Julian Moxon/PARIS
Greek start-up Aegean Airlines will be the second-largest airline in the country, after state-owned Olympic Airways, as a result of a forthcoming purchase of a majority share in Air Greece.
Aegean has agreed to take over the 54% share of Air Greece held by shipping company Minoan Lines. It is negotiating with other shareholders to take their stakes, which would increase its holding to a possible 70%.
Aegean general manager Antonis Simigdalas says the merger will effectively double the size of Aegean, which in June launched the first scheduled service in Greece since the market was deregulated at the beginning of the year. "It's a rapid expansion," he admits. "But we thought about it very carefully."
The Athens-based carrier, which has seen load factors increase from just 35% in June to more than 76%, recently took delivery of its third Avro RJ100 and ordered a fourth, for delivery in December.
Air Greece operates three ATR 72s and two Fokker 100s. Simigdalas says the Fokkers will probably be sold because "four types is too many for a regional carrier" and "there is also a support problem with Fokkers these days". The ATR 72s will be kept and Aegean is "examining purchasing up to six more Avros". Simigdalas adds that Aegean is unlikely to purchase the new Avro RJX, "because for a small airline the extra cost does not seem justified when set against the decrease in direct operating costs".
The purchase of Minoan's share in Air Greece is being financed by giving Minoan up to 27% in the enlarged Aegean's stock. The airline is also planning a $20 million capital increase.
The route structures of Aegean and Air Greece will be merged, launching Aegean into international operations for the first time, through Air Greece's routes from Heraklion and Thessaloniki to Stuttgart, Düsseldorf and Cologne. Air Greece also operates between Heraklion, Athens and Thessaloniki, which Simigdalas says will be rationalised with Aegean's domestic route structure.
Further agreements are likely, he says, centring mainly on increased co-operation with other independents. He adds that "much depends on what happens to Olympic's domestic operation when older aircraft such as the Boeing 737-200 are sold off".
Source: Flight International
