Brussels, 24/04/2013 (Agence Europe) - On 23 April 2012, the European Commission opened a detailed investigation into the planned acquisition by Aegean Airlines of Greece of its Greek competitor Olympic Air. It fears the deal will lead to price rises and lower service standards on various domestic flights from Athens because company resulting from the merger would monopolise the routes or at least be in a very strong position.
The merged company would monopolise flights from Athens to Chania, Santorino, Mytilene, Corfu, Alexandropolis and Kos, and would remove an important competitor on three other domestic routes (Athens to Thessalonica, Athens to Heraklion and Athens to Rhodes) where the two companies currently have one main competitor, Cyprus Airways. Cyprus Airways would not be able to compete effectively in the future on the domestic Greek market. The Commission's initial investigation revealed no indication of entry prospects that would occur on a scale and within a timeframe capable of constraining the merged entity and disciplining its pricing behaviour.
The commitments offered by Aegean during the preliminary investigation do not alleviate these concerns and the Commission will now examine the merger plans in detail and decide over the next three months whether it would significantly damage competition. The Commission banned the merger in January 2011 (see EUROPE 10302) on the grounds of competition problems on ten domestic flight routes from Athens. (FG/transl.fl)