The Consequences of a Possible Merger between Olympic Air and Aegean Airlines: A Business Marriage and at distance … Lufthansa

“Air transports of today and tomorrow”

Athens, A.I.A., b. 17, April 20^th , 2010

The real or emerging causes

of the merger in terms of OLYMPIC AIR and AEGEAN

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1. The rush of transition from one regime to another, despite the complexity of the project, without the necessary time to study, in difficult times.

1. The aircraft load factor which is rising with difficulty within the safety limits, combined with the expensive operation cost have caused visibly injurious operation, since both companies had exactly the same task, with a ruthless price war.

1. The choice of a multi-type fleet at this time.

1. The exclusion of Boeing which annulled the OLYMPIC Engineering expertise with impact to the maintenance.

1. The market shares and the conditions for tested size of AEGEAN and no immediate further expansion – economies of scale.

The commercial war of the former airline Competitors

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1. The announcements of M.I.G. regarding the “end of the party” following a press conference of Mr. Theodore Vassilakis. / 18-23-09-2009.

1. Causes of the war: Istanbul to Aegean and non profit lines.

1. What was the effect of Aegean’s on top or twice the offer comparing this of M.I.G. for the purchase of O.A.?

1. Has the competition between the business rivals, benefited them or not? And how is this reflected in the future agreed Legal Structure?

Legal Structure of the new schema – cost and profits for the 2 former Gladiators

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• M.I.G                                                                                  26,6%
• Th. Vasilakis Family                                                           26,6%
• Laskaridis Group                                                               14,0%
• Const/ou – D. Ioannou, G. David Families                       12,6%
• Piraeus Bank                                                                        3,5%
• Private investors (approx.)                                                16,7%

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(A:73,4-M 26,6)                                   100,00%

• What the purchase really costed to M.I.G.: 177,00 mio € appr.
• Available equity capitals of the three purchased companies    70,00

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• Net payment                   107,00
• What M.I.G. will receive upon merge                48,50
• For the 26,6% of the new company figure and up to 65%  of the schedules/ E.U./ approx. mio €      (final cost)             58,50
• For Aegean: 3 companies – economies of scale – non effective competition domestically – no option of existing types.

Results – Issues to be explored – Monopoly – Super Dominance – Approval.

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1. What is the impact on Competition? Within and outside Greece? – The logo?

1. What does this merger mean for all staff of both companies?

1. Are the promises about the preservation of a number of employee positions documented? What do personal associations permit?

1. Is the new company in the position to operate intercontinental? And how? Without WIDE BODIES?

1. Is the merger going to be approved by the E.U. authorities? Previous – major topical: merger of IBERIA – B.A., (New: I.A.G.).

04 .   FRIDAY FEBRUARY THE 26^th 2010

TOPIC DEAL

FROM 50% - 50% TO 73,4% - 26,6%

BOTH COMPANIES’ PROFILE

Fleet

AEGEAN                  OLYMPIC AIR

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A321                                                               4                                  _

A320                                                               18                                9

A319                                                               _                                  8

Total A320 family                                          22                                17

Boeing 737/400                                               4                                  _

RJ AVRO100                                                  6                                  _

Bombardier Q400                                           _                                  10

Bombardier Dash 8-100                                 _                                  5

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Total                                                               32                                32

Boeing 737/400 will be withdrawn from circulation

Schedules

AEGEAN             OLYMPIC AIR

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Domestic                                                         24                                41

International                                                  26                                15

Staff

AEGEAN 2.500               Olympic Air 1.300

Olympic Handling 2.000

Olympic Engineering 50

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Total                           2.500                           Total                                       3.350

Sizes – all forms of domestic competition – Sustainability at the International environment

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1. What do 65 - 80 carriers  mean as size?

1. Is a company of this size sustainable and how? in Greece – in Europe and not only?

1. What are the chances for smaller companies in Greece for a competitive activity?

1. Is it possible for foreign air carriers to enter the Greek market competitively?

1. Could other forms of transportation (maritime – rail), compete with the new shape?

Possible profits or damages for the passengers from the Merger – Is there basis on the given promises?

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1. How long will fares remain low?

1. How? Will checks take place so as the passengers will not pay for the merger? Is it possible to place a ceiling on the free market?

1. Will fares rise finally?

1. What will be the “touchstone” for the retention of rates?

1. What is the reason for the merging companies to give promises now?

HOW MUCH IS THE DAMAGE WE HAVE SUFFERED UNTIL NOW?

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• From:
• The purchase to M.I.G. approx. (remaining O.A.)       1,300.000.000 €
• The devaluation of the fleet remained with the parts 0,200.000.000€
• The many years of unsuccessful attempts for privatization (±)  7.000.000.000€
• Who will pay? The Greek people as usual, with a difference now: through I.M.F.

What is the outcome of the Merger? At distance … Lufthansa?

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1. What will happen with the (2) parallel companies? What about the base and Handling?

1. Will the participation to Star Alliance benefit?

1. What could hold back the Germans in their path to acquisition?

1. Do they have aspirations, geopolitical and commercial interest for oligopolistic tactics?

1. Can the Monopolies Commission be disruptive?

1. Is/was the future of the new schema predefined?

THE PRECEPT

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My dear friends, whom I really thank because you have watched so carefully and patiently this realistic presentation, the precept is:

Many may have been jealous of the glory and fame of Onassis, and were mentioned tumidily to him occasionally in interviews and inauguration, but the reality is one, unrivalled and compelling as the truth.

The real Onassis unfortunately for this country died for good –

Is the original vision also gone? We all hope for the opposite.

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