It what seems like a sense of deja vu, Aegean Airlines have announced a deal to acquire Olympic Air from its current owners- Marfin Investment Group – for €72 million.
Aegean plan to turn Olympic into a subsidiary brand of Aegean, whist retaining the two brands up front. At the backend, route networks will be adjusted to suit the combined entity, as well as cost savings at the backoffice (ticketing, IT systems, reservations, etc).
For those with long memories, this was tried in 2009 – and didn’t happen when the European Commission rejected the merger on competition grounds as a merger would create a “quasi-monopoly on Greek Air Transport.
Since then, Aegean has successfully become a Star Alliance member and both airlines have pottered along.
However, Aegean and Olympic have shrunk since then and argue that a takeover would stem further losses – Aegean reported a €27.2 million loss, whilst Olympic lost €37.6 million
In terms of fleets, Olympic operates 21 aircraft – mainly Airbus A319’s, A320 and Bombardier Dash 8-100, Dash 8-400s whilst Aegean operate an all Airbus narrow body fleet – A319, A320 and A321 totalling 29 aircraft.
The proposed deal still has to ratified by the European Commission – where it fell last time. For this to go through, there are going to have to be some major concessions to make it happen… and I’m not seeing much so far to hint at that.
Another Greek tragedy in the making? We’ll have to watch.
