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Aegean buys 100% of Olympic Air for 72 million euro. The former state-owned airline will become a subsidiary of Aegean, but it will keep its name and destinations. Both companies’ administrations will merge, which will optimize operating costs. This became clear late on Monday after the companies’ managements made an official announcement.

"Aegean and Olympic Air have invested more than two billion euro in renovation, organization and innovative services, ensuring an extremely high level of service for Greece and its visitors," Aegean’s president Theodoris Vassilakis says in the official statement. He emphasizes that the small size of the companies makes them uncompetitive in Europe. According to Vassilakis, the Greek market is threatened with dependence on foreign carriers that would bring long-term losses to the state and jobs. This is how Vassilakis justifies the establishment of a new airline giant in Greece, which will play a dominant role in both domestic flights and the flights that connect Greece to the world.

The communication of Marfin Investment Group (MIG) headed by Andreas Vgenopoulos, the owner of Olympic Air, states that after the merger, the former state-owned airline will be registered on the Athens Stock Exchange as a subsidiary of Aegean. Part of the amount of the 72 million euro will be paid in cash and the remainder will be repaid in instalments. Management, technical services and administrative staff will gradually merge.

Currently, the transaction is to be approved by the Competition Commission, which will determine when the merger will be completed.

Aegean and Olympic Air tried to merge in 2010. After two postponements of the third consideration in early 2011, the European Competition Commission refused to accept the merger contract. The Greek companies were still competing with each other then and both Aegean and Olympic Air were serving many international destinations that connect Athens to other parts of the world. Competition commissioner at the time Joaquin Almunia said the merger would be in stark violation of free competition principles and it would result in monopolization of both the Greek domestic market and the flights to and from Greece.

Although Vgenopoulos and Vassilakis failed to formally merge their businesses, they approached the issue differently. Several months after the refusal of the European authorities to approve the merger, the two companies redistributed the market. Aegean retained most of the external lines (51 out of 58) and Olympic Air took mainly the domestic flights (38 out of 57). Currently, Aegean has 1,700 employees and 29 aircraft Airbus A320. Olympic Air has 800 employees and 21 aircraft, of which 7 are Airbus A320 and 14 are of the Bombardier Dash type.

Today, the companies present the merger as a matter of survival between two airlines that do not compete to serve the same lines. There is no official announcement about whether the supervisory authorities will allow the takeover of Olympic Air, but according to unofficial sources, it will happen. The main reasons for the Competition Commission to reconsider its decision of 2011 may be the economic crisis, the drastic decline in passenger traffic and the presence of Cyprus Airways in the Greek market. The Cypriot company flies to Thessaloniki and is preparing to launch two more destinations - Heraklion and Rhodes. Meanwhile, the number of passengers using domestic flights fell by 8.1% and that of the people flying abroad fell by almost 14%. The Ministry of Economy and Finance has given its blessing to the takeover, but noted that competition authorities will have the final say.