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Aegean Airlines to acquire Olympic Air for EUR72m

23-Oct-2012 11:37 AM

Aegean Airlines announced (22-Oct-2012) plans to acquire Olympic Air for EUR72 million after it reached an agreement with Marfin Investment Group (MIG). MIG acquired Olympic Air in 2009 when the airline was privatised. Olympic Air will become a subsidiary of Aegean and the branding of both carriers will be maintained. The airlines' administrative, planning, purchasing and commercial functions will be unified which "will lead to substantial economies of scale, in buying power and elimination of duplicate systems. Fleet usage and network planning will be optimised to improve efficiencies and connectivity while improving coverage and product offer". The acquisition is subject to approval by Competition Authorities. Aegean Airlines operates a fleet of 29 aircraft on 70 routes as at Oct-2012 while Olympic Air operates a fleet of 21 aircraft on 45 routes as at Oct-2012. Ryanair welcomed the planned merger, stating the merger mirrors the European Commission’s clearance of International Airlines Group’s (IAG) acquisition of bmi. [more - original PR - Aegean Airlines] [more - original PR - MIG]

Aegean Airlines: "Aegean Airlines and Olympic Air in recent years have invested $2 billion in a brand new fleet. Their service quality has been recognized with the receipt of numerous industry Awards. 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. As a result we are faced with the immediate danger of Greek Tourism, an industry essential for the country’s recovery, becoming entirely dependent on foreign carriers with permanent losses in local employment and state revenues. Aegean still possesses the financial reserves to lead the consolidation of aviation in Greece to the benefit of tourism and state revenues as well as our employees and shareholders. The synergies from this agreement will allow us to reduce unit costs and offer enhanced network coverage with competitive prices to the consumers. We hope that all Greeks will support us in this challenging, ambitious and necessary endeavor," Theodoros Vassilakis, chairman. Source: Company statement, 22-Oct-2012.