Olympic Air's new focus on southeastern Europe has been bolstered by an extensive co-operation agreement with Cyprus Airways.
The agreement provides for codesharing between the two airlines - initially from 27 March on a large group of flights covering Athens, Rhodes, Heraklion, Thessaloniki, Larnaca and Paphos - and from 15 April on most of the two carriers' domestic and international services.
The two airlines say the co-operation will result in cheaper fares to both domestic Greek and international destinations served by their respective fleets.
The agreement will also cover such areas as provision of ground services in Greece and Cyprus, joint use of VIP lounges and "exploration of all options for the utilisation of the infrastructures of the two airlines".
Earlier this month Olympic announced it would cut international services to London, Paris, Brussels and Vienna while increasing services both within Greece and in southeastern Europe. The retrenchment decision followed the European Union's blocking of Olympic's plan to merge with Aegean Airlines on competition grounds.
A few days later Aegean acquired Olympic slots for London Heathrow and Paris and announced plans for new services to the airports from Larnaca in Cyprus. It also plans to establish a base at Larnaca and launch several routes to Greece.
Like Olympic, Cyprus Airways has experienced difficulties in recent times, barely breaking even in the most recent financial year. It also announced plans to cut staff and sub-lease one of its two Airbus A330-200s.