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New entity to carry Olympic name and logo

Greek carriers Aegean, Olympic agree merger

Greece’s two largest carriers, Aegean and recently privatised Olympic agreed to team up to form a stronger player better able to compete with foreign airlines. The merger will form one dominant carrier in the domestic market and ease pricing competition between the two airlines. Olympic ground handling and Olympic Engineering will become 100 percent subsidiaries of the new company which will be listed on the Athens stock exchange.

"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 our country’s tourism, increase route options for consumers and ensure the long tern viability of the two airlines," Aegean’s Chairman Theodore Vassilakis said. The two carriers announced they were in talks on a possible cooperation in a bourse filing on Feb. 11. Together, they operate a fleet of 64 aircraft and employ 5,850 workers. Aegean has been accepted into and is in the process of joining Star Alliance by June this year.

Aegean flies 24 domestic and 26 international routes. Olympic serves 41 domestic routes and 15 destinations abroad.

Under the deal, the new carrier will carry the name of Olympic Air and its logo of Olympic rings after a transition period during which Aegean’s name and logos will also be used in parallel. Olympic was founded in 1957 by the late shipping tycoon Aristotle Onassis who sold it to the government in 1974. Under state management the airline became debt laden and loss making.

Last year the government sold it to buyout firm Marfin Investment Group (MIG) (MRFr.AT), ending years of wrangling with the European Union over illegal state aid.

The merger agreement will need the blessing of the EU Commission. Until then, the exact process and timetable of the merger will be articulated, the two carriers said. "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," said Olympic Air’s Chairman Andreas Vgenopoulos.

Under the deal, the Vassilakis Group which is the main shareholder of Aegean and MIG, Olympic’s sole shareholder, will have equal shareholdings in the new airline.

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