The European Commission has prohibited the proposed merger between Aegean Airlines and Olympic Air. It would have resulted in a quasi-monopoly on the Greek air transport market, according to a statement.
The Competition Committee said that this would have led 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 control more than 90% of the Greek domestic air transport market. The Commission΄s investigation showed no realistic prospects that a new airline of a sufficient size would enter the routes and restrain the merged entity΄s pricing.
The companies 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. My services and myself did our best to find a solution, but unfortunately the remedies offered by the companies would not have adequately protected the interests of the four million consumers that use the routes.”
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 deal was notified to the Commission for regulatory clearance under the European Union΄s Merger Regulation.
Both Aegean and Olympic Air operate on routes covered by public service obligations (PSOs). Aegean has PSOs on four routes. Olympic has PSOs on thirteen routes.
As with previous airline mergers, the Commission analysed the combined effects of the proposed merger on the individual routes on which both companies operate. It received views and complaints from a large number of market participants in Greece and internationally, including consumer associations, public authorities, travel agents, airport operators, ferry operators and other airlines.
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