Aegean takes over main rival Olympic

Aegean takes over main rival Olympic

ATHENS - Agence France-Presse
Aegean takes over main rival Olympic

Commuters stand in front of electronic check-in machines of Aegean Airlines inside Athens’ Eleftherios Venizelos airport on Oct 23, 2012. REUTERS photo

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.