EU Blocks Aegean-Olympic Airlines Merger tagged:

EU Blocks Aegean-Olympic Airlines Merger

Posted by keeptalkinggreece in Uncategorized

The European Commission blocked the proposed merger between the two of Greece’s biggest airlines Olympic Air and Aegean Airlines arguing that the merger would create monopoly in the Greek air transport market.

EU Competitiveness Policy Commissioner Joaquin Almounia said at a press conference that “The Commission’s investigation showed no realistic prospects that the new airline would restrain entity’s pricing”.

The two airlines control more than 90% of the Greek air transport market. The merger would lead to repeated price increases for the four million of Greeks and Foreigners that use some specific routes from and to Athens, the Commission stressed.

The routes concerned are between Athens and the airports of Thessaloniki, (Northern Greece) and the islands Iraklion and Chania (both on Crete), Rhodes, Mytilene, Chios, Kos and Samos.

AegeanAirlines ( Vassilakis) and Olympic Air (Marfin Invetsment Group-Vgenopoulos) issued a common statement saying that the companies will study and evaluate the EU Commission’s decision and they will decide on further actions . Given the current situation the merger-agreement between the two airlines has been dissolved.

The two Greek airlines had announced their merging plan on February 2010. It took the Commission 10 months to evaluate their application.

 The big question is what will happen now with these two airlines as  their merger plan had made clear that they can not economically survive in the Greek market.