Greek carriers Aegean Airlines and Olympic Air have announced plans for a merger, to form a single national airline.
The agreement is subject to approval by the European Competition Commission.
Under the plans, the Aegean brand will disappear from the skies, with all flights to come under Olympic Air "following the necessary transition and adjustment period", said Aegean Airlines.
Mr Th. Vassilakis, chairman of Aegean, said: "The relative size of our competitiors within the European Union necessitates the joining of the two main Greek airlines, to achieve increased autonomy in serving the needs of our country's tourism, increase route options for consumers, ensure the long-term development and viability of the two airlines and protect the levels of employment in the sector."
Aegean, which is on line to join Star Alliance by June, said the new, national airline would "champion with enlarged presence in the European market as well as seamless coverage of even the most remote islands" in Greece.
The new company will be listed on the Athens stock exchange and will be lead jointly by Aegean's Vassilakis and Olympic's Mr A. Vgenopoulos.
Vgenopoulos commented: "The prevailing conditions in the Greek economy as well as in the aviation sector dictate the combination of forces in order to maintain competitive customer prices, protect levels of employment and increase our competitiveness at a European level.
"The merger of Olympic and Aegean serves all of those objectives and at the same time preserves and strengthens the Olympic brand name, an inherent piece of our national tradition making all Greeks very proud."