Greece’s two largest airlines, Olympic Air and rival Aegean, have announced that they have agreed to join forces in a bid to survive the country’s economic downturn and increased competition in the aviation industry.

The main shareholders of Olympic Air, Marfin Investment Group (MIG), and Aegean, the Vassilakis group, have agreed on the merger to create an airline servicing 106 domestic and international routes, employing 5,850 staff members and operating a fleet of 64 planes. The new company will carry the Olympic Air name.

“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,” said Andreas Vgenopoulos, chairman of Olympic Air.

The Vassilakis group and MIG will each hold an equal stake in the newly formed venture, the two companies said in a joint statement which did not provide any financial details.

The two airlines surprised the market in mid-February when they announced that they were in talks to create a single company that will have annual sales in excess of 1 billion euros.

Despite initial investor interest in the possible deal, shares in the two companies have underperformed gains of 4.85 percent in the broader Athens market in the last seven days.

Shares in MIG added 3.35 percent while stocks in Aegean Airline slipped 1.72 percent.

Stocks in the newly formed venture will be listed on the Athens stock exchange.

The agreement between the two airlines, which jointly control 95 percent of Greece’s air travel market, is subject to approval by European Union competition authorities.