From Regional Airline to Global carrier: The Aegean Airlines case

For decades, Greece’s national carrier was Olympic Airways, later Olympic Airlines.

It flew not only around its domestic islands, but also directly to major diaspora population hubs: Toronto, Chicago, Sydney, Melbourne, and others.

Aegean Airlines and Olympic Airlines (later Olympic Air) are closely connected through a merger and acquisition story:

Olympic Airlines was the state owned Greek flag carrier, founded in 1957 by Aristotle Onassis.

It ran until 2009, when financial troubles and EU competition rulings forced restructuring.- The Greek government created a successor company, Olympic Air, in 2009, transferring assets and operations from Olympic Airlines to the new private entity.- In 2013, Aegean Airlines acquired Olympic Air.

The European Commission approved the deal after concluding that both airlines would likely not survive independently in the challenging Greek market.

• After the acquisition, Olympic Air became a subsidiary of Aegean Airlines, operating mostly domestic and regional flights especially to islands with smaller airports.

• The Olympic brand still exists under Aegean, but it is essentially the regional arm of Aegean Airlines, while Aegean operates the larger international and domestic routes.

In short, Olympic Airlines was replaced by Olympic Air in 2009, which was then acquired by Aegean in 2013, and today Olympic operates as Aegean’s regional subsidiary.

That international footprint shaped expectations, Greeks abroad expected reliable links to their homeland.

When Olympic ceased many of its long haul international services, it left a gap.

Aegean Airlines has, in many ways, become the new iteration of Olympic’s international ambition, smaller, leaner, more market aware, but also inheriting a brand promise of global connectivity for Greeks at home and abroad.

Today, Aegean is not merely restoring old routes, it is forging a new model, one that mixes Visiting Friends & Relatives (VFR), leisure, and corporate traffic in ways Olympic could only partially manage.

To give a sense of scale, Melbourne, Australia, has the largest Greek speaking population outside Greece and Cyprus, with estimates ranging from about 170,000 by ancestry to broader Greek heritage counts reaching up to about 400,000.

Melburnians are proud of this heritage, Melbourne is often referenced among the top Greek cities.

Building on Solid Foundations

Aegean’s growth ambitions rest on strong financial and operational competence.

• Return on Equity (ROE): about 30%, above the about 28% industry average.

• Earnings Growth: Net income has increased about 59% over the past five years, confirming sustained profitability rather than episodic gains.

• Dividend and Payout Ratio: A median payout ratio of about 44%, this gives room to reward shareholders while retaining about 56% for reinvestment.

Analysts expect the payout ratio might move toward 60% in coming years, without significant erosion of ROE.

Strategic Leap Into India & Beyond

Aegean has made several moves that signal intention, not just ambition.

• In September 2025, it signed an MoU with IndiGo.

• It ordered Airbus A321XLR aircraft, permitting long range narrow body routes to operate more economically.

• Direct flights are to begin, Athens to New Delhi in March 2026, Athens to Mumbai in May 2026.

• Using IndiGo’s domestic network covering more than 90 destinations, Aegean’s passengers from India can access many internal cities, while Indian travelers gain smoother connection into Europe via Athens.

The Role at Home

Aegean’s global moves do not mean neglecting its domestic foundation:

• It connects the Greek islands, regional cities, and remote areas to central hubs (Athens, Thessaloniki).

• The airline supports inbound tourism, now projected at record levels, increasing seat capacity to about 21.2 to 21.5 million in 2025 reflects that.

• Aegean supplies economic ripple effects, suppliers, staff, tourism ecosystem, airport operations, hospitality.

The Mix That Makes International Carriers Thrive

One of the crucial lessons from Olympic’s era, and from other international carriers (notably in the Middle East), is that relying solely on VFR traffic is insufficient. To survive and thrive, airlines need the right mix:

The Diaspora Advantage

The Greek diaspora remains large and globally spread:

1. Over 5 million people of Greek origin live abroad, in about 140 countries.

2. Australia approximately 700,000, Canada about 300,000, USA about 3,000,000, and other European countries have substantial communities.

3. Melbourne’s Greek community is among the largest ex Greece, with about 170,000 by ancestry, with cultural institutions, festivals, Greek language retention, this is a reliably reachable market.

Competing in a Crowded Region

Risks on the Road Ahead

1. Fuel and Inflation, operating costs across fuel, staff, maintenance are exposed.

2. Geopolitical Instability, disruptions in transit hubs, Middle East politics, airspace closures, regulatory risks.

3. Overextension, adding many long haul routes without sufficient demand can lead to under filled flights and losses.

4. Competition, Gulf and Turkish carriers may respond, LCCs creeping into markets traditionally served by Aegean could wear down margins.

5. Regulatory and Environmental Pressures, carbon taxation, tighter emissions rules, noise restrictions can increase costs or force fleet upgrades.

Five Keys to Becoming a Global Contestant

1. Restore meaningful connections to diaspora hubs such as Sydney, Melbourne, Toronto, Montreal, Chicago, and New York.

2. Maintain the traffic mix with VFR, leisure, and corporate/business segments balanced.

3. Apply disciplined fleet strategy with long range narrow body aircraft and fuel efficiency.

4. Build strategic partnerships and alliances, following the IndiGo MoU model, expanded with Gulf and Asian carriers.

5. Tailor marketing and customer engagement to diaspora and high value tourists.

What comes next?

Aegean Airlines is picking up where Olympic left off, but doing it with sharper tools.

It has learned that in today’s airline world, it takes more than VFR, it needs leisure and corporate, as well.

Fleet cost, route economics, and partnerships matter more than sheer network size.

A diaspora is not just sentimental, it is economically meaningful if engaged well.

With its MoU with IndiGo, its financial strength, and its identity as the Greek carrier reaching outward, Aegean is developing a realistic road map from regional champion to global contender.

The next few years will test execution, whether it can balance risk with opportunity, route expansion with cost control, and network breadth with customer value.If it succeeds, Athens may once again be a base for global Greek travel, not just for tourists, but for families, businesses, culture, and commerce. And in doing so, Aegean could establish itself not just in the history books, but in skies across continents.