Aegean Airlines (A3, Athens) has announced a commercial joint venture and equity investment in Volotea (V7, Barcelona El Prat) of up to EUR50 million euros (USD55.2 million), split into two tranches. This could potentially give the Greek flag carrier a 21% stake in the Spanish LCC.

The first tranche of EUR25 million (USD27.6 million) has already been completed, and the second is due to follow in the first half of 2025, subject to conditions related to Volotea's financial performance. The equity investment is structured through convertible loans, which could result in Aegean taking a 13% stake in the first tranche and up to 21% after the second.

Aegean's chairman, Eftichios Vassilakis, said during a press conference that it was "very likely" that the second tranche would be executed.

The equity raise is accompanied by the same amount of EUR50 million (USD55.2 million) invested by Volotea's existing shareholders, including its chief executive and founder Carlos Muñoz.

The companies did not disclose the timeline or conditions for converting the loans into equity. Vassilakis said that even the maximum 21% stake would not require competitive review and added that there are currently no plans to increase Aegean's stake in Volotea further.

Irrespective of the Aegean deal, Volotea maintains its plans for a stock market debut, although Muñoz said that the next window is likely to be only in early 2025.

The two airlines will continue to operate independently in their current business models, Volotea being an LCC focused on serving mid-sized European cities and Aegean operating as a Greek flag carrier focused on Athens and Thessaloniki. They stressed that the largely complementary networks with limited overlap justified the partnership. Both airlines plan to utilise the partnership to grow their presence in Greek secondary airports, although Muñoz told ch-aviation that no specific plans for this expansion have been made just yet.

"This partnership increases the chances of success of launching routes initially and then potentially bases out of places we've been identifying, especially Rhodes International, Chania, and Irakleion. We haven't even finalised the plan for the summer of 2025 - we will be telling you more over the next few months, but over the midterm the intention is to develop that connectivity from those destinations in Greece, especially to France, Italy, and Spain," he outlined.

Vassilakis added that Aegean will continue to focus on its premium service out of the two main cities in Greece but "feels relatively weak" in the islands, competing with LCCs and leisure charter-focused carriers. Expansion through the Volotea partnership "could develop a lot better against this competition and be more effective for the connectivity," he said.

The short-term expansion plans will be limited by the lack of available aircraft capacity on the market. Volotea continues to eye remedy slots following the ongoing consolidation, despite the collapse of the Iberia-Air Europa deal. Muñoz said that both Italy following the Lufthansa-ITA Airways deal and Portugal following a potential TAP Air Portugal takeover could be interesting opportunities for growth.

Vassilakis revealed that talks about the Volotea-Aegean equity deal and a JV proceeded independently of Volotea's discussions with Abra Group about their potential role as remedy-takers after the Iberia-Air Europa deal.

Volotea has a base at Athens airport, the third-largest airport in its network, accounting for 4% of its total weekly departure capacity. The airline also serves ten regional airports in Greece. The country accounts for 10.5% of the airline's total weekly departure capacity.

The two airlines also plan to cooperate in distribution and other commercial areas. The cooperation will initially concentrate on cross-selling each other's flights. Volotea and Aegean will also explore MRO and flight simulator training cooperation.