Aegean Airlines has agreed to buy fellow Greek carrier Olympic Air for €72 million.
The two carriers had tried to merge two years ago but it was eventually blocked on competition grounds by the European Commission after a 10-month investigation. This latest deal between the companies will also have to be cleared by regulators.
Under the terms of the new deal, Olympic will become a subsidiary of Star Alliance member Aegean.
The separate brands and logos of the two carriers will be maintained, although the administrative and commercial departments of the two companies will be merged.
Aegean’s chairman Theodoros Vassilakis said: “Aegean Airlines and Olympic Air in recent years have invested $2 billion in a brand new fleet. The two companies contribute in excess of €270 million 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
“The synergies from this agreement will allow us to reduce unit costs and offer enhanced network coverage with competitive prices to the consumers.”
The two airlines would have a combined fleet of 50 aircraft including 36 Airbus A319, A320 and A321s plus 14 Bombardier Q400s and Bombardier Dash 8-100s.
Aegean Airlines is due to launch flights between Gatwick and Athens on October 28, complementing its existing service from Heathrow to the Greek capital.
Report by Rob Gill