European Commission blocks Aegean/Olympic merger

European Commission blocks Aegean/Olympic merger

European Commission officials have blocked the proposed merger of Aegean Airlines and Olympic Air on the grounds it would create a quasi-monopoly in the Greek air transport market.

Citing EU Merger Regulation, the commission argued the deal – which was first in mooted in February 2009 – would lead to higher fares for four out of six million Greek and European consumers travelling on routes to and from Athens each year.

Together the two carriers presently control more than 90 per cent of the Greek domestic air transport market, with an investigation revealing no realistic prospect of a new airline of a sufficient size entering the market.

The airlines had offered to cede take-off and landing slots at Greek airports, but Greek airports do not suffer from the congestion observed at other European airports in previous mergers or alliances.

Commission vice president in charge of competition policy Joaquín Almunia said: “The merger between Aegean and Olympic would have led to a quasi-monopoly in Greece and thus to higher prices and lower quality of service for Greeks and tourists travelling between Athens and the islands.

“It is the duty of the Commission to prevent the creation of monopolies when applying the EU merger control powers conferred on it by the Member States.”

The European Commission has prohibited the merger between Aegean Airlines, a publicly-listed company, and Olympic Air, which is part of the bigger Olympic group of companies themselves owned by Greece’s Marfin Investment Group.

The proposed merger would have created a quasi-monopoly according to the EU

Merger Partners

Aegean provides scheduled and charter air passenger transport as well as cargo transport in Greece and on international short-haul routes.

It operates from Athens International Airport and serves around 45 short-haul destinations, including to the Greek islands. It has been part of the Star alliance since 2010.

Olympic consists of three legal entities: (i) Olympic Air, active since October 1st 2009, following the privatisation of the former Olympic Airlines; (ii) Olympic Handling, which offers a full range of ground handling services at 39 Greek airports, serving both Olympic Air and third party airlines; and (iii) Olympic Engineering, which is currently in start-up mode and is active in the provision of maintenance, repair and overhaul services.