Aegean Airlines to Acquire 21% of Volotea with Loan

Aegean Airlines has announced plans to acquire a 21% stake in the Barcelona-based regional low-cost carrier Volotea through a €50 million convertible loan, as confirmed on September 3, 2024. This strategic investment is set to enhance both airlines’ operational and commercial synergies.

The €50 million investment will be disbursed in two equal tranches. The first tranche has already been provided by Aegean Airlines, while the second is anticipated in the second quarter of 2025. Following the disbursement, Aegean Airlines will convert these tranches into equity, giving it control over 13% and 8% of Volotea, respectively. The transaction reflects a substantial capital boost for Volotea, raising €100 million to strengthen its balance sheet.

Volotea’s founders will match Aegean’s investment, signaling a significant strategic move for the regional carrier. This capital increase is seen as a precursor to Volotea’s long-anticipated initial public offering (IPO), which is projected to occur in the first half of 2025. The partnership is also expected to deepen operational and commercial collaboration between the two airlines.

Volotea, known for its business model of connecting secondary cities directly and bypassing major hubs, has established a notable presence in Greece. It already codeshares with Aegean Airlines on several routes. The new partnership will expand their cooperation to include over 140 routes, adding new flights that connect Greece with Italy and France.

This alliance represents a significant strategic shift for Volotea. Previously, the airline had focused on acquiring short-haul routes from Air Europa in Spain and planned to open its largest base yet at Madrid-Barajas International Airport (MAD). This strategy was influenced by the European Union’s potential imposition of remedies on the acquisition of Air Europa by IAG, which would have required IAG and its Spanish subsidiary, Iberia, to relinquish certain routes.

However, with the EU’s rejection of IAG’s acquisition of Air Europa, Volotea’s strategic focus has shifted towards strengthening its existing alliances and expanding its network through this new partnership with Aegean Airlines.

The collaboration between Aegean and Volotea is expected to enhance connectivity between their respective markets and provide a broader network of routes for passengers. This move underscores Aegean Airlines’ commitment to expanding its influence in the European low-cost carrier market while fortifying Volotea’s financial and operational standing ahead of its public offering.