Swiss regional carrier Darwin Airline is to take over services and assets of Geneva-based Baboo, effectively consolidating the two operations.
The move follows the reduction of Baboo's operation, after the carrier axed its Embraer 190 jets leaving it with just a pair of Bombardier Q400s.
Darwin Airline says the agreement will allow it to expand, by picking up Baboo routes, and establish itself as a more prominent Swiss regional operator.
The combined operation, based at Darwin's Lugano headquarters with a supporting station in Geneva, will have a fleet of six Saab 2000s as well as the two Q400s.
Darwin says the agreement, to be completed early next year, will double its turnover to more than SFr80 million ($80 million) and expand its network to over 20 destinations in Switzerland, France, Italy and other points in Europe.
The Baboo brand will continue to exist, it adds, with some services marketed under the name.
Neither carrier has disclosed details of the new ownership structure nor the terms of the tie-up.
Darwin chief Fabio Parini says that the tie-up is in line with plans to sustain network growth, while his counterpart at Baboo, Mark Darby, adds that the combination will "create a Swiss regional airline of great importance".