Greece carriers in merger talks

Aegean Airlines is in talks to buy domestic rival Olympic Air as the two Greek carriers look to consolidate to cope with the country’s deep economic downturn, sources said.
By The Newsroom
Published 23rd Oct 2012, 07:00 BST

Greece’s economy is in its fifth year of recession as a result of austerity measures to deal with the debt crisis. The airlines tried to merge in 2010 but the European Commission blocked the deal on competition grounds.

“There are advanced talks on a deal in which Aegean will be acquiring Olympic,” one of the sources said yesterday.

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Aegean Airlines, which has a market value of about 121 million euros (£98m), would not comment.

Former state carrier Olympic Air was bought by Marfin Investment Fund after being privatised in 2009 and is not listed. Both airlines posted losses in 2011.

The economic slump could be an opportunity for the two airlines to get the green light from regulators since both have seen their market share shrink during the crisis.

“Their combined market share has been reduced because of the deep recession and new entrants in the market such as Cyprus Airways,” the source said, adding that both brand names would be maintained under the acquisition plan.

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The EU blocked the merger of Olympic and Aegean in January 2011 on grounds that the combined Greek carrier would have a quasi-monopoly in the domestic air market.

The carriers offered to cede take-off and landing slots in Greece, but the commission ruled this was not enough.

Related topics:Greece