to improve efficiencies and connectivity while improving coverage and product offer.

The deal is subject to approval by the Competition Authorities, a process which will also determine the timing of its execution.

The consideration for 100% of Olympic Air has been set at €72 mil with payment in installments to MIG by Aegean.The shareholding structure of Aegean is not affected by the transaction.” (Capital.gr)

Ealier on Monday KTG reported from Capital.gr:

Olympic Air and Aegean Airlines have renewed their merger negotiations. Despite the blockade of the European Commission in January 2011, according to Capital.gr sources from the airline industry, the two companies allegedly never gave up on the project.

According to the same sources the discussions are at an advanced stage. 

The prolonged Greek recession that has reduced dramatically the domestic demand for both airline companies as well as the high oil prices that have increased the cost, are the two main reasons that the rationale of the renewed merger attempt is based on.

In other words, due to the recessionary climate, the merger between the two airline companies seems more necessary than ever, as it is apparent that the Greek market cannot absorb two major carriers.

As a reminder, Olympic Air and Aegean Airlines announced their intention to merge on 22 February 2010. The newly merged airline would carry the Olympic brand name and logo, while the Aegean brand would cease to exist after a transition period.

However, on January 2011 the European Commission blocked the proposed merger between the two Greek airline companies. In a press release the Commission stated that it “prohibited, on the basis of the EU Merger Regulation, the proposed merger between Aegean Airlines and Olympic Air, as it would have resulted in a quasi-monopoly on the Greek air transport market. This would have led to higher fares for four out of six million Greek and European consumers travelling on routes to and from Athens each year. Together the two carriers control more than 90% of the Greek domestic air transport market . (Full article Capital.gr)

See also European Commission Blocks OA-AA merger January 2011