Aegean Airlines and Olympic Airlines – both of Greece have had their request to merge blocked by the European Commision.
The orignal proposal was annouced in 2010 when Aegean was joining Star Alliance, but has now been refused on the grounds it would
(create a)”quasi-monopoly on the Greek air transport market”
and
“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”.
To quote:
“Together the two carriers control more than 90 per cent of the Greek domestic air transport market and 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.”
Fears of a monopoly on various routes include Athens and Thessaloniki, and eight island airports, namely Herakleion and Chania, (both in Crete), Rhodes, Santorini, Mytilini, Chios, Kos and Samos.
Aegean are unhappy stating an opportunity to consolidate has been lost, but will adjust and continue. Meanwhile Olympic states it will have negative effects for consumers, the country and benefit competitors outside of Greece.
Both are studying the judgement, and are considering appeals where possible.
In the light of the Greek fiscal situation, this is a blow to both of them. Aegean is hoping to push it’s expansion via Star Alliance, and had hoped to benefit the extra routes. Meanwhile the current version of Olympic Air is still “growing up” after the failure of Olympic Airways (and the subsequent privatisation) and could had done with the merger to boost it’s long term credentials.
Some how or other, there is still time to run with this I think….
