How does the Aegean–Olympic merge affect Cyprus Tourism?

Aegean Airlines and Olympic Air are very close signing an agreement that will create the new Greek airline. The 2 companies will very soon announce their merge and the new airline will be called Olympic. The new company will have a structure where the 2 strong men of the two companies will have equal shares, Vasilakis  from Aegean and Vgenopoulos from  Olympic Air (Marfin Group) and the rest of the shares will be in the Greek stock market. The new entity will be owned by Aegean Air by 75% and 25% by Marfin . (News published on Inbusiness news online in Greek)

Now the question drawn from this piece of news is.  When are they going to buy Cyprus Airways,  Eurocypria of both? The bad financial situation of the two Cypriot Airlines should worry the Cypriot Tax payer. The airlines that lately had a media fight about who should close down, are completely sustained by state investment. The state of Cyprus owns 100% of the regular airline (Cyprus Airways) and 100% of the charter airline, Eurocypria. The minister of finance of Cyprus has played his last card for Eurocypria last week at the parliament where he obtained 35 million Euros to inject them in the empty cash drawers of Eurocypria.
Most economists of Cyprus believe that the 2 airlines are not sustainable due to their very high operational costs produced basically by the “heritage” of civil servant employees and the lack of modernization of internal procedures in order to have more flexibility and productivity.

Now with the airports of Cyprus being managed by the private sector the 2 airlines do not have the favours they user to have before (especially before 2004) something that finds them “exposed” to the open global market. If the new Greek airline giant wants to keep the piece of the pie in the Cypriot routes then the option of buying the 2 companies is not a bad one.

We will be waiting to see what the next move is. Vgenopoulos has the expertise in buying Cypriot companies and I am sure he knows the potential of Cyprus as a hub in the eastern Mediterranean.

From this blog I predict that next year the same day we will be talking  about one global Greek and Cypriot air carrier and is then when we will be able to fly to Cyprus with better connections and definitely better prices.