Aegean Airlines Invests EUR50 Million in Volotea, Secures Up to 21% Stake

Aegean Airlines (A3) has announced a significant commercial joint venture and equity investment in Spanish low-cost carrier Volotea (V7), potentially acquiring up to a 21% stake. The investment, totaling EUR50 million (USD55.2 million), is structured in two phases, reported ch-aviation.com.

The first phase, amounting to EUR25 million (USD27.6 million), has been completed, while the second tranche, contingent on Volotea’s financial performance, is expected in the first half of 2025. The investment will be made through convertible loans, allowing Aegean to secure a 13% stake initially and potentially increase to 21% after the second tranche.

Aegean’s chairman, Eftichios Vassilakis, indicated a high probability of the second tranche proceeding. This equity raise is matched by EUR50 million (USD55.2 million) from Volotea’s current shareholders, including CEO and founder Carlos Muñoz.

Details on the timeline and conditions for converting the loans into equity have not been disclosed. Vassilakis noted that even with a 21% stake, the deal would not require a competitive review and there are no plans to further increase Aegean’s share.

Volotea, despite the Aegean deal, is still planning an IPO, though Muñoz suggested it may not occur until early 2025. Both airlines will continue to operate independently, with Volotea focusing on mid-sized European cities and Aegean on Greek hubs like Athens and Thessaloniki. The partnership aims to expand their presence in Greek secondary airports, with potential future routes including Rhodes, Chania, and Irakleion.

Vassilakis acknowledged that while Aegean excels in premium services, it faces challenges from LCCs and charter carriers in the Greek islands. The partnership with Volotea is seen as a strategic move to enhance connectivity and compete more effectively.

Short-term expansion may be constrained by aircraft availability, but Volotea is exploring growth opportunities in Italy and Portugal, following recent industry consolidations.

In addition to the investment, Aegean and Volotea plan to collaborate on distribution and other commercial initiatives, including cross-selling flights and potential cooperation in maintenance, repair, and operations (MRO) and flight simulator training.

Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com, Aegean Airlines