Italian operator Eurofly and its majority shareholder Meridiana have agreed to fully integrate and become single airline, Meridiana Fly.
The new airline will focus on medium- and long-haul services. Peak short-haul and charter operations will be handled by newly-incorporated company Meridiana Express, which will exist within Meridiana Fly. The deadline for integration is 31 January 2010.
Meridiana states: "Integration is characterised by the development of significant commercial synergies and significant improvements in quality of service...by obtaining a greater size, the rationalization of the fleet, greater operational flexibility and the achievement of industrial synergies with a significant reduction in production costs."
The deal is subject to Eurofly's securing €30 million ($45 million) of financing to be made available post-integration.
Before then Eurofly intends to raise €53 million through a share issue. Another capital increase of €40 million will be required once it joins Meridiana.
Subject to certain conditions, the Aga Khan Fund for Economic Development will make €30 million available to Meridiana to support the integration. Half that sum will be used to ensure the liquidity of financially-troubled Eurofly. The Aga Khan is a shareholder in Meridiana.
Eurofly currently operates nine Airbus A320s and three A330-200s, while Meridiana's fleet comprises 18 Boeing MD-82 aircraft and four A319s.