Fearing that Olympic Air, Greece’s once-dominant national carrier and a symbol of the country for decades, would go out of business otherwise, the European Union’s antitrust authority has approved Aegean Airlines’ takeover of its troubled rival, giving Greece only one major in-country airline.
“It is clear that, due to the on-going Greek crisis and given Olympic’s own very difficult financial situation, Olympic would be forced to leave the market soon in any event,” EU competition commissioner Joaquin Almunia said in a statement. “Therefore we approved the merger because it has no additional negative effect on competition.”
If Olympic left the market, Aegean would become the only significant domestic service provider and would capture Olympic’s current market shares anyway. Thus the merger causes no harm to competition that wouldn’t have occurred anyway, the commission said.
The Greek crisis has seen a 26% drop in demand for domestic air passenger transport from Athens, from 6.1 million passengers in 2009 to 4.5 million passengers in 2012, the commission said.
The competition watchdog rejected Aegean’s initial bid in 2011 to snap up struggling Olympic, arguing that the combined company would be too dominant.