Posted on: 22 February 2010 by Ross McSweeny
With the Greek economy in crisis, the main shareholders of Aegean Airlines and Olympic Air have reached an agreement to merge their respective activities, resulting in the formation of a new company that will be listed on the Athens Exchange.
The merged company will end up carrying the Olympic Air brand, but only after a transition period during which the Aegean brand will be used in parallel. Olympic Handling and Olympic Engineering will become 100% subsidiaries of the new company. The agreement is subject to the approval of the European Competition Commission, which is the relevant competent authority given the size and particular terms of the transaction.
According to the terms of the agreement, the main shareholder of Aegean (Vassilakis Group) and the sole shareholder of Olympic Air (Marfin Investment Group) will have an equal shareholding in the combined entity, while the groups of Messrs Laskaridis, V. Constantakopoulos, G. David and L. Ioannou as well as Piraeus Bank will all maintain their proportional equity participations in the new company.
Theodoros Vassilakis and Andreas Vgenopoulos are expected to lead the new company, ensuring the smooth integration of the businesses and the creation of a national airline champion with enlarged presence in the European market as well as seamless coverage of even the most remote Greek islands.
In reference to the agreement, Aegean chairman Vassilakis commented, “Since the first day of Aegean’s operations, we have been pursuing our vision for innovative, high quality services, through significant investments. The relative size of our competitors within the European Union necessitates the joining of the two main Greek airlines, to achieve increased autonomy in serving the needs of our country’s tourism, increase route options for consumers, ensure the long-term development and viability of the two airlines and protect the levels of employment in the sector.”
Olympic Air chairman Andreas Vgenopoulos remarked, “The prevailing conditions 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. The merger of Olympic with Aegean serves all of those objectives and at the same time preserves and strengthens the Olympic brand name, an inherent piece of our national tradition making all Greeks very proud.”
Bringing together the two fleets will pose little problem for the medium-haul type with Aegean operating four A321s and 18 A320s, while Olympic has nine A320s and eight A319s. Aegean also has four Boeing 737-400s which are planned to leave the fleet.
For the shorter haul routes, Aegean has six Avro RJ100s with an average aage of just over 10 years. Olympic has 10 Bombardier Q400s (four flown on ACMI terms by Flybe plus six owned, with four new aircraft scheduled for delivery early in the third quarter) plus five Dash 8-100s.
The fleet will undoubtedly be revised to deliver the best possinble utilisation across the merged route network. Aegean currently has 24 domestic and 26 international routes, while Olympic operated 41 domestic and 15 international routes.
Staff numbers currently stand at 2,500 at Aegean, 1,300 at Olympic Air, with Olympic Handling having 2,000 and Olympic Engineering 50.