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European Commission Probes Olympic Air - Aegean Merger

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The European Commission said Friday it has opened an in-depth investigation under the EU Merger Regulation into the planned merger between Olympic Air and Aegean Airlines.

“The Commission’s initial market investigation indicated that the proposed merger could raise serious competition concerns, in particular because the merged entity would have very high, if not monopolistic, market shares on all domestic routes and on a number of international routes where both parties operate,” the EU executive said in a statement.

The Commission also expressed its serious doubts as to the compatibility of the transaction with the Merger Regulation in connection with the provision of Public Service Obligation routes in Greece and the provision of ground handling services in Greece. The Commission now has 90 working days, until 7 December 2010, to take a final decision on whether the merger would significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.

Commission Vice President in charge of competition policy Joaquín Almunia said: “The Commission must make sure that consumers and businesses will continue to have a competitive choice of airline services in Greece, both as regards fares and routes, in particular at a time of difficult economic circumstances.”
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